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W.P(C^ No. 7734/2009
Through; Mr. JayantBhushan, Sr. Advocatewith Mr. Abhishek Saket, Advocate
Through: Dr. Ashwani Bhardwaj, Advocate for respondents No. 1 to 3.
HON'BLE MR. JUSTICE VALMIKI J.MEHTA
JUDGMENT
1. Wlietherthe Reporters oflocal papers may be allowed to see the judgment?
2. To be referred to the Reporter or not?
3. Whether the judgment should be reported in the Digest? % VALMIKI J.MEHTA, J
1 The present writ petition has been filed by the petitioner under Article 226 of the Constitution of India seeking inter alia, the relief against the respontat No.2/Commissioner of Customs to release the goods in question, namely. Honey without any PFA. (Prevention of Food Aduheration) check and health check. Further relief is prayed for quashing of CSL Test conducted by W.P.CC) 7734/2009 Page 1 2009:DHC:7794-DB the respondent No.3/Director of Central Food Laboratory and under which test the consignment of Honey has been found to be adulterated/contaminated with an antibiotic, Chloramphenicol.
2 The facts of the case are that the petitioner No.l is engaged in the business of export of Agri Food Commodities and the petitioner No.2 is in the business of processing Honey and exporting the same out of India. The petitioners state that in the course of its export business, the petitioner No.l got an export order from a US Company namely, LAMEX. The petitioner No.l, through petitioner no.2 supplied Honey to the said US buyer. As per the contentions of the petitioner, after the shipment was sent, the buyer LAMEX retumecfa part ofthe consignment on the ground that the same was found to be containing moisture beyond their requirement and acceptable limit. On return of the said shipment, the customs official sent a sample of Honey to the respondent No.3 and which sample when tested was found to be adulterated containing the antibiotic Cliloramphenicol. The petitioners further contend that in terms of the Custom Circular No.1/02 dated 8.1.2002, it has been clarified by the respondent No.l that the Prevention of Food Adulteration Act, 1954. (hereafter PFA Act) is not applicable for food items meant for export on re export. The petitioners further contend that since the Commissioner of Custorfc^espondent No.2 has identified the re-imported Honey as that, which was exported i.e meant for export on re-export, the goods should be released as V W.P.CC) 7734/2009 Page 2 A r it is recorded in the customs report that the foreign buyer had sent the goods back due to quality issue ofmoisture content.
3. At this stage, it would be relevant to refer to the circular No.1/02 dated 8.1.2002. "Circular No.l/2002-Cus. 8*'' January, 2002. F.No.450/21/98-Cus. IV (Vol. II) Government of India Ministry ofFinance (Department of Revenue) Central Board ofExcise & Customs ^ Subject: Application ofPFA Act, 1954 for clearance ofconsignments of food articles-reg.- I am directed to refer to Board's Circular No.58/2001-Cus., dated 25.10.2001 on the above mentioned subject. In the said Circular, it hasbeenprovided that allthe consignments of imported food items areto be referred to Port Health Officers for testing under the PFA Act, 1954. A reference has been received from the trade stating that the food items imported by EOUs for subsequent export after processing should be exempted from the mandatory testingunderthe said Act.
2. The matter has been examined in consultation with the Ministry of Health & Family Welfare. It is observed that there is no provision in the PFA Act to exemptfood items importedbyEOUs or unitsin EPZ/SEZfrom testingunder the said Act It has, however, been clarified by theMinistryofHealth &Family Welfare that the PFAAct is not applicable forfood meantfor export. Therefore, in casethe Commissioner of Customs is satisfied that importedfood items, after their processing in EOUs or units in EPZ/SEZ. shall be exported and no part thereof shall be sold in India, he may allovy clearance of such food items without mandatory testing under the said Act. The Commissioners may take an undertaking from the EOUs or units in EPZ/SEZ importing the food itemsto the effect that the imported food item or any product manufactured therefrom would not be sold in the i TDomestic Tariff Area under any circumstances. These instructions may be brought to the notice of all concerned for compliance.
4. Difficulties, if any, faced in the implementation of above instructionsmay be brought to the notice of the Board. Kindly acknowledge receipt." W.P.(C) 7734/2009 Page 3 1-^
4. The learned counsel for the petitioner has laid stress on the italicised portion ofthe circular to contend that the said line in the circular is wholly independent ofthe other portions ofthe circular and that the circular is not to be interpreted so as to be applicable only to imports by EOUs (Export Oriented Units) or units in EPZ/SEZ (Export Processing Zone/Special Economic Zone).
5 The counsel for the petitioner has finally contended that since the writ petition is entitled to succeed, the respondent No.2 is liable to pay the demurrage charges incurred during this period when the Honey is lying at the iriJstance ofthe respondent No.2.
6. The counsel for the respondents on the other hand has strenuously urged that the circular dated 8.1.2002, is an exception to the general circular dated 25.10.2001 which specifically provides that "it has been provided that no food item would be allowed clearance unless it is tested under the Prevention of Food Aduheration Aot, 1954 and other allied laws". This circular is of the Central Board of Excise and Customs and the relevant portion of this Circular reads as undcr:- "Customs Circular No.58-2001 Circular NO.58/2001-CUS.[3] ^ 25"'October, 2001 F.NO.450/21/98-CUS.1V Government of India Ministry of Finance (Department ofRevenue) Central Board of Excise & Customs W.P.[C) 7734/2009 Page 4 Subject: Application of PFAAct, 1954 and other Acts forthe clearance of consignments of food articles-instructions-regarding- I am directed to refer to the Board's Circular No.36/2001-CUS., dated 15*^ June, 2001 on above-mentioned subject. The said Circular provides detailed guidelines for examination and testing of good items prior to Customs clearance. It has been provided that no food item would be allowed clearance unless it is tested under the Prevention of Food Adulteration Act. 1954 and other allied laws. In this connection, a number of representations has been received from the hotel industry stating that they are facing difficulties in clearance of perishable food items due to mandatory testing of all consignments. The Federation of Hotel and Restaurant Association Of India has requested for restoration of the exemption granted earlier to hotels from 100% testing under Circular No.l03/2000-Cus., dated 15^' December, 2000 (which was superseded by Circular No.36/2001-Cus., dated 15/6/2001)."
7. The counsel for the respondents has, therefore, contended that the -dxceptiorj provided by means of the circular dated 8.1.2002, is therefore confined only to import by EOUs or Units in EPZ/SEZ. The learned counsel has flirther contended that it is clearly shown by the report of the Central Food Laboratory that the sample of Honey was adulterated because it contained the antibiotic Chloramphenicol. The counsel has placed their reliance upon the circular dated 16.10.2003 issued by the Director General of Health Services which showed that Chinese Honey containing the Antibiotic Chloramphenicol -which causes cancer or anaemia is being dumped into India as the said goods are being stopped from being imported in U.K, Canada and Germany. This circular is relevant and the same is reproduced herein. V "No. P-15011/3/2002-PH(F) DTE.
1. All ports/Airports Health Officers.
2. All Customs Collectors. Subject:- Import of ChineseHoney. Madam/Sir, It has been brought to the notice of this Dte. By M/o Agriculture that Export Inspection Council of India informed them that U.K. Food standards Agency, the Canadian Food inspection Agency and the German Agriculture & Consumer protection Ministry have through a series of sample tests found that Chinese Honev had contained traces of an antibiotic, chloramphenicol, which can cause cancer or a plastic anaemia if consumed over a long period. The U.K. Canada and Germany have stopped imports of Chinese honey due to the reason of contamination. The Export Inspection Council of India further informed that Chinese honey, which is being rejected in Europe and North American countries, is being dumped into India through both legal and illegal channel.. The import of Chinese honey jumped to 1,381.03 tons (worth Rs.583.14 lakhs) in the first nine months of 2002/03 as compared to only O.io tons (at Rs.0.09 lakhsO during 2001-02. It is also gjieged that Nepalese exporters arere-exporting Chinese Honev. You aretherefore, requested to keep a strictvigil on the quality of such consignments of honey before the same is released for human consumption. Yours faithfully, Sd/= (Dr. S.K. Gupta) ASSTT.
1. All Directors of C.F. Labs.
2. Public Analysts of States/U.T.s, who are authorised for analysis of samples ofimported food.
3. The Director Customs, Central Board of Excise & Customs, Deptt. Of Revenue, M/O. Finance, North Block, New Delhi. Sd/=(Dr.
S.RGupta) Assistant Director General (PFA) 8, Tfe counsel for the respondents has further contended that a reading of the relevant requirement of the PFA Rules pertaining to the food item Honey shows that it should be free from foreign matter and any other extraneous matter W.P-CC) 7734/2009 Page 6 a which surely would include any form ofharmful substance such as an antibiotic Cliloramphenicol.
9. We feel that the contentions of the counsel for the respondent are well founded and the writ petition is liable to be dismissed. The circular dated 8.1.2002, when read in its entirety makes it clear that the same only applies to imports byEOUs orunits inEPZ/SEZ. This becomes clear from the underlined portionofthe circular reproduced above.
10. This issue also becomes clear from para 1 of the circular which specifies that tlie same is with respect to reference received from trade with respect to V" / food items imported by EOUs for subsequent export after processing. Even on general principles one fails to understand as to how it can be contended by the petitioners that without any testing of the goods, the same can be brought into the country. For example, the food item may contain ingredients of contagious disease or many other harmfril and dangerous diseases and which goods if allowed to be imported in the country, may cause grave harm to the denizens of ^the country. Surely, the customs officials are entitled to ensure that harmfril goods do not cross the customs barriers of the country so as to come within the domestic tariff area. If this power is not given, to the customs authorities, grave harm, prejudice and havoc can be caused. The goods with respect to which no testing is claimed as a matter of right can in many circumstances find their way illegally into the domestic market and cause untold harm and misery. We, therefore, even on first principles cannot agree with the contentions of the W.P.CC) 7734/2009 Page 7 f petitioners that simply because the goods would be re-exported, there is no requirement at all of goods to be inspected by any authority including the authorities under the PFA Act.
11. At this stage, it is also relevant to mention that in the writ petition, the petitioners admit that they themselves do not manufacture honey in their own farms but they source the same from outside bee-hive keepers, and thus the chance of adulterated honey coming into their possession cannot be ruled out. P Also, in para 6 of the counter-affidavit filed by the respondents No.l and 2, it has bee|^ clearly stated that the petitioner had filed a bill of entry of home consumption and which is not disputed by the petitioners in the rejoinder filed. Merely because on a first checkby the customs authorities, the oral statement of the petitioner was accepted that the goods had been sent back due to moisture content cannot be conclusive of the matter. We may note that in fact it has not even been argued and canvassed during the course of hearing that the antibiotic Chloramphenicol has not been found in the consignment of Honey in question. ' VVliat is only sought to be urged is that in the relevant rule with respect to the Jood item Honey, there is no standard prescribed with respect to non-existence of the antibiotic Chloramphenicol. This argument is clearly mis-conceived on i tlie face of it because the said relevant article in the PFA Rules not only prescribes certain standards with respect to moisture Sucrose etc but on reading the same, it clearly states as under:- W.P.CC) 7734/2009 Page[8] "[A.07.03-"HONEY" means the natural sweet substance produced by honey bees from the nectar of blossoms or from secretions of plants which honey bees collect,transform store in honey combs for ripening. When visually inspected, the honey shall befree from any foreign matter such as mould dirt, scum, pieces of beeswax, the fragments of bees and other insects and from any other extraneous matter"
12. We also feel thatthe explanation ofthe petitioner thatthe consignment in question was sent back by the US buyer merely because there was excess moisture content does not seem to be too believable not only no report of US aiMhorities is filed to this effect and also because in the letter dated 6.11.2008 which is filed by thepetitioner itself, there is no mention of rejection because of >' anymoisture content. This letter simplyreads as under: "November 06, 2008 Kejriwal Enterprises W-42 Greater Kailash-2 New Delhi-110048 India Dear Kejriwal Enterprises, The product in this container OOLU 1505972 is being returned since it did not meetthe specifications of the intendedbuyer. This product was originallyshipped in FCLFCIU 3261311. Best Regards, Sd/- Gregory Olsen LAMEX Foods, Inc."
13. No doubt, subsequently an additional affidavit was filed by the r petitioner, along with the letter dated 19.3.2008 of LAMEX, which appears to be on the letter head of the LAMEX, but the same is an unsigned letter. This letter appears as annexure 4 to the additional affidavit dated 4/8/April/2009. We would hasten to add that our final conclusions are not based upon this W.P.(C) 7734/2009 Page 9 Ir aspect but we found this issue abit perplexing and therefore have referred to the same.
14. In view of the above, since we are dismissing the writ petitionitself, there arises no question of claim of demurrage to be paid by the respondent No.2as has been prayed inthe writ petition. In the peculiar facts ofthis case, when the honey in question has been found to be contaminated with a dangerous substance which can cause cancer and anaemia and only for which the circular dated 16.10.2003 was issued by the Director General of Health Services and as reproduced above in the body of the order, and the petitioner has filed this misconceived petition claiming its release on grounds which are wholly unacceptable we dismiss the writpetition with costs quantified at Rs.25,000/-. VALMIKI J.MEHTA, J A.K. SIKRI, J ^ September 25, 2009 W.P.(C) 7734/2009 Page10 /I,