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M/S J. K. Traders vs Union Of India on 5 September, 2019

IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.6657 of 2019

1. M/s J. K. Traders Doturi, Kawatika, Bijni, Chirang, Assam-738390 through
its Manager Allauddin Sheikh, Aged about 34 years, Male, Son of Abdus
Samad, Resident of Vill/Town-(A) Doturi (Part 2), P.S.-Bijni, Sub-Division-
Bijni, Dist. Chirang (Assam).

2. M/s Ganga Sagar Transport, Dhupguri, Bhaga Jatin Colony, Ward No.5,
Dist. Jalpaiguri, West Bengal-735210

… … Petitioner/s
Versus

1. Union of India through The Commissioner of Customs (Prev), Patna, 5th
Floor, Kendriya Rajaswa Bhawan, Bir Chand Patel Path, Patna-800001

2. The Assistant Commissioner, Customs (Prev) Division, Forbesganj, Goryare
Chawk, Forbesganj, Dist-Araria (Bihar)-854318

3. The Superintendent (Prev), Customs (Prev) Division, Forbesganj, Goryare
Chawk, Forbesganj, Dist-Araria (Bihar)-854318

4. The Inspector (Prev), Customs (Prev) Division, Forbesganj, Goryare Chawk,
Forbesganj, Dist-Araria (Bihar)-854318

… … Respondent/s

Appearance :

For the Petitioner/s : Mr.Amit Pandey,Advocate
For the Respondent/s : Mr. Manoj Kumar Singh, C.G.C.

CORAM: HONOURABLE MR. JUSTICE RAJEEV RANJAN PRASAD
C.A.V JUDGMENT

Date : 05-09-2019

Heard Mr. Amit Pandey, learned counsel for the

petitioner and Mr. Anshuman Singh, learned counsel for the Union

of India.

2. The petitioner in the present writ application seeks the

following reliefs:

i) To issue a writ in the nature of mandamus
commanding the authorities to releae 23,660 kgs
of Betel Nuts (Arecanuts) as evaluated at Rs.

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67,33,163/- and a truck bearing Registration No.
TN 25 BC/5209 as evaluated at Rs. 23,00,000/-
which was seized vide Seizure Memo dated
06.02.2019 unconditionally; And/or

ii) To direct the Respondent Authority to upkeep
the condition and safety of goods so as to prevent
deterioration in it’s value as the seized goods is a
perishable goods; And/or

iii) To issue a writ in the nature of Certiorari for
quashing the Seizure Order / Seizure Memo dated
06.02.2019 whereby and where under 23,660
Kgs. Of Betel Nuts (Arecanuts) as evaluated at Rs
67,33,163/- and a truck bearing Registration No.
TN 25 BC/5209 as evaluated at Rs. 23,00,000/-
was seized on 06.02.2019 and all consequential
proceedings in pursuance of same’ And/or

iv) To grant any other relief or reliefs to which the
petitioners are entitled in the facts and
circumstances of the case.”

3. The case of the petitioner is that the petitioner no. 1 is

engaged in business of trade of Betel Nuts grown in North Eastern

Region of the country and the petitioner no. 2 is Transporter of

goods. On 06.02.2019 when a vehicle bearing Registration No.

TN 25 BC / 5209 engaged by petitioner no. 2 for carrying the

Betel Nuts of petitioner no. 1, it was detained by the officials of

the Customs, Forbesganj under the office of the Commissioner of

Customs (Prev), Patna near Haria Bara Toll Plaza, Araria and
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seized the Betel Nuts approximately 23660 kg valued at Rs.

67,33,163/- and the truck in question. A seizure memo was

prepared wherein it has been recorded that the origin of goods is

that of a third country/foreign origin but according to the learned

counsel for the petitioner, the seizure list nowhere discloses the

name of the country from which the goods have been originated.

Further that how the customs officials formed a belief that the

goods were of foreign origin.

4. Learned counsel submits that the goods have been

seized with reference to Notification No. 09 /1996-Cus (NT) dated

22.01.1996 issued under Section 11 of the Customs Act read with

Section 3(2) of the Foreign Trade (Development and Regulation)

Act, 1992. The notification prohibits the imports of goods from

Nepal which has been exported to Nepal from other country in

India.

5. Learned counsel assailed the seizure on the ground

that seizure of goods and conveyance has been done without

having any reason to believe that the conveyance was carrying on

any smuggled goods or the impugned goods were in any way

liable for confiscation under the Customs Act, 1962. He has

referred Section 106 of the Customs Act, 1962 to show that the

power for search of conveyance would be available only in case
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the proper officer has reason to believe that any vehicle is being

used in the smuggling of any goods and in the carrying of any

goods which has been smuggled. It is submitted that the

respondent authorities have asserted that they had specific

information received from their Additional Commissioner over

telephone that the Betel Nuts of third country or origin were being

transported from Gauhati to Karnataka and getting upon the said

information the Truck was intercepted. It is submitted that there

was no authentic information that the respondent authorities

which could be deemed to be actionable and upon which they

proceeded to search of truck in question. It is further submitted

that the internal information, if any, was required to be recorded in

Form DRI-1. It’s authentication were required to be verified and

then only action should have been taken.

6. Further learned counsel for the petitioner submits that

the description given by the customs officials that the Areca Nuts

are appearing as small and round shaped and light brown in colour

whcih are the character of “Malasian” origin is not correct and

has no basis. It is submitted that by seeing the shape and colour of

Betel Nut their country of origin cannot be determined. Further it

is submitted that even samples sent by the respondent authorities

to ‘ADRF’ have failed to determine it’s country of origin. In this
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regard learned counsel refers Annexure ‘R/4’ and ‘R/5’ to the

counter affidavit.

7. Further relying upon the judgment of the Hon’ble

Division Bench of this Court in the case of Rara Brotheres

Vs.M.L. Dey reported under [2000 (126) E.L.T. 425 (425)],

Angou Golmei Vs Vizovolie Chakha Sang reported under [1996

(81) E.L.t. 440 (Pat.)] and that by the Division Bench of Bombay

High Court in teh case of M.G. Abrol, Additional Collector of

Customs., Bombay Vs. Amichand Vallamji reported under

[2002 (149) E.L.T. 32 (Bom.)]. Learned counsel submits that

when the respondents are not able to fulfil the legal requirement of

valid search and seizure, having resorted to the contention that the

sample of seized Areca Nuts were tested and found to be unsafe

for food and human consumption and those are not confirming the

standards under the Regulation No. 2.12 and 2.3.47 (5) of the

Food Safety and Standards (Food Products Standards Food

Additives ) Regulations, 2011.

8. Learned counsel relied upon Section 47 of the Foods

Safety and Standards Act, 2006 read with Rule 2.4 of the Rule

2011 whereunder the Food Safety Officer has to give notice in

writing about intention to take samples to get it analysed to the

person from whom the samples are being taken. It is submitted
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that the Officers of Customs have not been appointed as Food

Safety Officer under the Act and also the procedures as regards

taking the sample under the Said Act and Rules have not been

followed. Thus, the entire procedure is without authority.

9. As regards the reliance placed upon Circular No. 03

of 2011 of the Customs dated 06.01.2011 and Circular No.

58/2011- Customs Dated 25.10.2001 it is contended that these

circulars are applicable to imported goods prior to custom

clearance. The submission is that in the instant case there is

neither any belief to show that the impugned goods are smuggled

or imported nor there is anything to show that the respondent

authorities had any jurisdiction to cause “customs clearance” of

the said goods.

10. Learned counsel further relied upon the judgment of

this Court in the case of Salsar Transport Company in M.J.C. No.

2185 of 2013 vide order dated 24.07.2013.

11. On the other hand learned counsel for the Union of

India has contested the writ application on the various grounds

which have been taken note of by this Court in detail while

considering the connected writ application bearing C.W.J.C. No.

10109 of 2019. The contention of the learned counsel for the

Union of India has been discussed in detail in the said judgment.
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The same are not being reiterated hereunder. Paragraph ‘8’ and ‘9’

of the counter affidavit are however reproduced hereunder for a

ready reference:

“”8. That ascertain the country of origin of the seized
Dried Areca Nuts, samples were sent to (1.) Arecanut
Research Development Foundation, Varanashi Towers,
Mission Street, Mangalore, Karnataka and (2.) Central
Food Laboratory, Kolkata, Extension Centre Raxual,
Bihar.

i. The Arecanut Research Development Foundation,
Mangalore vide their letter ARDF/CUS/FBG/18-19/ 1517
dated 14.02.2019 provided test report as under:-
Texture The Arecanuts (Betel Nuts) supplied are of
medium in size with round to oval in shape. The samples
of Arecanuts supplied for testing the country of origin are
of very bad qualities and more than 50% of the nuts are
infected with moulds inside and found difficult to study the
internal characteristics to identify the country of origin.
Final Conclusion “The sample of Arecanuts provided by
the Assistant Commissioner, Office of the Assistant
Commissioner, Customs (Prev) Division, Goriyare Chowk,
Forbesganj, Bihar vide letter C.No. VIII(10)
317/Cus/Seiz/DPU/FBG/18-19/1517 dated 07.02.2019
under its seal has been tested and found to be White
Whole Arecanuts of very bad quality. More than 50% of
the nuts are infected with moulds inside. Such Arecanuts,
irrespective of their country of origin, are not fit for
human consumption/chewing.”

ii. Central Food Laboratory, Kolkata, Extension Centre
Raxaul, Bihar in vide their Certificate No.
INF/CFL/KOL/RXL/19/FEB-68 reported that:-

“The sample of Betel Nut were tested as per Standard
Food Safety norms falling under regulation No. 2.12 85
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2.3.47 (5) of Food Safety Standards (Food Products
Standards 85 Food Additives) Regulations, 2011 and
found non-conforming to the standards due to presence of
fungal growth, Damaged Betel Nuts and presence of
Insects. Thus the sample is ‘unsafe food’ under Section
3(I)(ZZ)(ix) of FSS Act, 2006.”

iii. To ascertain the country of origin of the seized goods,
further investigation viz. verification of buyer/seller and
their actual work profile from jurisdictional
Commissionerate, verification of documents submitted by
the truck driver at the time of interception of the tuck etc.
are being done by the Division office, Forbesganj.

9. That M/s J. K. Traders (Petitioner) vide his letter dated
14.02.2019 requested for Provisional Release of the seized
Arecanuts which was denied by the competent authority in
view of test report of seized Areca Nut / Betel Nut given
by both the test labs i.e. (1.) Arecanut Research
Development Foundation, Varanashi Towers, Mission
Street, Mangalore, Karnataka and (2.) Central Food
Laboratory, Kolkata, Extension Centre Raxaul, Bihar in
which it has been reported that “the sample is ‘unsafe
food’ for human consumption.”

12. After hearing learned counsel for the petitioner and

learned counsel representing the Union of India, this Court finds

that the submissions of learned counsel for the parties are identical

to the submissions raised in C.W.J.C. No. 10109 of 2019 which

has been disposed of today itself. The consideration and operative

part of the judgment in C.W.J.C. No. 10109 of 2019 are quoted

hereunder:

“20.Having heard learned counsel for the
petitioner as well as for the Union of India, this Court finds
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that the whole argument of the petitioner for purpose of
quashing of the seizure list revolves around the provision of
Section 110 of the Customs Act. Section 110 of the
Customs Act is quoted hereunder for a ready reference:

“110. Seizure of goods, documents and things. -(1) If
the proper officer has reason to believe that any goods
are liable to confiscation under this Act, he may seize
such goods :

Provided that where it is not practicable to seize any
such goods, the proper officer may serve on the
owner of the goods an order that he shall not
remove, part with, or otherwise deal with the goods
except with the previous permission of such officer.

1

[ (1-A) The Central Government may, having regard to the
perishable or hazardous nature of any goods, depreciation
in the value of the goods with the passage of time,
constraints of storage space for the goods or any other
relevant considerations, by notification in the Official
Gazette, specify the goods or class of goods which shall, as
soon as may be after its seizure under sub-section (1), be
disposed of by the proper officer in such manner as the
Central Government may, from time to time, determine
after following the procedure hereinafter specified.
(1-B) Where any goods, being goods specified under sub-

section (1-A), have been seized by a
proper officer under sub-section (1), he shall prepare an
inventory of such goods containing such details relating to
their description, quality, quantity, mark, numbers, country
of origin and other particulars as the proper officer
may consider relevant to the identity of the goods in any
proceedings under this Act and shall make an application to
a Magistrate for the purpose of –

(a)certifying the correctness of the inventory so prepared;

or

(b)taking, in the presence of the Magistrate, photographs of
such goods, and certifying such photographs as true; or

1. Inserted by Act 80 of 1985, S. 8 (w.e.f. 27-2-1985)
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(c) allowing to draw representative samples of such goods,
in the presence of the Magistrate, and certifying the
correctness of any list of samples so drawn.
(1-C) Where an application is made under sub-section (1-
B), the Magistrate shall, as soon as may be, allow the
application.]
(2) Where any goods are seized under sub-section (1) and
no notice in respect thereof is given under clause (a) of
section 124 within six months of the seizure of the goods,
the goods shall be returned to the person from whose
possession they were seized:

Provided that the aforesaid period of six months may, on
sufficient cause being shown, be extended by the
1
[Principal Commissioner of Customs or Commissioner of
Customs] for a period not exceeding six months.
(3) The proper officer may seize any documents or things
which, in his opinion, will be useful for, or relevant to, any
proceeding under this Act.

(4) The person from whose custody any documents are
seized under sub-section (3) shall be entitled to make
copies thereof or take extracts therefrom in the presence of
an officer of customs.

2

[110-A. Provisional release of goods, documents and
things seized pending adjudication.- Any goods,
documents, or things seized under section 110, pending the
order of the 3[adjudicating authority], be released to the
owner on taking a bond from him in the proper form with
such security and conditions as the 3[adjudicating
authority] may require.]”

21. In the facts of the present case, the counter
affidavit of the respondents states that the Cut Dried
Arecanuts is of dark pink colour which are not the
characteristics of Indian origin Arecanuts because the
Arecanuts of Indian origin are normally Oval in shape. In
order to ascertain the country of origin of the seized cut
dried Arecanuts, samples were sent to the two Laboratories.
The test report of ARDF, Mangalore reads as under:

1. substituted by Act 25 of 2014,S. 78, for “Commissioner of Customs” (w.e.f. 1-10-2014).

2. Inserted by Act 29 of 2006 (w.e.f. 13-7-2006).

3. Substituted by Act 8 of 2011, S. 47, for “adjudicating officer” and “Commissioner of Customs”.
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” The sample of areca nuts contain very small cut pieces
(Chips), boiled, dried and coated with some colouring
material. The colour is red and very shiny. It is not the
natural colour of arecanut or its extract. They suspect that
the arecanut pieces are coated with some artificial
colouring materials”.

22. Further the test report of the ‘CFL’ reported

reads as under:

“The sample of Betel Nut were tested as per Standard
Food Safety norms failing under regulation No. 2.12
2.3.47 (5) of Food Safety and Standards (Food Products
Standard Food Additives) Regulations, 2011 and
found non-conforming to the standards due to presence
of Damaged Betel Nuts and Added Colouring matter.
Thus the sample is ‘unsafe food’ under section 3(I)(ZZ)

(ix) of FSS Act, 2006″.

23. The respondents have come out with a
statement that in order to ascertain the country of origin of
the seized goods further investigation is going on. So far as
the two test reports are concerned, this Court finds that
those are not saying about the country of origin of the Betel
Nuts.

24. In the case of M/s Ayesha Exports Vs. The
Union of India (C.W.J.C. No. 7589 of 2018), this Court has
recorded the views of the learned co-ordinate Bench of this
Court in M.J.C. No. 2185 of 2013 which had in fact been
challenged before the Hon’ble Supreme Court in Special
Leave to Appeal (Civil) No. CC7331 of 2014 but the same
was dismissed on 08.05.2014 keeping the question of law
open.

25. This Court reiterated that in absence of there
being any standardized laboratory test for tracing the
country of origin, established under some statute and unless
such Labs have been accredited by the competent authority
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and that the Labs could have the scientific method to come
to a conclusion that the Betel Nut is of a particular country’s
origin, it would not be in the interest of justice to direct the
petitioner to pay the custom’s duty.

26. This Court finds that in the present case the
request of the petitioner to release the Betel Nuts have been
rejected on a totally different ground. In paragraph 26 of the
counter affidavit respondents have come out with the
following statements:

“26. That in the view of the statements made in paragraph
no. 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61,
62, 63, 64, 65, 66, 67 and 68 of the writ petition under
reply, it is humbly stated and submitted that it is pertinent
to mention that facts and circumstance of the instant case
are not identical to the facts and circumstances for the
cases referred by the petitioner in his application. In the
instant case respondent has placed reliance upon the test
report given by the two test labs, in which it has been
reported that “the sample is ‘unsafe food’ for human
consumption; while in any of the cases referred by the
petitioner no such report was available at that point of
time. In view of the same it would not be appropriate to
release the seized goods for human consumption.”

27. Learned counsel for the Union of India has
placed before this Court a Government of India’s Circular
No. 3 of 2011 issued by Ministry of Finance in the
Department of Revenue, Central Board of Excise and
Customs on 6th January, 2011. The Circular provides
detailed guidelines for examination and testing of food
items prior to its testing and clearance by Customs
Officers under the provisions of Prevention of Food
Adulteration Act, 1954 ( in short ‘PFA Act, 1954’). It is
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submitted that in terms of the said Circular dated 6 th
January, 2011, the Custom Officers are competent to get the
samples tested from the nearest Central Food Laboratory or
a Laboratory authorized for such testing by DGHS or FSSI.

Circular No. 3 of 2011 is reproduced hereinbelow for ready
reference:

“Circular No. 3/2011-Customs
F. No.450/115/2009-Cus.IV
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise Customs
North Block, New Delhi-1,
6th January, 2011.

To
All Chief Commissioners of Customs / Customs (Prev.).
All Chief Commissioners of Customs Central Excise.
All Commissioners of Customs / Customs (Prev.).
All Commissioners of Customs (Appeals).

All Commissioners of Customs Central Excise.
All Commissioners of Customs Central Excise (Appeals).
Subject: Import of edible / food products – regarding.

***
Sir / Madam,
Attention is invited to Board Circular No.58/2001-Cus
dated 25.10.2001 which provides detailed guidelines for
examination and testing of food item prior to its testing and
clearance by Customs officers under the provisions of
Prevention of Food Adulteration Act, 1954 (PFA Act, 1954).

2. Further, in terms of Para 8 of Chapter I A (General Notes
Regarding Import Policy) of the ITC (HS) Classification of
Export and Import items, import of all such edible/food
products including tea, domestic sale and manufacture of
which are governed by Prevention of Food Adulteration Act,
1954, shall be subject to all the conditions laid down in the
aforesaid Act. Import of all these products will have to
comply with the quality and packaging requirements as laid
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down in the Act. Compliance of these conditions is to be
ensured before allowing customs clearance of the
consignment.

3. To consolidate the laws relating to food and to provide for
a systematic and scientific development of Food Processing
Industries, the government has enacted The Food Safety and
Standards Act, 2006 (FSS Act, 2006). Under the Act, the
Food Safety and Standards Authority of India (FSSAI) has
been established to lay down standards and regulate/monitor
the manufacturing, import, processing, distribution and sale
of food. Section 97 of the FSS Act, 2006 provides that the
existing Acts and Orders relating to food items such as PFA
Act, 1954; Food Products Order, 1955; Meat Food Products
Order, 1973; Vegetable Oil Products (Control) Order, 1947;
Edible Oils Packaging (Regulation) Order, 1988; Solvent
Extracted Oil, Deoiled Meal, and Edible Flour Control
(Order), 1967; Milk and Milk Products Order, 1992 etc shall
be repealed from a date to be notified.

4. The FSSAI has taken over PHO functions at select ports
such as Nava Sheva and Mumbai with effect from
13.09.2010 with the stipulation that the existing rule and
procedures will continue to be followed without any change
till FSSAI regulations are notified. Thus, FSSAI has replaced
PHO with its authorized officers at abovementioned ports in
terms of section 47 (5) of the FSS Act, 2006.

5. Difficulties have been reported to Board by certain
importers regarding delay in testing of samples and clearance
of goods consequent upon implementation of FSS Act, 2006
at select ports.

6. It is also noted that vide Policy Circular 25(RE-
2003)/2002-007 dated 28.01.2004 and 37(RE-2003)/2002-
2007 dated 14.06.2004, the DGFT has modified the
procedure for sampling of imported edible/Food Products.

7. Accordingly, the procedure of clearance of food articles
has been revisited by the Board, and following modified
procedure has been prescribed:

(a) All consignments of high risk food items, as listed in
DGFT Policy Circular No. 37(RE-2003)/2002-2007 dated
14.06.2004 (as may be modified from time to time), shall be
referred to Authorised Representative of FSSAI or PHOs, as
the case may be, for testing and clearance shall be allowed
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only after receipt of the test report as per the instructions
contained in the Customs Circular No. 58/2001-Cus, dated
25.10.2001.

(b) All consignments of perishable items like fruits,
vegetables, meat, fish, cheese, etc., will continue to be
handled in terms of the guidelines contained in Para 2.3 of
the Board’s Circular No.58/2001-Customs dated 25.10.2001.

(c)In respect of food items not covered under (a) and (b)
above, the following procedure would be adopted in
addition to the general checks prescribed under Para 2.1 of
the Circular No. 58/2001-Cus, dated 25.10.2001:

(i)Samples would be drawn from the first five consecutive
consignments of each food item, imported by a particular
importer and referred to Authorised Representative of FSSAI
or PHOs, as the case may be, for testing to ascertain the
quality and health safety standards of the consignments.

(ii) In the event of the samples conforming to the prescribed
standards, the Customs would switch to a system of checking
5% – 20% of the consignments of these food items on a
random basis, for checking conformity to the prescribed
standards. The selection of food items for random checking
and testing would be done by the Customs taking into
consideration factors like the nature of the food products, its
source of origin as well as track record of the importers as
well as information received from FSSAI from time to time.
(iii In case, a sample drawn from a food item in a particular
consignment fails to meet the prescribed standards, the
Customs would place the import of the said consignment on
alert, discontinue random checking for import of such food
items and revert to the procedure of compulsory checking.
The system of random sampling for import of such food
items would be restored only if the test results of the samples
drawn from the 5 consecutive consignments re-establish that
the food items are in conformity with the prescribed
standards.

8.Authorised Officers of FSSAI will ascertain that for the
imported pre-packaged good items, the language and other
major requirements of the label like mention of best before
date, nutrition information etc. should comply the labeling
provisions under PFA Rules, failing which sample may not
be drawn from such consignment for testing.
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9.It is also clarified that Risk Management System (RMS)
module for import consignments of edible / food items,
presently does not provide for random sampling as it is one
of its CCR (Compulsory Customs Requirements) targets.
Accordingly, Risk Management System (RMS) shall take
necessary steps to modify the RMS module to conform to the
new requirements. Till such time, this modification is
carried out, Customs shall take appropriate decision to waive
the CCR requirements in respect of food items not covered
under Para 7 (a) and 7 (b) above and to the extent mentioned
under Para 7 (c) above. In terms of Circular No.43/2005-Cus
dated 24th November, 2005 such a course of action shall,
however, be taken only with the prior approval of the
jurisdictional Commissioner of Customs or an officer
authorized by him for this purpose, who shall not be below
the rank of Addl./Joint Commissioner of Customs, and after
recording the reasons for the same. A brief remark on the
reasons and the particulars of Commissioner/ADC/JC
authorization should be made by the officer examining the
goods in the departmental comments in the EDI system.

10.Further, as per Para 13 of Chapter I A (General Notes
Regarding Import Policy) of the ITC (HS) Classification of
Export and Import items, import of all such edible/ food
products, domestic sale and manufacture which are governed
by PFA Act, 1954 shall also be subject to the condition that
at the time of importation, the products are having a valid
shelf life of not less than 60% of the original shelf life. Shelf
life of the product is to be calculated based on the declaration
given on the label of the product, regarding its date of
manufacture and the due date for expiry. Therefore, Customs
shall ensure that this condition is complied with before
allowing clearance of such consignments.

11. It is clarified that at certain ports / airports / ICDs / CFSs
where Port Health Officers (PHO) under PFA, 1954 or
Authorised officers under FSS Act, 2006 are not available,
the samples will be drawn by Customs and the same may be
got tested from the nearest Central Food Laboratory or a
laboratory authorized for such testing by DGHS or FSSAI.

12. RMD shall develop an application software that
incorporates the stipulation of testing of imported foodstuff
and alerts the Customs officer to the effect the number of
past shipments already tested and found fit warrants future
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shipments need not ordinarily be tested. This should apply
regardless of port of import so long as the importer, supplier
and item of import do not change. In other words, if such a
shipment is imported say, at Mumbai and the previous 5
shipments imported at, say, Delhi have passed the test, then
the next shipment at Mumbai need not be tested. A suitable
data base would also be prepared at each Custom House to
indicate the compliance history of importers.

13. The Board Circular 58/2001-Cus dated 25.10.2001
stands modified to above extent.

14. These instructions may be brought to the notice of all
concerned by way of issuance of suitable Public Notice /
Standing Order.

15. Difficulties, if any, in implementation of these
instructions may be brought to the notice of the Board
Yours faithfully,
( R. P. Singh )
Director (Customs)”

28. Learned counsel for the Union of India,
Department of Customs and Excise placed before this Court
a Circular No. 35 of 2017 dated 16 th August, 2017 which
provides guidelines for provisional release of seized
imported goods pending adjudication under Section 110 A
of the Customs Act, 1962. The relevant part of the
guidelines as contained in paragraph 2, 2.1., 2.2, 2.3 and 3
are quoted hereunder for a ready reference:

“2. While provisional release of seized imported good
is under Section 110A of the Customs Act, 1962 may
normally be considered by the competent adjudicating
authority upon a request made by the owner of the seized
goods, provisional release shall not be allowed in the
following cases –

(i) Goods prohibited under the Customs Act, 1962 or any
other Act for the time being in force;

(ii) Goods that do not fulfill the statutory compliance
requirements/obligations in terms of any Act, Rule,
Regulation or any other law for the time being in force;

Patna High Court CWJC No.6657 of 2019 dt.05-09-2019
18/28

(iii) Goods specified in or notified under Section 123 of the
Customs Act, 1962;

(iv) Where the competent authority, for reasons to be
recorded in writing believes that the provisional release
may not be in the public interest.

2.1. seized imported goods shall be released
provisionally by the competent authority upon request of
the owner of the seized goods, subject to executing a Bond
for the full value/estimated value of the seized goods.
2.2 Further, in addition to the Bond mentioned at Para
2.1. above, the competent authority shall take a Bank
Guarantee or Security Deposit to cover the following:
i.the entire amount of duty/differential duty leviable on the
seized goods being provisionally released;
ii. amount of fine that may be levied in lieu of
confiscation under Section 125 of he Customs Act, 1962, at
the time of adjudication of the case. While securing the
same, the competent authority shall take into account the
nature of the seized goods, the duty and charges payable on
the said goods, their market price and teh estimated margin
of profit;

iii. Amount of penalties that may be levied under the
Customs Act, 1962, as applicable, at the time of
adjudication of the case.

2.3. Depending on the specific nature of a case, the
competent authority may, for reasons to be recorded in
writing, increase or decrease the amount of security deposit
as indicated above.

3. In this context, attention is invited to the judgment
dated 28.07.2016 of the Hon’ble Madras High Court in Writ
Appeal No. 377 of 2016 in the case of Malabar Diamond
Gallery Pvt. Ltd. Vs Additional Director General, DRI,
Chennai Ors. Wherein the Hon’ble Court has given
sufficient discretion to the adjudicating authority to deny
provisional release of goods in any case where the goods
are smuggled or import is treated as illegal and in violation
of the statutory provisions. In terms of the said judgment,
by specifying the relevance and reason, the adjudicating
authority may deny provisional release of any goods which
are liable to confiscation under Section 111 or Section 113
as they would fall under the definition of prohibited goods,
in terms of Section 2(33) of the Customs Act, 1962.”

29. Further learned counsel has placed before
this Court the information issued by the Director (Imports)
Patna High Court CWJC No.6657 of 2019 dt.05-09-2019
19/28

of the Food Safety Standards Authority of India (Statutory
Authority established under the Food Safety and Standards
Act, 2006) which reads as under :

“File No.1-1600/FSSAI/Imports/2016 (Part18)
Food Safety and Standards Authority of India
(A Statutory Authority established under the Food Safety
and Standards Act, 2006)
FDA Bhawan, Kotla road, New Delhi-110002
20 November, 2018
Import of Betel Nut/Areca Nut
Standards of areca nuts are prescribed under sub-regulation
2.3.55 of Food Safety and Standards (Food Products
Standards and Food Additives) Regulations, 2011 and also
in Chapter 2 of Food Safety Standards (Contaminates,
Toxins Residues) Regulations 2011. Further, limits of
aflatoxin as 15 ug/kg in areca nut is prescribed in the Food
Safety and Standards (Contaminants, toxins and Residues)
Regulation, 2011 through amendment dated 27.12.2017.

2. Areca nut, the fruit of the areca palm (Areca catechu),
commonly referred to as betel nut is prone to the formation
of fungal growth during various stages of its production,
storage and transportation. Accordingly, it has been
decided that the consignments of imported Betel/Areca Nut
shall not be cleared through Risk Management System
(RMS) and all the imported consignments shall be
subjected to 100 % sampling and testing. Also, FSSAI’s
Authorised Officers and Customs officials notified as
Authorised Officers by FSSAI are heareby advised to be
vigilant and strictly ensure the compliance of above
mentioned FSS Regulations before clearance of
consignments of imported areeca/betel nuts.

(Suneeti Toteja)
Director (Imports)”

30. The Government of India, Ministry of
Finance has issued Circular No. 30 of 2017-cus dated 18 th
July, 2017 which provides for a detail guidelines for re-
testing of the samples, the same is produced hereunder:

“Circular No.fe /2017-Cus
F.No. 450/15/2017-Cus IV
Government of India
Ministry of Finance Department of Revenue
Patna High Court CWJC No.6657 of 2019 dt.05-09-2019
20/28

(Central Board of Excise Custom)
**********
New Delhi, dated the/18th July, 2017

To,
All Principal Chief Commissioners/Chief Commissioners of
Customs / Customs(Preventive),
All Principal Chief Commissioners/Chief Commissioners of
Customs and Central Excise,
All Directors General,
All Principal Commissioners/Commissioners of Customs /
Customs (Preventive),
All Principal Commissioners/ Commissioners of Customs and
Central Excise.

Sir/Madam,

Sub: Detailed guidelines for re-testing of samples- reg.

World Trade Organization (WTO) negotiated Trade Facilitation
Agreement (TFA),which aims at simplifying the trade processes
and bringing down barriers to trade has come into force w.e.f
22nd February, 2017. India is a signatory to this agreement.

2) India has placed a number of trade related measures negotiated
under the TFA in Category A. Article 5.3.1 envisages granting an
opportunity for a second test in case the first test result of a
sampletaken upon arrival of goods declared for importation
shows an adverse finding. Further Article 5.3.3makes it
obligatory to consider the result of the second test, if any, for the
release and clearance of goods, and, if appropriate, may accept
the results of such test. The aforementioned Articles have been
placed incategory A. In order to have uniformity in approach
among the field formations with regard to re-testing of samples,
the following procedure is prescribed:

a. Customs officers may draw the samples from import
consignments for testing in case of consignments wherever
needed. The results of all test reports, adverse or otherwise, shall
be communicated to the importer or his authorized
representative/ Customs Broker immediately on its receipt.
b. In case the importer or his agent intends to request the
Additional/ Joint Commissioner of Customs for a re-rest, then the
same shall be made in writing to the said officer within a period
of ten days from the receipt of the communication of the test
results of the first test. Customs officers may take a reasoned
view in case the importer or his authorized representative
Customs Broker is unable to do so for reasons beyond his
control.

c. Where the Additional/Joint Commissioner of Customs grants
an opportunity for a second test, he must clearly indicate in
writing the name and address of the laboratory/institution where
the second test can be carried out. Such referral for re-testing
may be made only after being reasonably sure that the desired re-
testing facilities exist at the laboratory/ institution.

d. Re-test should be made only on the remnants of the samples
originally tested or on duplicate representative sealed samples in
the custody of the Customs. Further, to avoid delays, samples for
Patna High Court CWJC No.6657 of 2019 dt.05-09-2019
21/28

second tests shall be marked as “immediate” before sending to
the laboratory. In a case it may so happen that fresh samples have
to be drawn, then such sampling should be done in the presence
of the importer or his representative/customs broker.
e. The requests for re-test of samples on the ground that the
original sample was not representative should be entertained only
if the consignment is still in Customs control. At the time of
drawing the samples, the importer or his representative shall be
present and certify that the samples drawn are representative.
f. The competent authority shall consider the results of the re-test
without prejudice to the results of the first test. In case there is a
variation in the results of the first test and the re-test,the
competent authority shall take the decision relying upon either of
the tests specifying the grounds in writing for the decision so
taken. In case the competent authority is unable to decide
whether to rely upon the first or the re-test results, then it may
order a second re-test provided the consignment is still within the
customs control. However, this option should not be resorted to
in every case of variation between the first test and re-test results.
g. The facility of re-testing, is a trade facilitation measure, which
should generally not be denied in the ordinary course. However,
there might arise circumstances where the customs officer is
constrained to deny the re-testing facility. Board expects that
such denial would be occasional and on reasonable grounds to be
recorded in writing.

h. Where the re-testing procedure is done at the instance of the
department instead of the importer, the above procedure shall be
followed mutatis mutandis.3) Difficulties, if any, in
implementation of this circular, should be brought to the notice
of the Board.4) Hindi version of the circular will follow.

Yours faithfully
(Zubair Riaz)
Director (customs)

31. In the aforesaid background the latest
development has come vide office Memorandum Dated 4 th
June, 2019 issued by the Government of India in its
Ministry of Commerce and Industry, Department for
Promotion and Industry and Internal Trade, the office
Memorandum reads as under”

” No. 12013/14/2019/NPC-QCI
Government of India
Ministry of Commerce and Industry
Department of Promotion of Industry and Internal Trade
NPC-QCI Section
Udyog Bhawan, New Delhi
Dated 4th June, 2019
OFFICE MEMORANDUM
Patna High Court CWJC No.6657 of 2019 dt.05-09-2019
22/28

Subject: A letter from Chairman, Central Board of Indirect Taxes
Customs regarding matter related to import of Areca Nut /
Betel Nut.

The undersigned is directed to refer to D.O. letter No.
451/24/2018 Cus.V dated 05.04.2019 [copy enclosed] received
from Chairman, Central Board of Indirect Taxes Customs
(CBITC), Department of Revenue, M/o Finance addressed to
Secretary, DPIIT regarding matter related to import of Areca
nut /Betel nut.

2. In this regard, it is stated that the matter was referred to BABL
and NABL vide email dated 16.05.2019 (copy enclosed) has
stated that they have contacted ARDF Mangalore and ICAR-
IISR, Calicut labs and discussed regarding NABL accreditation.
NABL would follow up with them and ensure their accreditation
status at the earliest. NABL has attached a list of few NABL
accredited labs which have accreditation as on date (about 4-5
labs for testing Arecanut /Beetal nut and about 60 labs for testing
black pepper). The list of NABL accredited lab for Pepper, Areca
nut and Betel nut is enclosed at Annexure-I, Annexure-II and
Annexure-III respectively.

This issues with the approval of Secretary, DPIIT.
Encl.: As above
(Gokul Chand)
Under Secretary to the Govt. of India
Tel no. 2306 2906
To
The Chairman,
Central Board of Indirect Taxes Customs (CBITC),
Department of Revenue,
Ministry of Finance,
North Block,
New Delhi-110 001″

32. On perusal of the aforesaid materials at first
instance, it would appear that these materials were not
placed before the learned Writ Court in course of hearing of
C.W.J.C. No. 3784 of 2013 and M.J.C. No. 2185 of 2013
whereunder the learned Writ Court took a view agreeing
with the submissions of the writ petitioner and respondents
that the Betel Nuts which were being sent from one place
to another was not being offered for sale, at this stage, in
which the samples could have been taken out and subjected
to analysis under the provisions of the Food and Safety and
Analysis Rules and Regulations. The learned Writ Court
took a view that the Betel Nuts are raw materials which
Patna High Court CWJC No.6657 of 2019 dt.05-09-2019
23/28

requires sufficient processing to be done and only
thereafter, this would be packaged in terms of the
provisions of the Food Safety and Standards (Packing and
lebelling) Regulations 2011 for being put up for sale. The
learned Writ Court took a view that the stage had not come
into existence when the sample was sent by custom
authorities to the ‘CFL’, Kolkata (Extension Center,
Raxaul).

33. As is evident from the discussions made in
the judgment dated 24.07.2013 passed in M.J.C. No. 2185
of 2013, learned Writ Court hearing the modification
application was not apprised of the fact that all
consignment of high risk food items are liable to be
referred to authorized representative of FSSAI or PHOs as
the case may be for testing and clearance for testing and
clearance can be allowed only after testing report as per the
instructions contained in the Custom Circular No. 58/2001
dated 25.10.2001 (referred the Circular No. 3/11). The
Court was also not informed that the Custom authorities
were authorized to take samples and get them tested from
the nearest Central Food Laboratory. Further it appears that
the guidelines for provisional release of the seized goods as
contained in Circular No. 35 of 20017 was not placed
before the learned Writ Court. The guidelines specifically
provides in paragraph ‘2’ that the request for provisional
release of the seized food shall not be allowed in the given
cases, one of the cases in which release shall not be allowed
is where the goods do not fulfill the statutory compliance
requirements /obligations in terms of any Act, Rule,
Regulation or any other law for the time being enforced.

34. Further the information furnished by the
Director (Imports) in the communication dated 20th
Patna High Court CWJC No.6657 of 2019 dt.05-09-2019
24/28

November, 2018 with regard to merit of Betel/Areca Nut
are also important to appreciate. It clearly provides that
Areca Nuts, commonly known as Betel Nuts is capable of
the formation of Fungal growth during various stages of its
production, storage or transportation, therefore, the
consignment of imported Betel /Areca Nut shall not be
cleared through risk management system and all the
imported consignments shall be subjected to 100%
sampling and testing. The FSSAI’s authorized officers and
custom officers as authorized officers were therefore,
advised to be vigilant and strictly ensure the compliance of
the FSS regulations before clearance of consignments of
imported Areca/Betel Nuts.

35. At this stage, this Court is getting a clarity as
regards the stage of testing of the Areca Nuts / Betel Nuts.
In terms of the views of the Food Safety and Standards
Authority of India as stated in the information dated 20 th
November, 2018, Areca Nuts / Betel Nuts is to be tested
strictly and it cannot be said that the Betel Nuts being a raw
material unless processed and packed for sale for
consumption, cannot be subjected to the laboratory test.
This Court is, therefore, of the considered opinion that the
plea which is being taken by learned counsel for the
petitioners citing the judgment of the learned Writ Court in
C.W.J.C. No. 3784 of 2013 and M.J.C. No. 2185 of 2013
cannot be accepted. It is well settled law that a judgment of
the Court is always rendered in the facts placed before the
Court and the submissions made in the matter. Since this
Court has found that the aforesaid materials were not
brought before the learned Writ Court in the case of Salsar
Transport Company (supra), the said decision cannot be
applied on the face of the materials which have been placed
Patna High Court CWJC No.6657 of 2019 dt.05-09-2019
25/28

before this Court in the present case. Nothing has been
brought to show that the very sampling and testing of the
Areca Nut was not in accordance with law.

36. The another submission of learned counsel
for the petitioners that there cannot be a refusal to
provisionally release the goods on the grounds stated in
Annexure ‘4’ to the writ application is also not acceptable
to this Court. The Court has taken note of the detail
guidelines issued by the Department of Customs to
streamline the divergent procedures being followed for
grant of provisional release of the goods which are seized
under Section 110 of the Customs Act, 1962. The
provisional release of the seized goods is to be refused
when the goods do not fulfill the statutory compliance
requirements of any Act, Rule, Regulation or any other law
for the time being enforced.

37. In the present case, since the Food
Laboratory Report has found that the Betel Nut are not fit
for human consumption, in the opinion of this Court, no
fault may be found with the rejection of the request of the
petitioners for grant of release.

38. Now coming to the another question with
regard to the sustainability of the seizure. This Court had
earlier occasion to deal one mater being C.W.J.C. No. 7589
of 2018 (M/s Ayesha Exports vs. The Union of India
and Ors.). In the said case the solitary question which was
considered by this Court was as to whether the seizure
report may be allowed to sustain when it is an admitted
position that M/s Areca Nut Research and Development
Foundation, Manglore is not accredited laboratory and it’s
report has been held to be of no legal sanctity by the
learned Writ Court in Salsar Transport Company (supra).
Patna High Court CWJC No.6657 of 2019 dt.05-09-2019
26/28

In the same case the seizure of Betel Nuts was sought to be
done on the sole consideration that the report of ADRF,
Manglore declared that the Betel Nuts seemed to be of
Indonesian Origin. This Court held that because in the case
of Salsar Transport Company and Anr. (supra) the report
was not having any legal sanctity and there was not
material to show that the said laboratory is an accredited
laboratory by the competent authority, it’s report cannot
have a consequence of fastening of any legal liability. In
the said case, the information received under the Right to
Information Act by the petitioner were placed before this
Court wherein the Directorate of Areca Nuts and Spics
Development, Government of India in response to query as
to whether a Betel Nut is indigenous grown or of foreign
origin can be determined by means of any laboratory test,
the information supplied by the Government: “No
laboratory test has been standardized for tracing the country
of origin”.

39. It appears that after the aforesaid judgment
passed by this Court on 24.01.2019, the respondents came
in action and the matter was taken up at the level of the
Ministry of Commerce and Industry, Department for
Promotion of Industry and Internal Trade. This Court has
taken note of the office Memorandum dated 4th June, 2019
hereinabove which shows that about 4-5 labs have already
been accredited for testing Areca Nuts / Betel Nuts and
steps towards accreditation of ARDF and ICAR-IISR,
Calicut Labs were under discussion and it was to be done
at the earliest.

40. Learned counsel for the Union of India,
Department of Customs has submitted that the
developments so far may persuade this Court not to
Patna High Court CWJC No.6657 of 2019 dt.05-09-2019
27/28

interfere with the seizure at this stage when the matter is
still under investigation and a complete view may be taken
as regards the foreign origin after obtaining a report from
the accredited lab.

41. This Court is of the considered opinion that
in the given facts and circumstances of the case, where the
matter is still under investigation and even some accredited
labs have come into existence, this Court need not interfere
with the seizure of the Betel Nuts at this stage and this
issue be kept open for consideration at appropriate stage
after the investigation is over and the respondents receive a
report as regards the country of origin from an accredited
lab within a period of three months by following the
established procedures.

42. In result, this Court finds no reason to
interfere with the impugned orders. The writ application
has no merit. It is dismissed accordingly.”

13. The ratio of the above-quoted judgement would

fully apply in the facts and circumstances of this case. This Court

has taken note of the two reports as stated in paragraph ‘8’ and ‘9’

of the counter affidavit of the respondents. The samples of

Arecanuts are of very bad qualities and more than 50% of the nuts

are infected with moulds inside. The petitioner no. 1 is, therefore,

unable to make out a case for a direction to release the betel-nuts.

The prayer as regards release is, thus, refused. For the reasons

stated in paragraph ’41’ of the judgement in C.W.J.C. No. 10109
Patna High Court CWJC No.6657 of 2019 dt.05-09-2019
28/28

of 2019, this Court would not interfere with the seizure at this

stage.

14. As regards the release of vehicle in question, it will

be open for petitioner no. 2 to make an appropriate application

before the competent authority who will consider the same and

pass an appropriate order thereon within a period of 30 days from

the date of filing of the application.

(Rajeev Ranjan Prasad, J)
avin/-

AFR/NAFR AFR
CAV DATE 03.07.2019
Uploading Date 05.09.2019
Transmission Date

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