TaxTMI 
TaxTMI 
2023 (5) TMI 668
X X X X Extracts X X X X
X X X X Extracts X X X X
....n Customs Act, 1962, with effect from 13th July 2006 in accordance with Taxation Laws (Amendment), Act, 2006, generated controversies over its implementation. Some of these decisions, and including those after the impugned provision had been amended by Finance Act, 2011 to substitute 'adjudicating authority' therein for 'Commissioner of Customs' with effect from 8th April 2011, claimed initially as legislative intent to disconnect the exercise of that authority from jurisdictional oversight of the appellate hierarchy, recited in order [final order no. A/85594-85595/2022 dated 23rd June 2022] of the Tribunal, arising from rejection of application for provisional release by order [order no. CA CC-PVNSB/04/2023 Adj (I) ACC dated 23rd May 2022] of the adjudicating authority, may have dissuaded from such urging on this occasion even as the saga of insistence on retaining possession of seized goods, by recourse to one ground or other, continues. 2. Neither is there a suggestion that the restrictive prescription in the Foreign Trade Policy, intended for controlling imports of 'arecanuts' of heading 8002 of First Schedule to Customs Tariff Act, 1975, had been attempted to be overc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cleared from customs charge and that is the justification held out before us by Learned Authorised Representative for the impugned order; impliedly, we would be doing disservice to public interest should we not concur with that outcome. We, too, are conscious of our obligations to ensure these grand purposes are achieved through the instruments designed in legislation, leaving us with no option but to approach the present dispute in terms of the authority vested in Commissioner of Customs to direct, and in accordance with section 110A of Customs Act, 1962, withholding of access by owner to the goods. 4. The factual matrix is undisputed: the goods, viz., 270 metric tons of 'API supari', imported from Indonesia in ten containers and sought to be cleared at ICD, Mihan against bill of entry no. 3060179/28.10.2022, were seized under section 110 of Customs Act, 1962 and the importer had, pending adjudication, requested the goods to be released to them. Report of test carried out by the customs laboratory at New Custom House, Mumbai on samples drawn therefrom was furnished to Superintendent of Customs (SIIB), Nagpur by communication dated 16th November 2022 along with remnant of the samp....
X X X X Extracts X X X X
X X X X Extracts X X X X
....elhi, the referral lab designated by Central Board of Indirect Taxes & Customs (CBIC) in circular no 46/2020-Cus dated 15th October 2020, had elicited report dated 21st December 2022 concluding that the moisture content, absence of starch and damage to nuts by mould and insects had rendered the goods under seizure to be unfit for human consumption and potentially hazardous to public health and public interest. 6. By the impugned order, Commissioner of Customs, Nagpur, taking note of the prohibition in section 25 of Food Safety and Standards Act, 2006 as applying to the goods reported upon by the customs laboratory at New Delhi and of the revision, vide notification no. 20/2015-2020 dated 25th July 2018 of Director General of Foreign Trade (DGFT), of policy condition, in relation to goods falling under heading 0802, from 'free' to 'prohibited' to the extent that CIF value was less than Rs. 251 per kilogram that squarely applied to the impugned consignment with declared value of Rs. 105 per kilogram, declined to consider the relief sought in the writ petition that, by order of Hon'ble High Court of Bombay, was converted into request under section 110A of Customs Act, 1962. 7. There....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uch withholding is premised on legal ineligibility from some purported prohibition in other law in force and not attributed to pendency owing to investigation into valuation or classification. On the presumption that enactment of law proceeds from validly conferred authority and bears no inconsistency with existing legislation, unless deliberately intended so to create exception, the intent of inserting section 110A of Customs Act, 1962 could not have been designed to empower Commissioner of Customs to determine prohibition definitively enough at this stage of tentatively reasonable belief of possible detriment of section 111 of Customs Act, 1962 and, thereby, prejudice the judicious discharge of adjudicatory disposal of notice to be issued under section 124 of Customs Act, 1962. Therefore, it would appear to us that empowerment under section 110A of Customs Act, 1962 is limited to determination of the bond and surety values to be secured as quid pro quo and that, in the event of goods being prohibited, such conclusion at this stage is justified, and demonstrated, only by show cause notice under section 124 of Customs Act, 1962 setting adjudication process underway to preclude 'pro....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... is irresponsible argument; while seeking approbation of the report of the Delhi laboratory by touting as FSSAI-approved, the lack of validity of tests undertaken by the Mumbai laboratory is impliedly admitted and, yet, the divergence of that test with that of another FSSAI-approved laboratory is touted as justification for reference to the Delhi laboratory which, from the communication of 5th December 2022, appears to be for appellate recourse. Oddly, customs authorities resorted to this remedy reserved for those who have a stake in a final outcome though stake of customs authorities in non-revenue disputation is mighty strange indeed. 11. In the light of the impassioned plea of Learned Authorized Representative, we have thoroughly scoured Customs Act, 1962 - conferring jurisdiction upon us and, presumably, upon the respondent- Commissioner - and our eyes were unable to alight upon injury to public health as source of authority to alienate owner of the goods from possession thereto; all that we could find is contained in section 111 of Customs Act, 1962 which, as noted supra, is warranted only upon breach of prohibition imposed by Customs Act, 1962 or any other law for the time b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ance with the conditions of the licence; and (iii) any article of food in contravention of any other provision of this Act or of any rule or regulation made thereunder or any other Act. ....' of Food Safety and Standards Act, 2006 which, in relation to food, places restrictions on persons does not bring them under the jurisdiction of customs officers except on a finding by the designated officer that the said provision has been breached in the course of imports. The consequence of breach of the said obligation under the said statute, which does not empower customs authorities for any purpose whatsoever, is prosecution and action, including disposal thereof, that may be visited on goods, offending under the Food Safety and Standards Act, 2006, is laid out in rules and regulations framed thereunder; confiscation under Customs Act, 1962, with resultant vesting of the confiscated goods in the Central Government, would be at odds with the consequences intended by Food Safety and Standards Act, 2006. The entire regime for filtration of articles of food, including testing by FSSAI-credited laboratories and reference to FSSAI before clearance thereof, on import is founded upon this di....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on [final order no. A/85472/2022 dated 11th May 2022 in customs appeal no. 85127 of 2022] of the Tribunal in the dispute of this very appellant, viz., Excellent Betelnut Products Private Ltd v. Principal Commissioner of Customs holding that '20. This is a classification dispute and, being a classification dispute, denial of provisional release would be disproportionate determinant. The appellant is a regular importer and differential duty, if any, arising upon conclusion of proceedings should be recoverable without difficulty. Breach of policy prohibition, should that be determined, is also rectifiable for such is the authority to relax vested in the Director General of Foreign Trade and, hence, not warranting denial of provisional release....' is no less applicable to the facts before us. 14. The 'prohibition' in the notification cited in the impugned order cannot be made applicable to the impugned goods except by invoking provisions of Customs Act, 1962 attracting consequence of misclassification; there is no whiff of such intent. The conclusion that the impugned goods are 'unfit for human consumption' is beyond the scope of jurisdiction conferred by Customs Act, 1962 on the....