Imported crude palm oil for refining is not prohibited goods merely for failing food standards.

Crude palm oil imported as input for further refining was not prohibited goods merely because it did not meet the edible-oil standard for immediate human consumption. The Customs Act permits clearance unless import is legally prohibited, and non-conformity with a food standard alone does not create prohibition where the consignment is declared for processing rather than direct consumption. The Court noted that palm oil must be refined before being supplied as food, and the Food Safety and Standards regime would apply only after processing for human use. The refusal to assess and clear the goods on the footing of prohibition was set aside, and customs authorities were directed to assess duty and proceed under law.

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Issues: Whether crude palm oil imported for further refining and not for immediate human consumption could be treated as prohibited goods under the Customs Act merely because it did not conform to the edible-oil standard applicable to food items; and whether the Customs Authorities could refuse assessment and clearance on that basis.

Analysis: The imported goods were declared as crude palm oil of edible grade meant for further processing. The statutory scheme of the Customs Act permits clearance of goods for home consumption unless the goods are prohibited, and the definition of prohibited goods does not include goods whose import conditions have been complied with. The standards in Appendix B to the Prevention of Food Adulteration Rules, 1955 show that palm oil imported into the country is required to be refined before being supplied for human consumption and must then conform to the refined vegetable oil standard. The Court further noted that the declaration in the bill of entry did not represent the goods as ready-to-consume food, and there was no material to show that the importer intended immediate human consumption in the imported form. In that situation, non-conformity with the edible standard applicable to food did not by itself make the consignment prohibited goods. The Food Safety and Standards regime would apply if and when the goods were to be used as food after processing.

Conclusion: The imported crude palm oil was not prohibited goods, and the Customs Authorities were required to assess duty and proceed in accordance with law.

Final Conclusion: The appeal succeeded, the refusal to clear the goods on the footing that they were prohibited was set aside, and the customs authorities were directed to assess and deal with the consignment under the Customs Act.

Ratio Decidendi: Goods imported as raw material for further processing are not prohibited goods merely because they do not satisfy the standard applicable to food intended for immediate human consumption; prohibition must be shown by law or by non-compliance with the conditions attached to permitted import.

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