2026-VIL-659-CESTAT-CHD-CU
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CUSTOMS CESTAT Cases

Customs - Classification of Imported Areca Nuts, Bond and Bank Guarantee for Provisional Release - Appellant imported "Areca Nuts" from Sri Lanka and classified them under CTH 08028090. The Customs Department, based on CRCL test reports, held that the goods were "Roasted Areca Nuts" and should be classified under CTH 2008. The Department issued a show cause notice proposing classification under CTH 2008, denying ISFTA benefit, and demanding customs duty - Whether the conditions imposed by the Customs authorities for provisional release of the seized goods, particularly the requirement of furnishing a bank guarantee, are arbitrary, unreasonable and onerous - HELD - The report of the CRCL, which classified the goods as "Roasted Areca Nuts" based on visual inspection, cannot be relied upon as the Chemical Examiner is not a food analyst. The classification should be based on the General Rules for Interpretation, Section Notes and Chapter Notes, not visual inspection - Further, the Customs Department from very beginning, has not acted in accordance with regulations issued by the FSSAI (Import Regulation) wherein it has been specifically provided that samples of food items should be sent to the nearest FSSAI approved laboratory. The National Food Laboratory, Ghaziabad had found the samples to be "fit for human consumption" as per the FSSAI Regulations – The Customs Department's reliance on the CBIC Circular No. 35/2017-Cus dated 16.08.2017 to impose harsh conditions for provisional release is not justified as the Circular has been struck down by the Delhi High Court in some cases - The requirement of furnishing a bank guarantee is arbitrary and unreasonable, and the same cannot be sustained - the detained goods are directed to be released, subject to fulfillment of the conditions of the impugned Provisional Release Order except requirement of furnishing the bank guarantee – The appeal is allowed
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