Case Note & Summary
The dispute arose from the import of two consignments of Roasted Arecanuts Splits (Beetle Nuts) by the petitioner, a sole proprietary concern, under Bills of Entry No.8347475 and 8347647 on 28 March 2026. The Customs Department examined the goods, drew samples, and sent them to the Food Safety and Standards Authority of India (FSSAI). On 10 April 2026, FSSAI issued a No Objection Certificate certifying that the imported goods conformed to the Food Safety and Standards Act, 2006. Despite this NOC, the customs authorities did not release the goods; consequently, on 23 April 2026, the petitioner filed a writ petition before the Bombay High Court. During the pendency of the petition, the customs authorities sent samples to the Central Revenue Control Laboratory, which reported moisture content of 6.8% and 6.9% in two reports dated 5 May 2026. On 19 May 2026, the Commissioner of Customs (SIIB-Import) seized the goods. The petitioner sought provisional release on execution of a bond, but by order dated 22 June 2026, the Joint Commissioner of Customs permitted provisional release only upon executing a bond and furnishing a bank guarantee of Rs.40,00,000. The petitioner amended the petition to challenge the seizure memo and the bank guarantee condition. The respondents defended the seizure, contending that tariff classification under the Customs Tariff Act, 1975 was distinct from FSSAI conformity and that the NOC did not conclude the classification issue; they asserted that the bonafide dispute justified testing by CRCL and the demand for bank guarantee. The petitioner argued that once FSSAI had examined and cleared the goods, there was no justification for further testing by CRCL; the issue was squarely covered by the decision in NBG International Private Limited v. Union of India, which had been followed by several High Courts. The High Court, after examining the precedent, relied on paragraphs 17 and 18 of NBG International, which in turn cited Make Index Impex v. Union of India and the Food Import Manual. The court observed that FSSAI laboratory analysis must be completed within five days with a conclusive opinion on conformity, indicating high standards of testing. It held that once FSSAI issued a clear NOC, customs authorities could not adopt a contrary position, and there was no sound premise for reclassification or re-testing. Consequently, the court held that the seizure memo dated 19 May 2026 and the order dated 22 June 2026 to the extent of demanding a bank guarantee of Rs.40,00,000 were liable to be quashed. It allowed the writ petition, quashed the impugned orders, and directed the Joint Commissioner of Customs to forthwith release the goods without insisting on a bank guarantee. The petitioner was directed to obtain a fresh Certificate of Fitness from FSSAI before dealing with the goods in the open market, given that the goods had been lying with the respondents since March 2026. No order as to costs was made.
Headnote
A) Customs Law - Provisional Release of Imported Goods - Requirement of Bank Guarantee - Customs Act, 1962; Food Safety and Standards Act, 2006 (no specific sections cited) - The petitioner imported Roasted Arecanuts Splits and received FSSAI NOC dated 10 April 2026 confirming conformity with the FSS Act, 2006, yet customs authorities later seized the goods and demanded a bank guarantee of Rs.40,00,000 for provisional release. The Bombay High Court followed NBG International and held that once FSSAI cleared the goods, customs could not insist on re-testing through CRCL or impose a bank guarantee; directed release on bond without security deposit. Held that FSSAI NOC is conclusive for food safety and the seizure/demand was unjustified (Paras 9-10). B) Food Safety Law - FSSAI Conformity Assessment - Finality of FSSAI NOC - Food Safety and Standards Act, 2006; Food Safety and Standards (Import) Regulations, 2017 (no specific sections cited) - The Food Import Manual requires FSSAI laboratories to provide a conclusive opinion within five days, and FSSAI tests are of precise nature and high standards. Customs cannot create a window for reclassification after FSSAI clearance. Held that no reclassification or re-testing is permissible once FSSAI issues an NOC (Para 9). C) Precedent - Binding Precedent and High Court Decisions - NBG International Private Limited v. Union of India - The Bombay High Court in NBG International held that after FSSAI's clear stand, customs cannot adopt a contrary position; the decision was followed by the Calcutta High Court, Punjab and Haryana High Court, and Madras High Court. The issue in the present case was squarely covered by NBG International. Held that the petition deserved to be allowed (Paras 6, 9-10).
Issue of Consideration
Whether the seizure and demand of bank guarantee of Rs.40,00,000 by Customs authorities was justified after FSSAI issued NOC for imported Roasted Arecanuts Splits; whether the issue is squarely covered by NBG International Private Limited v. Union of India.
Final Decision
Writ Petition allowed. Seizure memo dated 19 May 2026 and order dated 22 June 2026 to extent of bank guarantee of Rs.40,00,000 quashed and set aside. Respondent No.5 directed to forthwith release goods without insisting on bank guarantee. Petitioner to obtain fresh Certificate of Fitness from FSSAI before dealing with goods in open market. No order as to costs.
Law Points
- Once FSSAI issues NOC under Food Safety and Standards Act
- 2006
- it conclusively establishes conformity of imported food
- customs authorities cannot re-test or reclassify goods based on tariff classification after FSSAI clearance
- provisional release of Roasted Arecanuts should be on bond without bank guarantee
- issue covered by NBG International Private Limited v. Union of India
- 2026(3) TMI 1212
