Punjab And Haryana High Court Orders Release Of Roasted Areca Nuts Detained Since November 2024

The Punjab and Haryana High Court on 17 August directed the release of imported roasted areca nut consignments that had remained detained in Customs bonded warehouses since November 2024.

A Division Bench comprising Acting Chief Justice Ashwani Kumar Mishra and Justice Rohit Kapoor found that the Central Revenue Control Laboratory (CRCL), New Delhi had classified the goods as “dried” rather than “roasted” based only on their physical appearance and colour, without applying the scientific parameters prescribed in its own Standard Operating Procedure (SOP). It observed:

“when the report of Central Revenue Control Laboratory has based its conclusion only on physical appearance and not on any other scientific parameter, it would not be appropriate to allow the respondents to withhold the release of goods for years together.”

The petitioner-company had imported roasted areca nuts from Indonesia and expressed willingness to pay the customs duty applicable to that classification. The Customs authorities, however, took the position that the imported goods were “dried” areca nuts, attracting a different and higher rate of duty. The dispute resulted in the consignments remaining in the Customs bonded warehouse from November 2024.

The classification rested on a CRCL test report which described the samples as brown-coloured, hard and split nuts of irregular sizes, some partially burnt and having a smoky odour. The report referred to the standard under Regulation 2.3.55 of the Food Safety and Standards Regulations, 2011 and IS 16962:2018.

The Court found that the CRCL's conclusion that the samples were “dried” rather than “roasted” rested on physical appearance alone and did not consider the scientific parameters prescribed in its own SOP for making that determination. It also noted that the Food Safety and Standards (Import) Regulations, 2017 require such test reports to be furnished within five days, whereas the report in the present case took nearly a month.

Further, the Bench noted that the Customs authorities had released four other consignments on the petitioner furnishing a personal bond. The department's affidavit recorded that those Bills of Entry were assessed provisionally under bond because “the verification report of CoO [Certificate of Origin] document was awaited.” The fact that the goods were roasted areca nuts was not in dispute in those cases.

The judges declined to examine the merits of the classification dispute, noting that the authorities had already issued show-cause notices and that the question of the duty payable would be determined in those proceedings. They held that any observation on the merits could prejudice the pending adjudication and therefore refrained from expressing an opinion on the issue.

The Court nevertheless took into account the petitioner's several years of importing such products, the release of four comparable consignments on personal bond and the CRCL's failure to apply the scientific parameters prescribed in its own SOP. It held that the remaining consignments should also be released on similar terms.

The Bench directed the respondents to release the imported consignments forthwith on the petitioner furnishing a personal bond and to ensure physical delivery of goods declared fit for consumption within a fortnight. It also directed the release of two consignments which the respondents themselves had found to contain roasted areca nuts but had nevertheless withheld for eight months. It made the release subject to the pending show-cause proceedings concerning determination of customs duty.

The petitioner undertook to file its reply to the show-cause notice within four weeks, following which the respondents must fix a hearing date and pass appropriate orders in accordance with law.

Accordingly, the High Court directed release of the consignments on furnishing of a personal bond, without expressing any opinion on the merits of the pending classification and duty dispute.