'Moisture Content Below 10% Means Roasted Areca Nut': Madras HC directs Release of Seized Goods

The Madras High Court has directed the provisional release of 17 consignments of imported areca nuts, upholding the principle that areca nuts with moisture content below 10% are to be classified as 'roasted'.

The petitioner, M/s. Unik Traders, filed a Writ Petition seeking the release of goods imported under 19 Bills of Entry, which were being detained by the Customs authorities on the grounds of suspected mis-declaration. Counsel for the petitioner submitted that the goods had been certified as roasted areca nuts by the Food Safety and Standards Authority of India (FSSAI).

He argued that a previous judgment of the Court's First Bench, which had been affirmed by the Supreme Court, had established that areca nuts with moisture content below 10% should be classified as roasted. He further contended that the Customs Department was without jurisdiction to re-test the samples, as the FSSAI report was final.

Per contra, the Additional Solicitor General appearing for the respondents submitted that the writ petition was premature as an investigation was ongoing into a possible mis-declaration of raw areca nuts as roasted to evade duty and minimum import price restrictions.

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He relied on a report from the Central Revenues Control Laboratory (CRCL), which had categorized the goods as 'other than roasted areca nut', and also pointed to a new Notification that prohibited the import of roasted areca nuts below a certain CIF value.

A single bench of Justice N. Anand Venkatesh, after considering the arguments and the CRCL report, observed that the report itself showed the moisture content in most consignments was below 10%. The Court held that it was bound by the earlier decision of the First Bench, which had categorically held that moisture content below 10% means the areca nut is 'roasted'.

The Court found no basis for the CRCL's new categorization of the nuts as 'dried areca nut'. The Court also noted that the Notification cited by the respondents had already been stayed by the Court and was therefore not enforceable.

Considering that the goods were perishable and that 10 other consignments with the same FSSAI report had already been cleared, the Court disposed of the writ petition. The Court directed the provisional release of 17 of the 19 consignments, subject to the petitioner fulfilling certain conditions: (i) paying the duty as originally declared, and (ii) executing a bond for the differential duty, assessed at Rs. 2,24,33,60,198/-. The release was made subject to final adjudication by the Customs authorities.

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