TaxTMI 
TaxTMI 
2019 (9) TMI 1283
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.... in Charge, Central Food Laboratory, Kolkata (Extension Centre, Raxaul), reporting the samples to be non confirming to the Food Safety and Standards (Food Products Standards and Food Additives) Regulation 2011, the application for provisional release of the Betel Nutes has been rejected; (iii) Quashing of the consequential order of provisional release dated 04.04.2018 (Annexure 5) vide Letter No. 2707 to the extent that provisional release has been ordered on submission of the cash security of 20 % of the value of the Truck; and (iv) Direction upon the respondents to release the goods pending disposal of the instant writ application." 2. It is the case of the petitioners that they are the registered dealers under the provisions of the Goods and Services Taxes (GST) Act and in course of day to day business the petitioners dispatched a consignment of 15865 Kgs. Betel Nuts contained in 325 bags to one M/s Mahaveer Traders of Coimbatore (Tamilnadu) by the Truck bearing Registration No. KA-01-8691 through M/s Ajay Goods Carrier on 01.02.2019 along with the requisite documents in support of the same including eway Bill. Out of the total consignment of 15865 kgs of Be....
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....port cannot be relied upon. 7. It is submitted that the seizure of the Betel Nuts by the respondents is beyond their jurisdiction and the same is arbitrary and contrary to the provisions of the Customs Act, 1962. Referring to Section 110 of the Customs Act, learned counsel submits that it is subject to the statutory sine qua non viz reasons to believe that the goods are liable to confiscation under the Act. In the present case it is submitted that there is absolutely no reason to believe that the goods i.e. Betel Nuts are liable to confiscation under any of the provisions of the Customs Act, 1962. 8. So far as the Notification No. 9/96 issued under Section 11 of the Customs Act, 1962 is concerned, it is submitted that the same has no application because the said notification imposes restrictions on import from Nepal and is concerned with only those goods which have been exported to Nepal from countries other than India except machinery and equipment used in Nepal for the execution of a project. It is submitted that the notification applies only when goods are "Notified Goods" within the meaning of Section 11B of Chapter IVA of the Customs Act, 1962. According to learned couns....
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....l release of the Betel Nuts and the vehicles. 11. Again in C.W.J.C. No. 3784 of of 2013 the writ application was disposed of vide order dated 04.03.2012 on agreement of the parties with a direction to release the Betel Nuts and the vehicle of the petitioner in terms of order dated 17.01.2013 passed in C.W.J.C. no. 317 of 2012. The Department of Customs, thereafter, moved a modification application being M.J.C. No. 2185 of 2013 (Annexure '7') in which a detail order dated 24.07.2013 was passed by the learned co-ordinate Bench. The operative portion of the judgment dated 24.07.2013 passed in M.J.C. No. 2185 of 2013 reads as under: "I have considered the submissions of learned counsels for the parties. On a consideration of the various provisions it is evident that betel nut or supari has not been enumerated under the Food Safety and Standards (Food Products Standards and Food Additives) Regulations, 2011. Thus as per the submission of learned counsel for the petitioners it would be a proprietary food that has not been standardized under the said Regulations. It would thus be required to follow the labelling requirements specified under the Regulations and must also confor....
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....ds whether in the context of food grains or of different other vegetable products, etc. It is thus evident that it is not open to the petitioners to straightaway rely upon Section 3(1)(zz)(ix) of the Act without any reference to the standards laid down in the different Regulations. I am in agreement with the submission of learned counsel for the respondents that the case regarding samples being found adulterated is not borne out from the actual data obtained from the analysis as there is no reference to any adulterant in the course of such analysis. Moreover, I find that the prescribed standards column has not been filled up which would be the relevant point for consideration of the different data obtained from the examination of the sample of betel nut by the laboratory. Be that as it may, it is evident that the stage for taking out sample for its analysis had not yet come when the same was being transported for delivery to the processing unit for its processing by the respondents. Thus, on a consideration of the aforesaid facts and circumstances and the submissions of learned counsels for the parties, I am of the view that no modification is required to be made in the or....
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....to the standards due to presence of Damaged Betel Nuts and Added Colouring matter. Thus, the sample is "unsafe food" under section 3(1) (ZZ) (ix) of FSS Act, 2006." Both the reports are Annexure 'C' and 'D' respectively to the counter affidavit. 15. It is further submitted that to ascertain the country of origin of the seized goods further notification viz verification of buyer / seller and their actual work profile from jurisdictional commissionerate, verification of documents submitted by the Truck driver are being done by the Divisional office, Forbesganj. 16. It is in the aforementioned background the respondents submit that the seized goods being unfit for human consumption cannot be provisionally released. Annexure 'E' to the counter affidavit is the order of the Assistant Commissioner Customs (P) Division, Forbesganj by which he has refused to release the seized Arecanuts provisionally. It is stated that further investigation in the mater is still going on and therefore, it would not be desirable to release the Betel Nuts at this stage. 17. In paragraph 23 of the counter affidavit the respondents have stated that as regards the country of origin, ARDF's report is as....
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....entral Government may, from time to time, determine after following the procedure hereinafter specified. (1-B) Where any goods, being goods specified under sub-section (1- A), have been seized by a proper officer under sub-section (1), he shall prepare an inventory of such goods containing such details relating to their description, quality, quantity, mark, numbers, country of origin and other particulars as the proper officer may consider relevant to the identity of the goods in any proceedings under this Act and shall make an application to a Magistrate for the purpose of - (a)certifying the correctness of the inventory so prepared; or (b)taking, in the presence of the Magistrate, photographs of such goods, and certifying such photographs as true; or (c) allowing to draw representative samples of such goods, in the presence of the Magistrate, and certifying the correctness of any list of samples so drawn. (1-C) Where an application is made under sub-section (1-B), the Magistrate shall, as soon as may be, allow the application.] (2) Where any goods are seized under sub-section (1) and no notice in respect thereof is given under....
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....to presence of Damaged Betel Nuts and Added Colouring matter. Thus the sample is 'unsafe food' under section 3(I)(ZZ) (ix) of FSS Act, 2006". 23. The respondents have come out with a statement that in order to ascertain the country of origin of the seized goods further investigation is going on. So far as the two test reports are concerned, this Court finds that those are not saying about the country of origin of the Betel Nuts. 24. In the case of M/s Ayesha Exports Vs. The Union of India (C.W.J.C. No. 7589 of 2018), this Court has recorded the views of the learned co-ordinate Bench of this Court in M.J.C. No. 2185 of 2013 which had in fact been challenged before the Hon'ble Supreme Court in Special Leave to Appeal (Civil) No. CC7331 of 2014 but the same was dismissed on 08.05.2014 keeping the question of law open. 25. This Court reiterated that in absence of there being any standardized laboratory test for tracing the country of origin, established under some statute and unless such Labs have been accredited by the competent authority and that the Labs could have the scientific method to come to a conclusion that the Betel Nut is of a particular country's origin, i....
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....). All Commissioners of Customs (Appeals). All Commissioners of Customs & Central Excise. All Commissioners of Customs & Central Excise (Appeals). Subject: Import of edible / food products - regarding. *** Sir / Madam, Attention is invited to Board Circular No.58/2001-Cus dated 25.10.2001 which provides detailed guidelines for examination and testing of food item prior to its testing and clearance by Customs officers under the provisions of Prevention of Food Adulteration Act, 1954 (PFA Act, 1954). 2. Further, in terms of Para 8 of Chapter I A (General Notes Regarding Import Policy) of the ITC (HS) Classification of Export and Import items, import of all such edible/food products including tea, domestic sale and manufacture of which are governed by Prevention of Food Adulteration Act, 1954, shall be subject to all the conditions laid down in the aforesaid Act. Import of all these products will have to comply with the quality and packaging requirements as laid down in the Act. Compliance of these conditions is to be ensured before allowing customs clearance of the consignment. 3. To consolidate the laws....
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....tained in Para 2.3 of the Board's Circular No.58/2001-Customs dated 25.10.2001. (c)In respect of food items not covered under (a) and (b) above, the following procedure would be adopted in addition to the general checks prescribed under Para 2.1 of the Circular No. 58/2001-Cus, dated 25.10.2001: (i)Samples would be drawn from the first five consecutive consignments of each food item, imported by a particular importer and referred to Authorised Representative of FSSAI or PHOs, as the case may be, for testing to ascertain the quality and health safety standards of the consignments. (ii) In the event of the samples conforming to the prescribed standards, the Customs would switch to a system of checking 5% - 20% of the consignments of these food items on a random basis, for checking conformity to the prescribed standards. The selection of food items for random checking and testing would be done by the Customs taking into consideration factors like the nature of the food products, its source of origin as well as track record of the importers as well as information received from FSSAI from time to time. (iii In case, a sample drawn from a food item....
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....fe. Shelf life of the product is to be calculated based on the declaration given on the label of the product, regarding its date of manufacture and the due date for expiry. Therefore, Customs shall ensure that this condition is complied with before allowing clearance of such consignments. 11. It is clarified that at certain ports / airports / ICDs / CFSs where Port Health Officers (PHO) under PFA, 1954 or Authorised officers under FSS Act, 2006 are not available, the samples will be drawn by Customs and the same may be got tested from the nearest Central Food Laboratory or a laboratory authorized for such testing by DGHS or FSSAI. 12. RMD shall develop an application software that incorporates the stipulation of testing of imported foodstuff and alerts the Customs officer to the effect the number of past shipments already tested and found fit warrants future shipments need not ordinarily be tested. This should apply regardless of port of import so long as the importer, supplier and item of import do not change. In other words, if such a shipment is imported say, at Mumbai and the previous 5 shipments imported at, say, Delhi have passed the test, then the next ship....
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....at may be levied in lieu of confiscation under Section 125 of he Customs Act, 1962, at the time of adjudication of the case. While securing the same, the competent authority shall take into account the nature of the seized goods, the duty and charges payable on the said goods, their market price and teh estimated margin of profit; iii. Amount of penalties that may be levied under the Customs Act, 1962, as applicable, at the time of adjudication of the case. 2.3. Depending on the specific nature of a case, the competent authority may, for reasons to be recorded in writing, increase or decrease the amount of security deposit as indicated above. 3.In this context, attention is invited to the judgment dated 28.07.2016 of the Hon'ble Madras High Court in Writ Appeal No. 377 of 2016 in the case of Malabar Diamond Gallery Pvt. Ltd. Vs Additional Director General, DRI, Chennai & Ors. Wherein the Hon'ble Court has given sufficient discretion to the adjudicating authority to deny provisional release of goods in any case where the goods are smuggled or import is treated as illegal and in violation of the statutory provisions. In terms of the said judgment, by specif....
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.... Ministry of Finance Department of Revenue (Central Board of Excise & Custom) ********** New Delhi, dated the/18th July, 2017 To, All Principal Chief Commissioners/Chief Commissioners of Customs / Customs(Preventive), All Principal Chief Commissioners/Chief Commissioners of Customs and Central Excise, All Directors General, All Principal Commissioners/Commissioners of Customs / Customs (Preventive), All Principal Commissioners/ Commissioners of Customs and Central Excise. Sir/Madam, Sub: Detailed guidelines for re-testing of samples- reg. World Trade Organization (WTO) negotiated Trade Facilitation Agreement (TFA),which aims at simplifying the trade processes and bringing down barriers to trade has come into force w.e.f 22nd February, 2017. India is a signatory to this agreement. 2) India has placed a number of trade related measures negotiated under the TFA in Category A. Article 5.3.1 envisages granting an opportunity for a second test in case the first test result of a sampletaken upon arrival of goods declared for importation shows an adverse findi....
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....ice to the results of the first test. In case there is a variation in the results of the first test and the re-test,the competent authority shall take the decision relying upon either of the tests specifying the grounds in writing for the decision so taken. In case the competent authority is unable to decide whether to rely upon the first or the re-test results, then it may order a second re-test provided the consignment is still within the customs control. However, this option should not be resorted to in every case of variation between the first test and re-test results. g. The facility of re-testing, is a trade facilitation measure, which should generally not be denied in the ordinary course. However, there might arise circumstances where the customs officer is constrained to deny the re-testing facility. Board expects that such denial would be occasional and on reasonable grounds to be recorded in writing. h. Where the re-testing procedure is done at the instance of the department instead of the importer, the above procedure shall be followed mutatis mutandis.3) Difficulties, if any, in implementation of this circular, should be brought to the notice of the Bo....
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....Writ Court in course of hearing of C.W.J.C. No. 3784 of 2013 and M.J.C. No. 2185 of 2013 whereunder the learned Writ Court took a view agreeing with the submissions of the writ petitioner and respondents that the Betel Nuts which were being sent from one place to another was not being offered for sale, at this stage, in which the samples could have been taken out and subjected to analysis under the provisions of the Food and Safety and Analysis Rules and Regulations. The learned Writ Court took a view that the Betel Nuts are raw materials which requires sufficient processing to be done and only thereafter, this would be packaged in terms of the provisions of the Food Safety and Standards (Packing and lebelling) Regulations 2011 for being put up for sale. The learned Writ Court took a view that the stage had not come into existence when the sample was sent by custom authorities to the 'CFL', Kolkata (Extension Center, Raxaul). 33. As is evident from the discussions made in the judgment dated 24.07.2013 passed in M.J.C. No. 2185 of 2013, learned Writ Court hearing the modification application was not apprised of the fact that all consignment of high risk food items are liable to b....
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....ned Writ Court in C.W.J.C. No. 3784 of 2013 and M.J.C. No. 2185 of 2013 cannot be accepted. It is well settled law that a judgment of the Court is always rendered in the facts placed before the Court and the submissions made in the matter. Since this Court has found that the aforesaid materials were not brought before the learned Writ Court in the case of Salsar Transport Company (supra), the said decision cannot be applied on the face of the materials which have been placed before this Court in the present case. Nothing has been brought to show that the very sampling and testing of the Areca Nut was not in accordance with law. 36. The another submission of learned counsel for the petitioners that there cannot be a refusal to provisionally release the goods on the grounds stated in Annexure '4' to the writ application is also not acceptable to this Court. The Court has taken note of the detail guidelines issued by the Department of Customs to streamline the divergent procedures being followed for grant of provisional release of the goods which are seized under Section 110 of the Customs Act, 1962. The provisional release of the seized goods is to be refused when the goods do not....