Madras High Court
M/S.Shahnaz Commodities ... vs The Chairman on 3 June, 2025
W.P.(MD).Nos.27895 & 27615 of 2024
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
RESERVED ON : 28.04.2025
PRONOUNCED ON : 03.06.2025
CORAM:
THE HONOURABLE MR.JUSTICE VIVEK KUMAR SINGH
W.P.(MD)Nos.27895 & 27615 of 2024
and
W.M.P.(MD)No.23656 of 2024
In W.P.No.27895 of 2024:-
M/s.Shahnaz Commodities International Pvt.
Ltd.,
715, 7th Street, Spencer Plaza,
Suite 652, Mount Road,
Chennai-600 002. ... Petitioner
Vs.
1.The Chairman,
Central Board of Indirect Taxes
& Customs,
North Block,
New Delhi – 110 001.
2.The Principal Director General,
O/o.Directorate of Revenue Intelligence,
7th Floor, D-Block, I.P.Bhawan,
I.P. Estate,
New Delhi – 110 002.
1/26
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3.The Additional Director General,
O/o. Directorate of Revenue Intelligence,
Zonal Unit – Lucknow,
2/32, Vishal Khand, Gomti Nagar,
Lucknow – 226 010.
4.The Assistant Director,
O/o. Directorate of Revenue Intelligence,
Zonal Unit – Lucknow,
2/32, Vishal Khand, Gomti Nagar,
Lucknow – 226 010.
5.The Commissioner of Customs,
Custom House,
New Harbour Estate,
Tuticorin – 628 004. ... Respondents
PRAYER: Petition filed under Article 226 of the Constitution of India, to
issue a Writ of Certiorarified Mandamus, calling for the records of
proceedings of the original impugned orders passed by the respondents
No.3 & 4 in Detention Memo dated 22.09.2024, in File
No.DRI/LZU/C1-26/Int-28/2024 the seizure Memo dated 16.11.2024 in
File No.DRI/LZU/CI-26/Int.28/F/2024/1861-1868 and the summon
dated 18.11.2024 in F.No.DRI/LZU/CI-26/Int.28/F/2024/1874, being the
proceedings initiated by the third and fourth respondents during the
pendency of this proceeding and to quash the same with a direction to
the respondents 1 to 4 to handover the documents to the fifth
respondent to process the documents as per the related provisions of
the Customs Act, Notifications, Rules, Circulars and Instructions or
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subject to such terms and conditions as may be specified by this Court
and also to issue a storage, detention cum demurrage waiver certificate
with respect to the seized goods in terms of the provisions of the
Handling of Cargo in Customs House Area Regulation, 2009 and the Sea
Cargo Manifest and Transshipment Regulations, 2018 respectively for
the period under detention/seizure.
For Petitioner : Mr.Vijay Narayanan, Senior counsel
for Mr.T.Bala Krishnan
For Respondent : Mr.AR.L.Sundareshan, ASGI
Nos.1 to 4 Asst. by Mr.K.Govindarajan, DSGI
For Respondent-5 : Mr.N.Dilip Kumar
In W.P.No.27615 of 2024:-
M/s.Shahnaz Commodities International Pvt.
Ltd.,
rep. by its Director Mr.A.Sithikgani
715, 7th Street, Spencer Plaza,
Suite 652, Mount Road,
Chennai-600 002. ... Petitioner
Vs.
1.The Additional Director General,
O/o. Directorate of Revenue Intelligence,
Zonal Unit – Lucknow,
2/32, Vishal Khand, Gomti Nagar,
Lucknow – 226 010.
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2.The Assistant Director,
O/o. Directorate of Revenue Intelligence,
Zonal Unit – Lucknow,
2/32, Vishal Khand, Gomti Nagar,
Lucknow – 226 010.
3.The Commissioner of Customs,
Custom House,
New Harbour Estate,
Tuticorin – 628 004. ... Respondents
PRAYER: Petition filed under Article 226 of the Constitution of India, to
issue a Writ of Mandamus, directing the respondents 1 & 2 herein, to
cause release of the goods covered under the 4502344 dated
15.07.2024 and 4502923 dated 15.07.2024 based on the test report of
CRCL, New Delhi supra and also on the representation dated 16.10.2024
and the remaining goods covered under bills of entry No.5576076 to
5576078 dated 13.09.2024 & 5599773, 5616559, 5597675 dated
14.09.2024 and cause testing the same by the CRCL, New Delhi and to
take decision on the release of the imported goods in terms of the Test
Results or subject to such terms and conditions as may be specified by
this Court and also issue a storage, detention cum demurrage waiver
certificate with respect of the seized goods in terms of the provisions of
the Handling of Cargo in Customs House Area Regulation, 2009 and the
Sea Cargo Manifest and Transshipment Regulations, 2018 respectively.
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For Petitioner : Mr.Vijay Narayanan, Senior counsel
for Mr.T.Bala Krishnan
For Respondent : Mr.AR.L.Sundareshan, ASGI
Nos.1 & 2 Asst. by Mr.K.Govindarajan, DSGI
For Respondent-3 : Mr.N.Dilip Kumar
COMMON ORDER
Challenging the proceedings of the original impugned orders
passed by the third and fourth respondents in Detention Memo dated
22.09.2024 in File No.DRI/LZU/C1-26/Int-28/2024; the seizure Memo
dated 16.11.2024 in File No.DRI/LZU/CI-26/Int.28/F/2024/1861-1868
and the summon dated 18.11.2024 in F.No.DRI/LZU/CI-26/Int.
28/F/2024/1874 and consequently to direct the respondents 1 to 4 to
handover the documents to the fifth respondent to process the
documents as per the related provisions of the Customs Act,
Notifications, Rules, Circulars and Instructions or subject to such terms
and conditions as may be specified by this Court and also to issue a
storage, detention cum demurrage waiver certificate with respect to the
seized goods in terms of the provisions of the Handling of Cargo in
Customs House Area Regulation, 2009 and the Sea Cargo Manifest and
Transshipment Regulations, 2018 respectively for the period under
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detention/seizure, the petitioner has preferred the present Writ Petition
in W.P.No.27895 of 2024.
2. The petitioner in W.P.No.27615 of 2024, seeks a direction to the
respondents 1 & 2 herein, to cause release of the goods covered under
the 4502344 dated 15.07.2024 and 4502923 dated 15.07.2024 based
on the test report of CRCL, New Delhi supra and also on the
representation dated 16.10.2024 and the remaining goods covered
under bills of entry No.5576076 to 5576078 dated 13.09.2024 &
5599773, 5616559, 5597675 dated 14.09.2024 and cause testing the
same by the CRCL, New Delhi and to take decision on the release of the
imported goods in terms of the Test Results or subject to such terms
and conditions as may be specified by this Court and also issue a
storage, detention cum demurrage waiver certificate with respect of the
seized goods in terms of the provisions of the Handling of Cargo in
Customs House Area Regulation, 2009 and the Sea Cargo Manifest and
Transshipment Regulations, 2018 respectively.
3. Heard Mr.Vijay Narayanan, learned Senior counsel for the
petitioner and Mr.AR.L.Sundareshan, learned Additional Solicitor General
of India appearing on behalf of the respondents/Chairman, Central
Board of Indirect Taxes & Customs, New Delhi; Principal Director
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General, DRI, New Delhi; Additional Director General [ADG] & Assistant
Director [AD], DRI, New Delhi, as well as Mr.N.Dilip Kumar, learned
counsel for the respondent/Commissioner of Customs, Tuticorin.
4. Since the issue involved in both the Writ Petitions are one and
the same, they are taken up and heard together and disposed of by way
of a common order.
5. The brief facts which leads to the filing of the present Writ
Petitions are as follows:-
5.1. The petitioner firm is in the business of import and local sale
of betel nut products such as roasted betel nut, menthol scented supari
etc., from the year 2020, which has registered with the GST authorities
bearing GST Registration No.33ABFCS0068P1Z1 and has been allotted
with Import Export Code by the office of the Ministry of Commerce and
Industry through its Zonal Director of Foreign Trade, Chennai in
No.ABFS0068P.
5.2. The petitioner firm have filed bills of entry Nos.4502344 dated
15.07.2024 & 4502923 dated 15.07.2024 for the import of roasted
areca nuts split on the strength of the Advance Ruling No. ADV Ruling.
CAAR/MUM/ARC/44 45 & 46/2022 dated 07.12.2022, which have been
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duly assessed by the respondent/Commissioner of Customs, Tuticorin on
first check basis by giving suitable examination order, followed by
examination of goods by the Proper Officers of Customs in charge of
examination and found that the declared details of the goods were
tallied. They also drawn samples from all the consignments and referred
the same to the Central Revenues Control Laboratory (for brevity
“CRCL”), New Delhi with Test Memo queries. Based on the examination
findings and the test report from the CRCL, New Delhi, the
respondent/Commissioner of Customs, Tuticorin assessed and released
the consignments covered under the bills of entry Nos.4502344 dated
15.07.2024 & 4502923 dated 15.07.2024 on 11.09.2024. Despite the
due process of assessment, examination, test and final clearance from
the Customs Custody by the Proper officers belonging to the
respondent/Commissioner of Customs, Tuticorin, the respondent/AD,
DRI, Lucknow under the directions of the respondent/ADG, DRI,
Lucknow, intercepted the consignments on its enroute to the petitioner's
buyers destination at Nagpur. For which, the petitioner made a detailed
representation on 29.09.2024, explaining the circumstances leading to
issuance of Advance Ruling No.CAAR/MUM/ARC/44 -45&46/2022 dated
07.12.2022 in their favour, classifying the roasted betel nuts under the
Tariff item 2008 1920 and the due process followed in the clearance of
the intercepted goods and therefore, the petitioner sought for clearance
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of the impugned goods intercepted by the respondents herein/ ADG &
AD, DRI, Lucknow. In the meanwhile, the petitioner firm has also filed
seven more bills of entry viz., 5576076 to 5576078 dated 13.09.2024;
5597675, 5599773 & 5616559 dated 14.09.2024; and 5655457 dated
17.09.2024 with respect to the consignments imported from the
supplier of the very same goods. The said bills of entry were put on hold
by the respondent/Commissioner of Customs, Tuticorin on the
instructions of the respondents/ ADG & AD, DRI, Lucknow on
18.09.2024.
5.3. As more than 60 days had elapsed from the date of filing of
the bills of entry and the detention of the goods for the purpose of
investigation, which had caused absolute hardship to the petitioner on
account of detention charge to the tune of Rs.6 lakhs per month per
container which paved way to massive loss of Rs.1,80,00,000/- per
month of continued detention for 30 detained containers and in addition,
the firm is liable to pay the storage charges to a sum of Rs.36 lakhs for
36 containers to the Container Freight Station (CFS), where it is
currently lying.
5.4. Inspite of clarifying the points with facts and reasons by the
petitioner and request for release of goods covered under the bills of
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entry stated above, the respondents has detained the goods and also
affected seizure on 16.11.2024 which has been followed by summon on
18.11.2024, which are in complete derogation of the powers conferred
under the Customs Act, 1962 [hereinafter referred to as “Act”] r/w.
relevant Notifications, Rules, Circulars and instructions and also, it is a
well settled proposition of law regarding reference of samples to the non
accredited labs and the limitations of the respondents/ ADG & AD, DRI,
Lucknow in expropriating the powers and duties of the
respondent/Commissioner of Customs, Tuticorin in the name of
investigation.
6. Aggrieved over the detention, seizure and summon
proceedings, the petitioner has come forward with the present Writ
Petition in regard to the relief sought for in the prayer.
7. The learned Senior counsel for the petitioner submitted that the
petitioner firm has imported two consignments of roasted areca nuts
covered under the Bills of Entry Nos.4502433 dated 15.07.2024 and
4502923 dated 15.07.2024 during the course of their business. These
consignments were duly assessed and cleared for home consumption by
the Proper Officers of Customs and subsequently sold to domestic
buyers. While that being so, during its transit to the buyer's destination,
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the Directorate of Revenue Intelligence (DRI), Lucknow has intercepted
and subsequently detained the goods on 22.09.2024 on mere suspicion
that these goods were wrongly classified under the Customs Tariff
Heading (CTH) 2008 1920 as roasted areca nuts instead of CTH 0802
090 as raw areca nut. Subsequent to this detention, seven other
consignments covered under the bills of entry Nos.5576076 to 5576078,
5599773, 5616559, 5597675, 5655457 dated 13.09.2024, 14.09.2024,
17.09.2024 respectively were also seized on 16.11.2024 by the DRI,
Lucknow before the same was processed by the Tuticorin Customs.
Thereafter, the DRI, Lucknow has issued summons on 18.11.2024 for
petitioner's appearance.
8. He contended that the respondents/ ADG & AD, DRI, Lucknow
are not justified in detaining the goods that were already cleared from
customs area and subsequently sold to the domestic buyers as the
goods were properly assessed, examined and tested for its description
and quantity etc., as per the declaration by the Customs Authorities at
Tuticorin Customs. He stressed upon the fact that the goods were
tested by their own and competent lab viz., CRCL, New Delhi as per the
Central Manual of the Chemical Laboratories in the Custom Houses and
the CBIC Circular No.46/2020 dated 15.10.2020.
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9. In furtherance, he argued that the respondents/ ADG & AD,
DRI, Lucknow acted tyrannically in detaining the subsequent shipments
of roasted areca nuts imported by the petitioner without any rational
reasons and also have referred the drawn samples from the subsequent
consignments to ICAR-CPCRI, Kasargod inspite of the letter dated
30.07.2024 from the CRCL, New Delhi, wherein it has directed to send
the samples to them for the reason that it has the requisite facility,
expertise and methods to test areca nut products, including roasted
areca nuts. He submitted that due to inordinate delay and wrong test
report as the import item as other than the roasted areca nut of the
ICAR-CPCRI, Kasargod had caused huge loss to the petitioner. He
highlighted that even the respondents have powers to refer the samples
to any lab, the test report of the ICAR-CPCRI is invalid and unacceptable
as it is not an NABL accredited lab as per the email confirmation dated
23.12.2024 received by the petitioner. In support of his contention, he
cited the decisions of the various appellate forums, including the Hon'ble
Supreme Court, wherein it was held that the test report issued by a non
accredited lab is not reliable and the detention/seizure based on such
report are liable to be quashed, which are as under:
a)Laltanpuii Vs. Commissioner of Cus.
(Preventive), NER, Shillong reported in 2022 (382)
ELT 716 (Tri-Kol);
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b)C.C. (Preventive), NER Region, Shillong Vs.
Laltanpuii reported in 2022 (382) ELT 592 [Meghalaya
High Court]; and
c)Commissioner of Customs (Preventive) Vs.
Laltanpuii reported in 2022 (382) ELT 588 (SC) [SLP
Dismissed].
10. It is predominant to note that to test the roasted betel nut,
the methods followed by the ICAR-CPCRI for determining the moisture
content and the ash content are patently wrong which are the vital
parameters to ascertain whether the item has undergone the process of
roasting. Moreover, it is relevant to point out that the ICAR-CPCRI used
AOAC 925.09 meant for flour instead of test method AOAC 934.06
meant for dried fruit which includes areca nut and likewise, ICAR-CPCRI
used AOAC 938.08 meant for sea food to determine the ash content
present in roasted areca nuts and vehemently contended that on these
grounds, ICAR-CPCRI test report informing the subject item as other
than roasted areca nuts, is unacceptable and invalid. Adding his
arguments, he referred that the test report of ICAR-CPCRI is self
contradictory as it stated the colour of the nuts as brown but at the
same time concluded that the nuts did not undergo roasting and also
cited words such as non categorical, can be presumed, may not and like
which paved the way for the report to be unreliable.
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11. He drew the attention of this Court to the recent decision of
the First Bench of this Court in W.A.No.3647 & 3648 of 2024
dated 04.03.2025, wherein it has held that if the moisture content is
below 10% and imported in terms of advance ruling that has attained
finality, then there is no reason to state that the imported item is raw
areca nut. In the light of the aforesaid judgment, the moisture content
reported in the impugned ICAR-CPCRI test report ranges from 4.15% to
8.12% which reveals that the goods under seizure covered under seven
bills of entry, are undoubtedly roasted betel nuts only.
12. He emphasized that the Tribunal in the case of Laltanpuii Vs.
CC (Preventive), NET Region, Shillong reported in 2022 (382)
(382) ELT 716 (Tr-Kol) quashed the detention / seizure based on
invalid test reports as illegal and the same was upheld by the High Court
of Meghalaya and the Hon'ble Supreme Court. Likewise, the Hon'ble
Patna High Court in the case of Ayesha Exports Vs. Union of India
reported in 2000 (371) ELT 353 (Pat)., quashed the seizure of
goods affected based on the test report issued by a non accredited lab.
13. The learned Senior counsel expressed the hardships caused to
the petitioner due to the illegal and arbitrary acts of the respondents/
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ADG & AD, DRI, Lucknow such as reference of the samples to a non
accredited lab after lapse of substantial time which shows their ill
intention and huge loss caused for container storage charges at CFS,
shipping liner charges and also the risk of deterioration of the cargo due
to prolonged detention. At this stage, he pointed out that more than
221 days have lapsed after inception of the subject matter and at the
instance of these petitions, the respondents have revealed the test
report on which basis, the cargo was seized and summoned.
14. He also referred to the decision of this Court in the case of
Commissioner of Customs, Chennai-2 Vs. Shahnaz Commodities
International Pvt. Ltd., reported in 2023 (386) Elt 214 (Mad.)
upheld the ruling of the CAAR and categorically held that the roasted
areca nuts are rightly classified under the CTH 2008 1920, being a
specific heading repeatedly upheld by the Hon'ble Supreme Court which
has been followed by the Calcutta High Court in the case of
Commissioner of Customs (Port), Custom House, Kolkata Vs.
Shahnaz Commodities International Pvt. Ltd., in Custa/9/2023
in IA.No.GA/2/2023 dated 30.08.2024 which was also accepted by
the Government vide its Office Memorandum No.276/400/2023-CX.SA
dated 19.02.2024 and hence attained finality.
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15. While summing up his arguments, the learned Senior counsel
prayed this Court to take into consideration of the aforesaid facts and
allow the petitions by quashing the detention dated 22.09.2024, seizure
memo dated 16.11.2024 and summons dated 18.11.2024 and ordering
unconditional release of the detained goods with a direction to hand
over the documents to the jurisdictional customs to release the goods
on simple test bond taking into account the inordinate delay caused by
the respondents 3 & 4 and to make sure that no storage, detention and
demurrage charges are levied and collected by CFS and shipping liners
from the petitioner.
16. Per contra, the learned Additional Solicitor General of India
contented that the characteristics of the detained goods whether it is
areca nut or roasted nut are all matters of disputed questions of fact
which could be finally adjudicated only after a full fledged enquiry is
conducted under the provisions of the Act by the respondents as
contemplated under Section 124 and 28 of the Act and the order of
adjudication would be passed by following due process of law.
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17. He contended that the samples have been tested by CRCL,
New Delhi and hence, there cannot be any further proceedings is
misconceived and untenable, as the tested goods at CRCL and the
transported and seized enroute goods are one and the same is also a
disputed question of fact and the detained enroute samples were sent
for testing to the Central Plant Protection Crops Research Institute
[CPCRI], Kerala Laboratory by the respondent/AD, DRI, Lucknow and
report dated 12.11.2024 has been received that the areca nut was only
partially heated and not roasted and after sun dried, it has been
subjected to moderate heat treatment only and hence, it is not roasted
areca nut as per the report. Therefore, based on the said report and
being prima facie satisfied, seizure order dated 16.11.2024 has been
issued under Section 110 and summons has been sent on 18.11.2024
under Section 108 of the Act for a full fledged investigation.
18. He brought to the notice of this Court that the areca nut if
imported into the Country at a price lesser than the minimum import
price of Rs.351/- per kg, is a prohibited good and admittedly, in the
present case on hand, the goods have been imported at less than the
minimum import price. By importing areca nut under the guise of
roasted areca nut, is an attempt made to evade the consequences of
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prohibition, imposition of adjudication orders for confiscation, penalty
etc., under the provisions of the Act. Moreover, the petitioner is
attempting to evade higher rate of customs duty by mis-declaring areca
nuts and roasted areca nuts and the approximate customs duty evasion
is Rs.33.77 Crores. He vehemently argued that if the petitions are
allowed, it is against the policy of the Government not to allow import of
areca nut at a price lesser than the MIP and the camouflage of the
petitioner would be allowed to be achieved, as against the interest of
the farmers of the Country and larger public interest.
19. Furthermore, he submitted that release of the goods by the
Customs authorities at the port does not take away the jurisdiction and
authority of the DRI to detain the goods enroute and after forming a
prima facie opinion to seize the goods and initiate proceedings for
adjudication with regard to the actual characteristics of the goods which
is imported and determine whether they are prohibited goods or free
goods and determine the quantum of duty evasion and compute the
penalty and for confiscation of the goods.
20. He further highlighted the submissions of the petitioner in
regard to advance ruling which has tested the samples placed before it
but the same does not automatically apply to all future imports under
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the guise of roasted areca nut as the goods which are imported on
subsequent dates and declared as roasted areca nuts are actually areca
nut or raw areca nut is a question of fact and it is to be noted that the
advance ruling does not apply to the future imports. Hence, it is open
to the respondents to check the samples of the subsequent imports
whether they satisfy the characteristics of roasted areca nut or not.
21. He also continued that the respondents are to be allowed to
continue the proceedings and to direct the petitioner to cooperate with
the investigation. He urged that if the subject goods are not areca nuts,
it would be a case of mis-declaration amounting to smuggling under the
provisions of the Act, giving rise to adjudication, confiscation, levy of
differential duty, penalty etc.
22. He further contended that specific intelligence information has
been received by the respondents that the petitioner under the guise of
roasted areca nut is actually importing raw areca nut and insofar as the
subject matter of seven bills of entry is concerned, the approximate
customs duty evasion is Rs.33.77 Crores and also that, they violated the
DGFT notification number 57/2015-2020 dated 14.02.2023 by which
areca nuts, whole or split are prohibited goods, if the value of the goods
imported is less than Rs.351/- per kg, whereas in the present case on
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hand, the goods have been imported at a price less than Rs.351/- and
hence, they are prohibited goods which amounts to smuggling under
Section 2(39) of the Act and are liable to be confiscated under Section
111 of the Act.
23. He continued his arguments to the effect that the DRI Officers
are Proper Officers and are entitled to initiate proceedings against
smuggling of goods by issuance of detention orders, seizure orders and
show cause notices under the provisions of the Act. In support of his
contentions, he cited the decision of the Hon'ble Supreme Court in The
Commissioner of customs V. Canon India Private Limited in
Review petition No.400/2021 in Civil Appeal No.1827/2018
dated 07.11.2024. He clarified the point that the issue is whether the
subject goods are roasted areca nut which will come under ITC HS code
0802 8010 or 2008 1920 and for this, the testing is not restricted to
CRCL, New Delhi alone and therefore, the respondent has sent the
drawn samples of the subject goods for testing to a premier
Government of India Institute, namely, ICAR and the report was given
on 12.11.2024 certifying that the sample is not roasted areca nuts,
wherein it has been stated that the roasted areca nuts will develop a
darker colour due to the process of roasting but the subject goods only
undergone moderate degree of heating and as such, there is sufficient
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material for the respondents to proceed with the investigation to its
logical end.
24. He further submitted that the disputed questions of fact
arising in this case cannot be adjudicated and decided by this Court and
the detention, seizure and summon proceedings are correct or not can
be decided only after completion of a full fledged investigation by the
concerned authorities as per the provisions of the Act.
25. In support of his contentions, he drew the attention of this
Court to the following decisions of the Hon'ble Supreme Court:
a)Commissioner of Customs & Central Excise and Others
Vs. Charminar Nonwoven Ltd., [2004 STPL 8161 SC];
b)Union of India (UOI) Vs. Rubber Products Ltd., [2021
(14) SCC 688]; and
c)Union of India (UOI) and Others Vs. Raj Grow Impex LLP
and Others [2021 (18) SCC 601].
26. The learned Additional Solicitor General of India submitted
that moreover, there is an effective remedy under the provisions of the
Act such as appeal before the Commissioner of Appeals under Section
128 of the Act and against the order of First Appellate Authority, there is
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W.P.(MD).Nos.27895 & 27615 of 2024
a further appeal before the Tribunal viz., the Central Excise and Service
Tax Appellate Tribunal [CESTAT] under Section 129A of the Act and
furthermore, a Civil Miscellaneous Appeal before this Court under
Section 130 of the Act but however, without availing the remedies
available under the Act before the Competent Authorities, the petitioner
has straightaway approached this Court by way of the present petitions
questioning the detention, seizure and summon which is not
maintainable in law. Thus, he submitted that for the aforesaid reasons
the petitions are liable to be dismissed.
27. Considered the rival submissions made by the respective
learned counsels on either side and also perused the materials available
on record.
28. It is seen that the detained goods covered under the Bills of
Entry Nos.4502433 dated 15.07.2024 & 4502923 dated 15.07.2024 by
the respondents/ ADG & AD, DRI, Lucknow were already assessed and
cleared for home consumption by the Proper Officers by the Customs at
Tuticorin and sold to domestic buyers. Subsequent to that seven more
consignments were sent through bills of entry as stated above. While
that being so, the consignments dated 15.07.2024 were detained by
the respondents/ ADG & AD, DRI, Lucknow on suspicion at Nagpur and
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W.P.(MD).Nos.27895 & 27615 of 2024
their samples were drawn and subjected to test at CPCRI. Apart from
that, subsequent consignments were also detained by the
respondent/Commissioner of Customs, Tuticorin on the instructions of
the respondents/ ADG & AD, DRI, Lucknow based on the test report of
CPCRI, wherein the report stated that it is not roasted areca nuts but
only raw areca nuts which are transported illegally by evading customs
duty and wanted a full fledged investigation on the same whether it falls
under smuggling. However, the learned counsel for the petitioner drew
the attention of this Court that the ash content and moisture content
were not done properly by CPCRI and it is a non accredited lab and
referred to the decision of this Court in the case of Commissioner of
Customs, Chennai-2 V. Shahnaz Commodities International Pvt.
Ltd., which was also followed by the Calcutta High Court and also
highlighted the Laltanpuii's case and Ayesha Exports' case as stated
supra.
29. Apparently, it is clear that the consignments were duly
assessed and examined by the authorities concerned and sold to buyers.
The decisions of the Tribunal, as well as various High Courts and the
Hon'ble Supreme Court also supports the present case on hand. It is
relevant to note that the essential parameters such as moisture and ash
content were not tested properly and also in a non accredited lab which
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W.P.(MD).Nos.27895 & 27615 of 2024
is unsustainable. Apart from this, it is predominant to note that the
consignments were detained for a very long time making serious
hardships without any progress for the detention. Considering all these
aspects and in the light of the decisions of the various forums, High
Courts as well as the Hon'ble Supreme Court as stated supra, the orders
impugned in these petitions are liable to be quashed and accordingly,
the detention order dated 22.09.2024, seizure memo dated 16.11.2024
and summon dated 18.11.2024 are set aside and the matter is remitted
back to the respondent/Principal Director General, DRI, New Delhi for a
fresh consideration and the respondent concerned shall dispose of the
subject matter as expeditiously as possible, preferably within a period of
eight weeks from the date of receipt of a copy of this order.
30. The Writ Petitions stand disposed of with the above directions.
Consequently, the connected Miscellaneous Petition is closed if any.
There shall be no order as to costs.
03.06.2025
NCC : Yes/No
Index : Yes / No
Order : Speaking/ Non Speaking
DP
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W.P.(MD).Nos.27895 & 27615 of 2024
To
1.The Chairman,
Central Board of Indirect Taxes
& Customs,
North Block,
New Delhi – 110 001.
2.The Principal Director General,
O/o.Directorate of Revenue Intelligence,
7th Floor, D-Block, I.P.Bhawan,
I.P. Estate,
New Delhi – 110 002.
3.The Additional Director General,
O/o. Directorate of Revenue Intelligence,
Zonal Unit – Lucknow,
2/32, Vishal Khand, Gomti Nagar,
Lucknow – 226 010.
4.The Assistant Director,
O/o. Directorate of Revenue Intelligence,
Zonal Unit – Lucknow,
2/32, Vishal Khand, Gomti Nagar,
Lucknow – 226 010.
5.The Commissioner of Customs,
Custom House,
New Harbour Estate,
Tuticorin – 628 004.
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W.P.(MD).Nos.27895 & 27615 of 2024
VIVEK KUMAR SINGH, J.
DP
ORDER made in
W.P.(MD)Nos.27895 & 27615 of 2024
and W.M.P.(MD)No.23656 of 2024
03.06.2025
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