Roasted or dried? P&H High Court orders release of betel nuts held by Customs since 2024

The Punjab and Haryana High Court recently directed Customs authorities to release consignments of areca nuts/ betel nuts imported by an Indian company in 2024 [Prenda Creations Pvt. Ltd. Ludhiana v Union of India & Ors]

While the Indian company declared them to be roasted nuts, the Customs said they were dried nuts which involve a different rate of duty. Due to the dispute, the product remained in a Customs warehouse since November 2024.

On August 17, a Bench of Acting Chief Justice Ashwani Kumar Mishra and Justice Rohit Kapoor directed the release of the imported consignment on furnishing of a personal bond.

It added that the release of the goods would remain subject to the proceedings initiated by authorities in respect of the determination of the customs duty to be paid by the importer. The importer said it will respond to the show-cause notice issued by authorities within four weeks.

The Court found that the test report relied upon by the authorities was based upon the physical appearance of the product, and not any other scientific parameters.

The importer earlier argued that such a report cannot justify detainment of imported goods for years together. It also said that authorities were required to supply a copy of the test sample reports within five days but did so nearly after a month.

It was also submitted that four consignments of areca nuts were already released on personal bond as their country of origin or nature of goods was not disputed.

The Court said that any observation on the merits of the case would prejudice the proceedings initiated by authorities to determine the classification of the imported produce.

However, it also noted that the four consignments already released by the authorities were similar to the seized consignment as their moisture content, a determinative factor, was below 7 percent.

The Court also took note of private lab reports showing that the imported consignments were roasted areca nuts. Thus, the Court allowed the petitions.

"In such circumstances we are of the view that 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, or call upon the petitioner to release such goods only on furnishing of bank guarantee," the Court said.

Thus, it directed that physical delivery of goods declared fit for consumption be ensured within a fortnight. Further, the Court directed that the two consignments, found to be roasted areca nuts by authorities themselves but withheld for eight months, also be released.

Advocates Saurabh Kapoor, Mustan Gupta, Tanya Kumar and Vivek Sharma represented the petitioner.

Senior Standing Counsel Sourabh Goel with Advocates Himanshi Gautam and Drishti Saraf represented the Union of India and the Central Board of Indirect Taxes and Customs.

Advocates Yudhveer and Praveen Moudgil represented FSSAI.

Advocates Jaivir S Chandail and Amandeep Chauhan represented other respondents.

[Read Judgment]