2022 (4) TMI 59 - AT - Customs

Classification of imported goods - API supari - areca nuts classifiable in chapter 8 of the First Schedule to Customs Tariff Act, 1975 or not - Denial of provisional release of goods - HELD THAT - Classification of impugned goods may have to depend on tests for distinguishing rival claims between tariff item declared in bills of entry for free importability and against sub-heading 0802 80 of First Schedule to Customs Tariff Act, 1975 which, according to customs authorities, it is with implication of policy restriction. Certification by Food Safety and Standards Authority of India (FSSAI) is of no less importance but should originate from that authority and not on presumption, even if bona fide, emanating from amateurish swashbuckling. There are laws that restrict and credibility in enforcement of such law rests solely on conformity with procedure which the factual matrix does not inspire. There are no harm in acceding to this plea; it would facilitate availability of expert opinion relevant for disposal of the appeal and accord credibility to the process that importers are subject to without jeopardizing either commercial considerations or public interest - immediate steps should be taken for drawal of representative samples, in the presence of importer, which conforms to the pre-requisites for testing under Customs Act, 1962 as well as Food Safety and Standards Act, 2006 and on any account to be not later than 14th February 2022 as the goods, intended for human consumption, should not be allowed to deteriorate. This matter is adjourned till 9th March 2022 and, in the meanwhile, the respondent-Commissioner shall carry out the directions supra to enable the reports to be filed in the Tribunal before that date.

Summary

Issues:
1. Denial of provisional release of goods seized after import.
2. Classification of goods under Customs Tariff Act.
3. Seizure under section 110 of Customs Act, 1962.
4. Mis-declaration of goods and testing by Central Revenue Control Laboratory.
5. Contention regarding import of 'supari' and clearance by FSSAI.
6. Reliance on test reports and refusal to provide documents.
7. Appropriation of statutory responsibility by customs authorities.
8. Impediments in fulfilling appellate authority obligations.
9. Necessity of testing for resolving disputes and conformity with laws.
10. Directions for drawal of representative samples and testing protocols.

Analysis:
1. The appeal involved the denial of provisional release of goods seized post-import by M/s Excellent Betelnut Products Private Limited. The dispute arose from the classification of 'API supari' under the Customs Tariff Act, 1975, with claims of mis-declaration and goods being unfit for human consumption leading to the denial.

2. The seizure was under section 110 of the Customs Act, 1962, based on the belief of incorrect classification by the importer. The importer's petition before the Hon'ble High Court of Bombay was deemed an application under section 110A for decision. The importer's approach to the Authority for Advance Rulings confirmed the classification under the Customs Tariff Act, but subsequent testing raised concerns about the goods' suitability for human consumption.

3. The importer contended that the 'supari' imported was classifiable under the Customs Tariff Act and required clearance by the Food Safety and Standards Authority of India (FSSAI). Disputes arose regarding test reports from different agencies, with allegations of lack of credibility in sample collection and refusal to provide documents by the respondent-Commissioner.

4. The Tribunal highlighted the statutory responsibilities of customs authorities and FSSAI, emphasizing the need for proper testing procedures and conformity with laws. Directions were given for drawal of representative samples, testing protocols, involvement of FSSAI, and the possibility of re-export if goods were found unfit for human consumption.

5. The Tribunal adjourned the matter for compliance with the directions, ensuring justice and transparency in the testing process. The judgment aimed to resolve the classification disputes and ensure the goods' suitability for human consumption, emphasizing the importance of following prescribed procedures and legal requirements.