2015 (9) TMI 454 - HC - Customs

Court deems rejection of consignments for labeling issues unconstitutional, stresses legal compliance.

The Court found the rejection of consignments based on labeling non-conformity arbitrary and in violation of constitutional rights and legal provisions. ... Release of Consignment - import of Canola Oil – Labels not in conformity with Packaging and Labelling Regulations – In past petitioner was permitted to import Canola Oil and no objection was taken by respondent No.1, but consignments imported in January and June, 2014 was rejected on ground that label does not conform to Packaging and Labelling Regulations under Clause 2.2.2(2), which was published on respondent-1 website – Held that:- label prima facie appears to be in complete conformity with clause – Therefore, action of rejecting said consignments is absolutely arbitrary – Pertinent to note that Food Authority, after having rejected consignment of January, had cleared consignment of same product in April and thereafter again in June consignment of same product was rejected – Action of Food Authority, therefore, is arbitrary and is violative of Article 14 of Constitution of India – Food Authority to clear consignments which have been detained by them, subject to compliance of provisions of other relevant Act, Rules and Regulations – Decided in favour of Assesse. Issues:Challenge to rejection of consignments due to labeling non-conformity with regulations under the Food Safety and Standards Act, 2006.Analysis:The petitioner, an importer of Canola Oil, challenged the rejection of consignments in January and June 2014 by respondent No.1, the Food Safety and Standards Authority of India. The rejection was based on labeling non-conformity with Packaging and Labelling Regulations under Clause 2.2.2(2). The petitioner contended that the label complied with regulations, mentioning the product name as Canola Oil. The Food Authority argued that the label did not conform to the regulations and contained genetically altered ingredients, posing a risk to consumers. The Court noted that the only reason for rejection cited by the Food Authority was the labeling issue as per a note uploaded on their website. The Court found the rejection arbitrary, especially since earlier consignments of the same product were cleared. The Court held the rejection violated Article 14 of the Constitution and the provisions of the Food Safety and Standards Act. Interim relief was granted, directing the Food Authority to clear the detained consignments.The Court emphasized that the Food Authority should have conducted proper analysis and provided specific reasons for non-conformity with standards, rather than solely relying on the label issue. The Court observed that the label appeared to comply with the regulations, making the rejection arbitrary. Notably, the Food Authority's inconsistent actions in clearing and rejecting similar consignments further highlighted the arbitrary nature of the rejection. The Court found the Food Authority's actions contrary to the law and granted interim relief to the petitioner, ordering the clearance of detained consignments subject to relevant legal compliance.In conclusion, the Court deemed the rejection of consignments based on labeling non-conformity as arbitrary and violative of constitutional rights and legal provisions. The Court's decision highlighted the importance of proper analysis and adherence to legal standards by regulatory authorities to prevent arbitrary actions impacting businesses and consumers. The interim relief granted aimed to address the unjust detention of consignments and ensure compliance with the law while awaiting final adjudication on the matter.