Bombay High Court Directs Release Of Imported Areca Nuts Without Guarantee, Says FSSAI Clearance Suffices

The Bombay High Court on 31 August directed the Customs Department to release two consignments of imported roasted areca nuts belonging to Shivshakti Enterprises without insisting on a Rs. 40 lakh bank guarantee.

A Division Bench of Justices M.S. Karnik and Sandesh D. Patil applied the principle laid down in the High Court's earlier decision in NBG International Private Limited v. Union of India & Ors. and held that the issue in the present case was squarely covered by that ruling. The Court observed in NBG International:

“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.”

Shivshakti Enterprises had imported two consignments of Roasted Arecanuts Splits (Betel Nuts). Samples were sent to the Food Safety and Standards Authority of India (FSSAI) for testing, following which it issued a No Objection Certificate stating that the goods conformed to the Food Safety and Standards Act, 2006. Despite the clearance, Customs did not release the goods.

During the pendency of the petition, the samples were also sent to the Central Revenue Control Laboratory (CRCL). Customs subsequently seized the goods. It later permitted their provisional release subject to execution of a bond and furnishing of a Rs. 40 lakh bank guarantee. Shivshakti Enterprises challenged the seizure as well as the bank guarantee condition.

Customs argued that FSSAI clearance did not finally determine the tariff classification of imported goods under the Customs Tariff Act. It submitted that FSSAI's jurisdiction was confined to examining compliance with food safety standards, while Customs could independently verify the description and classification declared by an importer.

Shivshakti Enterprises relied on NBG International, submitting that the issue of releasing roasted areca nuts against a bond without insisting on a security deposit had already been settled. It also referred to subsequent decisions of the Calcutta, Punjab and Haryana, and Madras High Courts that followed the same principle.

Allowing the petition, the Bench held:

“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.”

Accordingly, the High Court quashed the seizure memo and the provisional release order to the extent they required a Rs. 40 lakh security deposit or bank guarantee. It directed Customs to release the goods forthwith without insisting on the bank guarantee.

However, since the goods had remained with Customs since March 2026, the Court directed Shivshakti Enterprises to obtain a fresh Certificate of Fitness from FSSAI before dealing with them in the open market.

For Petitioner: Senior Advocate Darius Shroff, along with Jas Sanghavi, Linzy Sharan and Sakshi Doshi, instructed by PDS Legal.

For Respondent Nos. 2 & 3: Jitendra B. Mishra, along with Ashutosh Misra and Abhishek R. Mishra.