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TMI Blog2012 (10) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... th the requirement of the Prevention of Food Adulteration Rules - Mandamus - Appeal allowed - G.A. No. 1223 of 2011 - - - Dated:- 16-6-2011 - Bhaskar Bhattacharya and Sambuddha Chakrabarti, JJ. REPRESENTED BY : S/Shri Shibdas Banerjee and R.K. Chowdhury, for the Appellant. S/Shri R. Bharadwaj, K.K. Maiti, Somnath Bose and Soumitra Mukherjee, for the Respondent. [Judgment per : Bhaskar Bhattacharya, J.]. This appeal is at the instance of a writ-petitioner and is directed against an order dated 11th March, 2011, passed by a learned Single Judge of this Court by which the said learned Single Judge dismissed the writ application filed by the appellant. 2. The case made out by the appellant in the writ-application, out of which the present appeal arises, may be summed up thus : (a) The appellant has a unit of refining Crude Palm Oil and for manufacturing the Refined Palm Oil at Haldia as per specification prescribed under the provisions of the Prevention of Food Adulteration Act, 1954. The said unit of the appellant is registered with the Central Excise Authorities. The said unit of the appellant is capable of reducing the free fatty acid up to 0.25% by refi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereunder. (i) The Authorized Officer (Haldia), Food Safety Standard Authority of India, Ministry of Health Family Welfare, Government of India, by its letters dated January 10, 2011 and January 24, 2011 informed the appellant that the samples did not conform to the standards laid down under PFA 1955 due to high acid value and hence, the NOC was not being issued to the Customs Authority for clearance. (j) Hence, the writ-application was filed claiming the following relief : (a) A Writ of and/or in the nature of Mandamus directing and commanding the respondents, each of them, their subordinates and officers to act in accordance with law without discrimination and to allow the petitioner to process the imported consignment under Bill of Entry Nos. 2472693 and 2471923 dated 23rd December 2001 to conform the same to the standards laid down under PFA 1955 and upon such processing to permit the clearance thereof in such time and manner as may be permitted by the said Hon ble Court; (b) A writ of and/or in the nature of Certiorari directing and commanding the respondents to transmit the records relating to the case to the said Hon ble Court after certifying th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt and health on consumption. Provisions concerning Food have also been made under the Customs Act with common intention to prevent import of adulterated food in to India and public health. Hence, both the said. Laws call for harmonious construction. The standard of edible oils is under Appendix B Schedule A.17 of the Prevention of Food Adulteration Rules, 1955 and the respective standards of different edible oils are prescribed under Heading A. 17.01 to A. 17.26 thereunder. So far Palm Oil is concerned, the standard thereof is under Heading 17.19. The said Heading 17.19 has two parts, one speaks of Palm Oil which is edible oil and the standard thereof is laid down. The other part is imported Palm oil. The legislature has specifically excluded the imported palm oil from the 1st portion of 17.19 consciously, but in the proviso thereto provided intentionally that Palm Oil imported into the Country shall be refined before it is supplied for human consumption and the same shall conform to the Standards laid down under A.17.15. The standard under A.17.15 is of Refined Vegetable Oil i.e. Refined bleached and deodorized and the conditions stipulated thereunder are; (a) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said Notification with Specific definition and Standard of Crude Palm Oil (Edible Grade) , imposing condition that import of Crude Palm Oil (Edible Grade) will be permitted only for manufacture of edible oil etc. In any event, if it is held that the Heading 17.19 is for Crude Palm Oil in that event it is evident by implication the said standard under Heading 17.19 has been superseded by the Central Government by issuing Notification No. 120/2003 dated 1-8-2003) (Page 138 of the petition) and further by Notification No. 91/2007-Cus., dated 2-8-2007 (Copy enclosed Annexure-21, page nos. 197 to 198) in exercise of power under Foreign Trade (Development and Regulation) Act, 1992 by regulating import of Crude Palm, Oil of description specified under the said Notifications. Crude Palm Oil (Edible Grade) was defined for the first time under Customs Notification No. 120/2003-Cus., dated 1st August, 2003 and the same was brought under Serial No. 30 the Notification No. 21/2002 by another Notification being No. 91/2007 dated 2nd August, 2007. Crude Palm Oil (Edible Grade) has neither been defined nor any standard, thereof has been prescribed under the PFA Rules or any Appendix or Sche ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rted by the petitioner is edible as such or the same is meant for sale before refining. It is also not in dispute that in the unit of the petitioner the said imported Crude Palm Oil would be made edible oil of the Standard 17.15 with acid value not more than 0.5. It is pertinent hereto to mention that the Acid value is the measure of free fatty acid in crude oil and by refining free fatty acid can be removed by use of alkali from 30% to 0.5 of less than 0.5 as will be evident from Board Circular 29/97 dated 31st July, 1997 and 40/2001 dated 31 July, 2001 (page 129 and page 127 para of the petition 3). The unit of the petitioner is capable of bringing down the Acid value from 15% to less than 0.5% as will be evident from the Certificate of Plant manufacturer (at page 45 of the Petition). In the preamble of the Food Safety and Standards Act, 2006 it is admitted by the Central Government that the standard prescribed, under the different food laws are creating confusion and that the standards are often rigid and non-responsive to scientific advancements and modernization, which is detrimental to the growth of the nascent food processing industry and is not conducive to effect fix ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has not yet become edible food/Article. In any event the said Circulars have no force of Law. The said Circulars are not binding on this Hon ble Court. The departmental instruction under the said Circular has no bearing to the present case The Central Government is empowered to prohibit, restrict or otherwise regulate import of articles of food under the Foreign Trade (Development and Regulation) Act, 1992 and lay down its own Standard thereof. 7. Mr. Banerjee, therefore, prays for setting aside the order impugned and for directing the Customs Authority to clear the goods not as a food but as crude palm oil for further purification to make it in conformity with the standard of edible oil as provided under the PFA Act and the Rules framed thereunder. 8. Mr. Bharadwaj, the learned counsel appearing on behalf of the Customs Authority, has, on the other hand, opposed the aforesaid contentions of Mr. Banerjee and has supported the order passed by the Customs Authority and the learned Single Judge. 9. According to Mr. Bharadwaj, the appellant had imported crude palm oil of edible grade and filed the bill of entry as prescribed under Section 46 of the Customs Act, 1962 before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsumption of goods, according to Mr. Bharadwaj, has to produce relevant declaration along with his bill of entry that the imported goods are not prohibited goods and the proper officer has to satisfy himself that the goods which has entered into the country for home consumption are not prohibited goods. If the proper officer is satisfied in this respect, then he shall send the bill of entry to the assessing officer for assessing the duty of goods as prescribed under Section 17 of the Customs Act. After assessment, if the proper officer is satisfied that the importer has paid the import duty, if any, assessed thereon and any charges payable under this Act in respect of the same, the proper officer shall make an order permitting clearance of the goods for home consumption. Therefore, according to Mr. Bharadwaj, if the proper officer finds that the goods are prohibited goods he will not refer the matter to the assessing officer to initiate the proceeding for assessment of the imported goods. 15. Mr. Bharadwaj, in this connection, refers to the provisions contained in Section 2(33) of the Customs Act defining prohibited goods to mean any goods the import or export of which is subj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 3(j) of the Food Safety and Standards Act, 2006, the proper officer under the Customs Act has to obtain a certificate from the authorized officer under the Food Safety and Standards Authority of India as prescribed in Section 25 read with Section 47(5) of the Food Safety and Standards Act, 2006 for clearance of imported goods and thus, the authorized officer collected the samples of the imported crude oil for testing to verify whether the crude oil (edible grade) which is imported for processing and refining into refined vegetable oil conforms to the standard as prescribed under the Prevention of Food Adulteration Rules, 1955 and consequently, the authorized officer followed the rules and standards as prescribed under the Prevention of Food Adulteration Rules, 1955, as no rules and standards has been formulated yet under the Food Safety and Standards Act, 2006. 18. In this connection, Mr. Bharadwaj strongly relies upon Rule 5 of the Prevention of Food Adulteration Rules which is quoted below : Rule 5. Standards of quality of the various articles of food specified in Appendices B, C and D to these rules are as defined in those Appendices. Appendix B A.17.15 - Refined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... down under A.17.15. Thus, according to Mr. Bharadwaj, the standard prescribed in A.17.19 is nothing but for crude palm oil (edible grade) and it has to be processed for direct human consumption and the acid value has to be reduced to 0.50 as laid down in A.17.15 from acid value not more than 10. i.e. the standard prescribed in A.17.19. 19. Mr. Bharadwaj submits that in this case, the Authorized Officer, (Haldia Sea Port), Food Safety Standards Authority of India, issued the first certificate dated 10th January, 2011, (at page no. 109 of the application,) stating that It is to inform to you that the Crude palm Oil sample collected on 4-1-2011 by the official of the Authorized Officer, (Haldia Sea Port) from the import consignment vide Bill of Entry Number - 2471693 dated 23-12-2010 is found failed to conform the PFA specification due to High Acid Value (10.96 against the maximum permissible limit of 10.00). This is based on the laboratory received from the authorized laboratory concerned . 20. Mr. Bharadwaj submits that as the certificate issued by the authorized officer showed that palm oil edible grade does not conform to the standard prescribed under Prevention of Food ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 and where the benefit of such exemption is dependent upon the use of imported goods covered by the notification for the manufacture of any excisable commodity. 23. Mr. Bharadwaj submits that in order to avail such exemption, the importer/manufacturer has to comply with the conditions as prescribed in the relevant exemption notification. The crude palm oil (edible grade) falling under Tariff Item No. 1511 of the Customs Tariff Act will get an exemption under the General Exemption No. 122 of the Customs Tariff Act if the description of the said item conforms to the description as specified in the chart provided with the General Exemption No. 122 under the heading Description of Goods - Sl. No. Chapter or Heading No. or sub-heading No. Description of goods Stand-ard rate Addi-tional duty rate Condi-tion No. 29. 15 Edible oils falling under headings 15 08, 15 12, 15 13, 15 14, 15 15 or sub-heading 1511 10 85% - - 30. 15 II. The following goods, of edible grade namely,- (A) Crude palm oil falling under heading 151 1, having an acid value of 4 or more and total caroten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lm oil edible grade is a food item and the above certificate is required to establish that the goods are not prohibited goods. The assessing officer before assessment of duty had sent the sample to the Assistant Professor, Department of Chemical Technology, University of Calcutta being an authorized laboratory (at page no. 114 of the application) for testing total carotene content and acid value. The result of this test is as follows - Total carotene content (as beta carotene) : 426.85 mg/Kg Acid value : 9.93 27. However, according to Mr. Bharadwaj, the assessing officer could not initiate the assessment proceedings and could not look into this report as the proper officer failed to direct him to initiate assessment proceedings as the no objection certificate to be issued by the authorized officer under the Food Safety and Standards Act was not in his hand and till the proper officer was satisfied that the goods were not prohibited goods, he could not direct the assessing officer to initiate assessment proceedings. Circular No. 58/2001, dated 25-10-2001 and Circular 28/2006-Cus., dated 6th November, 2006 provide guidelines for ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal is whether the Palm oil sought to be imported by the appellant was a prohibited goods within the meaning of the Customs Act. 33. It appears that the appellant had imported crude palm oil of edible grade and filed the bill of entry as prescribed under Section 46 of the Customs Act, 1962 before the proper officer for clearance of goods for home consumption as prescribed under Section 47 of the said Act. The description of the goods as per bill of entry dated 23rd December, 2010 (page 85 of the application) is as follows - Tariff Item No. 15111000 CRUDE PALM OIL (EDIBLE GRADE) IN BULK (CAROTENE CONTENTS 250 - 2500) ACID VALUE 4 - 10 . 34. As pointed out by the Supreme Court in the case of Union of India and another v. V.M. Salgaoncar and Bros. (P) Ltd., reported in AIR 1998 SC 1367 = 1998 (99) E.L.T. 3, the word consumption may involve in the narrow sense using the article to such an extent as to reach the stage of its non-existence. But the word consumption in fiscal law need not be confined to such a narrow meaning. It has a wider meaning in which any sort of utilization of the commodity would as well amount to consumption of the article, albeit that article retaining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appendices. Appendix B is quoted below : A.17.15 - Refined Vegetable oil means any vegetable oil which is obtained by expression or solvent extraction of vegetable oil bearing materials, deacidified with alkali and/or physical refining and/or by miscellane refining using permitted food grade solvents followed by bleaching with absorbent earth and/or carbon and deodourised with steam. No other chemical agent shall be used. the name of the vegetable oil from which the refined oil has been manufactured shall be clearly specified on the label of the container. In addition to the under-mentioned standards to which refined vegetable oils shall conform to the standards prescribed in these rules for the specified edible oils shall also apply except for acid value which shall not be more than 0.5. Moisture shall not exceed 0.10 per cent by weight. A.17.19 - Palm oil means the oil obtained from fleshy mesocarp of fruits of the oil palm (Elaeis Guineensis) tree by the method of expression or solvent extraction. It shall be clear, free from rancidity, suspended or other foreign matter, separated water, added colouring or flavouring substances or mineral oil. It shall conform to the fol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... country or produced by solvent extraction shall be refined before it is supplied for human consumption and it shall conform to the standards laid down under A. 17.15. Additionally, it shall have Flash Point (Penske-Marten closed method) - Not less than 250 C and the test for argemone oil shall be negative. 40. We, therefore, find that the imported goods was not a prohibited item for import nor was the same imported as a food within the meaning of the Act of 2006. The Appendix B to the Prevention of Foods Adulteration Rules, 1955 quoted above itself permits import of palm oil having more than 0.5% acid contents but puts restriction for further purification if intended to be used as vegetable edible oil, an item of food within the meaning of the Act of 2006. If we accept the contention of Mr. Bharadwaj that import of crude palm oil having more than 0.5% acid contents make it a prohibited goods, the aforesaid observations in the Appendix B of the Prevention of Food Adulteration Rules becomes redundant. 41. Even if we look at the definition of food contained in Section 3(j) of the Act of 2006, the declaration in the bill of entry did not claim it to be a food within the meaning of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oving the same to the custody of the importer, the provisions contained in the Act of 2006 would be applicable by the appropriate authority under the said Act in accordance therewith but the Customs Authority will have nothing to do unless the importer has declared the item as one intended for immediate use for human consumption in the same form and the same is on examination found to be not in conformity with the guidelines given in the Act of 2006. 46. In the case of International Airport Authority (supra), relied upon by Mr. Bharadwaj, the Customs Department had issued detention certificate and informed International Airport Authority of India ( IAAI ) and Central Warehousing Corporation ( CWC ) that no demurrage might be charged for the period during which the goods were in custody of IAAI or the CWC due to pendency of adjudication proceedings. But the IAAI or the CWC instead of treating entire period as free period granted rebate and calculated demurrage in accordance with the Rate Schedule framed by them. The amount of demurrage in each case came to be two or three times more than the value of the goods, and therefore, the respondents approached the High Court by way of wri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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