Seizure of imported ‘Roasted Areca Nuts’ based on contradictory CRCL report not tenable

Prenda Creations Pvt Ltd Vs Commissioner of Customs (CESTAT Chandigarh)

CESTAT Chandigarh held that seizure of imported ‘Roasted Areca Nuts’ on the basis of contradictory CRCL reports is not justifiable since report failed to account for low moisture levels. Accordingly, appeal is allowed and detained goods are directed to be released.

Facts- The appellant during the course of business for import of Food Items in order to import “Roasted Areca Nuts” from Indonesia applied for Advance Ruling u/s 28H of the Customs Act, 1962 before the Authority for Advance Ruling. Further, the appellant was granted permission to import “Roasted Beetle Nuts” vide Advance Ruling issued by the Competent Authority and during the course of business, imported 40 Containers of “Roasted Areca Nuts” from its suppliers namely “Pt. Sasco Karya Mandiri”, Indonesia, PT. DVS Inter Kontinental, Jakarta, Pt. Cahaya Auriga Amerta Indonesia and PT. Sayuti Tijarah Amanah, Indonesia.

The department drew two samples from the said consignments and sent one sample for testing to CRCL New Delhi and CRCL tested the samples of imported Roasted Areca Nuts and reported vide its report dated 30.06.2025 that the goods are dried areca nuts and not roasted areca nuts. Further, the imported areca nuts are not fit for human consumption, the report of the CRCL was communicated to the importer on 03.07.2025. The department came to the conclusion that the imported goods are not roasted and ordered for seizure of the goods u/s. 110 of the Customs Act, 1962 vide seizure memo dated 13.10.2025; thereafter, the appellant requested the respondent for release of goods u/s. 110A of the Customs Act vide letter dated 22.11.2025, wherein, the appellant submitted copy of Star Export House Certificate issued by the DGFT to the appellant and thereafter, personal hearing was granted to the appellant on 28.11.2025 and thereafter, impugned order dated 09.12.2025 was passed imposing stringent conditions for provisional release of the goods. Aggrieved by the said order, the appellant filed the present appeal.

Conclusion- Held that the earlier report of CRCL regarding the previous consignment of areca nuts dated 04.09.2024, 26.09.2024, 02.10.2024 imported by the appellant clearly held that the sample is roasted areca nuts having moisture content less than 10% and fit for human consumption and further earlier reports from the nearest food laboratory Bali Test House dated 23.09.2024, 04.10.2024, 09.10.2024 and 07.10.2024 was found to be as per Food Safety and Standard Regulation Act, 2011 and was found fit for human consumption; both the laboratory found the sample of areca nuts conform to the standard prescribed by the Food Safety and Standard Authority of India Act, 2006 and also the Rules frame thereunder.

Held that in the case of Principal Commissioner of Customs/Preventive Commissionerate, New Delhi Vs N & N Traders (2024) 18 Centax 274 (Tri-Del). It has been observed by the Tribunal in para 29 that Chemical Examiner in CRCL has no role to play in the classification because classification is part of assessment which is an appealable order. All that the Chemical Examiner should say is what the goods are, what is the purity etc. We therefore find that the allegation of misdeclaration of the nature of goods is not very serious especially since it is based on somewhat ambiguous test report of CRCL.

FULL TEXT OF THE CESTAT CHANDIGARH ORDER

The present appeal is directed against the Provisional release Order No. 08/2025-26 dated 09.12.2025 passed by the learned Commissioner, wherein, the learned Commissioner of Customs has ordered for provisional release of imported goods comprising of ‘Roasted Areca Nuts’ Split falling under CTH 20081920 imported vide Bill of Entry No. 8178899 dt. 04.02.2025. The Ld. Commissioner of Customs vide the impugned order has imposed the following conditions:-

(i) The importer shall furnish a Bond equal to the assessable value of the impugned goods i.e. Rs. 3,04,62,312/- (Rupees Three Crore Four Lakh Sixty Two Thousand Three Hundreed Twelve Only) to bind himself to pay in case of any duty demand /fine/ penalty interest as may be leviable on such goods, subsequently in adjudication in the light of Para 2.1 of Board’s Circular No. 35/2017-Cus dated 16.08.2017.

(ii) In addition, the importer shall furnish a Bank Guarantee/Security (containing clause binding the issuing Bank to keep it renewed and valid till payment of full liability in this case, or in the even of non-renewal of bank guarantee, the guaranteed amount be credited to Govt. Account by the bank on its own) of Rs. 7,70,84,881/- (Rupees Seven Crore Seventy Lacs Eighty Four Thousand Eight Hundreed Eighty One Only) as security covering payment of any possible future liabilities of Duties/penalties/ fines against the said goods in the light of Para 2.2 of Board Circular No. 35/2017-Cus Dated 16.08.2017.”

2. Briefly the facts of the present case are that the appellant during the course of business for import of Food Items in order to import “Roasted Areca Nuts” from Indonesia applied for Advance Ruling u/s 28H of the Customs Act, 1962 before the Authority for Advance Ruling, wherein the Ruling was issued in favour of the appellant vide Advance Ruling dated 28.06.2024 as reported in (2024) 23 CENTAX 325 (A.A.R.-Cus-Del). Further, the appellant was granted permission to import “Roasted Beetle Nuts” vide Advance Ruling issued by the Competent Authority and during the course of business, imported 40 Containers of “Roasted Areca Nuts” from its suppliers namely “Pt. Sasco Karya Mandiri”, Indonesia, PT. DVS Inter Kontinental, Jakarta, Pt. Cahaya Auriga Amerta Indonesia and PT. Sayuti Tijarah Amanah, Indonesia.

2.1 For the purposes of Import of Food Items namely “Roasted Beetle Nuts” the appellant fulfilled all the conditions namely, furnishing the certificate of fitness of the food items and Fumigation of the imported goods before the goods were exported to India along with certificate of phytosanitary certificates; thereafter, the appellant on the basis of the import documents filed Self Assessed Bill of Entry u/s 46 of the Customs Act, 1962 before the Department along with the “Certificate of Origin” issued by the Indonesian Government wherein, all the particulars in respect of imported consignment was mentioned. The appellant claimed exemption in terms of Notification No. 103/2010-Cus dated 01.10.2010 wherein exemption was provided to the said goods.

Thereafter, the department drew two samples from the said consignments vide test Memos No. 1278492 dated 27.05.2025 and sent one sample for testing to CRCL New Delhi and CRCL (vide its report dated 30.06.2025) tested the samples of imported Roasted Areca Nuts and reported vide its report dated 30.06.2025 that the goods are dried areca nuts and not roasted areca nuts. Further, the imported areca nuts are not fit for human consumption, the report of the CRCL was communicated to the importer on 03.07.2025 and thereafter, the appellant/importer requested to re-test the sample vide its letter dated 11.07.2025 and on 22.07.2025 duplicate sample was sent to CRCL for re-test and its report was received on 20.08.2025 confirming that the impugned goods are not roasted but dried areca nuts; thereafter the importer vide his letter dated 04.09.2025 requested for testing the same by NFL, Ghaziabad and the respondent vide letter dated 16.09.2025 sent fresh samples to NFL Ghaziabad to ascertain only fitness for human consumption and the report of NFL Ghaziabad was received on 04.10.2025 certifying that the goods are fit for human consumption. Thereafter, on the basis of CRCL report, the department came to the conclusion that the imported goods are not roasted and ordered for seizure of the goods under Section 110 of the Customs Act, 1962 vide seizure memo dated 13.10.2025; thereafter, the appellant requested the respondent for release of goods under Section 110A of the Customs Act vide letter dated 22.11.2025,

wherein, the appellant submitted copy of Star Export House Certificate issued by the DGFT to the appellant and thereafter, personal hearing was granted to the appellant on 28.11.2025 and thereafter, impugned order dated 09.12.2025 was passed imposing stringent conditions for provisional release of the goods. Aggrieved by the said order, the appellant filed the present appeal.

3. Heard both the parties and perused the material on record and both the parties have filed their written submissions which are taken on record.

4. Learned Counsel for the appellant submits that the impugned order is not sustainable in law and is liable to be set aside as the same has been passed without properly appreciating the facts and the law; and binding judicial precedents. He further submits that the conditions imposed for provisional release of the goods are onerous and unreasonable, without any nexus with the extent of duty alleged to be evaded and therefore such conditions are illegal, arbitrary unreasonable and not sustainable in law. He further submits that the seizure order of the goods and thereafter the provisional release of the goods with the conditions mentioned therein is not sustainable in law because the appellant before importing the subject goods applied for Advance Ruling in terms of Rule 28 H of the Customs Act, 1962 and the Competent Authority after following the procedure passed orders in favour of the appellant and the said order has not been assailed by the department and the same has been attained finality and is binding upon the department. He also submits that as per the said order, the only determining factor to conclude that the Areca Nuts are “Roasted” or not is the Moisture content which in the present case is below 6%. The learned counsel also took us through the order of the Advanced Authority, he further submits that the impugned order is not sustainable in law as it has placed reliance on the test results mentioned in test report dated 30.06.2025 which is based only on visual observations in respect of the “Areca Nuts” sent for testing. He further contended that the only criteria for determining as to whether the imported Areca nuts is roasted or not is based on the Moisture content which has to be below 10% as held in the case Universal Impex Vs. Commissioner of Customs & Ors. 2024 SCC Online Mad. 6760b.

4.1 The learned counsel also took us through the relevant paras of the said Madras High court to buttress his arguments that the imported consignments is roasted areca nuts and also fit for human consumption and the test report submitted by the CRCL is palpably wrong and no reliance can be placed on such reports. He also submits that the Single Member Bench order of the High Court has been affirmed by the Division Bench of the Madras High Court as Commissioner of Customs Vs. Universal Impex 2025 (394) ELT 606 (Mad) as also by the Hon’ble Supreme Court of India in the case of Commissioner of Customs, Vs. M/s Neena Enterprises SLP ( C ) No. 17655-17656 of 2025 decided on 25.07.2025.

4.2 Learned counsel also submits that the results as communicated by the CRCL Delhi cannot be relied upon in so far as their findings are not conclusive. He also submits that the report of referral laboratory which has concluded that the imported sample of areca nuts are roasted and fit for human consumption should be given preference over the report furnished by CRCL New Delhi. He further submits that the test reports issued by the CRCL New Delhi cannot be relied upon because tests have not been conducted as per the guidelines framed by Food Safety & Standard Authority of India vide FSSAI (import regulation), wherein it has been specified that the samples of foods items are to be tested by food analyst whereas in the present case Sh. T.R. Suresh is not a food analyst and consequently test results furnished in the said report cannot relied upon. Learned counsel further contended that CRCL New Delhi failed to conduct test within the prescribed time limit as prescribed under FSSAI (Import Regulation); CRCL New Delhi received the samples on 27.05.2025, however, the test reports was furnished on 30.06.2025 after a gap of more than one month; further in the case of re-testing conducted by from CRCL New Delhi, samples were sent for testing on 22.07.2025 and test report was submitted on 20.08.2025 after a gap of more than 25 days. The learned counsel placed reliance on regulation 9(12) of FSSAI (Import regulation which mandates that the testing of samples has to be completed within 7 days, hence, the test conducted beyond the stipulated time cannot be relied upon for rejecting the declared classification of the goods. He also submits that the test results by CRCL, New Delhi cannot be relied upon as the same is contrary to the SOP issued by the CRCL, New Delhi wherein for the purposes of testing and determining as to whether imported goods are roasted or not; the same cannot be done on the basis of visual inspection of the samples.

4.3 He further submits that the findings in the report furnished by the CRCL New Delhi is solely based on visual inspection by Chemical Examiner who is not a food analyst. He also contended that the report submitted by the CRCL is not worthy of credence because the Chemical Examiner Sh. T.R. Suresh who conducted the test on Roasted Areca Nuts have reported the same as unfit for human consumption on the ground that the percentage of damaged nuts by moulds were more than prescribed limit of 3% however, the same Chemical Examiner in the case of other importers have reported the same to be fit for human consumption; despite the fact that percentage of nuts damaged by moulds are more than 3%. The learned counsel established this fact by producing test reports issued by the same Chemical Examiner Sh. T.R. Suresh. The learned counsel further submits that the report of CRCL New Delhi cannot be relied upon as he has reported that the samples of Areca nuts were found to be “Brown” in color and the same cannot be considered as “Roasted”, however, to the contrary in case of earlier imports affected by the appellant vide Bill of Entry no. 5917500 dated 02.10.2024, 5813663 dated 26.09.2024, 5779891 dated 24.09.2024 and 5410294 the Chemical Examiner of CRCL after observing that the Areca nuts are brown in color had reported the same to be Roasted Areca nuts. Copies of test reports have been furnished in the written submissions filed by the learned counsel for the appellant. Learned counsel for the appellant further submits that the appellant had also imported the roasted areca nuts earlier which was also subject to test by CRCL and the earlier report of CRCL dated 04.09.2024, 26.09.2024 and 02.10.2024 regarding previous consignments of areca nuts imported by the appellant clearly holding that the sample is roasted areca nuts having moisture contents less than 10% and fit for human consumption. He further submits that the earlier reports from the nearest food laboratory Bali Test House dated 23.09.2024, 04.10.2024, 09.10.2024 and 07.10.2024, where the earlier samples of areca nuts were sent as per the Food Safety and Standard Regulation Act, 2011 and was found fit for human consumption. He further submits that both the laboratories found the samples areca nuts conform to be standard prescribed by the Food Safety and Standard Authority of India Act, 2006 and also the Rules made thereunder.

4.4 Learned counsel for the appellant further submits that the seizure memo dated 30.10.2025 executed by the respondent Customs Department reveals that the same was issued “without any din” and thus the same appears to be an after thought in order to save the limitation under Section 110 and 110A of Customs Act, 1962. He further submits that in the earlier imports of the areca nuts, the Hon’ble High Court in CWP No. 28682 of 2024 passed an Interim Order that the samples of imported roasted areca nuts be sent to the nearest authorized laboratories and in spite of such direction, the Department in the present case sent the samples to CRCL new Delhi for testing of the samples to be roasted or otherwise. He further submits that the Chemical Examiner Sh. T.R. Suresh has issued varied reports in respect of the imports made by the appellant as compared to the reports issued to the other importers and therefore no credence can be given to the reports issued by the Chemical Examiner Sh. T.R. Suresh for deciding the classification of the impugned goods. He further submits that on the basis of the report of the Chemical Examiner wherein he has declared the impugned goods not fit for human consumption then how the Custom Department can pass on order for provisional release of goods by imposing the onerous conditions demanding the bond as well as bank guarantee. He further submits that in the entire process, the Custom Department did not follow the regulation prescribed in FSSAI (Import Regulation) issued by the Food and Safety Standard Authority of India. He further submits that the goods are required to be released unconditionally imported vide Bill of Entry 8178899 dated 04.02.2025 because the Bill of Entry for human consumption was filed on 04.02.2025 and the respondent Custom failed to examine the goods and permit the clearance of the same in terms of provisions of Customs Act, 1962. He referred to the Circular/instruction No. 0172006: CCO (D2) dated 22.08.2006 vide which the goods imported by the appellant/importer required to be examined within 24 hrs and thereafter assessment has to take place within next 48 hours. Whereas, in the present case the Bill of Entry was filed on 04.02.2025 and the goods were already lying in customs area under the control of Customs Officers. He further submits that in terms of Section 110 (2) of the Customs Act, 1962 the goods are subject to unconditional release if the same are not permitted to be released within 6 months from the date of Seizure and in the present case the Bill of Entry having been filed on 04.02.2025, the Examination order issued on 10.02.2025 by “ICEGATE”, the goods were illegally detained from the said date i.e. 10.02.2025. He further submits that the period of detention will be computed from 10.02.2025 itself when the respondent failed to examine the goods and the period of 6 months having been expired on 10.08.2025, the goods are liable to be returned/released to the appellant unconditionally. He further submits that there is no difference between the “Seizure” and “Detention” and for this, he relied upon the following decisions:

• Ms. Rajesh Arora vs. Collector of Customs, 1998 (101) ELT 246 (Del.),
• M/s Gian Chand & Ors. Vs. State of Punjab 1983 (13) ELT. 1365 (S.C.).
• M/s M Mohammed Vs. Collector of Customs & C.Ex. Cochin 1999 (110) ELT 451 (Ker.)
• M/s S.J Fabric Pvt. Ltd Vs. Union of India 2011 (2680 ELT 17 (Cal.)
• M/s ESI Ltd. Vs. Union of India 2003 (156) ELT 344 (Cal.)
• M/s Om Udyog Vs. Union of India 2010 (254) ELT 547 .
• M/s Exim Corporation Vs. Union of India & Ors. CWP No. 1898 of 2020
• M/s Sai Incorporation Vs. Principal Commissioner for Customs (Import) 2016 (338) ELT 578
• M/s Ramnarain Bishwanath Vs. Collector of Customs Calcutta 1988 (34) ELT 202 (Tribunal) affirmed by Hon’ble Supreme Court in 1997 (96) ELT 224 (S.C.).

5. On the other hand, learned Special Counsel for the respondent has justified the impugned order of provisional release passed by the Commissioner. He further submits that the Department is well within its power to impose conditions to safeguard the Revenue while provisionally releasing the goods and it is purely discretionary and is not subject to judicial scrutiny. He further submits that Section 110A authorizes provisional release of seized goods pending adjudication, the statutory word “may” and the express authorization to impose “security and conditions” are the textual anchors for the Department’s power to insist upon a bank guarantee/security deposit, while safeguarding the interest of the revenue. He further submits that the impugned order has been passed in view of CBIC guidelines on provisional release (Circular No. 35/2017) and on re-testing (Circular No. 30/2017). He further submits that on a prima facie “reason to believe” supported by CRCL’s classification-oriented findings alongside the import-policy restriction justifies the quantum of bank guarantee as a rational security covering estimated duty potential penalty plus potential redemption fine, squarely aligned to Section 110A read with the CBIC framework. He further submits that the appellant/importer has already filed CWP-17983-2025 with regard to other bills of entry which are part of the common show cause notice dated 31.01.2026. He further submits that once the matter is subjudice before the Hon’ble High Court, the present appeal filed by the appellant against the order of provisional release is not maintainable and should be dismissed.

5.1 The learned Special Counsel further submits that the impugned order has been passed keeping in view the CBIC Circular No. 35/2017 which provides a guiding framework for bond/bank guarantee. He also submits that the Advance Ruling passed by the Advance Ruling Authority has limited binding affect and is binding only on the applicant who sought it and No. 2 custom authorities in respect of that applicant and remains so unless there is a change of law or facts. In support of his submissions, he relied upon the following judgments:

• T.L. Verma & Co. Pvt. Ltd. Vs. Union of India 2010 (251) ELT A116 SC (Supreme Court of India (DB))
• T.L. Verma & Co. Pvt. Ltd. Vs. Union of India 2009 (234) ELT 203 (P&H) [Punjab & Haryana High Court (DB))
• Zest Aviation Pvt. Ltd. Vs. Union of India 2013 (289) ELT 243 (DEL) (High Court of Delhi (DB)]
• Maggie Marketing Pvt. Ltd. Vs. Commissioner of Customs (Exports) 2019 (366) ELT 70 (DEL) [High Court of Delhi (DB))
• Unik Traders Vs. Directorate of Revenue Intelligence, Chennai 2019 (367) E.L.T. 353 (Mad.) [High Court of Madras (DB)]
• Malabar Diamond Gallery Pvt. Ltd. Vs. Addl. Dir. General, Directorate of Revenue Intelligence, Chennai 2016 (341) E.L.T. 65 (Mad.) [High Court of Madras (DB)
• Classic Interiors Vs. Commissioner of Customs, New Delhi [Customs Appeal No. 51454 of 2022] [CESTAT-New Delhi)

6. In reply to the arguments put forth by the Special Counsel for the Department, the learned Counsel for the appellant has filed rebuttal to the submissions made by the respondent. The learned counsel for the appellant submits that the objections of the Special Counsel that the writ petition challenging the reports issued by the CRCL is pending adjudication in CWP No. 17983-2025 and therefore, the present appeal does not lie. The learned counsel submits that in the said petition as referred by the respondent does not pertain to the proceedings pertaining to bill of entry dated 04.02.2025 and the Hon’ble High Court vide its order dated 18.02.2026 was pleased to grant liberty to the appellant to challenge the provisional release order passed during the pendency of the writ petition.

6.1 As regards the reliance placed on the Circular No. 35/2017 for the purposes of imposition of condition of bank guarantee for provisional release of goods; the learned counsel further submits that the said circular has been stuck down by the Hon’ble High Court of Delhi in the case of Additional Director General Vs. Its My Name Pvt. Ltd. 2021 (375) ELT 545 (Del.) relied upon in the case of Shanus Impex Vs. Union of India 2024 (388) ELT 78 (Del.). He further submits that the reliance placed on the said Circular for imposition of Bank Guarantee is bad in law and he has also relied upon the following decision on this issue which are as follows:

• M/s Hemant Subhas Teke Vs. Union of India 2024 (389) ELT 161 (Bom.)
• Indusina Exim LLP Vs. Commissioner of Customs (Import) 2024) 16 (Centax) 118 (Bom.)
• N C Alexender Vs. Additional Commissioner of Customs 2025 (391) ELT 48 (S.C.).
• M/s Carfuknit P Ltd. Vs. Union of India order dated 26.11.2024 passed in CWP No. 31746 of 2024.

6.2 Learned counsel further submits that the respondent has strongly placed reliance on the judgement rendered by the Hon’ble Jurisdictional High Court in the case of M/s TL Verma & Company Private Limited Vs Union of India 2009 (234) ELT 203 (P&H) and affirmed by Hon’ble Supreme Court in 2010 (251) ELT A 116 (S.C). He submits that the judgement relied upon by the respondent is not applicable to the facts of the case in hand as in the case of M/s TL Verma & Company the condition of Bank Guarantee was imposed keeping in view the modus operandi adopted by the said importer for under valuation as observed in Para 3 of the said order. However, in the present case, the proposed change in classification is solely based on the test reports issued by CRCL New Delhi on the basis of Visual Inspection, wherein the CRCL in case of test results pertaining to initial 3 Bills of Entries have reported “Brown Colored Samples to be Roasted” which is contrary to the findings as relied upon in the case in hand, wherein “Brown Colored Samples have been opined to be Dried Areca Nuts”. He further submits that the issue in respect of criteria for determining “Roasted Areca Nuts” is no more res integra as held in the case of Universal Impex (cited supra). He further submits that the respondent department has strongly placed reliance on the Test Reports issued by CRCL New Delhi, wherein the said Laboratory cannot give any opinion in respect of the classification of the goods in question and further submits that the report furnished by NFL Ghazibad shall have credence over the report issued by CRCL, New Delhi. For this submissions, he relied upon the Reliance is placed on following decisions:

• Principal Commissioner of Customs/Preventive Commissionerate, New Delhi Vs N & N Traders (2024) 18 Centax 274 (Tri-Del).
• Shri Lakshmi Cotsyn Ltd Vs Commissioner of Cus. & C. Ex. Kanpur 2011 (263) ELT 299 (Tri-Del.).
• Smart Designer Vs Commissioner of Customs (Import) Mumbai 2019 (367) ELT 299 (Tri-Mum).

7. We have considered the submissions made by both the parties and has gone through the material on record as well as various judgments relied upon by both the parties, we find that the appellant has challenged the impugned order on the ground that the conditions for provisional release of the goods are onerous and arbitrary and unreasonable. Further, we find that in the present case before importing the goods/consignments i.e. roasted areca nuts from Indonesia applied for Advance Ruling under Section 28H of the Customs Act, 1962 and the ruling was issued in their favour vide Advanced Ruling dated 28.06.2025. It is pertinent to mention the relevant findings of the Advanced Ruling authority which is reproduced herein below:

“2.3 It is submitted that the process of ‘roasting’ is not defined in the Customs Tariff nor in the HSN Explanatory Notes nor in any of the Sections/Chapters, therefore, its meaning has to be understood in common trade parlance. In common trade parlance “roasting” means excess or very high heat treatment that produces fundamental chemical and physical changes in structure and composition of goods, bringing about charred physical appearance.

2.6 Now, the following process are involved in the preparation of Roasted Araca nut (Whole/Cut):

2.7 The process of roasting and cooling is generally completed in 2-3 days. Pursuant to roasting, the areca nut undergoes a drastic change in its appearance as well as chemical characteristics on account of the roasting process. There is a visible deposition of an ash-like substance on the outer surface of the betel nut.

2.8 By virtue of ‘roasting’ as per the processes detailed above, the betel nut/areca nut proposed to be imported by the appellant would fall under the HS Code 2008 19 20 as ‘Other Roasted Nuts and Seed’ and this Application before the Hon’ble Authority is seeking a Ruling on the classification of the same.

6.1 I note that the processes mentioned in Chapter 8 include chilling, steaming, boiling, drying and provisionally preserving. It does not specifically include the process of roasting. Here, it is Important to understand the difference between the processes of moderate heat treatment & dehydrating/drying referred in chapter 8 and processes of dry roasting, oil-roasting and fat-roasting referred in chapter 20. The terms dry-roasting, oil-roasting and fat-roasting however are not defined in the Customs Tariff Act, 1975. Therefore, these terms have to be understood in a commonly accepted sense. The Hon’ble Apex Court in the case of Alladi Venkateswarlu v. Government of Andhra Pradesh 1978 AIR 945 held that “the commonly accepted sense of a term should prevail in construing the description of an article of food”. In common trade parlance, “drying” is a method of food preservation by the removal of water content. On the other hand, “roasting” means the excess or very high heat treatment that produces fundamental chemical and physical changes in the structure and composition of the goods, bringing about a charred physical appearance. Therefore, drying is a moisture removal process involving methods such as dehydration, evaporation, etc., whereas roasting is a severe heat treatment process”.

8. Further, we find that the appellant imported the consignment after getting the advanced ruling authority in his favour and that said ruling of the advanced authority has not been challenged by the Customs and thus has attained finality qua the parties. The advanced authority has held that the only criteria for finding whether the areca nuts is roasted or not is on the basis of percentage of moisture and if the moisture content is less than 10%, it is roasted areca nuts. This issue was also considered by the Hon’ble High Court of Madras in the case of Universal Impex (cited supra), wherein, the Hon’ble High Court has held as under:

“ 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), Areca nut 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.

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 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 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 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 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 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:

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 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 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 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 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.”

9. Further, we find that aforesaid order passed by the Single Member Bench of the High Court was affirmed by the Division Bench of the Hon’ble High Court of Madras as Commissioner of Customs Vs. Universal Impex 2025 (394) ELT (394) ELT 606 (Mad) as also by the Hon’ble Supreme Court of India in the case of Commissioner of Customs, Vs. M/s Neena Enterprises SLP ( C ) No. 17655-17656 of 2025 decided on 25.07.2025.

10. Further, it is pertinent to mention here that recently the Hon’ble Bombay High in Writ Petition No. 3161 of 2026 decided on 03.2026 in the case of NBG International Private Limited vs. Union of India and others, has examined the identical issue of roasted areca nuts which were seized by the Customs Department and onerous and unreasonable, arbitrary condition of bank guarantee was imposed for its provisional release. The Hon’ble Bombay High Court, after considering submissions of both the parties at length and after considering the procedure prescribed for testing the said goods, has quashed and set aside the demand of furnishing bank guarantee for its provisional release. Relevant findings of the Hon’ble Bombay High Court are reproduced herein below:

“16. We are thus in agreement with the contentions as made on behalf of the Petitioner that once the FSSAI has cleared the imported goods as fit for human consumption, and also has specified the moisture content in the said test reports, then to question the wisdom of FSSAI, would not be an appropriate approach on the part of the Respondents, as the FSSAI itself being a statutory body is recognized under the Rules to certify the imports. It is not disputed on behalf of the Respondents that the FSSAI is acting under various rigorous provisions of the statute and also the stringent Rules and Regulations framed thereunder. Further, the Respondents have not been able to give any plausible or satisfactory explanation as to why re-testing/re-examination of the imported goods was sought to be done by the Respondents. Learned counsel for the Respondents has tried to canvass the argument that the imported goods are not fit for human consumption by placing reliance on the test reports issued by CRCL basis the observation by CRCL that some parts of the imported goods were damaged nuts and the damage was primarily on account of mould or insects. We are not in agreement with the aforesaid submission, considering the reports of the FSSAI. Even assuming that a minuscule percentage of the goods which are agricultural products, are stated to be damaged, it cannot be that the same yardstick is applied to the entire consignment. If such tests are applied to the several range of agricultural products domestically available from the indigenous sources, it would be impossible for any agricultural produce to have a market. Illustratively, 10 grains from a sample of 1000 grains cannot be determinative of the standard of the majority of the grains. The FSSAI reports cannot be disregarded, which was made available immediately after the samples of the imported goods were drawn for testing.”

The Hon’ble Bombay High Court has also considered the procedure prescribed in Food Import Manual issued by FSSAI to be followed in conducting the laboratory test on roasted areca nuts and has observed as under:

“18. Further, the Food Import Manual issued by FSSAI clearly specifies the steps to be taken insofar as laboratory analysis is concerned. It is only after this laboratory analysis is made, that a NOC is issued by the FSSAI and then on the basis thereof, the goods can be released. * * * * * *

It is seen from the above procedure that insofar as laboratory analysis is concerned, the analysis and test reports are made by FSSAI within five days from the date of receipt of sample with conclusive opinion about the product tested as conforming or non-conforming. This goes on to show that the tests conducted by the FSSAI are of precise nature and high standards of testing are ensured and made applicable before clearing the food suitable for human consumption. In this view of the matter, we are of the opinion that any window for reclassification of the categorised goods, itself is not on a sound premise, in the facts and circumstance of the case.

19. In the light of the aforesaid discussion, we are of the firm opinion that the action of the Respondents to detain the Petitioner’s imports in question, is not justified. * * * * * *”

11. Further, we find that manner in which the Custom Department from the very beginning has not acted in accordance with the regulation issued by FSSAI (Import Regulation), wherein it has been specifically provided that samples of Food Items should be sent to the nearest lab and the nearest lab in the present case is the Bali Test House which is also accreted laboratory by FSSAI authorities and in the past the appellant has imported the roasted areca nut which was sent to the Bali Test House and it was found fit for human consumption. We also find that the earlier report of CRCL regarding the previous consignment of areca nuts dated 04.09.2024, 26.09.2024, 02.10.2024 imported by the appellant clearly held that the sample is roasted areca nuts having moisture content less than 10% and fit for human consumption and further earlier reports from the nearest food laboratory Bali Test House dated 23.09.2024, 04.10.2024, 09.10.2024 and 07.10.2024 was found to be as per Food Safety and Standard Regulation Act, 2011 and was found fit for human consumption; both the laboratory found the sample of areca nuts conform to the standard prescribed by the Food Safety and Standard Authority of India Act, 2006 and also the Rules frame thereunder.

12. Further, we note that in the present case, the Department has drawn the samples on 27.05.2025, whereas, the Bill of entry was filed on 04.02.2025 and thereafter, the samples was sent to the CRCL on 27.05.2025 and the report was received on 30.06.2025 which is after a gap of more than one month and further for re­testing conducted by the CRCL, New Delhi, the samples were sent on 22.07.2025 and test report was furnished on 20.08.2025 after a gap of more than 25 days whereas, the regulation 9(12) of FSSAI (Import Regulation) mandates that the testing of samples have to be completed within 7 days and therefore, no credence can be given to the report issued by the CRCL, New Delhi. Further, we find that the test report issued by the Chemical Examiner Sh. T.R. Suresh who is not even a food analyst has given the classification of goods on mere visual inspection without following the SOP issued by CRCL New Delhi, wherein, for the purpose of testing and determining whether the imported goods are roasted or not the same cannot be done on the basis of visual inspection of goods. Further, we find that the Chemical Examiner Sh. T.R. Suresh has reported that the roasted areca nuts are unfit for human consumption on the ground that the percentage of damaged nuts by more than prescribed limit of 3%, whereas, the same Chemical Examiner in the case of other importers have reported the same to be fit for human consumption despite the fact that percentage of nuts damaged by moulds are more than 3% and such reports have also been placed on record by the learned counsel for the appellant which clearly shows that the Chemical Examiner has been given contradictory reports to different importers with regard to the same product and he is not a competent Food analyst also. Further, we find that the Department in passing the impugned order has mainly relied upon the Circular No. 35/2017 for the purpose of imposing the bank guarantee for provisional release of the goods. The said circular has been struck down by the Hon’ble High Court of Delhi in the case of Additional Director General Vs. Its My Name Pvt. Ltd (cited supra) and was held to be bad in other cases (cited supra).

13. As regards the reliance placed by the Customs in the case of M/s T.L. Verma & Co. Pvt. Ltd (cited supra), the facts of that case are not applicable in the present case because the condition of bank guarantee was imposed in that case, keeping in view the modus operandi adopted by the said importer for under valuation as observed in Para 3 of the said order, whereas, in the present case, the proposed change in classification is solely based on the test report by CRCL, New Delhi on the basis of visual inspection. Further, we find that the decision in the case of T.L. Verma (cited supra), was distinguished by the Jurisdictional of High Court of Punjab and Haryana in the case of M/s Amit Vs. Union of India reported in 2011 (269) E.L.T. 314 (P&H). The other objection raised by the department, as regards the jurisdiction of this Court to entertain the present appeal against the impugned order when the appellant has already invoked the jurisdiction of the Hon’ble High Court by filing the writ CWP No. 17983/2025, in this regard, we may note that during the pendency of the said petition, the High Court vide its order dated 18.02.2026 was pleased to grant the liberty to the appellant to challenge the provisional release order passed during the pendency of the writ petition and the said order has already been placed on record, therefore, we hold that the objection raised by the department does not have any force.

14. Further, we find that in the case of Principal Commissioner of Customs/Preventive Commissionerate, New Delhi Vs N & N Traders (2024) 18 Centax 274 (Tri-Del). It has been observed by the Tribunal in para 29 that Chemical Examiner in CRCL has no role to play in the classification because classification is part of assessment which is an appealable order. All that the Chemical Examiner should say is what the goods are, what is the purity etc. We therefore find that the allegation of misdeclaration of the nature of goods is not very serious especially since it is based on somewhat ambiguous test report of CRCL.

15. Therefore, considering the totality of the facts and circumstances and specially the facts that there is an Advance Ruling in favour of the appellant for the import of roasted areca nuts which has not been challenged by the Revenue and also the decision of the Hon’ble High Court of Madras in the case of Universal Impex (cited supra) and also the facts that reports of the CRCL classifying the goods on visual inspection which is not permitted in law and also the fact that the same laboratory with regard to the same product imported earlier have declared the impugned goods as roasted areca nuts fit for human consumption.

16. In the facts and circumstances of this case, we are of the considered opinion that the requirement of bank guarantee equal to 7,70,84,881 is clearly arbitrary and unreasonable and the said condition cannot be sustained. Accordingly, the appeal is allowed and the detained goods are directed to be released subject to fulfillment of the conditions of provisional release order dated 09.12.2025 except requirement of furnishing the bank guarantee. It is however made clear that this order will not affect the merits of the controversy which will be finally adjudicated upon in accordance with the law independently. Accordingly, the appeal is allowed on the above terms.

(Order pronounced in the open court on 07.04.2026)