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TMI Blog2024 (11) TMI 1088X X X X Extracts X X X X X X X X Extracts X X X X ..... 8650419 06.11.2023 3. Mr.B.Kumar, learned Senior counsel and Dr.S.Krishnanandh, learned counsel appearing on behalf of the petitioners had made the following submissions: 3.1 In this case, the petitioners had imported the "roasted areca nuts" from Indonesia. Subsequent to the said importation, the samples of areca nuts were sent to the CRCL Laboratories, Chennai, for testing. In the report of CRCL Laboratories, Chennai, it has been stated that the moisture content of the imported areca nuts is 3.97%. 3.2 As per the Advanced Ruling Authority, if the moisture content of the areca nuts is between the range of 10% and 15%, it would be considered as "raw areca nuts", whereas, if the moisture content is below 10%, it would be considered as "roasted areca nut". When such being the case, since the moisture content of the areca nuts imported by the petitioner is 3.97%, the same shall be classified as "roasted areca nuts" and in such case, the respondent is supposed to have released the goods imported by the petitioner. However, in spite of the representations made by the petitioner, the respondent had failed to take any steps to release the goods. Under these circumstances, with no ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the 4 lab reports, it has been categorically stated that the moisture content of the imported areca nuts is below 10%, that too, in 3 lab reports, it has been stated that the moisture content is below 4%. 3.6 Further, he would contend that there is no precise definition has been provided either in the Customs Tariff or anywhere else to define the term "roasted areca nuts". Hence, a set of procedures has been discussed in Advance Ruling and after an elaborate discussion, the Advance Ruling Authorities has arrived at a conclusion that based on the moisture content, the areca nut would be classified either as 'raw areca nut' or as 'roasted areca nut'. The said order passed by Advance Ruling Authorities was confirmed by the Hon'ble Division Bench of this Court vide order passed in CMA.Nos.600, 1206 and 1750 of 2023 filed by the petitioners and the same was not challenged before the Hon'ble Apex Court, whereby the order had attained its finality. 3.7 However, by over-ruling the decision of Advance Ruling Authorities and without considering all the above aspects and vital documents, the order-in-original came to be passed by the respondent in non-application of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per the order of this Court, as "roasted areca nuts" and they have only mentioned about the moisture content and smell of those areca nuts. 4.4 Further, he would submit that subsequent to the passing of the order-in-original by the respondents, this Court has categorically refused to entertain the plea of the petitioner in the writ appeal filed by them and directed the petitioner to only file an appeal before an appropriate forum in the manner known to law. However, in spite of filing an appeal before the concerned Appellate Authority, the petitioners have wrongly approached this Court, which is contrary to the order passed by the Hon'ble Division Bench of this Court. 4.5 He would also submit that the petitioners have also filed an appeal on the aspect of releasing the goods, upon payment of fine in lieu of confiscation under Section 124 of the Customs Act. However, he would contend that in this case, the confiscation is absolute and since the goods imported by the petitioners are prohibited goods, the same cannot be released upon payment of fine in lieu of confiscation. 4.6 Further, he would submit that since the issues involved in these writ petitions is with regard to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 21.09.2023 7940425 21.09.2023 8272800 12.10.2023 8160955 05.10.2023 8703860 09.11.2023 8704992 09.11.2023 8834034 18.11.2023 W.P.No.24237 of 2024: Bill of Entry Date 8293892 13.10.2023 8527337 29.10.2023 8527417 29.10.2023 8635894 05.11.2023 8650419 06.11.2023 10. The issues that have to be decided in this case are as follows: i) Whether the areca nuts imported by the petitioners are "roasted areca nuts" or "raw areca nuts"? ii) Whether this Court is a Competent Court to decide about the nature of imported areca nuts, when the alternate remedy of appeal is available for the petitioner? 11. This Court would like to deal with the above 2 issues together and answer the same accordingly. 12. In this case, the petitioners have imported areca nuts by virtue of the respective bill of entries stating that the goods imported are "roasted areca nuts". Upon perusal of tariffs, it is clear that the "raw areca nuts" falls under the Chapter 8 of Tariff 0802 80, whereas, the roasted areca nuts falls under the Chapter 20 of Tariff 2008 1920. There is no dispute between the parties with regard to the difference in Tariff and respective tariff entries for "raw ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ous process of preparation for roasting, which are detailed below: Firstly, the raw areca nut is de husked and its outer shell is removed Thereafter, the de-husked nut is scattered to check for any visible impurities and the same is cleaned, pursuant to which the raw dehusked areca nut/betel nut is left to dry. Secondly, the cleared and dried de husked areca nuts are fed into the seed roasting oven/machine and heated in the temperature of above 100 Degree Celsius. The roasting is done using firewood/ palm kernel-based ovens/machines and the temperature of the flames is around 400 to 600 degrees Celsius. As a result, the betel nuts would be roasted well beyond 100 degrees Celsius, usually in the range of 130-150 degrees Celsius. Thirdly, the areca nuts are removed from the roasting oven and allowed to cool at normal room temperature, with the assistance of the cooling fans. Fourthly, when the areca nuts have cooled and attained normal room temperature, they are again fed back into the oven at enormous heat, so as to evenly roast the areca nut. This process is performed repeatedly, until the water content of the fresh areca nuts is reduced to 10 to 15 per cent. It needs to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e samples were drawn and forwarded herewith in Tamper Proof Sampling Covers to test and classify the nuts based on the processing they have gone through (either roasted or raw areca nuts etc.). Test report of Arecanut Research & Development Foundation (R) -Mangalore was received in which it was stated that there is no particular variety known as roasted areca nut and the nuts sent for testing were of Indonesian variety, emitting a smoky smell, containing visible mould infestation and it inter-alia stated that, the areca nuts were not in accordance with the quality standards set out. Letters to CRCL labs (Chennai & Delhi) were sent seeking details on the roasting procedures. As no concrete reply from the above-mentioned agencies or any scientific publications on the tests or parameters adopted in identification of roasted nuts was adduced, recourse in this respect is taken from the order of Customs Authority for Advance Rulings ("CAAR") itself. Portion of the CAAR order "CAAR/MUM/ARC/39,40,41/2023 dated 12.05.2023" is reproduced below for ease of reference: "4.17 I have perused a test report issued by ABC Techno Labs India Pvt. Ltd., Chennai dated 31.3.2023 on the samples of roast ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reads as follows: "4.17 I have perused a test report issued by ABC Techno Labs India Pvt. Ltd., Chennai dated 31.3.2023 on the samples of roasted areca nut whole & split in which the test result indicates the moisture content, a test parameter, of the samples in the range of 3.34% to 3.84%. Moisture content in raw areca nut is found to be generally in the rage on 10-15%. As per applicant this test report indicates that the products were subjected to the roasting process. This aspect of product testing is a part of Customs Compliance Verification (CCV) process on importation of goods. Jurisdictional Customs Commissionerate carry out process of testing of imported goods with the help of concerned government partner agencies (GPAs) to cross- examine accuracy of declaration of goods in the import documents namely a Bill of entry and it's supporting documents before an out of charge (00C) is granted. Hence the utility of sample test report at this stage is limited to only support applicant's contention that the goods were subjected to the process of roasting and not merely to a moderate heat treatment." 19. The above paragraph makes it clear that even though no concrete reply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... % and 8.8%, Even though moisture content was shown on the higher side, the same does not exceeds the parameters fixed by the Advance Ruling Authorities for "roasted areca nuts". Further, in the other 3 reports given by CRCL Laboratories, Chennai, FSSAI and M/s.PT Carsurin Medan, the accredited Laboratory in Indonesia, the moisture content of the areca nuts are shown as below 4%. 24. Further, though the respondents had considered and recorded the findings of the Advanced Ruling Authorities, they had failed to provide any reason for non-consideration of parameters fixed by the Advance Ruling Authorities, based on which, one could arrive at a conclusion that the imported areca nuts are roasted or not. In spite of the fact that 3 Laboratories had given reports stating that the moisture content of the areca nuts is below 4%, the respondent had ignored the said reports and rejected the same blindfoldedly. 25. That apart, the parameters fixed by the Advance Ruling Authorities was also confirmed and upheld by the Hon'ble Division Bench of this Court and the same was not at all challenged before the Hon'ble Apex Court. In such case, it is clear that the order passed by the Advance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n-original, the respondents have recorded that in spite of the request made by the respondents, no concrete reply was provided by the aforementioned laboratories with regard to the roasting procedure of areca nuts. Under these circumstances, the Advance Ruling Authorities had fixed the parameters to determine as to whether the areca nuts are roasted or not and as stated above, no other definition is available to determine as to whether the areca nuts are roasted or not except the said parameters fixed by the Advance Ruling Authorities. However, without following the said parameters, the respondents had applied their own procedures while passing the impugned order, which is not permissible either in the Advance Ruling or in the Customs Tariff or under Customs Act. 30. Further, the respondents had over-exercised their jurisdiction and completely ignored the law laid down by this Court in CMA Nos.600, 1206 and 1750 of 2023 with regard to the parameters, based on which, one could arrive at a conclusion and get answers for the definition of "roaster areca nuts". 31. At this juncture, it is pertinent to mention that the author of this order is also hails from the agricultural family an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , men and the efforts put by the farmers to cultivate these products. Therefore, this Court is not inclined to sit and watch such waste of money, men, labour and hard work of farmers. 36. In view of the above, this Court directs the respondents to release the areca nuts, imported by the petitioner, within a period of 2 working days from the date of receipt of copy of this order. Further, since the fault is purely on the part of the respondents, they shall release the goods without any demurrage charges. In this regard, the respondents are directed to issue a detailed certificate for waiver of demurrage and container charges. 37. Additionally, this Court feels that it would be appropriate to point out that the Government has taken all the initiatives to protect the interest of the farmers, including the fixation of minimum support price for importing the "raw areca nuts" at the rate of Rs. 351/- per kg along with standard rate of duty at 100% and basic rate of duty at 80%. However, now the importers had imported the goods in the form of "roasted areca nuts", which would falls under Chapter 20, where they can import the "roasted areca nuts" at the rate of 30% of duty and no minimum ..... X X X X Extracts X X X X X X X X Extracts X X X X
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