Delhi HC Reduces Customs Security for Provisional Release of FSSAI-Cleared Areca Nuts

The assessee imported five containers of roasted areca nuts from Indonesia through three Bills of Entry filed at the ICD. Relying on a Customs Authority for Advance Ruling (CAAR) dated 13.05.2024, the importer classified the goods under the Customs Tariff, whereby some samples sent by the Customs Department to CRCL were cleared as fit for consumption, while others were categorized as “dried areca nuts” and declared unfit for consumption. The petitioner requested retesting, but the results remained inconsistent.

Despite a clean report from FSSAI, the Customs authorities detained the goods. The High Court directed the provisional release of the goods for industrial use, leaving it open to Customs to impose suitable conditions. Thereafter, the Joint Commissioner ordered release only upon submission of a Rs. 4.10 crore bond and a Rs. 5.81 crore bank guarantee, which the petitioner challenged as excessive.

Issue Raised: Whether the security terms imposed for provisional release were excessive and contrary to the High Court‘s earlier directions.

High Court’s Ruling: The High Court partly allowed the writ petition. It held that even assuming the Department’s valuation of Rs. 4.10 crore was correct, imposing a bank guarantee of Rs. 5.81 crore, in addition to the bond, was excessive and disproportionate. Such onerous conditions would effectively nullify the relief granted under the Court’s earlier order.

Accordingly, the Court directed the release of the goods upon execution of the Rs. 4.10 crore bond and reduced the bank guarantee requirement to Rs. 50 lakh. The relief granted is subject to the outcome of the ongoing investigation and compliance within two weeks of the date of the order. The Court maintained that its order was in the interest of fairness without prejudging the outcome.

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