2015 (12) TMI 315 - HC - Customs

Court directs immediate clearance of foreign-manufactured liquor based on historical practices.

Flemingo Dutyfree Shop Pvt. Ltd. & Anr. Versus Union Of India & Ors.

The court disposed of the writ application concerning the classification of foreign-manufactured branded liquor under the Food Safety and Standards Act, ... Request to stop the test of goods under Section 25 of the Food Safety and Standards Act, 2006. - Import of duty free foreign manufactured branded liquor for sale in the duty-free outlets in our international airports - Held that:- If the Customs and Food Safety authorities have been clearing the self-same branded alcoholic beverages brought into this country by the writ petitioner company in the past without testing there is no reason to believe that the present consignment may be contaminated or poisonous. They will clear the consignments covered by the above bills of entry, if they conform to those earlier brands and description going by the label, without in any manner opening the seal or breaking any bottle for testing. Such clearance order with short reasons, should be passed within two weeks from the date of communication of this order. - As no affidavit was invited, the allegations contained in the writ petition are deemed not to be admitted. - Petition disposed of. Issues involved:1. Classification of goods under the Food Safety and Standards Act, 2006.2. Contention regarding the imported status of goods.3. Customs and Food Safety clearance of alcoholic beverages.4. Application of the Food Safety and Standards Act, 2006.5. Disposal of the writ application based on past clearances.Analysis:1. Classification of goods under the Food Safety and Standards Act, 2006:The judgment revolves around the classification of foreign-manufactured branded liquor brought into the country by the petitioner company for sale in duty-free outlets at international airports. The petitioner argues that sales tax or VAT is not payable on these goods. The Customs and Food Safety Department had been clearing these goods under the classification of 'Beverages - Alcoholic' as per the Food Safety and Standards (Food Products Standards and Food Additives) Regulation, 2011.2. Contention regarding the imported status of goods:The petitioner contests the testing of the goods under the Food Safety and Standards Act, 2006, stating that the goods are not truly imported as they do not pass through the customs barrier. Reference is made to a decision by the Bombay High Court in a similar case. The petitioner asserts that since the goods do not attract Customs duty or sales tax, the Food Safety and Standards Act, 2006 should not apply to them.3. Customs and Food Safety clearance of alcoholic beverages:The Customs Department holds up two consignments of alcoholic beverages for testing under Section 25 of the Food Safety and Standards Act, 2006. However, the court notes that past clearances of similar goods without testing suggest that there is no immediate need for testing the current consignments. The court directs the authorities to clear the consignments based on previous clearances within two weeks without conducting any additional tests.4. Application of the Food Safety and Standards Act, 2006:The court opines that the specific questions regarding the imported status of goods and the applicability of the Food Safety and Standards Act, 2006 need not be addressed for the disposal of the writ application. The primary focus is on the past practice of clearance by the authorities and the absence of reasons to suspect contamination in the current consignments.5. Disposal of the writ application based on past clearances:Given the historical clearances of similar goods without testing and the absence of any affidavit, the court deems the allegations in the writ petition as not admitted. Consequently, the writ application is disposed of, directing the urgent supply of a certified copy of the order to the concerned parties.This judgment emphasizes the importance of consistent past practices in clearance procedures and highlights the need for authorities to act based on established precedents in similar cases.