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M/S Ramesh Kumar Baid And Sons … vs Union Of India Through The … on 5 September, 2019

IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.6563 of 2019

1. M/s Ramesh Kumar Baid and Sons (HUF) Babu Bazar Building Room No.
C4A, S.S. Road, Fancy Bazar, Guwahati- 781001 (Assam) Through their
Karta, Ramesh Rajendraprasad Baid, S/o Shri Rajendra Prasad Baid, Age
about 34 years, Male, Resident of Plot No. 419/521, Gurukrupa, Near
Lendra Park Ramdaspeth, Nagpur, Maharashtra- 440010.

2. M/s Shubham Logistics, 2nd Floor Kejriwal Complex, S.J. Road, Guwahati

– 781001 (Assam).

… … 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
Chowk, 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.S.D. Sanjay (Addl. Solicitor General)

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. S. D. Sanjay, 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 release 20,650 kgs of Betel Nuts
(Arecanuts) as evaluated at Rs. 58,76,577/- and a truck
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bearing Registration No. TN 25 BC/5330 as evaluated at
Rs. 23,64,000/- which was seized vide Seizure Memo
dated 06.02.2019 unconditionally; Anr/or

ii) To direct the Respondent Authorities 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 20,650 Kgs. of Betel Nuts
(Arecanuts) as evaluated at Rs 58,76,577/- and a truck
bearing Registration No. TN 25 BC/5209 as evaluated at
Rs. 23,64,000/- 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 / 5330 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 Bhabtiyahi towards Kosi Mahasetu

and seized the Betel Nuts approximately 20,650 kg valued at Rs.

58,76,577/- and the truck in question. A seizure memo was

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

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
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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

which 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

regard learned counsel refers Annexure ‘R/4’ and ‘R/5’ to the

counter affidavit.

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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 the 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 analyzed to the

person from whom the samples are being taken. It is submitted that

the Officers of Customs have not been appointed as Food Safety

Officer under the Act and also the procedures as regards taking the
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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 Vs. The

Union of India 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.

The same are not being reiterated hereunder. Paragraph ‘8’ and ‘9’
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of the counter affidavit are however, reproduced hereunder for a

ready reference:

“7. That to 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.

8. That the Arecanut Research Development
Foundation, Mangalore vide their letter

ARDF/CUS/FBG/18-19/ 1524 dated 14.02.2019 provided
test report :

“The Arecanuts are of assorted in size, shape and
harvested at tender stage with different age of maturity,
dehusked, boiled, light to dark brought in colour. Smoky
in taste. As the nuts are harvested in tender nut stage it is
difficult to identity the country of origin”.

9. That the final conclusion is that the sample of Arecanuts
provided by the Assistant Commissioner, Office of the
Assistant Commissioner, Customs (Prev.) Division,
Goriyare Chowk, Forbesganj, Araria Bihar vide letter
C.No. VIII(10) 319/Cus/Seiz/DPU/FBG/18-19/1524 dated
07.02.2019 under its seal has been tested and find that it is
difficult to identify the country of origin.

10. That Central Food Laboratory, Kolkata, Extension
Centre Raxaul, Bihar in vide their Certificate No.
INF/CFL/KOL/RXL/19/FEB-70 provided the test report:

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

11. That 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.”

12. After hearing the 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 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
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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

(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:

1. Inserted by Act 80 of 1985, S. 8 (w.e.f. 27-2-1985)
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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:

” 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

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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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
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:

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“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
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
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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 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;
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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 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
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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.

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
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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 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)”

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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;

(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;

Patna High Court CWJC No.6563 of 2019 dt.05-09-2019
18/27

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)
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.

Patna High Court CWJC No.6563 of 2019 dt.05-09-2019
19/27

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
(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.
Patna High Court CWJC No.6563 of 2019 dt.05-09-2019
20/27

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
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
Patna High Court CWJC No.6563 of 2019 dt.05-09-2019
21/27

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
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.

Patna High Court CWJC No.6563 of 2019 dt.05-09-2019
22/27

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 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
Patna High Court CWJC No.6563 of 2019 dt.05-09-2019
23/27

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 20 th
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
Patna High Court CWJC No.6563 of 2019 dt.05-09-2019
24/27

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 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
Patna High Court CWJC No.6563 of 2019 dt.05-09-2019
25/27

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). 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
Patna High Court CWJC No.6563 of 2019 dt.05-09-2019
26/27

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 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 judgment would fully

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

taken note of the reports and other circumstances as stated in
Patna High Court CWJC No.6563 of 2019 dt.05-09-2019
27/27

paragraph ‘7’ to ’11’ of the counter affidavit of the respondents.

The samples of Betel Nuts are in damaged condition with presence

of insects. These are thus, unsafe for human consumption. Other

unifications are still going on. The petitioner no. 1 is, thus, unable

to make out a case for direction to release the Betel Nuts. For the

reasons stated in paragraph ’41’ of the judgment in C.W.J.C. No.

10109 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 04.07.2019
Uploading Date 05.09.2019
Transmission Date

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