M/S Bismilla Food Enterprises vs. Union Of INDIA

Facts

The petitioner, M/s Bismilla Food Enterprises, filed a Special Civil Application seeking a direction to Respondent No. 3 (Customs) to order the provisional release and re-export of goods seized under a Seizure Memo-cum-No Objection for Provisional Release dated April 13, 2022, issued by Respondent No. 2. The goods, including various food items like instant coffee, chewing gum, noodles, and chocolates, were being transported from Mundra Port to Mumbai when intercepted on March 24, 2022. The authorities seized the goods and the vehicle, valuing the goods at Rs. 1,44,72,392/- and the vehicle at Rs. 19,58,900/-, citing non-compliance with the Food Safety and Standards Act, 2006, and related regulations. The seizure memo indicated that the importer could approach the competent authority for provisional release under Section 110A of the Customs Act, 1962.

Held

The Court held that the part of the petitioner's prayer seeking permission for re-export of the goods could not be granted, as the goods had already been transported away from the port of import and intercepted elsewhere. The Court explicitly stated it would not express any opinion on the petitioner's claim for re-export, advising the petitioner to pursue legal recourse for that aspect. Regarding the prayer for provisional release, the Court noted that the petitioner had already made applications for it. However, the Court found that the decision in Zip Zap Exim (P) Ltd. was based on different facts, particularly concerning the value of goods and the nature of allegations, and was not applicable to the present case involving serious breaches of food safety standards. The Court emphasized that Section 110A of the Customs Act empowers authorities to consider release and impose appropriate conditions. Therefore, the Court directed the competent Customs authority to decide the pending applications for provisional release within one week, imposing such conditions as deemed fit. The Court explicitly stated it would not express any opinion on the merits of the case or the nature of conditions to be imposed.

Key Issues

1. Whether the Court should direct the provisional release and re-export of the seized goods under Section 110A of the Customs Act, 1962, considering the alleged non-compliance with food safety norms? The petitioner argued for the provisional release and re-export of the goods, relying on the Division Bench decision in Zip Zap Exim (P) Ltd. vs. Union of India, which permitted re-export upon furnishing 25% of the Customs Duty. The petitioner sought a direction to Respondent No. 3 to order such release and re-export. The respondent (Customs) contended that the goods did not meet essential requirements under the Food Safety Act and Regulations, citing issues such as incorrect quantity, absence of the Food Safety and Standards Logo, lack of license number, inaccurate importer details, and missing Veg/Non-Veg logos. The respondent also noted that the petitioner had applied for provisional release but expressed inability to furnish the required bank guarantee.