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TMI Blog2019 (9) TMI 1283X X X X Extracts X X X X X X X X Extracts X X X X ..... gation and even some accredited labs have come into existence, this Court need not interfere with the seizure of the Betel Nuts at this stage and this issue be kept open for consideration at appropriate stage after the investigation is over and the respondents receive a report as regards the country of origin from an accredited lab within a period of three months by following the established procedures. Application dismissed. - Civil Writ Jurisdiction Case No.10109 of 2019 - - - Dated:- 5-9-2019 - Mr. Rajeev Ranjan Prasad, J. For the Petitioner/s : Mr.Prabhat Ranjan, Advocate For the Respondent/s : Mr. Anshuman Sinh, C.G.C. C.A.V. JUDGMENT The petitioners in the present case are seeking the following reliefs: (i) Quashing of the Memo of Seizure dated 06.02.2019 (Annexure-2) whereby 15865 Kgs. Of Betel Nuts contained in 328 bags valued at ₹ 4514862/- and along with the truck bearing Registration No. KA 01B-8691 valued at ₹ 5 Lakhs has been seized for alleged violation of Notification No. 9/96 (NT) Cus, dated 22.01.96 issued under Section 11 of the Customs Act, 1962 read with Section 3(2) of the Foreign ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs when approached the jurisdictional officers along with their representations and all documents as contained in Annexure 3 to the writ application and also filed applications to the Chairman, Central Board of the Indirect Taxes and Customs, Chief Commissioner of Customs and Commissioner of Customs for early release of the goods, the petitioners have been served with a Letter Dated 02.04.2019 as contained in Memo No. 2647 whereby on the basis of Sample Test Report of the seized Betel Nuts it has been held that the same is not fit for human consumption and therefore, cannot be provisionally released and thus, the application for provisional release has been rejected vide Annexure 4 to the writ application. 5. The truck in question has, however, been released provisionally vide Annexure 5 to the writ application on a condition to deposit ₹ 5 lakhs and execution of a bond for full seizure value and cash security of 20 % of the seized vehicle. 6. Learned counsel for the petitioners submits that the Sample Test Report obtained from the Central Food Laboratory, Kolkata (hereinafter in short CFL )on which reliance has been placed by the respondents to re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of the Regulations, 2011 for purpose of sale. Therefore, to say that those were not fit for consumption by public at this stage is not correct. 10. Referring to the earlier proceedings of similar nature learned counsel relied upon the order dated 17.01.2013 passed by a learned co-ordinate Bench of this Court in C.W.J.C. No. 317 of 2012 and C.W.J.C. No. 3784 of 2013. It has been submitted that this Court sitting in its writ jurisdiction had directed for provisional release of the Betel Nuts directed for release of the Betel Nuts. [A perusal of the order dated 17.01.2013 passed in C.W.J.C. No. 317 of 2012 would show that although in the said case initially the writ application was filed for quashing of the seizure list and other consequential reliefs, in course of argument the whole emphasis remained centered around the provisional release of the Betel Nuts and the vehicle involved therein.] The learned co-ordinate Bench directed the authorities of the Customs Department to release the Betel Nuts and the vehicle of the petitioner after due verification in terms of Section 110-A of the Customs Act after fixing a reasonable value for the Bank Guarnatee to be produced by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... existence when the sample was sent by the Customs authorities to the CFL, Kolkata (Extension Centre, Raxaul) for analysis as the same had not yet been put up for sale for human consumption and required various processing to be done before it was fit for the same. From the materials placed on the record by learned counsels for the parties I am also of the view that the sample has not been drawn in accordance with the provisions of Section 47 and Rule 2.4 of the Food Safety and Standards Act and Rules. So far as the reliance on the report by M/s. Arecanut Research Development Foundation, Mangalore is concerned, the petitioners have totally failed to bring on record any material to show that it is an accredited laboratory by a competent authority under the Act and Rules. Hence no legal liability can flow from the report of such an institution. I may here also point out that at a subsequent stage the petitioners have sought to rely upon the definition of unsafe food as contained in Section 3(1)(zz) of the Act, particularly of sub clause (ix) thereof stating that it would include article having been infected or infested with worms, weevils or insects. The said de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the respondent authorities were not justified in relying upon the ARDF, Mangalore s report to justify the seizure in question. 13. In this case a counter affidavit has been filed on behalf of respondents. A stand has been taken therein that upon examination of the goods loaded in the Truck it was found that Cut Dried Areca Nuts were appearing as dark pink in colour. The kind of appearance and colours are not the characters of Indian origin Areca Nuts. The Areca Nuts of Indian origin are normally oval in shape. The Betel Nuts and the Truck were seized under Section 110 of the Customs Act on a reasonable belief that the said Cut Dried Areca Nuts were illegally smuggled into India. Panchanama dated 06.02.2019 and seizure memo dated 06.02.2019 have been prepared to this effect on the spot. 14. It is further stated that to ascertain the country of origin of the seized Areca Nuts, samples were sent to (1) Arecanut Research Development Foundation, Varanashi Towers, Mission Street, Mangalore, Karnataka and (2) Central Food Laboratory, Kolkata, Extension Centre Raxaul, Bihar. The ARDF, Mangalore submitted a test report, according to which samples of arecanuts piec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the respondents have reasons to believe that the Betel Nuts being carried on the Truck in question was being illegally imported and were of foreign origin as the said truck was loaded near the boarder area near Gauhati. CONSIDERATION 20. Having heard learned counsel for the petitioner as well as for the Union of India, this Court finds that the whole argument of the petitioner for purpose of quashing of the seizure list revolves around the provision of Section 110 of the Customs Act. Section 110 of the Customs Act is quoted hereunder for a ready reference: 110. Seizure of goods, documents and things. -(1) If the proper officer has reason to believe that any goods are liable to confiscation under this Act, he may seize such goods : Provided that where it is not practicable to seize any such goods, the proper officer may serve on the owner of the goods an order that he shall not remove, part with, or otherwise deal with the goods except with the previous permission of such officer. Inserted by Act 80 of 1985, S. 8 (w.e.f. 27-2-1985) [ (1-A) The Central Government may, having regard to the perishable or hazardous nature of any goods, de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct 29 of 2006 (w.e.f. 13-7-2006) [110-A. Provisional release of goods, documents and things seized pending adjudication.- Any goods, documents, or things seized under section 110, pending the order of the Substituted by Act 8 of 2011, S. 47, for adjudicating officer and Commissioner of Customs [adjudicating authority], be released to the owner on taking a bond from him in the proper form with such security and conditions as the 3 [adjudicating authority] may require.] 21. In the facts of the present case, the counter affidavit of the respondents states that the Cut Dried Arecanuts is of dark pink colour which are not the characteristics of Indian origin Arecanuts because the Arecanuts of Indian origin are normally Oval in shape. In order to ascertain the country of origin of the seized cut dried Arecanuts, samples were sent to the two Laboratories. The test report of ARDF, Mangalore reads as under: The sample of areca nuts contain very small cut pieces (Chips), boiled, dried and coated with some colouring material. The colour is red and very shiny. It is not the natural colour of arecanut or its extract. They suspect that the arecanut pieces are coated wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aced reliance upon the test report given by the two test labs, in which it has been reported that the sample is unsafe food for human consumption; while in any of the cases referred by the petitioner no such report was available at that point of time. In view of the same it would not be appropriate to release the seized goods for human consumption. 27. Learned counsel for the Union of India has placed before this Court a Government of India s Circular No. 3 of 2011 issued by Ministry of Finance in the Department of Revenue, Central Board of Excise and Customs on 6th January, 2011. The Circular provides detailed guidelines for examination and testing of food items prior to its testing and clearance by Customs Officers under the provisions of Prevention of Food Adulteration Act, 1954 ( in short PFA Act, 1954 ). It is submitted that in terms of the said Circular dated 6th January, 2011, the Custom Officers are competent to get the samples tested from the nearest Central Food Laboratory or a Laboratory authorized for such testing by DGHS or FSSI. Circular No. 3 of 2011 is reproduced hereinbelow for ready reference: Circular No. 3/2011-Customs F. No.4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, 1992 etc shall be repealed from a date to be notified. 4. The FSSAI has taken over PHO functions at select ports such as Nava Sheva and Mumbai with effect from 13.09.2010 with the stipulation that the existing rule and procedures will continue to be followed without any change till FSSAI regulations are notified. Thus, FSSAI has replaced PHO with its authorized officers at abovementioned ports in terms of section 47 (5) of the FSS Act, 2006. 5. Difficulties have been reported to Board by certain importers regarding delay in testing of samples and clearance of goods consequent upon implementation of FSS Act, 2006 at select ports. 6. It is also noted that vide Policy Circular 25(RE-2003)/2002-007 dated 28.01.2004 and 37(RE-2003)/2002-2007 dated 14.06.2004, the DGFT has modified the procedure for sampling of imported edible/Food Products. 7. Accordingly, the procedure of clearance of food articles has been revisited by the Board, and following modified procedure has been prescribed: (a) All consignments of high risk food items, as listed in DGFT Policy Circular No. 37(RE-2003)/2002-2007 dated 14.06.2004 (as may be modified from tim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailing which sample may not be drawn from such consignment for testing. 9.It is also clarified that Risk Management System (RMS) module for import consignments of edible / food items, presently does not provide for random sampling as it is one of its CCR (Compulsory Customs Requirements) targets. Accordingly, Risk Management System (RMS) shall take necessary steps to modify the RMS module to conform to the new requirements. Till such time, this modification is carried out, Customs shall take appropriate decision to waive the CCR requirements in respect of food items not covered under Para 7 (a) and 7 (b) above and to the extent mentioned under Para 7 (c) above. In terms of Circular No.43/2005-Cus dated 24th November, 2005 such a course of action shall, however, be taken only with the prior approval of the jurisdictional Commissioner of Customs or an officer authorized by him for this purpose, who shall not be below the rank of Addl./Joint Commissioner of Customs, and after recording the reasons for the same. A brief remark on the reasons and the particulars of Commissioner/ADC/JC authorization should be made by the officer examining the goods in the departmental comments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovides guidelines for provisional release of seized imported goods pending adjudication under Section 110 A of the Customs Act, 1962. The relevant part of the guidelines as contained in paragraph 2, 2.1., 2.2, 2.3 and 3 are quoted hereunder for a ready reference: 2. While provisional release of seized imported good is under Section 110A of the Customs Act, 1962 may normally be considered by the competent adjudicating authority upon a request made by the owner of the seized goods, provisional release shall not be allowed in the following cases - (i) Goods prohibited under the Customs Act, 1962 or any other Act for the time being in force; (ii) Goods that do not fulfill the statutory compliance requirements/obligations in terms of any Act, Rule, Regulation or any other law for the time being in force; (iii) Goods specified in or notified under Section 123 of the Customs Act, 1962; (iv) Where the competent authority, for reasons to be recorded in writing believes that the provisional release may not be in the public interest. 2.1. seized imported goods shall be released provisionally by the competent authority upon request ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FDA Bhawan, Kotla road, New Delhi-110002 20 November, 2018 Import of Betel Nut/Areca Nut Standards of areca nuts are prescribed under sub-regulation 2.3.55 of Food Safety and Standards (Food Products Standards and Food Additives) Regulations, 2011 and also in Chapter 2 of Food Safety Standards (Contaminates, Toxins Residues) Regulations 2011. Further, limits of aflatoxin as 15 ug/kg in areca nut is prescribed in the Food Safety and Standards (Contaminants, toxins and Residues) Regulation, 2011 through amendment dated 27.12.2017. 2. Areca nut, the fruit of the areca palm (Areca catechu), commonly referred to as betel nut is prone to the formation of fungal growth during various stages of its production, storage and transportation. Accordingly, it has been decided that the consignments of imported Betel/Areca Nut shall not be cleared through Risk Management System (RMS) and all the imported consignments shall be subjected to 100 % sampling and testing. Also, FSSAI s Authorised Officers and Customs officials notified as Authorised Officers by FSSAI are heareby advised to be vigilant and strictly ensure the compliance of above mention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er or his agent intends to request the Additional/ Joint Commissioner of Customs for a re-rest, then the same shall be made in writing to the said officer within a period of ten days from the receipt of the communication of the test results of the first test. Customs officers may take a reasoned view in case the importer or his authorized representative Customs Broker is unable to do so for reasons beyond his control. c. Where the Additional/Joint Commissioner of Customs grants an opportunity for a second test, he must clearly indicate in writing the name and address of the laboratory/institution where the second test can be carried out. Such referral for re-testing may be made only after being reasonably sure that the desired retesting facilities exist at the laboratory/ institution. d. Re-test should be made only on the remnants of the samples originally tested or on duplicate representative sealed samples in the custody of the Customs. Further, to avoid delays, samples for second tests shall be marked as immediate before sending to the laboratory. In a case it may so happen that fresh samples have to be drawn, then such sampling should be done in the presen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DUM Subject: A letter from Chairman, Central Board of Indirect Taxes Customs regarding matter related to import of Areca Nut / Betel Nut. The undersigned is directed to refer to D.O. letter No. 451/24/2018 Cus.V dated 05.04.2019 [copy enclosed] received from Chairman, Central Board of Indirect Taxes Customs (CBITC), Department of Revenue, M/o Finance addressed to Secretary, DPIIT regarding matter related to import of Areca nut /Betel nut. 2. In this regard, it is stated that the matter was referred to BABL and NABL vide email dated 16.05.2019 (copy enclosed) has stated that they have contacted ARDF Mangalore and ICARIISR, Calicut labs and discussed regarding NABL accreditation. NABL would follow up with them and ensure their accreditation status at the earliest. NABL has attached a list of few NABL accredited labs which have accreditation as on date (about 4-5 labs for testing Arecanut /Beetal nut and about 60 labs for testing black pepper). The list of NABL accredited lab for Pepper, Areca nut and Betel nut is enclosed at Annexure-I, Annexure-II and Annexure-III respectively. This issues with the approval of Secretary, DPIIT. E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d food shall not be allowed in the given cases, one of the cases in which release shall not be allowed is where the goods do not fulfill the statutory compliance requirements /obligations in terms of any Act, Rule, Regulation or any other law for the time being enforced. 34. Further the information furnished by the Director (Imports) in the communication dated 20th November, 2018 with regard to merit of Betel/Areca Nut are also important to appreciate. It clearly provides that Areca Nuts, commonly known as Betel Nuts is capable of the formation of Fungal growth during various stages of its production, storage or transportation, therefore, the consignment of imported Betel /Areca Nut shall not be cleared through risk management system and all the imported consignments shall be subjected to 100% sampling and testing. The FSSAI s authorized officers and custom officers as authorized officers were therefore, advised to be vigilant and strictly ensure the compliance of the FSS regulations before clearance of consignments of imported Areca/Betel Nuts. 35. At this stage, this Court is getting a clarity as regards the stage of testing of the Areca Nuts / Betel Nuts. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o whether the seizure report may be allowed to sustain when it is an admitted position that M/s Areca Nut Research and Development Foundation, Manglore is not accredited laboratory and it s report has been held to be of no legal sanctity by the learned Writ Court in Salsar Transport Company (supra). In the same case the seizure of Betel Nuts was sought to be done on the sole consideration that the report of ADRF, Manglore declared that the Betel Nuts seemed to be of Indonesian Origin. This Court held that because in the case of Salsar Transport Company and Anr. (supra) the report was not having any legal sanctity and there was not material to show that the said laboratory is an accredited laboratory by the competent authority, it s report cannot have a consequence of fastening of any legal liability. In the said case, the information received under the Right to Information Act by the petitioner were placed before this Court wherein the Directorate of Areca Nuts and Spics Development, Government of India in response to query as to whether a Betel Nut is indigenous grown or of foreign origin can be determined by means of any laboratory test, the information supplied by the Government ..... X X X X Extracts X X X X X X X X Extracts X X X X
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