2024 (6) TMI 512 - HC - Customs

Classification of imported goods - roasted areca nuts - Validity of FSSAI reports - whether such areca nuts are fit for human consumption? - HELD THAT - Through its accredited laboratory, the FSSAI carried out tests of samples drawn from each consignment in the presence of representatives of both the respective petitioner and the respondents, and confirmed that the sample is of roasted areca nuts and that such sample conforms to standards specified in Regulation 2.3.55 of the the Food Safety and Standards (Food Products Standards and Food Additives) Regulations, 2011 and Regulations 2.1.1, 2.2.1, 2.3.1 and 2.5.1 of the Food Safety and Standards (Contaminants, Toxins and Residues) Regulations, 2011. The respective petitioner has placed copies of communications and representations seeking release of the goods. Such requests and representations were made even before the goods were subject to seizure. As on date, those representations have not been responded to by the respondents. While the adjudication officer is empowered to provisionally release goods, on application, subject to the execution of a bond and the provision of security, if deemed appropriate, the existence of such power does not operate as an embargo against the exercise of jurisdiction by this Court in appropriate cases. The factual issue as to whether the goods are areca nuts and whether they are fit for human consumption was also decided in favour of the respective petitioner by the FSSAI. The respondents are directed to release the consignments subject to fulfilment of conditions imposed - petition disposed off.

Issues Involved:
1. Classification of imported goods.
2. Jurisdiction of the Court in directing the release of goods.
3. Validity of FSSAI reports for classification and fitness for human consumption.
4. Provisional release of goods under the Customs Act.

Summary:

Issue 1: Classification of Imported Goods
The petitioners, M/s. Universal Impex and M/s. Neena Enterprises, imported goods labeled as roasted areca nuts. The Customs Authority for Advance Rulings (CAAR) had previously classified roasted areca nuts under Customs Tariff Heading (CTH) 2008 19 20. This classification was affirmed by the Division Bench of the High Court, which held that roasted areca nuts fall under CTH 2008 19 20 and not under CTH 08 02 80. Consequently, the classification issue does not require further consideration in these petitions.

Issue 2: Jurisdiction of the Court in Directing the Release of Goods
The respondents argued that the relief claimed for the release of goods cannot be sought under Article 226 of the Constitution of India and that such matters fall within the exclusive jurisdiction of customs authorities. However, the Court noted that the petitioners had made several requests for the release of goods, which were not responded to by the respondents. The Court held that it has the jurisdiction to exercise discretion in appropriate cases, especially when the factual issue of whether the goods are roasted areca nuts and fit for human consumption has been resolved in favor of the petitioners.

Issue 3: Validity of FSSAI Reports for Classification and Fitness for Human Consumption
The FSSAI was directed to test samples from each consignment to determine if they qualify as roasted areca nuts and are fit for human consumption. The FSSAI's accredited laboratory confirmed that the samples were roasted areca nuts conforming to the standards specified in Regulation 2.3.55 of the Food Safety and Standards (Food Products Standards and Food Additives) Regulations, 2011. The Court accepted these reports, noting that both questions were answered affirmatively by the FSSAI.

Issue 4: Provisional Release of Goods under the Customs Act
The respondents contended that the goods were seized and that no application for provisional release u/s 110A of the Customs Act, 1962, was made. The Court, however, directed the respondents to release the consignments subject to the payment of applicable taxes, execution of a personal bond for differential duty, and submission of requisite certificates. The Court emphasized that this order would not prevent the respondents from undertaking assessment in accordance with the Customs Act.

Conclusion:
The Court disposed of the writ petitions with specific directions for the release of the consignments to the petitioners, subject to certain conditions, including the payment of applicable taxes and execution of a personal bond. The Court also directed the respondents to consider any request for waiver of demurrage expeditiously. The order emphasized that the provisional release should occur within 48 hours of fulfilling all conditions. No costs were imposed, and connected writ miscellaneous petitions were closed.

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