Madras High Court
M/S.Universal Impex vs The Commissioner Of Customs on 22 November, 2024
Author: Krishnan Ramasamy
Bench: Krishnan Ramasamy
W.P.Nos.23836 & 24237 of 2024
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on 28.10.2024
Pronounced on 22.11.2024
CORAM
THE HON'BLE Mr. JUSTICE KRISHNAN RAMASAMY
W.P.Nos.23836 & 24237 of 2024
and
W.M.P.Nos.26088, 26089, 26481 to 26484 of 2024
W.P.No.23836 of 2024:
M/s.Universal Impex,
G-39, APMC Market-1, Phase 2,
Vashi (Turbhe),
Navi Mumbai 400 705
Rep by its Proprietor,
Shri Sarfraj Jaliyawala
... Petitioner
Vs.
1.The Commissioner of Customs,
Chennai Import, Chennai II,
Commissionerate, Customs House,
No.60, Rajaji Salai,
Chennai 600 001.
2.The Additional Commissioner of Customs (Group-1),
Chennai Import, Chennai II,
Commissionerate, Customs House,
No.60, Rajaji Salai,
Chennai 600 001.
1/37
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W.P.Nos.23836 & 24237 of 2024
3.The Assistant Commissioner of Customs,
Import, Chennai II,
Commissionerate, Customs House,
No.60, Rajaji Salai,
Chennai 600 001.
4.The Assistant Commissioner of Customs (SIIB),
Chennai III,
Commissionerate, Customs House,
No.60, Rajaji Salai,
Chennai 600 001.
... Respondents
Prayer:
Writ Petition filed under Article 226 of the Constitution of India
praying to issue a Writ of Certiorarified Mandamus, to call for the
records of the 2nd respondent in and connected with order in original
No.108280 of 2024 dated 22.07.2024 emanating from
F.No.CUS/APR/MISC/2020/2023-Gr.1, quash the same and direct
release of the goods namely 'roasted areca nuts' imported by the
petitioner under Bill of Entry Nos.7941675 dated 21.09.2023, 7940425
dated 21.09.2023, 8272800 dated 12.10.2023, 8160955 dated 05.10.2023,
8703860 dated 09.11.2023, 8704992 dated 09.11.2023 and 8834034
dated 18.11.2023 and also grant detention cum demurrage waiver
certificate for the period under which the goods were detained in terms of
Handling of Cargo in customs Area Regulation, 2009 and in terms of the
Sea Cargo Manifest and Transhipment Regulations, 2018 as amended.
2/37
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W.P.Nos.23836 & 24237 of 2024
W.P.No.24237 of 2024:
M/s.Neena Enterprises,
Shop No.8, First Floor,
5-1-767/8/FF, Vithal Das Market,
Koti, Hyderabad,
Telangana 500 095
Rep by its Authorised Signatory,
Shri.Gagan Uppal
... Petitioner
Vs.
1.The Commissioner of Customs,
Chennai Import, Chennai II,
Commissionerate, Customs House,
No.60, Rajaji Salai,
Chennai 600 001.
2.The Additional Commissioner of Customs (Group-1),
Chennai Import, Chennai II,
Commissionerate, Customs House,
No.60, Rajaji Salai,
Chennai 600 001.
3.The Assistant Commissioner of Customs,
Import, Chennai II,
Commissionerate, Customs House,
No.60, Rajaji Salai,
Chennai 600 001.
...Respondents
Prayer:
Writ Petition filed under Article 226 of the Constitution of India
praying to issue a Writ of Certiorarified Mandamus, to quash the Order in
Original No.108265 of 2024 dated 22.07.2024 in
3/37
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W.P.Nos.23836 & 24237 of 2024
F.No.CUS/APR/MISC/624/2023 GR-1, attributable to the 2nd respondent
and further direct the respondents herein to cause release of the goods in
question and further direct the respondents to issue a detention certificate
for waiver of demurrage and container detention charges.
For Petitioner in
W.P.No.23836/2024 : Mr.B.Kumar, Senior counsel
for Mr.B.Sathish Sundar
For Petitioner in
W.P.No.24237/2024 : Dr.S.Krishnanandh
For Respondents
in both petitions : Mr.K.Umesh Rao,
Senior Standing counsel
COMMON ORDER
The writ petition in W.P.No.23836 of 2024 is pertaining to the
following bill of entries:
Bill of Entry Date
7941675 21.09.2023
7940425 21.09.2023
8272800 12.10.2023
8160955 05.10.2023
8703860 09.11.2023
8704992 09.11.2023
8834034 18.11.2023
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2. The writ petition in W.P.No.24237 of 2024 is pertaining to the
following bill of entries:
Bill of Entry Date
8293892 13.10.2023
8527337 29.10.2023
8527417 29.10.2023
8635894 05.11.2023
8650419 06.11.2023
3. Mr.B.Kumar, learned Senior counsel and Dr.S.Krishnanandh,
learned counsel appearing on behalf of the petitioners had made the
following submissions:
3.1 In this case, the petitioners had imported the “roasted areca
nuts” from Indonesia. Subsequent to the said importation, the samples of
areca nuts were sent to the CRCL Laboratories, Chennai, for testing. In
the report of CRCL Laboratories, Chennai, it has been stated that the
moisture content of the imported areca nuts is 3.97%.
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3.2 As per the Advanced Ruling Authority, if the moisture content
of the areca nuts is between the range of 10% and 15%, it would be
considered as “raw areca nuts”, whereas, if the moisture content is below
10%, it would be considered as “roasted areca nut”. When such being the
case, since the moisture content of the areca nuts imported by the
petitioner is 3.97%, the same shall be classified as “roasted areca nuts”
and in such case, the respondent is supposed to have released the goods
imported by the petitioner. However, in spite of the representations made
by the petitioner, the respondent had failed to take any steps to release
the goods. Under these circumstances, with no other options, the
petitioners were constrained to move the writ petitions, viz., W.P.Nos.
33420, 33422 and 36343 of 2023.
3.3 Pending the aforesaid petitions, the respondent had sent the
samples of the imported areca nuts to the CRCL Laboratories, New
Delhi, and received the report stating that the moisture content of one
sample is 8.8% and other sample is 7%. Since there was a variation in
moisture content in the reports of the CRCL, Chennai and CRCL, New
Delhi, this Court directed to draw the fresh samples of imported areca
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nuts, in the presence of importers and Customs Authorities, for testing by
Food Safety Authorities, Chennai. The said order was challenged vide
W.A.Nos.1493, 1945 of 2024, etc., however, the same was confirmed by
the Hon'ble Division Bench of this Court vide order dated 05.09.2024.
3.4 Thereafter, the Food safety Authorities took the samples and
after testing, they issued a certificate stating that the moisture content in
the areca nut is 3.64% in one batch and 3.48% in another batch.
Therefore, based on the said report, this Court passed an order dated
23.04.2024, directing the respondents to release the consignment for the
aforesaid bill of entries. Subsequently, an appeal was filed by the
respondent against the order passed by this Court, by way of writ appeals
in W.A.Nos.1537, 1540, 1545, 1547 of 2024, etc. Pending the appeals,
the respondent was directed to pass an adjudication order. Accordingly,
the adjudication order came to be passed by the respondents on
22.07.2024. Thereafter, vide order dated 24.07.2024, this Court disposed
of the said writ appeals by granting liberty to the petitioners to assail the
order dated 22.07.2024 by filing an appeal before the appropriate forum.
Hence, these petitions have been filed.
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3.5 The learned Senior counsel appearing for the petitioners would
submit that in this case, the respondents, in non-application of mind, had
passed the order-in-original without considering the several vital
documents produced by the petitioner. He would also contend that the
Advance Ruling Authorities had already determined the moisture content
of “roasted areca nut” and “raw areca nut”, i.e., if the moisture content is
below 10%, the same shall be considered as “roasted areca nuts”,
whereas, if the moisture content is between 10% and 15%, the same shall
be classified as “raw areca nuts”. In this case, in all the 4 lab reports, it
has been categorically stated that the moisture content of the imported
areca nuts is below 10%, that too, in 3 lab reports, it has been stated that
the moisture content is below 4%.
3.6 Further, he would contend that there is no precise definition
has been provided either in the Customs Tariff or anywhere else to define
the term “roasted areca nuts”. Hence, a set of procedures has been
discussed in Advance Ruling and after an elaborate discussion, the
Advance Ruling Authorities has arrived at a conclusion that based on the
moisture content, the areca nut would be classified either as 'raw areca
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nut' or as 'roasted areca nut'. The said order passed by Advance Ruling
Authorities was confirmed by the Hon'ble Division Bench of this Court
vide order passed in CMA.Nos.600, 1206 and 1750 of 2023 filed by the
petitioners and the same was not challenged before the Hon'ble Apex
Court, whereby the order had attained its finality.
3.7 However, by over-ruling the decision of Advance Ruling
Authorities and without considering all the above aspects and vital
documents, the order-in-original came to be passed by the respondent in
non-application of mind. When such being the case, though the alternate
remedies are available, the petitioner can very well approach this Court
on the grounds narrated above. In this regard, he had referred various
judgments of the Hon'ble Apex Court with regard to the situations, under
which, a Writ Court can interfere with the order-in-original passed by the
respondent.
3.8 The impugned order was passed as if the petitioners had
violated the provisions of Section 46(4) and 46(4A) of the Customs Act,
1962, and further, the respondent had referred the petitioner's goods as
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prohibited goods under Section 114AA and confiscated the same under
Section 111D and 111A of the Customs Act, 1962. Therefore, he would
submit that the impugned order came to be passed, in non-application of
mind, under the mis-conception as if the petitioners had imported the
“raw areca nuts” and wrongly declared the same as “roasted areca nuts”.
4. On the other hand, Mr.Umesh Rao, learned Senior Standing
counsel appearing for the respondents had raised strong objections for the
importation of areca nuts by the petitioner and made the following
submissions:
4.1 In this case, the petitioners have mis-declared their goods as
“roasted areca nuts” instead of “raw areca nuts” and hence, the goods
imported by the petitioners are liable for confiscation. He would also
submit that the areca nuts imported by the petitioners are only “raw areca
nuts”, for which, the import value consideration is a sum of Rs.351/- per
kg, which is minimum import price imposed on the Tariff Line under
0802 80. Hence, the petitioners are supposed to pay 100% of the duty
value.
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4.2 Initially, the CRCL Laboratories, Chennai, has given its report
with regard to the moisture content of the areca nuts, however, due to the
doubts raised, once again the samples of the areca nuts were sent to the
New Delhi. In the report given by CRCL Laboratories, New Delhi, it has
been stated that the samples may be considered as 'moderately heat
treated' and not as 'roasted'. Hence, he would contend that the goods
imported by the petitioners are not “roasted areca nuts” but it shall be
considered as “moderately heat treated areca nuts”.
4.3 Even the FSSAI Lab Authorities have been examined,
whereby, they have made it clear that they had not at all referred
anywhere else that the imported areca nuts, which were sent for testing as
per the order of this Court, as “roasted areca nuts” and they have only
mentioned about the moisture content and smell of those areca nuts.
4.4 Further, he would submit that subsequent to the passing of the
order-in-original by the respondents, this Court has categorically refused
to entertain the plea of the petitioner in the writ appeal filed by them and
directed the petitioner to only file an appeal before an appropriate forum
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in the manner known to law. However, in spite of filing an appeal before
the concerned Appellate Authority, the petitioners have wrongly
approached this Court, which is contrary to the order passed by the
Hon'ble Division Bench of this Court.
4.5 He would also submit that the petitioners have also filed an
appeal on the aspect of releasing the goods, upon payment of fine in lieu
of confiscation under Section 124 of the Customs Act. However, he
would contend that in this case, the confiscation is absolute and since the
goods imported by the petitioners are prohibited goods, the same cannot
be released upon payment of fine in lieu of confiscation.
4.6 Further, he would submit that since the issues involved in these
writ petitions is with regard to the classification of areca nuts, i.e., factual
issues, the same can only be adjudicated by the Authorities concerned
and not by the Constitutional Court and the law is very well settled in this
aspect. Therefore, for the reasons stated above, he requested this Court to
dismiss these petitions and relegate the petitioners to prefer an appeal.
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5. In reply, the learned Senior counsel appearing for the petitioner
would submit that both the “raw areca nuts” and the “roasted areca nuts”
can be imported and only the payment of duty will vary, i.e., the cost of
raw areca nut would be 100% of the value by taking minimum import
price as a sum of Rs.351 per kg, whereas, the roasted areca nut would be
around 30%. Hence, he would contend that it is neither an absolute
confiscation nor the goods are prohibited and accordingly, the release of
goods, upon payment of fine in lieu of confiscation, is permissible.
6. Dr.B.Ramaswamy, learned amicus curie appointed by this
Court, had filed his report stating that in the present case, the goods
imported had fulfilled the parameters fixed by the Advance Ruling
Authorities for “roasted areca nuts”. However, the respondents have
made a strong objection for the said report filed by the learned amicus
curie and would submit that the learned amicus curie is only supposed to
put forth the facts and circumstances of the case and it is for the Court to
arrive at a conclusion with regard to the nature of imported areca nuts.
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7. In reply, the learned amicus curie would submit that in this case,
he has only ascertain the facts and put forth the same before this Court in
the form of a report. Further, he would submit that it is up to this Court to
arrive at any decision and also he will not stand in the way of taking any
decision by this Court, either in favour of petitioners or in favour of
respondents.
8. I have given conscious consideration to the submissions made
by the learned Senior counsel appearing on behalf of the petitioner, the
learned Senior Standing counsel appearing on behalf of the respondents
and the learned amicus curie appointed by this Court and also perused
the entire materials available on record.
9. In the case on hand, the writ petitioners have imported areca
nuts from Indonesia on various dates by virtue of respective bills of
entries, which reads as follows:
W.P.No.23836 of 2024:
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Bill of Entry Date
7941675 21.09.2023
7940425 21.09.2023
8272800 12.10.2023
8160955 05.10.2023
8703860 09.11.2023
8704992 09.11.2023
8834034 18.11.2023
W.P.No.24237 of 2024:
Bill of Entry Date
8293892 13.10.2023
8527337 29.10.2023
8527417 29.10.2023
8635894 05.11.2023
8650419 06.11.2023
10. The issues that have to be decided in this case are as follows:
i) Whether the areca nuts imported by the
petitioners are “roasted areca nuts” or “raw areca nuts”?
ii) Whether this Court is a Competent Court to
decide about the nature of imported areca nuts, when the
alternate remedy of appeal is available for the petitioner?
11. This Court would like to deal with the above 2 issues together
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and answer the same accordingly.
12. In this case, the petitioners have imported areca nuts by virtue
of the respective bill of entries stating that the goods imported are
“roasted areca nuts”. Upon perusal of tariffs, it is clear that the “raw
areca nuts” falls under the Chapter 8 of Tariff 0802 80, whereas, the
roasted areca nuts falls under the Chapter 20 of Tariff 2008 1920. There
is no dispute between the parties with regard to the difference in Tariff
and respective tariff entries for “raw areca nuts” and the “roasted areca
nuts”.
13. The Advance Ruling Authorities have already determined the
moisture content of roasted areca nuts, which falls under Chapter 20 of
the Customs Act, as below 10%, whereas for raw areca nuts, which falls
under the Chapter 8 of the Customs Act, it was determined as between
10% to 15%. The said aspect was also confirmed vide the order passed
by the Hon'ble Division Bench of this Court in writ appeals.
14. Now, let me examine as to what is the meaning of “roasted
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areca nuts”?
15. Admittedly, there is no precise definition for the term “roasted
areca nuts”. Even in the order-in-original, the respondents had recorded
its findings as there was no definition for the term”'roasted” to define as
to what is “roasted areca nuts”, either in the Customs Act or Tariff. At
this juncture, it would be apposite to extract Point No.5 of the impugned
order in W.P.No.23836 of 2024, which reads as follows:
5. CONSULTATIONS WITH DOMAIN EXPERT
AGENCIES ON PARAMETERS & TESTING
PROCEDURES:
5.1. Upon visual inspection of the imported goods,
it was found that areca nuts of differing colors and
textures were imported, making it difficult to assess
whether they are roasted or not, or the degree of roasting
if any.
Definition of roasting: It would be relevant to
define what is roasting in the first place. Roasting is a
slow-cooking process, using indirect, diffused heat to
cook its ingredients. It is a dry-heat cooking method
where hot air surrounds the goods and cooks it evenly on
all sides at a temperature of at least 300 °F (or 150 °C).
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The heat can also be derived from an open flame, an
oven, or another heat source. Roasting is typically used
to enhance flavour in a dish through caramelization and
browning on the surface of food. This method can also be
used to cook vegetables and fish. In the past, roasting
was typically done with an open flame, but is now
commonly done in the oven. In doing so, roasting takes
advantage of the natural sugar present in ingredients to
create a more concentrated taste. Roasting also retains
more nutrients than other cooking methods.
5.2. It is pertinent to note that, the applicant in his
application to the Customs Authority for Advance
Rulings "CAAR"), had submitted that the following
processes are involved in the Preparation of Roasted
Areca Nut: The raw/fresh areca nut undergoes various
process of preparation for roasting, which are detailed
below:
Firstly, the raw areca nut is de husked and its
outer shell is removed Thereafter, the de-husked nut is
scattered to check for any visible impurities and the same
is cleaned, pursuant to which the raw dehusked areca
nut/betel nut is left to dry. Secondly, the cleared and
dried de husked areca nuts are fed into the seed roasting
oven/machine and heated in the temperature of above
100 Degree Celsius. The roasting is done using firewood/
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palm kernel-based ovens/machines and the temperature
of the flames is around 400 to 600 degrees Celsius. As a
result, the betel nuts would be roasted well beyond 100
degrees Celsius, usually in the range of 130-150 degrees
Celsius.
Thirdly, the areca nuts are removed from the
roasting oven and allowed to cool at normal room
temperature, with the assistance of the cooling fans.
Fourthly, when the areca nuts have cooled and
attained normal room temperature, they are again fed
back into the oven at enormous heat, so as to evenly
roast the areca nut.
This process is performed repeatedly, until the
water content of the fresh areca nuts is reduced to 10 to
15 per cent.
It needs to be noted here that the process of
scattering mentioned is nothing but that of sun drying of
the nuts. [here there is a clear admission that the nuts
are already dried.] Mention of the flame temperature is
not relevant, that is the heat with which the fire
decomposes the solid firewood or palm kernels into a
gaseous state by burning and that flame temperature is
not relevant to the temperature of the nuts which are only
heated to a temperature of 100 degress for a short time
and are not burnt to a crisp therefore they cannot be said
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to be roasted in the proper sense, they are only heat
treated for a short while.
5.3. The most telling and accurate comment which
proves that the goods are being heated in the oven in this
process only for the sake of removing the inherent
moisture is readily apparent and evident from the
process which is graphically described above, but which
only results in removal of the moisture to the extent of
10-15%, which is far higher than the FSSAI norms for
even normal arecanut which has to be dried to an extent
of a minimum of 7% to be even considered as fit for
human consumption].
5.4. However, from most of the publications and
even from the FSSAI regulations, it can be ascertained
that the moisture content in raw arecanuts itself will be
lower than 10% and as per 2.3.55 standard of FSSAI
Food Regulations 2011, the Maximum moisture content
allowed is 7% for Areca nuts. In view of this, the
applicants claim of roasting the de-husked nuts multiple
times at high temperatures to bring down the moisture
content of areca nuts to 10-15% seems frivolous and
unacceptable. In view of this, Consultation with multiple
agencies viz. National Institute of Food Technology,
Entrepreneurship and Management Thanjavur
(NIFTEM-T), Arecanut Research & Development
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Foundation (R) Mangalore, M.S. Swaminathan
Agricultural College and Research Institute Thanjavur,
Kelad. Shivappa Nayaka University of Agricultural &
Horticultural Sciences Shivamogga, ICAR-Central
Plantation Crops Research Institute Kasargod etc.
having expertise in agricultural science were made by
way of letter communications (RUD-4), asking them to
provide information on the procedures adopted and
parameters (Moisture content/carbohydrate/Polyphenols
etc.) looked into for testing the areca nuts in identifying
whether they have gone through the procedure of
roasting. Further, representative samples were drawn
and forwarded herewith in Tamper Proof Sampling
Covers to test and classify the nuts based on the
processing they have gone through (either roasted or
raw areca nuts etc.). Test report of Arecanut Research &
Development Foundation (R) -Mangalore was received
in which it was stated that there is no particular variety
known as roasted areca nut and the nuts sent for testing
were of Indonesian variety, emitting a smoky smell,
containing visible mould infestation and it interalia
stated that, the areca nuts were not in accordance with
the quality standards set out. Letters to CRCL labs
(Chennai & Delhi) were sent seeking details on the
roasting procedures. As no concrete reply from the
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above-mentioned agencies or any scientific publications
on the tests or parameters adopted in identification of
roasted nuts was adduced, recourse in this respect is
taken from the order of Customs Authority for Advance
Rulings ("CAAR") itself. Portion of the CAAR order
"CAAR/MUM/ARC/39,40,41/2023 dated 12.05.2023" is
reproduced below for ease of reference:
"4.17 I have perused a test report issued by ABC
Techno Labs India Pvt. Ltd., Chennai dated 31.3.2023 on
the samples of roasted areca nut whole & split in which
the test result indicates the moisture content, a test
parameter, of the samples in the range of 3.34% to
3.84%. Moisture content in raw areca nut is found to be
generally in the rage on 10-15%. As per applicant this
test report indicates that the products were subjected 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
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applicant's contention that the goods were subjected to
the process of roasting and not merely to a moderate
heat treatment."
5.5. As per the instruction provided in the CAAR
order mentioned above, the representative samples
collected were sent to CRCL labs for testing the samples
for total moisture content and carbohydrate content for
identifying the nature of areca nuts.”
16. In the above paragraphs, the respondent had stated that even
though they have requested the CRCL Lab, Chennai and CRCL Lab,
Delhi, they had not received any response with regard to the roasting
procedures. Hence, they have recorded that there was no concrete reply
from both the CRCL Labs and also from other agencies, viz., National
Institute of Food Technology, Entrepreneurship and Management
Thanjavur (NIFTEM-T), Arecanut Research & Development Foundation
(R) Mangalore, M.S. Swaminathan Agricultural College and Research
Institute Thanjavur, Kelad. Shivappa Nayaka University of Agricultural
& Horticultural Sciences Shivamogga, ICAR-Central Plantation Crops
Research Institute Kasargod etc.
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17. According to the respondents, they are all having expertise in
agricultural science. Therefore, they have been called for report with
regard to the information of procedures adapted for testing the roasted
areca nuts. However, they have not provided any detailed report with
regard to the roasting procedure.
18. Further, in the impugned order, the respondent had extracted
the paragraph No.4.17 of the order passed by the Advance Ruling
Authorities, which reads as follows:
"4.17 I have perused a test report issued by ABC
Techno Labs India Pvt. Ltd., Chennai dated 31.3.2023
on the samples of roasted areca nut whole & split in
which the test result indicates the moisture content, a
test parameter, of the samples in the range of 3.34% to
3.84%. Moisture content in raw areca nut is found to be
generally in the rage on 10-15%. As per applicant this
test report indicates that the products were subjected 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
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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 refused to accept the order
passed by the Advance Ruling Authority and had submitted that as per
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2.3.55 Standard of Food Safety and Standards (food products standards
and food additives) Regulations, 2011, the maximum moisture content is
7% in the areca nuts and some times, the moisture content in the raw
areca nuts itself will be lower than 10%. Therefore, they had refused to
accept the decision of the Advance Ruling Authorities.
21. However, this Court is of the view that while arriving at the
conclusion in respect of the nature of imported areca nuts, it is important
for the respondents to analyse the self life of the raw areca nuts as well as
the roasted areca nuts. However, the respondent has not carried out any
exercise in this aspect. If the moisture content is considered with the self
life of the raw areca nuts, probably, the Authorities would have arrived at
different conclusion. However, no such exercise was carried out by the
Authorities concerned.
22. Further, as discussed above, there is no precise definition for
the term “roasted areca nuts”. Hence, in the absence of such precise
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W.P.Nos.23836 & 24237 of 2024
definition, they are bound to follow the decision of the Hon'ble Division
Bench, whereby the order passed by the Advance Ruling Authorities was
confirmed. However, while arriving at the conclusion to determine the
nature of imported goods, the respondents had passed the impugned
order-in-original, whereby they had completely deviated the law laid
down by the Hon'ble Division Bench.
23. The respondents had also referred the report issued by CRCL
Laboratories, New Delhi, whereby it was mentioned that the moisture
content of the areca nuts is 7% and 8.8%. On the other hand, according
to the petitioners, there was heavy rain due to cyclone and the areca nuts
were kept in a warehouse, where the water has intruded, due to which, in
the report given by CRCL, Delhi, the moisture content of the areca nuts
was shown on the higher side i.e., as 7% and 8.8%, Even though
moisture content was shown on the higher side, the same does not
exceeds the parameters fixed by the Advance Ruling Authorities for
“roasted areca nuts”. Further, in the other 3 reports given by CRCL
Laboratories, Chennai, FSSAI and M/s.PT Carsurin Medan, the
accredited Laboratory in Indonesia, the moisture content of the areca nuts
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W.P.Nos.23836 & 24237 of 2024
are shown as below 4%.
24. Further, though 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
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W.P.Nos.23836 & 24237 of 2024
nuts”. When such being the case, certainly, this Court can interfere with
the order-in-original passed by the respondent. Therefore, this Court is of
the view that though the alternate remedy is available, the petitioner can
very well approach this Court.
26. Further, the necessity for this Court to interfere in the
impugned order-in-original are as follows:
i) The order of Advance Ruling Authorities,
whereby they had fixed the parameters with regard to the
moisture content of the “roasted areca nut”, has not been
considered by the respondents while passing the
impugned order;
ii) In the CMA Nos.600, 1206 and 1750 of 2023,
the Hon'ble Division Bench had upheld the aforesaid
parameters fixed by the Advance Ruling Authorities vide
its order dated 01.08.2023 and the same was not at all
challenged by the respondents, in which case, the said
order had ultimately attained its finality. However, in
non-application of mind, the respondent had passed the
impugned order without considering the lab reports and
other vital documents filed by the petitioners.
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W.P.Nos.23836 & 24237 of 2024
27. In the above situations, this Court can very well interfere with
the order-in-original and the law is very well settled in this aspect.
Accordingly, the 2nd issue is hereby answered.
28. That apart, as contended by the petitioners, both the areca nuts
(raw areca nuts and roasted areca nuts) are not prohibited goods and the
same can be imported. For the importation of raw areca nuts, the
minimum price fixed is a sum of Rs.351/- per kg, whereas, no such
minimum price was fixed for the roasted areca nuts. Under these
circumstances, as per the parameters fixed by the Advance Ruling
Authorities, if the moisture content is between 10% and 15%, the same
would be considered as “raw areca nut” and anything below the said
category would be considered as “roasted areca nut”. Except the said
parameters, no other determinations are available to classify the nature of
areca nuts. In this case, most of the laboratories had given their reports
stating that the moisture content of the areca nuts is below 4%.
29. Even in the order-in-original, the respondents have recorded
that in spite of the request made by the respondents, no concrete reply
was provided by the aforementioned laboratories with regard to the
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roasting procedure of areca nuts. Under these circumstances, the
Advance Ruling Authorities had fixed the parameters to determine as to
whether the areca nuts are roasted 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
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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 areca nuts are not dried (fruits before
peeling) or roasted (after peeling), the same will get affected with fungus.
Further, it was informed by the farmers that once the raw areca nuts
(before its ripening stage) are peeled out and kept for more than a week,
the same will get spoiled and will not become viable to sell it
commercially. Hence, in the case of “raw areca nuts”, it is clear that the
same cannot be imported unless and otherwise it is “boiled” or “roasted”.
In this case, the Lab reports had made it clear that the said Labs have
witnessed the burning smell while testing the imported areca nuts, which
ultimately proves that the said imported areca nuts are “roasted”.
32. In this case, though the goods were imported an year ago, still
it had not lost its originality and it is in good condition, which ultimately
shows that the imported goods are “roasted areca nuts”.
33. For all these reasons, this Court is of the considered view that
as per the parameters determined by the Advance Ruling Authorities and
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taking into consideration of other aspects as discussed above, the areca
nuts, imported by the petitioners, will squarely fall within the parameters
of “roasted areca nuts”. However, the respondent had failed to consider
the aspects, which were discussed above, and passed the order-in-original
without even considering the order passed by this Court in CMA
Nos.600, 1206 and 1750 of 2023, whereby the order of the Advance
Ruling Authorities was confirmed. Therefore, the impugned order passed
by the respondent is liable to be set aside. Accordingly, the impugned
order passed by the respondents dated 22.07.2024 is set aside.
34. Since this Court has arrived at the above decisions after
considering the facts and circumstances of the case, the judgments
referred by both the learned Senior counsel have not been considered by
this Court.
35. Further, this Court is of the view that since these goods were
imported an year ago, the further delay in releasing the goods will
damage the products, which leads to economical waste of money, men
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and the efforts put by the farmers to cultivate these products. Therefore,
this Court is not inclined to sit and watch such waste of money, men,
labour and hard work of farmers.
36. In view of the above, this Court directs the respondents to
release the areca nuts, imported by the petitioner, within a period of
2 working days from the date of receipt of copy of this order. Further,
since the fault is purely on the part of the respondents, they shall release
the goods without any demurrage charges. In this regard, the respondents
are directed to issue a detailed certificate for waiver of demurrage and
container charges.
37. Additionally, this Court feels that it would be appropriate to
point out that the Government has taken all the initiatives to protect
the interest of the farmers, including the fixation of minimum
support price for importing the “raw areca nuts” at the rate of Rs.351/-
per kg along with standard rate of duty at 100% and basic rate of duty at
80%. However, now the importers had imported the goods in the form of
“roasted areca nuts”, which would falls under Chapter 20, where they can
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import the “roasted areca nuts” at the rate of 30% of duty and no
minimum support price has been fixed for the “roasted areca nuts”.
Therefore, taking advantage of Tariff entries in Chapter 20, the “roasted
areca nuts” have been imported and if the minimum support price is also
fixed for the “roasted areca nut” as of the “raw areca nuts”, the entire
issue will get resolved and in future, no such issues will be raised in the
case of importing the areca nuts. Of course it is not to say anything about
the minimum support price of the “roasted areca nuts” but it is purely the
wisdom of legislation.
38. In the result, these writ petitions are allowed. No costs.
Consequently, the connected miscellaneous petitions are also closed.
22.11.2024
Speaking/Non-speaking order
Index : Yes / No
Neutral Citation : Yes / No
nsa
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W.P.Nos.23836 & 24237 of 2024
To
1.The Commissioner of Customs,
Chennai Import, Chennai II,
Commissionerate, Customs House,
No.60, Rajaji Salai,
Chennai 600 001.
2.The Additional Commissioner of Customs (Group-1),
Chennai Import, Chennai II,
Commissionerate, Customs House,
No.60, Rajaji Salai,
Chennai 600 001.
3.The Assistant Commissioner of Customs,
Import, Chennai II,
Commissionerate, Customs House,
No.60, Rajaji Salai,
Chennai 600 001.
4.The Assistant Commissioner of Customs (SIIB),
Chennai III,
Commissionerate, Customs House,
No.60, Rajaji Salai,
Chennai 600 001.
Note: Issue Web Copy today
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W.P.Nos.23836 & 24237 of 2024
KRISHNAN RAMASAMY.J.,
nsa
W.P.Nos.23836 & 24237 of 2024
and W.M.P.Nos.26088, 26089, 26481 to 26484 of 2024
22.11.2024
https://www.mhc.tn.gov.in/judis
