2014 (5) TMI 483 - HC - Customs

Import of 20kgs of Oats for home use - Denial of re packing of goods - Misbranding of products - Whether the CESTAT is right in allowing appeal of the importer when Rule 32 of Prevention of Food adulteration Rules, 1955, specifies that the name of the goods, list of ingredient, name and complete address of the manufacturer, name and address of the importers, net content by weight or volume, Lot / ode / Batch Identification, date of manufacturing and packing, expiry date / best before date, country of origin and instructions for use, should be indicated on the package, is it correct to allow goods without date of manufacture and name and complete address of the manufacturer into India and allowing them o put the details on repacking in India after import. Held that;- It is obligatory on the part of the first respondent/ importer to strictly adhere to the PFA Act and Rules framed there under and if the statue prescribed a thing to be done in a particular manner, it should be done only in that manner and not in any other manner. Since the first respondent / importer has failed to adhere to the said statue and rules framed t here under, and the Customs authorities were also mandated in the above said circulars/ instructions to strictly comply with the provisions of the PFA Act and rules framed there under, the non - furnishing of the full address of the manufacturer and the d ate of manufacturer, on the part of the first respondent/ importer, cannot be condoned. The Tribunal has not referred to any rules or regulations under which it can direct the authorities to re pack and re label the impugned goods in custom bonded premises and, thereafter, test the same. In view of the subsequent development, viz., the shelf life of the product itself has expired. No useful purpose will be served in re packing and re labeling the imported food product for the purpose of testing it - Decided in favour of Revenue.

Issues Involved:
1. Compliance with Rule 32 of the Prevention of Food Adulteration Rules, 1955.
2. Determination of misbranding under Section 2(ix) of the Prevention of Food Adulteration Act, 1954.
3. Validity of CESTAT's decision allowing re-packing and re-labeling of imported goods in customs bonded premises.
4. Applicability of subsequent guidelines issued by FSSAI.

Detailed Analysis:

Issue 1: Compliance with Rule 32 of the Prevention of Food Adulteration Rules, 1955
The core issue revolves around whether the imported goods complied with Rule 32 of the PFA Rules, which mandates that the name of the goods, list of ingredients, name and complete address of the manufacturer, name and address of the importers, net content by weight or volume, Lot/Code/Batch Identification, date of manufacturing and packing, expiry date/best before date, country of origin, and instructions for use should be indicated on the package. The goods in question did not have the date of manufacture and the complete address of the manufacturer on the label, leading to their confiscation under Section 111(d) of the Customs Act, 1962. The Tribunal allowed the importer to re-pack and re-label the goods in a customs bonded premises, which was contested by the Customs authorities, arguing that the goods were misbranded and non-compliant with the labeling requirements.

Issue 2: Determination of Misbranding under Section 2(ix) of the Prevention of Food Adulteration Act, 1954
The Customs authorities argued that the goods were misbranded as per Section 2(ix) of the PFA Act because they were not labeled in accordance with the requirements of the Act. The Tribunal's decision to allow re-labeling was challenged on the grounds that such an allowance would contravene the PFA Act's stipulations. The court refrained from expressing an opinion on this issue, given the pending criminal prosecution against the importer for misbranding.

Issue 3: Validity of CESTAT's Decision Allowing Re-packing and Re-labeling of Imported Goods
The Tribunal's decision to allow re-packing and re-labeling of the goods in a customs bonded premises was challenged. The court noted that the Tribunal did not refer to any specific rules or regulations that would permit such an action. The court emphasized that the labeling requirements must be met at the time of importation, as per the circulars and notifications issued by the relevant authorities. The court found that the Tribunal's order was not sustainable, especially since the shelf life of the imported goods had expired, rendering re-packing and re-labeling futile.

Issue 4: Applicability of Subsequent Guidelines Issued by FSSAI
The importer argued that subsequent guidelines issued by FSSAI on 23rd March 2012, which allowed verification of the date of manufacture from relevant documents if not mentioned on the label, should apply. However, the court held that these guidelines could not be applied retrospectively. The labeling requirements that were in force at the time of filing the bill of lading and bill of entry were applicable, and the importer failed to comply with those requirements.

Conclusion:
The court concluded that the imported goods did not meet the mandatory labeling requirements under the PFA Rules, and the Tribunal's order allowing re-packing and re-labeling was set aside. The original order of confiscation, as modified by the appellate authority, was restored. The court did not address the issue of misbranding due to the pending criminal prosecution. The appeal was allowed, and the Tribunal's decision was overturned.

Final Judgment:
The civil miscellaneous appeal was allowed, setting aside the Tribunal's order dated 27th October 2011, and restoring the order passed by the original authority as modified by the appellate authority. No costs were ordered.

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