Praying for a direction to the respondent to assess and release Mono Sodium Glutamate totaling 506 Mts covered under Bills of Entry No.3618504 dated 26.05.2011; 4324694 dated 10.08.2011 and 4376254 dated 17.08.2011, after waiving detention and demurrage charges by issuance of a Detention Certificate in terms of Customs (Handling of Cargo in Customs Areas) Regulations, 2009, the petitioner has filed this writ petition.
2. Facts leading to the filing of this Writ Petition are as under: 2.1. The petitioner is in the trade of import and local sales of spices, condiments, food items, etc. for more than two decades and have been favoured with Import and Export Code No.0791011917 issued by the Office of the JDGFT, Bangalore, attached to the Ministry of Commerce, Government of India. The said IE code is Annexure-A. The petitioner Concern is also assessed to Income Tax, besides local sales tax.
2.2. In the course of their business, they placed orders with one M/s.Prudence Enterprises, Hong Kong, China for supply of Food Additives, i.e. Monosodium Glutamate during March 2011. The said material was sourced from a manufacturer viz. Neimenggu Fufgeng Biotechnologies Company Limited of China. The supplier, after negotiations, confirmed supply of 506 MTS of the said goods at US$ 1300 PMT. The goods were to be shipped in April 2011 from the Port of Xingang, China to Tuticorin Seaport. In terms of the sale confirmation, the goods were to be shipped in three lots. Payment was to be made on D/P basis. The sales confirmations are Annexure-B collectively.
2.3. Pursuant to the sales confirmation, the supplier raised three Invoices in No.VML-11082-11 dated 04.04.2011 for 138 Mts VMIN 11012 dated 18.04.2011, for 184 Mts and VMIN 11034 dated 24.05.2011, for 184 Mts on the petitioner. Along with the said Invoices, the supplier dispatched the Packing List, Certificate of Origin, Certificate of Analysis and Bills of Lading. These import documents collectively are Annexure-C series.
2.4. The first consignment of goods in 5520 Bags arrived at Tuticorin Seaport in the 3rd week of May, 2011 and the petitioner entity filed Bill of Entry No.3618504 dated 26.05.2011, on first check basis for clearance of the goods. Examination order was issued by the Proper Officer of Customs, which is Annexure-D. However, it transpires that the Directorate of Revenue Intelligence, Tuticorin caused an Investigation into the import of the said consignment and issued summons dated 13.06.2011, to the deponent to give evidence and produce documents in respect of the import. The said summons is Annexure-E. The petitioner entity therefore submitted Certification of the supplier and the manufacturer to the said agency causing the investigation. The petitioner entity therefore submitted Certification of the supplier and the manufacturer to the said agency caused the investigation. The said certifications and communications collectively are Annexure-F. Statement was also recorded from the deponent's son, who appeared in person in compliance with the summons above referred. The petitioner thereafter filed two Bills of Entry in Nos.4324694 dated 10.08.2011 and 4376254 dated 17.08.2011, for clearance of the balance of the consignment, which had arrived in 14720 bags weighing 368 MTS totally. The said Bills of Entry are collectively Annexures G & H.
2.5. It is transpired that samples from each of the consignments were drawn and sent to various testing agencies at Tuticorin, Palayamkottai and Food Safety and Standards Authority of India, New Delhi, Central Revenue Control Laboratory at New Delhi, which all confirmed that the samples were indeed Monosodium Glutamate, a Food Additive, classifiable under Customs Tariff Heading 2922 4220. The petitioner therefore caused a communication by Fax and Registered Post on 14.09.2011, 20.09.2011, 23.09.2011, 28.09.2011, 30.09.2011 to the respondents for clearance at release of the subject goods covered under the aforesaid Bills of Entry. The said communications collectively are Annexure-I.
2.6. Vide communication dated 30.09.2011, the Office of the respondent informed the petitioner that the Bills of Entry in respect of the subject goods have been taken up for investigation by the Office of the Directorate of Revenue Intelligence, Tuticorin, who are yet to return the same and that the Bills of Entry will be assessed after receipt of the same from the Investigation Agency, which is Annexure-J. However, the Investigation Agency, Directorate of Revenue Intelligence, Tuticorin under communication dated 04.10.2011 informed that the goods imported is a Food Additive of Chinese origin and the packings did not have the name and address of the manufacturer and Importer, which violated Rule 32(c) of the Prevention of Food Adulteration Rules, 1955 (in short 'Rules) and therefore, prohibited for imports under
Section 5 of the Prevention of Food Adulteration Act, 1954 (in short 'Act'). Therefore, the consignment covered under the aforesaid Bills of Entry were seized under Mahazar dated 01.08.2011 and 02.08.2011 and the Report and documents were returned to the Office of the respondent for taking further action. The communication/Report of the Directorate of Revenue Intelligence, dated 04.10.2011 is Annexure-K. Subsequent to the said communication, the petitioner entity has sent three communications by Fax and Registered Post dated 13.10.2011, 20.10.2011 and 11.11.2011 to the respondent seeking clearance and release of the goods. It was also informed that the imports were in bulk pack and labelling requirements will not apply to such packs and the petitioner intends to repack the same into smaller retails packs on which labelling requirement would be met before local sale. These communications collectively are Annexure-L.
2.7. In the meantime, the office of the respondent drew further samples from the consignments and sent it to the Referral Food Laboratory, CFTRI, Mysore, the Nodal Agency in terms of
Section 4 of the Prevention of Food Adulteration Act, 1954, as amended. The said Laboratory under Reports dated 13.12.2011, has now found that the samples confirm to the fact that it is indeed Monosodium Glutamate, a Food Additive falling under the Food Safety and Standards Act, 2006 and the Rules of 2011. The said reports collectively are Annexure-M. Pursuant to the said reports, the petitioner has once again requisitioned the respondent to issue a Show Cause Notice for adjudication. The petitioner, through its Custom House Agent has also approached the office of the respondent for assessment and clearance of the goods, but of no avail or appropriate response from the respondent and functionaries under the same. Having no other alternative, except to approach this Court, the petitioner has come up with the present writ petition.
3. The respondent has filed counter affidavit and has stated as follows :
(i) The petitioner has imported 'Monosodium Glutamate', a food additive, totaling 506 Mts covered under three Bills of Entry No.3618504, dated 26.05.2011, 4324694 dated 01.08.2011 and 4376254 dated 17.08.2011, classified the said goods under CTH 29224220 and claimed assessment under DEPB Scheme. Since the imported goods were edible food additives, first check appraisement was resorted to under
Section 17 of the Customs Act, 1962 and there is no violation on the part of the Assessing Group.
(ii) In the meanwhile, Officers of DRI, Tuticorin had gathered intelligence that Monosodium Glutamate, an organic food additive used as flavouring agent, were being imported in violation of the provisions of the Prevention of Food Adulteration Act, 1954 and the Prevention of Food Adulteration Rules, 1955 read with the provisions of the Customs Act, 1962. They opened the containers, inspected the goods and on examination, found to contain white crystalline material packed in PP bags. The label pasted on the PP bags, though found to contain Batch No., Production date, net weight, Purity, Made in China, etc., the name and address of the Manufacturer as well as the Importer's name and address were absent, which is mandatory and it should be figured in the bags as per Rule 32(c) of the Prevention of Food Adulteration Rules, 1955. Since the impugned consignments in the present writ petition have been imported in violation of the provisions of the Act and the Rules read with the provisions of the Customs Act,1962, the said imported goods were seized under
Section 110(a) of the Customs Act, 1962 by the DRI, Tuticorin.
(iii) Since the goods in question seized by DRI, Tuticorin were under investigation for the violation of the provisions of the Act and Rules read with the provisions of the Customs Act, 1962, the contention of the petitioner that the seizure is without authority of law is not sustainable.
(iv) The imported goods are subjected to clearance only if it confirms to the Act read with Food Safety and Standard Act, 2006. Samples were drawn and forwarded to the Referral Food Laboratory, CFTRI, Mysore. The Director, CFTRI, Mysore gave his opinion vide their Certificates No.502P/FSSA/2011; 503P/FSSA/2011 & 504P/FSSA/2011, all dated 13.12.2011 that "samples conform as a permitted Food Additive (Monosodium Glutamate) under the Food Safety and Standards Act, 2006 and Rules, 2011 thereof". In the said Report, the label details were mentioned as:
"Label (as per separate date sheet) MONOSODIUM GLUTAMATE : Country of Origin : China; Importer : Unik Traders, # 140 Old Tharagupet, Bangalore - 560053 India; Suppliers : Prudence Enterprises, P.O.Box No.2364, Hong Kong, China; Batch No.11040301/M11030301/M11030301; Mfg. Date : Mar 2011/April 2011; Expiry Date: March 2014."
(v) The above "Label" relied on in the analysis report was neither available on the consignment nor was forwarded by the Customs along with the samples. Based on the above, the Director, Referral Food Laboratory, Mysore was addressed by the respondent vide Letter C.No.VIII/10/144/2011-Adjn., dated 12.01.2012, as to how the details of the label were furnished in the above test reports. In response, the Director, Referral Food Laboratory, Mysore informed vide their letter No.FT/AQCL/FSSA(Misc.)/2012 dated 16.01.2012 that the label details were provided by the importer while submitting the above samples for analysis. The above said labels were not available on the import consignment and were neither produced to the Investigation Authority (DRI) nor to the Assessing Officer. In view of the above, it appears that the importer had misled the Referral Food Laboratory, Mysore, by furnishing the data not available in the import consignment. Thus, it appears that the reports of the Referral Food Laboratory, Mysore, on the above aspect, is nothing but a reproduction of details furnished in the Certificate of Analysis produced by the petitioner to the Laboratory and thus the same is not reliable and acceptable.
(vi) The petitioner's contention that the appropriate authority, under the Food Safety and Standards Act, 2006 and Rules, 2011 has not taken any action in respect of the subject consignments is not correct. A show cause notice was issued under
Section 124 of Customs Act, 1962 vide the respondent's letter C.No.VIII/10/144/2011-Adjn., dated 25.01.2012. As the role of the Customs is not only restricted to implementing the Customs Act, 1962, but also enforcing the other allied Acts and Rules relating to the import and export of goods and not acted without jurisdiction as contended by the petitioner. The compliance under the Food Safety and Standards Act, 2006 and Rules, 2011 is required for the purpose of fixing the responsibility on the importer when the import goods are found to cause injury to the public in the course of consumption of the same, since it is a food additive.
(vii) The contentions of the petitioner are not acceptable on the following grounds :
(a) The imported good viz. 'Monosodium Glutamate' is used as a flavouring agent and in terms of Section 2(v) of the Act, the subject goods are covered under the definition of 'Food' and in terms of Rule 32(c) of the Rules, the goods are prohibited for import under
Section 5 of the Prevention of Food Adulteration Act, 1954.
(b) Rule 64(B) of the Rules, stipulate the conditions for use of 'Monosodium Glutamate' in food, which may be added to food as per the conditions in Appendix-C, subject to Goods Manufacturing Practice (GMP) level and under proper label declaration as provided in Rule 42(S). As per Rule 64(B), Monosodium Glutamate shall not be added to any food for use by an infant below 12 months and in the list of foods (51 nos.), detailed in Rule 64(B). Rule 32(k) of the Rules, reads thus :
"instructions for use - instructions for use, including, reconstitution, where applicable, shall be included on the label, if necessary, to ensure correct utilization of the food."
(c) The importer should have mentioned the details as per Rule 64(B) read with Rule 32(k) of the packages. But, the importer has failed to adhere to the above Rules, as the details required under Rule 64(B) has not been mentioned in the packages as per Rule 32(k).
(viii) The requirement of mandate of affixing the details on the label, if any under the Food Safety and Standards Act, 2006 and Rules, 11 would be done at the time of repacking of the subject goods cannot be sustained since the Customs Authorities cannot supervise the same for the reason that such act may take place at some other jurisdiction.
4. Heard the learned counsel on either side and perused the materials available on record.
5. Mr.S.Sathish Sundar, learned counsel for the petitioner would contend that there is a statutory obligation on the part of the respondent and the assessment group attached to the respondent to cause examination and testing of goods without any undue delay once the importer like the petitioner has entered any imported goods under
Section 46 of the Customs Act, 1962, which is mandated under
Section 17(1) of the Customs Act. It is his further contention that the subject goods have since been seized by the Office of the Directorate of Revenue Intelligence, in terms of
Section 110 of the Customs Act, 1962. Though such seizure is clearly without authority of law, no reasonable belief has been entertained or made out on the face of records to show that the imported goods are indeed liable for confiscation under the Customs Act. Therefore, continued detention of the goods by the respondents cannot be sustained.
5a. In support of his case, learned counsel for the petitioner has relied on an unreported judgment of this Court, dated 12.01.2012 made in W.P.No.30323 of 2011, wherein, it is held as under:
"15. In view of the contentions raised on behalf of the parties concerned and on a perusal of the records available, this Court finds it appropriate to direct the respondents to release the goods in question by following the conditions prescribed in the order of the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai, dated 27.10.2011, as the respondents have not been in a position to show that the order of the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai, dated 27.10.2011, had already been challenged, by way of an appeal. It is found that the order of the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai, dated 27.10.2011, makes it clear that the goods in question shall be released only on the petitioner undertaking to provide all the necessary details required to comply with the local laws, at the time of the re- packing and the re-labeling of the said goods, in the customs bonded area, before the necessary customs clearance is given.
16. It had also been stated that the goods in question would be subjected to the necessary tests, by the Port Health Authorities, before the customs clearance is sought for by the petitioner. The Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai, had passed the order, by setting aside the impugned order, which had been challenged before it, and by directing the respondents to allow the petitioner to re-pack and re-label the goods in question, in a customs bonded area, subject to mutual convenience.
17. It had also been stated that it would be open to the Port Health Authorities concerned to test and to certify the detained goods. It had also been made clear that a fresh order may be passed by the original authority after the certification was done by the Port Health Authorities. Therefore, it is clear that the petitioner would have to comply with a number of conditions before the goods in question are released. Sufficient safeguards had been incorporated in the order of the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai, to make sure that the goods in question are fit for human consumption, as they would be released only after appropriate inspection by the Port Health Authorities.
18. Further, the petitioner shall abide by any further condition to be imposed by the respondents before the goods are released. The respondents shall not release the goods, unless they are found to be fit for human consumption. As such, with the above conditions, the respondents are directed to implement the order of the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai, dated 27.10.2011, within a period of two weeks from the date of receipt of a copy of this order."
6. Per contra, Mr.B.Vijay Karthikeyan, learned counsel for the respondent would submit that the imported good, which is used as a flavouring agent is covered under the definition of 'Food' and in terms of Rule 32(c) of the Rules, the name and address of the manufacturer as well as the importer should figure in each of the bags. Inasmuch as the said goods under import had contravened the provisions of Rule 32(c), it is prohibited for import under
Section 5 of the Act. Moreover, it is his contention that the importer should have mentioned the details as per Rule 64(B) read with Rule 32(k) on the packages, but, he has failed to adhere to the above Rules.
7. I have heard the learned counsel for the parties and also gone through the records.
8. It is not in dispute that the goods of the petitioner namely 506 MTs. of Monosodium Glutamate covered under the Bills of Entry No.3618504 dated 26.05.2011; 4324694, dated 10.08.2011 and 4376254, dated 17.08.2011 are under the custody of the respondent department for some shortcomings viz., the labels affixed on the said goods do not have the names and addresses of the manufacturer and the importer, and the same are pending for assessment and clearance.
9. It is to be stated, that, vide communication dated 30.09.2011, the Office of the respondent informed the petitioner that the Bills of Entry in respect of the subject goods have been taken up for investigation by the Office of the Directorate of Revenue Intelligence, Tuticorin, who are yet to return the same and that the Bills of Entry will be assessed after receipt of the same from the Investigation Agency. However, the said Investigating Agency, namely, Directorate of Revenue Intelligence, Tuticorin, under communication dated 04.10.2011, informed that the goods imported are Food Additive of Chinese origin and the packings did not have the name and address of manufacturer and Importer, which violated Rule 32(c) of the Prevention of Food Adulteration Rules, 1955, and, therefore, prohibited for imports under
Section 5 of the Prevention of Food Adulteration Act, 1954. Therefore, the consignment covered under the aforesaid Bills of Entry were seized under Mahazars dated 01.08.2011 and 02.08.2011 and the Report and documents were returned to the Office of the respondent for taking further action. Subsequent to the communication of the Directorate of Revenue Intelligence, dated 04.10.2011, the petitioner entity had sent three communications by Fax and Registered Post dated 13.10.2011, 20.10.2011 and 11.11.2011 to the respondent, seeking clearance and release of the goods. It was also informed that the imports were in bulk pack and labeling requirements would not apply to such packs and that the petitioner intended to repack the same into smaller retail packs on which labeling requirement would be met before local sale.
10. What may, as contended by the respondent, the imported good, which is used as a flavouring agent is covered under the definition 'Food' in terms of Rule 32(c) of the Rules and name and address of the manufacturer as well as the importer should figure in each of the bags before it is released for consumption and inasmuch as the goods under import have contravened the provisions of the Rule, it is a prohibited item for import under
Section 5 of the Act. Therefore, the importer ought to have mentioned the details as per Rule 64(B) read with Rule 32(k) on the packages, which is, admittedly, not done.
11. It is also not debated, that, in similar circumstances, this Court, by an order dated 12.01.2012, made in W.P.No.30323 of 2011, ordered release of the goods, subject to certain conditions. Following the same, this Writ Petition is disposed of in the following terms :
The respondent is directed to release the goods in question only on the petitioner undertaking to provide all necessary details required to comply with the local laws, at the time of re-packing and re-labeling of the said goods in the customs bonded area, before the necessary customs clearance is given. Since the goods would be subjected to necessary tests by the Port Health Authorities, before the customs clearance is sought for by the petitioner, the respondent shall allow the petitioner to re-pack and re-label the goods in a customs bonded area, subject to mutual convenience. Similarly, as it is open to the Port Health Authorities to test and certify the detained goods, a fresh order may be passed by the original authority, after the certification is done by the Port Health Authorities. Sufficient safeguards are to be taken to make sure that the goods in question are fit for human consumption, as they would be released only after appropriate inspection by the Port Health Authorities. Further, the petitioner shall abide by any other condition to be imposed by the respondent for release of the goods. The respondent shall not release the goods unless they are found to be fit for human consumption. The entire exercise shall be completed within a period of four weeks from the date of receipt or production of a copy of this order.
No costs. Consequently, the connected M.P.(MD).No.1 of 2012 is closed.
abe/dixit To The Commissioner of Customs, Custom House, New Harbour Estate, Tuticorin - 628 004.