TaxTMI 
TaxTMI 
2026 (4) TMI 451
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....hree Hundred Twelve Only) to bind himself to pay in case of any duty demand /fine/ penalty interest as may be leviable on such goods, subsequently in adjudication in the light of Para 2.1 of Board's Circular No. 35/2017-Cus dated 16.08.2017. (ii) In addition, the importer shall furnish a Bank Guarantee/Security (containing clause binding the issuing Bank to keep it renewed and valid till payment of full liability in this case, or in the even of non-renewal of bank guarantee, the guaranteed amount be credited to Govt. Account by the bank on its own) of Rs. 7,70,84,881/- (Rupees Seven Crore Seventy Lacs Eighty Four Thousand Eight Hundred Eighty-One Only) as security covering payment of any possible future liabilities of Duties/penalties/ fines against the said goods in the light of Para 2.2 of Board Circular No. 35/2017-Cus Dated 16.08.2017." 2. Briefly the facts of the present case are that the appellant during the course of business for import of Food Items in order to import "Roasted Areca Nuts" from Indonesia applied for Advance Ruling u/s 28 H of the Customs Act, 1962 before the Authority for Advance Ruling, wherein the Ruling was issued in favour of the appellan....
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...., on the basis of CRCL report, the department came to the conclusion that the imported goods are not roasted and ordered for seizure of the goods under Section 110 of the Customs Act, 1962 vide seizure memo dated 13.10.2025; thereafter, the appellant requested the respondent for release of goods under Section 110A of the Customs Act vide letter dated 22.11.2025, wherein, the appellant submitted copy of Star Export House Certificate issued by the DGFT to the appellant and thereafter, personal hearing was granted to the appellant on 28.11.2025 and thereafter, impugned order dated 09.12.2025 was passed imposing stringent conditions for provisional release of the goods. Aggrieved by the said order, the appellant filed the present appeal. 3. Heard both the parties and perused the material on record and both the parties have filed their written submissions which are taken on record. 4. Learned Counsel for the appellant submits that the impugned order is not sustainable in law and is liable to be set aside as the same has been passed without properly appreciating the facts and the law; and binding judicial precedents. He further submits that the conditions imposed for provisional re....
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....at the report of referral laboratory which has concluded that the imported sample of areca nuts are roasted and fit for human consumption should be given preference over the report furnished by CRCL New Delhi. He further submits that the test reports issued by the CRCL New Delhi cannot be relied upon because tests have not been conducted as per the guidelines framed by Food Safety & Standard Authority of India vide FSSAI (import regulation), wherein it has been specified that the samples of foods items are to be tested by food analyst whereas in the present case Sh. T.R. Suresh is not a food analyst and consequently test results furnished in the said report cannot relied upon. Learned counsel further contended that CRCL New Delhi failed to conduct test within the prescribed time limit as prescribed under FSSAI (Import Regulation); CRCL New Delhi received the samples on 27.05.2025, however, the test reports was furnished on 30.06.2025 after a gap of more than one month; further in the case of re-testing conducted by from CRCL New Delhi, samples were sent for testing on 22.07.2025 and test report was submitted on 20.08.2025 after a gap of more than 25 days. The learned counsel placed....
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....e sample is roasted areca nuts having moisture contents less than 10% and fit for human consumption. He further submits that the earlier reports from the nearest food laboratory Bali Test House dated 23.09.2024, 04.10.2024, 09.10.2024 and 07.10.2024, where the earlier samples of areca nuts were sent as per the Food Safety and Standard Regulation Act, 2011 and was found fit for human consumption. He further submits that both the laboratories found the samples areca nuts conform to be standard prescribed by the Food Safety and Standard Authority of India Act, 2006 and also the Rules made thereunder. 4.4 Learned counsel for the appellant further submits that the seizure memo dated 30.10.2025 executed by the respondent Customs Department reveals that the same was issued "without any din" and thus the same appears to be an after thought in order to save the limitation under Section 110 and 110A of Customs Act, 1962. He further submits that in the earlier imports of the areca nuts, the Hon'ble High Court in CWP No. 28682 of 2024 passed an Interim Order that the samples of imported roasted areca nuts be sent to the nearest authorized laboratories and in spite of such direction, the Dep....
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....ly. He further submits that there is no difference between the "Seizure" and "Detention" and for this, he relied upon the following decisions: ⮚ Ms. Rajesh Arora vs. Collector of Customs, 1998 (101) ELT 246 (Del.), ⮚ M/s Gian Chand & Ors. Vs. State of Punjab 1983 (13) ELT. 1365 (S.C.). ⮚ M/s M Mohammed Vs. Collector of Customs & C.Ex. Cochin 1999 (110) ELT 451 (Ker.) ⮚ M/s S.J Fabric Pvt. Ltd Vs. Union of India 2011 (2680 ELT 17 (Cal.) ⮚ M/s ESI Ltd. Vs. Union of India 2003 (156) ELT 344 (Cal.) ⮚ M/s Om Udyog Vs. Union of India 2010 (254) ELT 547 . ⮚ M/s Exim Corporation Vs. Union of India & Ors. CWP No. 1898 of 2020 ⮚ M/s Sai Incorporation Vs. Principal Commissioner for Customs (Import) 2016 (338) ELT 578 ⮚ M/s Ramnarain Bishwanath Vs. Collector of Customs Calcutta 1988 (34) ELT 202 (Tribunal) affirmed by Hon'ble Supreme Court in 1997 (96) ELT 224 (S.C.). 5. On the other hand, learned Special Counsel for the respondent has justified the impugned order of provisional release passed by the Commissioner. He further submits that the Departm....
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....ts) 2019 (366) ELT 70 (DEL) [High Court of Delhi (DB)) * Unik Traders Vs. Directorate of Revenue Intelligence, Chennai 2019 (367) E.L.T. 353 (Mad.) [High Court of Madras (DB)] * Malabar Diamond Gallery Pvt. Ltd. Vs. Addl. Dir. General, Directorate of Revenue Intelligence, Chennai 2016 (341) E.L.T. 65 (Mad.) [High Court of Madras (DB) * Classic Interiors Vs. Commissioner of Customs, New Delhi [Customs Appeal No. 51454 of 2022] [CESTAT-New Delhi) 6. In reply to the arguments put forth by the Special Counsel for the Department, the learned Counsel for the appellant has filed rebuttal to the submissions made by the respondent. The learned counsel for the appellant submits that the objections of the Special Counsel that the writ petition challenging the reports issued by the CRCL is pending adjudication in CWP No. 17983-2025 and therefore, the present appeal does not lie. The learned counsel submits that in the said petition as referred by the respondent does not pertain to the proceedings pertaining to bill of entry dated 04.02.2025 and the Hon'ble High Court vide its order dated 18.02.2026 was pleased to grant liberty to the appellant to challenge the pro....
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....epartment has strongly placed reliance on the Test Reports issued by CRCL New Delhi, wherein the said Laboratory cannot give any opinion in respect of the classification of the goods in question and further submits that the report furnished by NFL Ghazibad shall have credence over the report issued by CRCL, New Delhi. For this submissions, he relied upon the Reliance is placed on following decisions: * Principal Commissioner of Customs/Preventive Commissionerate, New Delhi Vs N & N Traders (2024) 18 Centax 274 (Tri-Del). * Shri Lakshmi Cotsyn Ltd Vs Commissioner of Cus. & C. Ex. Kanpur 2011 (263) ELT 299 (Tri-Del.). * Smart Designer Vs Commissioner of Customs (Import) Mumbai 2019 (367) ELT 299 (Tri-Mum). 7. We have considered the submissions made by both the parties and has gone through the material on record as well as various judgments relied upon by both the parties, we find that the appellant has challenged the impugned order on the ground that the conditions for provisional release of the goods are onerous and arbitrary and unreasonable. Further, we find that in the present case before importing the goods/consignments i.e. roasted areca nuts from ....
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....1 I note that the processes mentioned in Chapter 8 include chilling, steaming, boiling, drying and provisionally preserving. It does not specifically include the process of roasting. Here, it is Important to understand the difference between the processes of moderate heat treatment & dehydrating/drying referred in chapter 8 and processes of dry roasting, oil-roasting and fat-roasting referred in chapter 20. The terms dry-roasting, oil-roasting and fat-roasting however are not defined in the Customs Tariff Act, 1975. Therefore, these terms have to be understood in a commonly accepted sense. The Hon'ble Apex Court in the case of Alladi Venkateswarlu v. Government of Andhra Pradesh 1978 AIR 945 held that "the commonly accepted sense of a term should prevail in construing the description of an article of food". In common trade parlance, "drying" is a method of food preservation by the removal of water content. On the other hand, "roasting" means the excess or very high heat treatment that produces fundamental chemical and physical changes in the structure and composition of the goods, bringing about a charred physical appearance. Therefore, drying is a moisture removal process invo....
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....cted to the roasting process. This aspect of product testing is a part of Customs Compliance Verification (CCV) process on importation of goods. Jurisdictional Customs Commissionerate carry out process of testing of imported goods with the help of concerned government partner agencies (GPAs) to cross- examine accuracy of declaration of goods in the import documents namely a Bill of entry and it's supporting documents before an out of charge (00C) is granted. Hence the utility of sample test report at this stage is limited to only support applicant's contention that the goods were subjected to the process of roasting and not merely to a moderate heat treatment." 19. The above paragraph makes it clear that even though no concrete reply was provided with regard to the roasting procedure of areca nuts from any agencies, the Advance Ruling Authorities have determined the parameters for "raw areca nuts" as well as the "roasted areca nuts". They had found that generally the moisture content of the "raw areca nuts" would be between the range of 10% and 15%, whereas the moisture content of "roasted areca nuts would be below 10%. 20. The respondent-department had re....
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....h the respondents had considered and recorded the findings of the Advanced Ruling Authorities, they had failed to provide any reason for non-consideration of parameters fixed by the Advance Ruling Authorities, based on which, one could arrive at a conclusion that the imported areca nuts are roasted or not. In spite of the fact that 3 Laboratories had given reports stating that the moisture content of the areca nuts is below 4%, the respondent had ignored the said reports and rejected the same blindfoldedly. 25. That apart, the parameters fixed by the Advance Ruling Authorities was also confirmed and upheld by the Hon'ble Division Bench of this Court and the same was not at all challenged before the Hon'ble Apex Court. In such case, it is clear that the order passed by the Advance Ruling Authorities had attained its finality and hence, the law is well settled in the aspect of fixing the parameters for roasted areca nuts. However, without considering the said parameters, the respondents had arrived at a conclusion that the imported areca nuts are not "roasted areca nuts". When such being the case, certainly, this Court can interfere with the order-in-original passed ....
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....or not and as stated above, no other definition is available to determine as to whether the areca nuts are roasted or not except the said parameters fixed by the Advance Ruling Authorities. However, without following the said parameters, the respondents had applied their own procedures while passing the impugned order, which is not permissible either in the Advance Ruling or in the Customs Tariff or under Customs Act. 30. Further, the respondents had over-exercised their Jurisdiction and completely ignored the law laid down by this Court in CMA Nos.600, 1206 and 1750 of 2023 with regard to the parameters, based on which, one could arrive at a conclusion and get answers for the definition of "roaster areca nuts". 31. At this juncture, it is pertinent to mention that the author of this order is also hails from the agricultural family and the betel nuts are cultivated, in and around his farm lands, where he had occasions to examine the difference between the "raw areca nuts" and the "roasted areca nuts". As per the answers received from the Farmers, who are cultivating the betel nuts (areca nuts) and doing the process of roasting the same, it appears that if the arec....
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....ision Bench of the Hon'ble High Court of Madras as Commissioner of Customs Vs. Universal Impex 2025 (394) ELT (394) ELT 606 (Mad) as also by the Hon'ble Supreme Court of India in the case of Commissioner of Customs, Vs. M/s Neena Enterprises SLP ( C ) No. 17655-17656 of 2025 decided on 25.07.2025. 10. Further, it is pertinent to mention here that recently the Hon'ble Bombay High in Writ Petition No. 3161 of 2026 decided on 06.03.2026 in the case of NBG International Private Limited vs. Union of India and others, has examined the identical issue of roasted areca nuts which were seized by the Customs Department and onerous and unreasonable, arbitrary condition of bank guarantee was imposed for its provisional release. The Hon'ble Bombay High Court, after considering submissions of both the parties at length and after considering the procedure prescribed for testing the said goods, has quashed and set aside the demand of furnishing bank guarantee for its provisional release. Relevant findings of the Hon'ble Bombay High Court are reproduced herein below: "16. We are thus in agreement with the contentions as made on behalf of the Petitioner that once the FSSAI has cleared th....
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.... and test reports are made by FSSAI within five days from the date of receipt of sample with conclusive opinion about the product tested as conforming or non-conforming. This goes on to show that the tests conducted by the FSSAI are of precise nature and high standards of testing are ensured and made applicable before clearing the food suitable for human consumption. In this view of the matter, we are of the opinion that any window for reclassification of the categorised goods, itself is not on a sound premise, in the facts and circumstance of the case. 19. In the light of the aforesaid discussion, we are of the firm opinion that the action of the Respondents to detain the Petitioner's imports in question, is not justified. * * * * * *" 11. Further, we find that manner in which the Custom Department from the very beginning has not acted in accordance with the regulation issued by FSSAI (Import Regulation), wherein it has been specifically provided that samples of Food Items should be sent to the nearest lab and the nearest lab in the present case is the Bali Test House which is also accreted laboratory by FSSAI authorities and in the past the appellant has imported the ....
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....llant which clearly shows that the Chemical Examiner has been given contradictory reports to different importers with regard to the same product and he is not a competent Food analyst also. Further, we find that the Department in passing the impugned order has mainly relied upon the Circular No. 35/2017 for the purpose of imposing the bank guarantee for provisional release of the goods. The said circular has been struck down by the Hon'ble High Court of Delhi in the case of Additional Director General Vs. Its My Name Pvt. Ltd (cited supra) and was held to be bad in other cases (cited supra). 13. As regards the reliance placed by the Customs in the case of M/s T.L. Verma & Co. Pvt. Ltd (cited supra), the facts of that case are not applicable in the present case because the condition of bank guarantee was imposed in that case, keeping in view the modus operandi adopted by the said importer for under valuation as observed in Para 3 of the said order, whereas, in the present case, the proposed change in classification is solely based on the test report by CRCL, New Delhi on the basis of visual inspection. Further, we find that the decision in the case of T.L. Verma (cited supra), wa....