2015 (7) TMI 1097 - HC - Customs

Seeking direction to issue NOC to allow clearance of duty payable on perishable goods - Imported Rostaa processed triangle cheese lying in the warehouse for more than four months. Held that - the petitioner as per the requirement of notification S.O. 655(E) dated 07.07.2001 of the Ministry of Agriculture imported the subject goods into India with a SIP and the said shipment arrived into India on 10.09.2014, which is prior to the notification S.O. 2666(E) was introduced on 17.10.2014. Therefore, the notification S.O. 2666 (E) itself provides a remedy to the petitioner in terms of applicability of the provision of S.O. 655 (E) over its subject goods. Since the consignment already arrived before the notification S.O. 2666 (E) came into force, the argument that the petitioner s subject goods satisfy the requirements as prescribed under S.O. 655 (E) find favour with this Court. However, as the petitioner has not been able to convince this Court so as to whether the said certification meets the Indian vegetarian requirements and standards. Therefore, the submission of the respondents that the conditions need to be certified as the other ingredients viz. cheddar cheese, butter, milk protein concentrate have been imported from other countries by the manufacturer in Egypt in addition to skimmed milk powder from India, finds favour with this Court. It is a contention of the respondents that the concerned department has asked the petitioner to submit the test reports and animal rennet certification conducted by the Egyptian authority so that the department can examine and take a considerate view, but the petitioner has failed to oblige. Since it has been confirmed now that the Egyptian authorities will not issue the health certificate as per the Indian requirement for this particular consignment, this court is of the view that the testing of the samples has to be conducted in India. There is no justifiable reason so as to understand why any deficiency on the part of the Indian importer/petitioner cannot be made up by the petitioner itself in India. The object of this entire process is to satisfy the respondents/concerned authority that no animal rennet has been used in the process of creation of the subject goods. In order to issue a NOC, the respondents must be satisfied so as to the veracity of the declaration on the label and the requisite tests need to be carried out in this regard. Therefore, this court gives the liberty to the petitioner to allow the Central Government to take requisite samples of the subject goods for conducting the necessary tests or if the petitioner wants to get the samples tested from the Central Government authorized and approved laboratories; he may be entitled to do so. The results of such samples are to be provided to respondent No.4 who may then take a decision whether the products are entitled to be released or not based upon such samples. Petition disposed of

Summary

Issues Involved:
1. Issuance of No Objection Certificate (NOC) for clearance of duty-paid perishable goods.
2. Compliance with Livestock Importation Act and related notifications.
3. Validity and format of the sanitary certificate from the exporting country.
4. Adherence to Food Safety and Standards Authority of India (FSSAI) regulations.
5. Potential use of animal rennet in cheese and its labeling.
6. Financial implications and potential wastage of perishable goods.

Issue-wise Detailed Analysis:

1. Issuance of No Objection Certificate (NOC) for Clearance of Duty-Paid Perishable Goods:
The petitioner sought a directive under Article 226 of the Constitution of India for the issuance of an NOC to clear Rostaa processed triangle cheese, which had been lying in a warehouse for over four months. Despite fulfilling all formalities and receiving an NOC from FSSAI, the petitioner faced refusal from the concerned officer due to the absence of a sanitary certificate in the prescribed format.

2. Compliance with Livestock Importation Act and Related Notifications:
The petitioner's import was governed by Section 3A of the Livestock Importation Act, which allows the central government to restrict imports affecting human or animal health. The import of milk and milk products is regulated by notifications such as S.O. 655(E) and S.O. 2666(E). The petitioner complied with the notification S.O. 655(E) by obtaining a sanitary import permit (SIP) before the introduction of S.O. 2666(E).

3. Validity and Format of the Sanitary Certificate from the Exporting Country:
The petitioner argued that the sanitary certificate issued by Egyptian authorities substantially conformed to the requirements and that there was no prescribed format for such certificates. The respondents contended that the certificate did not meet specific Indian requirements, particularly concerning animal rennet and other health certifications. The court noted that the petitioner's consignment arrived before the new notification and hence, the previous notification's requirements were applicable.

4. Adherence to Food Safety and Standards Authority of India (FSSAI) Regulations:
The FSSAI had issued an NOC stating that the consignment conformed to the standards under the Food Safety and Standards Act, 2006. The petitioner argued that this NOC should suffice for clearance. However, the respondents maintained that compliance with FSSAI regulations did not supersede the Livestock Importation Act requirements, and both clearances were necessary.

5. Potential Use of Animal Rennet in Cheese and Its Labeling:
The respondents raised concerns about the possible use of animal rennet, which is not permitted in India for cheese manufacturing and must be labeled if present. The petitioner claimed that no animal rennet was used, and the product was vegetarian, as indicated by the green mark on the packaging. The court found the petitioner's certification insufficient to meet Indian standards and required further verification.

6. Financial Implications and Potential Wastage of Perishable Goods:
The court acknowledged the significant financial investment and potential wastage of the perishable goods if not cleared. However, it emphasized the importance of adhering to Indian health and safety standards, particularly concerning animal rennet, which could affect spiritual and dietary beliefs in India.

Conclusion:
The court provided a pragmatic solution by allowing the petitioner to have the samples tested in India to verify the absence of animal rennet. The Central Government was authorized to take samples for necessary tests, and the results would determine the release of the goods. This process was to be expedited and completed within a month to prevent further financial loss to the petitioner. The petition was disposed of with these directions.