Delhi HC Orders Provisional Release of Roasted Areca Nuts for Industrial use after Conflicting Test Reports [Read Order]

The High Court of Delhi, ordered the provisional release of a consignment of Roasted Areca Nuts imported by the petitioner for industrial use, following conflicting test reports.

Perfect Trading CO,petitioner-assessee,had imported a consignment of Roasted Areca Nuts based on an advance ruling dated 5th January 2024, which classified the goods under CTH 20081920 as “Other roasted nuts & seeds.” The bill of entry was filed on 21st June 2024.

The ruling referred to similar cases, including a Madras High Court judgment and a previous advance ruling for Shree Ganesh Traders, both supporting the same classification.

Despite this, when the consignment arrived, Customs officials seized the goods and sent them to FSSAI for testing. A panchnama was drawn on 3rd July 2024. Due to the monsoon, the goods were allowed to be stored in a warehouse. Later, a report was received from Food Safety and Standards Authority of India (FSSAI).

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The goods were sent to the Central Revenue Control Laboratory (CRCL) for testing. Despite satisfactory reports, the goods were not released, as further samples were repeatedly tested. The assessee then filed a petition seeking the quashing of the seizure memo dated 1st August 2024 and the unconditional release of the consignment.

On 12th December 2024, the Court noted conflicting test reports about the Areca Nuts. Some reports showed moisture and insect infestation, while others did not. The Court directed FSSAI to inspect and test the consignment again with both Customs officials and the petitioner’s representatives present.

On 16th January 2025, the Court clarified that the National Food Laboratory (NFL) should test the samples under sub-regulation 2.3.55 of the Food Safety and Standards Regulations, 2011, which applies to Areca Nuts. The petitioner had requested the unconditional release of the goods for industrial use, not for human consumption, which was opposed by the authorities.

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FSSAI confirmed the samples were sent to NFL, and the Court directed that the tests be conducted under the correct regulation and reports submitted before the next hearing. The Court also asked for a response from the authorities on the petitioner’s request for release of the goods.

The Division Bench of Justice Prathiba M.Singh and Justice Rajneesh Kumar Gupta reviewed the reports and found inconsistencies in the testing. Initial reports from CRCL and FSSAI identified the goods as "Roasted Areca Nuts," but later CRCL reports stated the sample was unfit for human consumption due to moisture, mould, and insect damage. The NFL's final report confirmed the goods were substandard and unsafe for human consumption.

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The court concluded that the goods had deteriorated during testing and agreed that keeping them with Customs was unnecessary. The petitioner undertook not to use the goods for human consumption. As a result, the consignment was provisionally released upon payment of Rs. 5 lakhs as security, and Customs was instructed to issue a Show Cause notice.

The petitioner also assured that the goods would be used for industrial purposes only. The bench warned of strict action if the goods were misused for human consumption.Therefore,the petition was disposed of.

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