2025 (9) TMI 773 - HC - Customs

Refusal to allow time-bound re-testing of seized food samples ruled improper; fresh samples to be drawn and tested within month

HC held the respondents' refusal to permit re-testing was inappropriate and contrary to the Public Notice; re-test requests are time-bound (10 days) but ... Refusal by the Respondents to re-test the seized goods - permissible under the guidelines in Public Notice dated 28 July 2017 or not - time-limit for requesting re-test (10 days from communication of first test result) - HELD THAT:- This was not the appropriate occasion for the Customs Authorities to deny the facility of re-testing. Ultimately, such denial must be only occasional and that too, on reasonable grounds to be recorded in writing. The guidelines emphasised that this facility of re-testing is nothing but a trade facilitation measure, which, generally, will not be denied in the ordinary course. Suppose the seized goods are found to be prohibited after following a fair process. In that case, additional steps can always be taken, including re-export if allowed or paying the differential duty, which has already been secured. If the seized goods match the description declared by the petitioner, there is no point in allowing this issue to linger. This is not trade facilitation. Such an approach contradicts the objectives of the guidelines. It is directed that the drawal of fresh samples from out of the goods seized within five days from the date this order is uploaded in the presence of the representative of the Petitioner which is also the requirement under the Public Notice dated 28 July 2017. Such samples should now be sent to the Central Revenues Control Laboratory, New Delhi, by FSSAI. The Central Revenues Control Laboratory, New Delhi, which is not a private laboratory, but the Government of India Laboratory, is requested to submit its report within one month from the receipt of the samples. The FSSAI must communicate this order to the Central Revenues Control Laboratory and pursue the matter so that the report is received within a month from the receipt of the samples - Upon the drawal of the samples, subject to the Petitioner fulfilling the prescribed requirements and in accordance with the previous orders made by this Court, the Petitioner would be entitled to seek the provisional release of the seized goods. Petition disposed off. ISSUES PRESENTED AND CONSIDERED 1. Whether the refusal by the Customs/authorities to permit re-testing of seized goods (by drawing fresh samples) is permissible under the guidelines in Public Notice dated 28 July 2017. 2. Whether the time-limit for requesting re-test (10 days from communication of first test result) barred the present request. 3. Whether re-testing is limited to remnants/duplicate representative sealed samples originally tested, or whether fresh samples can be drawn from the seized consignment. 4. Whether the choice of laboratory (referral to a Kerala laboratory instead of a Maharashtra laboratory previously used) was permissible and whether FSSAI has discretion to select the testing laboratory. 5. The appropriate interim directions pending adjudication, including the role of the Central Revenues Control Laboratory, provisional release, and filing of replies to the show-cause notice. ISSUE 1 - Permissibility of Denial of Re-testing under Public Notice dated 28 July 2017 Legal framework: The Public Notice dated 28 July 2017 contains guidelines for re-testing of samples; notably clauses 2(f) and 2(g) describing re-test as a trade facilitation measure and permitting consideration of re-test results where variation arises. Precedent treatment: No judicial precedent was invoked or considered in the judgment; the Court treats the Public Notice as administrative guidelines rather than statutory rules. Interpretation and reasoning: The Court holds that the Public Notice is intended as a trade facilitation measure which 'generally, will not be denied in the ordinary course.' Guidelines require substantial rather than hyper-technical compliance; denial must be occasional and on reasonable grounds recorded in writing. Given prior testing in Maharashtra favouring the petitioner and no convincing reasons for deviation, blanket refusal to re-test was unreasonable and inconsistent with the spirit and objective of the guidelines (i.e., fair determination of correct status of imported goods and promotion of ease of doing business). Ratio vs. Obiter: Ratio - administrative guidelines that constitute trade facilitation should ordinarily be implemented in substance; denial of re-testing must be exceptional, on reasonable written grounds. Obiter - comments lamenting general resistance by officials to implementing ease-of-doing-business policies. Conclusion: Denial of re-testing on the facts was impermissible; the facility should not have been refused absent exceptional written reasons. ISSUE 2 - Effect of the 10-day Timelimit for Requesting Re-test Legal framework: Public Notice prescribes a 10-day period from receipt of communication of first test result for requesting re-test. Precedent treatment: No authority was cited; the Court examined the alleged compliance and the factual dispute about when the request was made. Interpretation and reasoning: The Court observed factual dispute as to when the request was made (petitioner asserts within three days; respondents dispute). The Court found the 10-day argument unpersuasive on the record before it, especially where respondents did not provide detailed explanation for delay and where the public notice is to be substantially complied with. The guideline's objective and surrounding facts (previous favourable Maharashtra test, absence of written grounds for denial) weigh against strict application to defeat a re-test request in this instance. Ratio vs. Obiter: Ratio - where factual ambiguity and absence of convincing reasons for denial exist, the 10-day requirement should not be enforced in a manner that frustrates trade facilitation; substantial compliance and fairness govern. Obiter - admonition that adherence to procedural timelines remains relevant but subject to context. Conclusion: The 10-day limitation did not bar relief on the facts; the argument failed to persuade the Court. ISSUE 3 - Whether Re-testing Must Be on Remnants/Duplicate Sealed Samples or Fresh Samples May Be Drawn Legal framework: The Public Notice contemplates re-testing normally on remnants or duplicate representative sealed samples in Customs custody; guidelines however emphasise facilitation and reasoned exceptions. Precedent treatment: No precedent discussed; Court assessed reasonableness and implementation practice. Interpretation and reasoning: The Court accepted that, ordinarily, re-test is to be on remnants/duplicate samples, but emphasised that where Customs possess seized goods and a petitioner requests fresh drawal in the presence of its representative (as permitted by the Notice), such a request cannot be refused on unreasonable grounds. Given lack of convincing explanation why Maharashtra laboratories were not used in the present instance, refusal to allow fresh samples for re-test was unjustified. Ratio vs. Obiter: Ratio - while remnants/duplicate samples are the norm, fresh samples drawn in accordance with the Notice and in the petitioner's presence may be permitted and refusal must be based on reasonable, recorded grounds. Obiter - observations about potential Customs arguments after provisional release preferring to rely on lack of custody. Conclusion: Re-testing by drawing fresh samples from seized goods was warranted here and refusal was improper absent reasonable written reasons. ISSUE 4 - Choice of Laboratory and FSSAI Discretion Legal framework: FSSAI oversees selection/referral to testing laboratories; multiple NABL-accredited laboratories exist, including government and private labs (Central Revenues Control Laboratory in New Delhi identified as government laboratory). Precedent treatment: No precedent cited; Court relied on administrative structure and laboratory landscape communicated by FSSAI. Interpretation and reasoning: FSSAI has discretion to refer to laboratories, including specialized ones; referral to Kerala laboratory for cashew-nut roasting issue may be explainable if specialisation exists. However, the Court required a convincing administrative explanation for deviation from prior practice (Maharashtra labs were used earlier). In the circumstances, the Court directed sending fresh samples to the Central Revenues Control Laboratory, New Delhi (a government laboratory), to achieve a fair, authoritative test result within a fixed period. Ratio vs. Obiter: Ratio - FSSAI's discretion to choose laboratories is not unfettered; where fairness and trade facilitation require, selection of a neutral government lab (Central Revenues Control Laboratory) and timely reporting may be directed. Obiter - acknowledgment that testing in Kerala is not per se impermissible if justified by specialisation. Conclusion: The referral to Kerala laboratory lacked convincing justification on the record; Court directed FSSAI to send samples to the Central Revenues Control Laboratory, New Delhi for a report within one month. ISSUE 5 - Interim Directions: Drawal of Samples, Timelines, Provisional Release and Filing of Reply Legal framework: Public Notice procedures (drawal in presence of importer's representative), provisions for provisional release subject to compliance with prerequisites, and administrative adjudication on show-cause notice. Precedent treatment: No precedent cited; Court exercised supervisory jurisdiction to issue directions in the interest of fairness and facilitation. Interpretation and reasoning: To secure a fair adjudicatory process and to facilitate filing of replies, the Court directed drawal of fresh samples within five days in the presence of the petitioner's representative, transmission of those samples by FSSAI to the Central Revenues Control Laboratory, New Delhi, and submission of the report within one month. The Court permitted provisional release subject to petitioner fulfilling prescribed requirements and consistent with earlier court orders. The Court refrained from imposing costs to encourage compliance with ease-of-doing-business policy. Ratio vs. Obiter: Ratio - where re-testing is justified, court may order drawal of fresh samples in petitioner's presence, direct referral to an appropriate laboratory, fix time-limits for reporting, and allow provisional release subject to compliance. Obiter - policy remarks encouraging departmental adherence to ease-of-doing-business objectives. Conclusion: Immediate directions were issued: fresh samples to be drawn within five days; samples sent to Central Revenues Control Laboratory, New Delhi by FSSAI; report in one month; provisional release entitlement subject to compliance. No costs imposed to promote facilitation.