Shivshakti Enterprises Vs Commissioner of Customs (Bombay High Court)
Summary: The Bombay High Court considered a writ petition filed by Shivshakti Enterprises, a sole proprietary concern of Rohit Kumar Somabhai Patel, concerning the seizure and provisional release of two consignments of Roasted Arecanuts Splits (Beetle Nuts). The petitioner challenged the seizure memo dated 19th May, 2026 and the order dated 22nd June, 2026 to the extent that provisional release was made conditional upon furnishing a Bank guarantee of Rs.40,00,000/-.
The petitioner had imported two consignments on 28th March, 2026 under Bills of Entry Nos. 8347475 and 8347647. The imported goods were examined and samples were sent to the Food Safety and Standards Authority of India (FSSAI). On 10th April, 2026, FSSAI issued a NOC stating that it had no objection to release of the goods as they conformed to the Food Safety and Standards Act, 2006. The goods were nevertheless not released and the petition was filed on 23rd April, 2026. During pendency of the petition, samples were also sent to the Central Revenue Control Laboratory (CRCL). Its two reports dated 5th May, 2026 recorded moisture content of 6.8% and 6.9%. The goods were seized on 19th May, 2026. On the petitioner seeking provisional release on bond, respondent No.5 permitted release by order dated 22nd June, 2026 upon execution of a bond and furnishing a Bank guarantee of Rs.40,00,000/-.
The respondents contended that the importer’s declaration concerning the nature, description and tariff classification of the goods remained subject to verification, reassessment and investigation under the Customs Act, 1962 and the Customs Tariff Act, 1975. They submitted that the FSSAI NOC did not conclude the issue of tariff classification because FSSAI’s jurisdiction was confined to food safety standards. They therefore defended the seizure and the requirement of the Rs.40,00,000/- security deposit/Bank guarantee.
The petitioner relied upon the Bombay High Court judgment in NBG International Private Limited v/s The Union of India and Ors., contending that release of Roasted Arecanuts on furnishing a bond without insisting upon a security deposit was already settled. It was also submitted that NBG International had been followed by the Calcutta High Court in M/s Credence International V/s. Union of India & Ors., the Punjab and Haryana High Court in M/s Prenda Creations Pvt. Ltd. Ludhiana, M/s Prenda Creations Pvt.Ltd. Ludhiana V/s. Union of India & Ors., and the Madras High Court in M/s. Universal Impex, M/s Neena Enterprises V/s. The Commissioner of Customs & Ors.
The Bombay High Court found that the issue was squarely covered by NBG International. In that judgment, the Court had relied upon Make Index Impex Vs. Union of India and others, 2023-SCC OnLine-Bom-1678, where it had held, in the context of imported Soya bean, that once FSSAI had taken a clear position that the goods were not harmful for human consumption and complied with FSSAI requirements, the Customs Department could not adopt a contrary position and the goods had to be released in the facts of that case. The Court also reproduced portions of that judgment concerning the FSSAI laboratory-analysis procedure and its conclusive opinion on whether the product conformed or did not conform.
The Court further considered the Food Import Manual issued by FSSAI, which specified the laboratory-analysis procedure, including forwarding samples to notified laboratories, analysis according to parameters under the FSS Act and Regulations, completion and uploading of reports in Form 2 within five days with a conclusive opinion, and the availability of NABL-accredited and referral laboratories. The Court observed that FSSAI testing was of a precise nature and involved high standards before food was cleared as suitable for human consumption. It concluded that the window for reclassification of the categorised goods was not on a sound premise in the facts and circumstances of the case.
Consequently, the Bombay High Court allowed Writ Petition No. 6043 of 2026. It quashed and set aside the impugned Seizure Memo dated 19th May, 2026 and the order dated 22nd June, 2026 to the extent that the petitioner was required to furnish a security deposit/Bank guarantee of Rs.40,00,000/-. Respondent No.5 was directed to forthwith release the petitioner’s goods without insisting on a Bank guarantee. At the same time, the Court directed the petitioner to once again obtain a Certificate of Fitness from FSSAI before dealing with the goods in the open market, since the goods had remained with the respondents since March, 2026. There was no order as to costs, and the Rule was made absolute in the above terms.
Cases Discussed
- NBG International Private Limited v/s The Union of India and Ors. — relied upon as squarely covering the issue regarding release of Roasted Arecanuts without insisting upon a security deposit.
- Make Index Impex Vs. Union of India and others, 2023-SCC OnLine-Bom-1678 — discussed in the NBG International judgment concerning the effect of FSSAI clearance on Customs Department action.
- M/s Credence International V/s. Union of India & Ors. — referred to as a Calcutta High Court matter following NBG International.
- M/s Prenda Creations Pvt. Ltd. Ludhiana, M/s Prenda Creations Pvt.Ltd. Ludhiana V/s. Union of India & Ors. — referred to as a Punjab and Haryana High Court matter following NBG International.
- M/s. Universal Impex, M/s Neena Enterprises V/s. The Commissioner of Customs & Ors. — referred to as a Madras High Court matter following NBG International.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1. Rule. Rule is made returnable forthwith with the consent of the parties and is taken up for final disposal.
2. By the present petition, the petitioner is seeking quashing of the impugned seizure memo dated 19th May, 2026 and the impugned order dated 22nd June, 2026 passed by the respondent No.5 to the extent it seeks a security deposit / Bank guarantee of Rs.40,00,000/- from the petitioner.
3. The facts and circumstances give rise to filing of the petition are as under :
The petitioner on 28th March, 2026 imported two consignments of Roasted Arecanuts Splits (Beetle Nuts) under Bills of Entry bearing No.8347475 and 8347647. The department took examination of the imported goods and accordingly samples were drawn and sent for testing to the Food Safety and Standards Authority of India (‘FSSAI’ for short).
On 10th April, 2026, the FSSAI issued a NOC stating that they have no objection if the imported goods are released as the same were in conformity under Food Safety and Standards Act, 2006 (‘FSS Act, 2006’ for short). Inspite of the said order of NOC by the FSS Act, 2006, the goods were not released, therefore, the petitioner on 23rd April, 2026 filed the present petition.
During pendency of the present petition in this Court, the samples of the imported goods were sent to the Central Revenue Control Laboratory (‘CRCL’ for short) for further testing. The CRCL in its two reports, both dated 5th May, 2026 stated that the moisture content in the samples of the imported goods was 6.8% and 6.9%, respectively.
On 19th May, 2026, the respondent No.2 proceeded to seize the goods. The petitioner requested the respondents to release the imported goods, provisionally, on acceptance of bond, however, the respondent No.5 vide order dated 22nd June, 2026 permitted provisional release of imported goods upon the petitioner executing a bond and furnishing a Bank guarantee of Rs.40,00,000/-. The petitioner, therefore, amended the petition and challenged the impugned Seizure Memo dated 19th May, 2026 and the order dated 22nd June, 2026 to the extent the petitioner was directed to furnish Bank guarantee of Rs.40,00,000/-.
4. The respondent Nos.2 and 3 have filed their affidavit. It is the contention of the respondents that the declaration made by the importer regarding nature, description and tariff classification of the goods is always subject to verification, reassessment and investigation by the proper officer in accordance with the provisions of the Customs Act, 1962 and the Customs Tariff Act, 1975. It is further contended that the issuance of no objection certificate from the authorized officer under the FSSAI Act, 2006 did not conclude the issue of tariff classification under the Customs Tariff Act, 1975. It is submitted that the jurisdiction exercised by the FSSAI Authorities is confined to ensuring that imported food articles conform to the standards prescribed under the FSS Act. Since there was a bonafide dispute, the samples were referred to the CRCL, New Delhi.
5. It is contended that the goods were rightly seized and the petitioner was rightly called upon to furnish a security deposit / Bank Guarantee of Rs.40,00,000/-.
6. Learned Counsel appearing for the petitioner contended that once the goods were examined by the authorized officer under the FSSAI, there was no justification on the part of the respondents in undertaking examination through CRCL. The issue regarding release of Roasted Arecanuts upon furnishing a bond and without insisting upon any security deposit is now settled by the Judgment of this Hon’ble Court in the case of NBG International Private Limited v/s The Union of India and Ors.1 It is further contended that the Judgment in the matter of NBG International (supra) has been followed by the Calcutta High Court in the case of M/s Credence International V/s. Union of India & Ors.2, the Punjab and Haryana High Court in the case of M/s Prenda Creations Pvt. Ltd. Ludhiana, M/s Prenda Creations Pvt.Ltd. Ludhiana V/s. Union of India & Ors.3 and the Madras High Court in the case of M/s. Universal Impex, M/s Neena Enterprises V/s. The Commissioner of Customs & Ors.4.
7. Learned Counsel appearing for the respondents refuted the position and made submissions which are already recorded in the affidavit as mentioned above.
8. Heard learned Counsel appearing for the parties.
9. The issue in hand is squarely covered by the Judgment in the matter of NBG International (supra). This Court has in paragraph Nos.17 and 18 observed as under :
“17. A Division Bench of this Court in the case of Make Index Impex Vs. Union of India and others 2023-SCC OnLine-Bom-1678, of which one of us (G.S. Kulkarni, J.) was a member, in the context of import of Soya bean, which the Respondents had contended, was harmful for human consumption, has clearly held that once a clear stand is taken by the FSSAl that the Soya bean in question was in no manner harmful for human consumption in whatever form and was in light of the requirements and parameters of FSSAI Rules, any contrary position could not be adopted by the Customs Department and the goods have to be released in the facts of the case. Relevant paragraphs of the aforesaid decision are reproduced below:
“13. Accordingly, a clear stand of the FSSAl is on record that the Soya bean sought to be cleared by the petitioner and subject matter of the present proceedings, in no manner whatever would be harmful for human consumption/health in whatever form, in the light of the requirements and parameters of the FSSAI Act, 2006 and the Rules framed thereunder, if the goods are permitted to be cleared
14. Considering such clear position on record, we are of the opinion that the approach as now sought to be adopted by the Customs Department and more particularly in the light of the position taken by respondent no. 1-Union of India, respondent no. 8-Genetic Engineering Appraising Committee as also respondent no.10-Ministry of Environment, Forest & Climate Change and most significantly by respondent no.7-Food Safety & Standards Authority of India, we are of the opinion that the approach as suggested by Mr. Vyas, learned ASG and as noted by us above, ought to be accepted, and the proceedings, without prejudice to the rights and contentions of the parties on any of the issues, which may arise, be disposed of by the following order.”
(Emphasis supplied)
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. The relevant procedure for laboratory analysis is reproduced below:
“iv) Laboratory Analysis :
a) The sample of the imported food product is forwarded to the notified laboratory that is auto selected randomly in the Food Import Clearance System (FISC);
b) The samples of imported Food sent by the Officer authorized by FSSAl are analyzed by the laboratory as per parameters defined in the FSS Act and the Regulations thereunder;
c) The laboratory shall complete the analysis and upload the test report in FICS in Form 2 of the FSS (Import) Regulations, 2017) within five days of receipt of the sample with conclusive opinion about the product tested as conforming or nonconforming.
d) For testing of food Import consignments through a transparent and expeditious process, NABL accredited laboratories have been notified by FSSAI throughout the country. These FSSAl notified laboratories are also utilized for testing of imported food consignments by the Authorized Officers of Customs Department. FSSAI has also notified 22 Referral labs other than the Primary labs, for re-testing of appeal samples of the Importers. The list of the food testing labs is available at https://www.fssai.gov.in/cms/food-laboratories.php.”
(Emphasis supplied)
It is seen from the above procedure that insofar as laboratory analysis is concerned, the analysis and test reports are made by FSSAl 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 FSSAl 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.”
10. Taking into consideration the law laid down by this Court in the Judgment of NBG International (supra), which squarely covers the issue involved in the present case, we are of the firm opinion that the petition deserves to be allowed. Hence, the following order :
ORDER
(i) Writ Petition No. 6043 of 2026 is allowed.
(ii) The impugned Seizure Memo dated 19th May, 2026 (annexed at Exhibit – FF to the petition) and the impugned order dated 22nd June, 2026 (annexed at Exhibit – HH to the petition) passed by the respondent No.5 to the extent it seeks a security deposit / Bank guarantee of Rs.40,00,000/- is quashed and set aside.
(iii) The respondent No.5 is directed to forthwith release the goods of the petitioner without insisting on Bank guarantee.
(iv) The petitioner should once again obtain Certificate of Fitness from the FSSAI before dealing with the goods in the open market as the same are lying with the respondents since March, 2026.
(v) No order as to costs.
11. Rule is made absolute in the above terms and the petition is accordingly disposed of.
Notes:
1 2026(3) TMI 1212
2 2026(7) TMI 1137
3 (2026(8) TMI 1298
4 2024 (11) TMI 1088
