TaxTMI 
TaxTMI 
2015 (4) TMI 1117
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....e order of the appellant authority holding the consignment of "Lactic Culture‟ imported by the respondent No.1 / writ petitioner to be non- compliant with the Food Safety and Standards (Packaging and Labelling) Regulations, 2011 (hereinafter referred to as "Packaging and Labelling Regulations") and thus refusing the "No Objection Certificate" (NOC) to enable the respondent No.1 / writ petitioner to have the said consignment released from the Customs Authorities. The learned Single Judge by the judgment impugned in this appeal held the provisions of the Packaging and Labelling Regulations, for the reason of non-compliance wherewith the NOC was refused, to be not applicable and hence directed the appellant authority to issue the NOC if the consignment was otherwise found to be in conformity with the description as available on the consignment as well as the product description sheet provided by the respondent No.1 / writ petitioner. 3. The respondent No.1 / writ petitioner claims to be engaged in the business of import, distribution and sale of wide range of products that are used by manufacturers of food and beverages, dietary supplements and pet food. The consignment afore....
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....s" is not defined under the FSS Act but the definition of "food" in Section 3(1)(j) of the FSS Act is couched in wide terms to mean any substance which is intended for human consumption including any substance used into the food during its manufacture, preparation or treatment; (iii) that the goods imported by the respondent No.1 / writ petitioner being intended for use in preparation of yogurt, would fall within the wide definition of expression „food‟ and its packaging and labelling would require to be compliant with the Packaging and Labelling Regulations; (iv) Section 25(1)(iii) of the FSS Act prohibits import of any article of food in contravention of the provisions of the FSS Act or any Rule or Regulation made thereunder; (v) that it was the admitted case of the parties that the subject goods fall within Category 99 of Indian Food Code which includes "substances added to food which are not for direct consumption as food" and sub-category 99.6 whereof covers "microorganisms and microbial preparations‟; (vi) that it was the contention of the respondent No.1 / writ petitioner that since the definition of "yogurt" in Regulation 2.1.12:1 of the Safety....
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....iled product description of the goods and the composition, properties and physical / chemical specifications as well as microbiological specifications; (xvi) that all the aforesaid was sufficient for the appellant authority to test whether the goods in question conform to the description. 7. Aggrieved from the aforesaid, this appeal was preferred. Though the same was entertained, but the interim stay sought of the judgment of the learned Single Judge refused. The counsel for the appellant authority, on 26th September, 2014 informed that in inspection pursuant to the directions of the learned Single Judge, the contents of the consignment were not found to be in conformity with the description available on the package. 8. The counsel for the appellant authority before us argued: (a) that India has become a dumping ground for unsafe food; (b) without proper labelling, the laboratory of the appellant authority cannot check whether the goods are what they are labeled as; (c) that the Packaging and Labelling Regulations are also intended to disclose the origin of food and to enable the consumers to make a choice; (d) that before the FSS Act, the right to take action ....
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....#8223; as a person engaged in the business of manufacturing any article of food for sale and includes any person who obtains such article from another person and packs and labels it for sale; that a combined reading of the said provisions with the definition of "consumer" in Section 3(f) of the FSS Act leaves no manner of doubt that the labelling requirements are for manufacturer of food also, whether the said food is for direct sale to the consumer or to an intermediary; (l) that Regulation 2.2.2 of the Packaging and Labelling Regulations requires inter alia the list of ingredients to be disclosed and the said requirement cannot be obviated by otherwise submitting the list of ingredients as the respondent No.1 / writ petitioner had done and which has been held by the learned Single Judge to be a sufficient compliance. 9. We had during the hearing enquired from the counsel for the appellant authority, whether an exporter of foods to India can be expected to comply with the provisions of FSS Act and the rules and regulations framed thereunder, besides with the laws, rules and regulations of its own country / place of manufacture and whether there is any corresponding obligatio....
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....ty and Standards Regulations specifically dealing with Fermented Milk Products and providing the parameters therefor including for Yoghurt and it was contended that without the subject consignment / goods complying with the Packaging and Labelling Regulations, the appellant authority would be unable to test, whether the said parameters were met or not. It was also argued that the respondent No.1 / writ petitioner was hesitating to make the declaration as required by the Packaging and Labelling Regulations, as it will in the said declaration have to declare the harmful bacteria contained in the goods. It was yet further argued that without declaration in terms of the Packaging and Labelling Regulations on the consignment, no lab can carry out the requisite test. 16. The senior counsel for the respondent No.1 / writ petitioner though in his initial argument contended that a food additive is included in the definition of food in Section 3(1)(j) but in subsequent hearing contended that a food additive is distinct from food. We may in this regard notice that the contention of the respondent No.1 / writ petitioner before the learned Single Judge was of a food additive being not food a....
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.... / writ petitioner pointed out that Heartland Trading Company Pvt. Ltd. supra was a case of edible grade refined oil with respect whereto, specific regulations exist and not relating to food additives and that Sarad Kumar Bohra supra was a case of sugar confectionary which also is a food and not a food additive. It was further contended that on the contrary, the present case is not concerned with a pre-packed food but with a food additive and particularly described in the Safety and Standards Regulations as a food additive and which also lay down the parameters thereof. 19. Both counsels have also since filed written submissions and the counsel for the appellant authority has on 12th March, 2015 also handed over copy of the judgment dated 4th February, 2014 of the Division Bench of the High Court of Kerala in W.A. No.1317/2014 titled Authorized Officer, Cochin Sea Port and Airport Food Safety and Standards Authority of India Vs. Mondelez India Food Limited holding Cocoa bean to be a food and subject to the Act and the Regulations made thereunder. 20. The appellant authority in his written submissions is not found to have stated anything new. 21. The respondent No.1 / writ ....
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....e in the manufacture, processing, preparation, treatment, packing, packaging, transport or holding of such food results, or may be reasonably expected to result (directly or indirectly), in it or its by-products becoming a component of or otherwise affecting the characteristics of such food but does not include "contaminants" or substances added to food for maintaining or improving nutritional qualities." 25. In our opinion a food additive, is distinct from, and is not a food. 26. Food, in Section 3(1)(j) is defined as "any substance, .....which is intended for human consumption....". The definition thereafter proceeds to provide, that food "includes primary food, genetically modified or engineered food or food containing such ingredients, infant food, packaged drinking water, alcoholic drinks, chewing gum, and any substance, including water used into the food during its manufacture, preparation or treatment....". It would thus be noticed that the definition, after providing that food is any substance intended for human consumption, includes within its fold certain items, some of which are also separately defined, but does not mention a food additive. 27. Per contra, Food ....
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....he definition. It was further held that in each case it has to be established that input mentioned in the inclusive part is used in or in relation to the manufacturing of the final product and that the definition has to be read in its entirety. It was yet further held that where the definition is in two parts namely the specific part and the inclusive part, both the parts are required to be satisfied. 33. To the same effect are Board of Revenue Vs. A.M. Ansari (1973) 3 SCC 512 (Para 26) and The State of Himachal Pradesh Vs. Maharani Kam Sundari MANU/HP/0062/1984 (DB) (Para 20). 34. Thus, a substance which is not normally consumed as a food by itself or used as a typical ingredient of a food and which may be a food additive, cannot be a food as only those substances which are intended for human consumption can be food. Merely because a food additive may fall within the expression "...and includes any substance......used into the food during its manufacture, preparation or treatment" within the inclusive part of the definition of food will not make a food additive food because a food additive fails to satisfy the crucial part of the definition of food i.e. "intended for human c....
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....od and which thus necessarily play a vital role in ensuring safe and wholesome food. Without regulating and monitoring food additives which go into manufacture and processing of food, safe and wholesome food cannot be ensured. Not only so, Section 16(2)(b) specifically provides for the appellant authority to by Regulations specify the limits for use of food additives and the context in which the word food is used in other clauses of Section 16(2) would also take within its ambit food additives. 38. The appellant authority is thus clearly wrong in its assertion that without holding food additives to be also food, it would not have authority to regulate and monitor manufacture and processing, distribution, sale and import of food additives. The Act, takes within its ambit, food as well as food additives and the two being different, makes separate provisions with respect to two. However, the context in which food is used in some of the provisions of the Act, take within their ambit food additives also. What the appellant authority is however wanting to do is to make the provisions of the Act made in context of foods, applicable to food additives also and which cannot be permitted. ....
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....powers under Section 23 of the FSS Act read with Section 92(2)(k) of the FSS Act. Section 92(2)(k) empowers the appellant authority to make Regulations under Section 23. We have hereinabove held that the context in which the word food is used in Section 23, does not allow inclusion of food additives therein. It thus follows that the Packaging and Labelling Regulations do not apply to food additives. A reading of the Packaging and Labelling Regulations also shows that the same can possibly have no application to food additives. This also becomes evident from the anomalies arising from the intent of the appellant authority to apply the said Regulations to food additive with which we are concerned. We had during the hearing enquired from the counsel for the appellant authority, as to how possibly for a food additive of the nature with which we are concerned in the present case, any information on the label thereof of nutritional value or whether it is veg. or non-veg. can be given. The counsel though, when we enquired whether he would classify lactic acid / lactic culture as veg. or non-veg., stated that it is non-veg. but when we enquired, whether yogurt, for use in manufacture where....
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....ppellant authority cannot be permitted to apply to food additives, Packaging and Labelling Regulations made under Section 23--for food, and application whereof to food additives would lead to ridiculous results. 47. In the light of the above, issues D and E culled out by us hereinabove do not arise for adjudication. Therefore, without intending to return any conclusive finding on the said aspect we may only observe that the whole purpose of labelling is to make the persons dealing with the product aware of the nature and character thereof. The prohibition in Section 23(1) against the manufacturer of food products not marked and labelled in the manner prescribed cannot possibly apply to a manufacturers of a food product situated outside India. However, the same would apply to distribution, sale / exposure for sale and delivery of such products in India and before which is done, the said products would definitely be required to be labelled in the manner prescribed. However, the responsibility for such labelling cannot be of the foreign manufacturer of such food products and we see no bar to the requirement of such labelling being fulfilled by the person who distributes, sells, dis....
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....ns prohibiting any vegetable fat except cocoa butter in chocolate; (iii) that the Packaging and Labelling Regulations required the label to indicate the date of manufacture or packaging of the commodity, even where the „best before or use by date‟ is mentioned on the label; (iv) that admittedly the labels on goods in question though indicated the best before date but did not mention the date of manufacturing; that thus the said eight types of the chocolates did indeed not comply with the Packaging and Labelling Regulations; (v) however, it was also the contention of the respondent No.1 / writ petitioner that the defect was curable; (vi) that as per the definition of label in Section 3(1)(z) of the FSS Act, it was not necessary that a label be printed directly on the cover, wrapper of the container but could also be attached as a sticker, provided that the sticker conformed to Regulation 2.2.1:4 of the Packaging and Labelling Regulations; (vii) that the respondent No.1 / writ petitioner had furnished a certificate from the manufacturer giving the details of the manufacturing and the expiry dates in respect of each of the consignment; (viii) that thus th....
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....ared, subject to the respondent No.1 / writ petitioner complying with the other requirements. 51. The appeal was entertained though no interim stay of the order of the learned Single was granted. 52. It was the contention of the counsel for the appellant authority: (a) that the learned Single Judge has erred in holding that the defect in labelling could be rectified--reliance was placed on the judgments supra of the other High Courts holding the same to be not curable; (b) that a filled chocolate is also a chocolate and therefore should comply with Regulation 2.7.4 of the Food Safety and Standards Regulations; (c) that admittedly filling in the said chocolates contain vegetable fat in excess of the prescribed limit; (d) that Regulation 2.7.4 supra prohibits use of vegetable fat in excess of prescribed limit--thus, the vegetable fat in excess of the prescribed limit cannot be permitted in the filling of the chocolate also; (e) that the vegetable oil / vegetable fat does not melt in human body and is thus considered dangerous and not permitted beyond the prescribed limit; (f) that Chocolatier Guylian also is not putting vegetable oil even in filling in chocola....
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....ontroversy in this appeal is twofold. The first is with respect to the curability of the defect, if any in labelling and the second is with respect to vegetable fat. 56. As far as the first aspect is concerned, we have already in our decision in the other appeal, though ultimately finding that the question did not arise for adjudication therein, nevertheless expressed our view that the FSS Act and the Regulations made thereunder cannot be binding on a foreign manufacturer or supplier of food and considering the purpose of labelling, the defect / deficiency in labelling in imported goods is curable. We now confirm our said observations / findings 57. We have perused the judgment of the High Court at Calcutta, relied upon by the appellant authority in this regard and are unable to find therein any reason for holding, the defect in labelling to be not curable, other than that there is no provision therefor in the Act or the Regulations. 58. We are, with respect, unable to concur. 59. The object of labelling, as per the counsel for the appellant authority also, vis-à-vis the imported goods is to enable the appellant and other authorities to know what the imported goo....
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.... or misbranded or substandard foods or in contravention of the provisions of the Act or any Regulation made thereunder. We can understand, that non-compliance of some of the packaging regulations to ensure safety of goods may not be rectifiable as the damage from non-compliant packaging may already have been done. However, we fail to see the harm if any in allowing any defect / deficiency in labelling being permitted to be made up, in respect of imported goods, in India. We find no prohibition thereagainst in the Act or any Regulations. In our opinion, in case of imported foods, the obligation to comply with the provisions of the Act and the Regulations thereunder with respect to labelling is of the food business operator in India who imports the goods or otherwise deals with them first after their arrival in India and thus the said obligation can be permitted to be performed in India. 62. We otherwise also see no purpose in insistence on the goods found deficient/defective qua labelling being re-shipped to the manufacturer to enable him to cure the said defect when such defect can be cured by him or anyone on his behalf, across oceans, in India itself. 63. As far as the aspe....
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....gulation 3.1.3 and label declaration as provided under regulation 2.4.5 (24, 25, 26, 28 & 29) of Food Safety and Standards (Packaging and Labelling) Regulations, 2011: Provided further that in addition to the ingredients mentioned above, the chocolate may contain one or more of the substances as outlined below, under different types of chocolates. (a) edible salts. (b) spices and condiments. (c) permitted emulsifying and stabilizing agents. (d) permitted sequestering and buffering agents. The product may contain food additives permitted in these regulations including Appendix A. Chocolates shall also conform to the following standards namely:-- Sl. Characteristics No. Requirements for Milk Chocolate Chocolate Milk Covering Chocolate Plain Plain Chocolate White Covering Chocolate Blended Chocolate 1. Total fat (on dry basis) per cent by weight. Not less than 25 25 25 25 25 25 2. Milk fat (on dr....
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....aid requirements cannot dilute the absolute prohibition against chocolates containing any vegetable fat/oil other than Cocoa Butter but in the general definition/description of chocolates. (C) The language of Regulation 2.7.4 commonly understood would be of there being a prohibition against chocolates containing vegetable fat/oil other than Cocoa Butter--a chocolate containing vegetable fat/oil other than Cocoa Butter, though not in its composition but inside it would nevertheless be understood as chocolate containing vegetable fat/oil. (D) If consumption of vegetable fat/oil other than cocoa butter, by the consumers of chocolate is harmful so as to require the appellant authority to ban the same in chocolate, the said harm would still be caused by the vegetable fat / oil filled inside the chocolate rather than being homogeneously mixed with the other ingredients of the chocolate in its composition. (E) A chocolate with the filling of vegetable fat would also be sold and marketed as chocolate only and nothing else and a buyer/consumer thereof is likely to assume that the same in accordance with Regulation 2.7.4 does not contain any vegetable fat other than cocoa butter, th....
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....be no bar per se against the consumption of vegetable fats / oils other than cocoa butter; if that were so, we fail to understand as to why the consumption thereof as a filling inside a chocolate should be barred. (b) At least some material available on the internet indicates that the prohibition against use of vegetable fats other than cocoa butter in chocolate all over the world had more to do with maintaining the quality, flavor and taste of chocolate and for the benefit of the cultivators of the cocoa bean, than for the harmful effects of vegetable fats, though mention at places is also made of more harmful effects of vegetable fats other than cocoa butter. (c) Though prior to 2nd August, 2003, the European Union had prohibited use of vegetable fats in chocolate throughout its member states, since August 2003, certain vegetable fats (refined and /or fractioned) to the extent of five percent are permitted in chocolate (d) Addition of vegetable fat other than cocoa butter, whether as a component of chocolate mixture or as a filling inside a chocolate shell is reported to reduce/ avoid „blooming‟ of chocolates, increase shelf life of chocolates and add to the ....
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....rdingly direct the appellant authority to in accordance with Section 18 and after considering all the relevant factors including those highlighted by us hereinabove decide whether a filling of vegetable fat other than cocoa butter and to what extent is permitted in filled chocolates. We deem time of six months to be appropriate therefor. The said decision be accordingly taken within six months of today. 69. Section 18(2) also requires the appellant authority to take into account prevalent practices, international standards and practices. Our research shows that the "Guidance on Cocoa and Chocolate Products Regulations, 2003" published by the Food Standards Agency of the United Kingdom, in clause 7 thereof states that the Regulations allow the use of specified vegetable fats other than cocoa butter upto a maximum on five percent in the preparation of chocolate products including in filled chocolates. It thus appears that internationally, vegetable fat other than cocoa butter, though are permitted in chocolates including as filling in filled chocolates but only of certain type and subject to maximum limits of 5%of the total content. The appellate authority while taking the decisio....
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....dundant and of no value. The appellate authority to in future deal with such request in right earnest and without any delays. We however do not deem it appropriate to render any conclusive finding in this regard and leave it open to the respondent No.1 / writ petitioner to, if so desires take appropriate action against the appellant authority for the losses, if any caused to the appellant authority. 73. LPA No.711/2014 is accordingly partly allowed to the aforesaid extent with no order as however as to costs. 74. SUMMARY: The length of the judgment having stretched beyond intended, we deem it appropriate to summarise our findings as under: A. A Food Additive, as defined in the FSS Act is distinct from food, also as defined in the Act. B. The FSS Act deals with food as well as Food Additive and empowers the appellate authority to exercise specified powers with respect to Food Additive also. C. While some of the provisions of the FSS Act are with respect to foods only and others are with respect to Food Additive only, yet in context of some other provisions, food additive are included in foods. D. Section 23 of the FSS Act titled "Packaging and Labelling of Foods" is w....