Customs can independently sample imported food to investigate tariff fraud, Calcutta High Court rules

M/s Credence International imported three containers declared as “Roasted Areca Nuts” under CTH 20081991.

Acting on intelligence that the goods were dried areca nuts misdeclared to evade tariff and Minimum Import Price requirements, DRI and Customs officers examined and sampled the cargo under Section 144 of the Customs Act, 1962.

NFL and CRCL reports found the goods misdeclared and unfit for human consumption; Customs seized the consignment under Section 110 and issued a show-cause notice.

The importer’s writ petitions sought fresh sampling by FSSAI-authorised officers.

The Single Judge held Customs sampling invalid, quashed the test reports and directed fresh sampling and related relief.

Customs and DRI appealed.

1. Whether Customs officers may draw samples of imported food articles under Section 144 of the Customs Act for tariff classification, valuation and investigation, notwithstanding the FSS Act and its import-clearance procedures

2. Whether Customs sampling and the resulting NFL and CRCL reports could be quashed in writ proceedings before adjudication of the show-cause notice

3. Whether the Single Judge’s directions for fresh sampling, cargo release and waiver of demurrage or detention charges exceeded the permissible scope of judicial review

The Court applied Sections 2(25), 2(34), 17, 45, 46, 47, 108, 110, 111, 144 and 25(1)(iii) of the Customs Act and FSS Act, respectively, treating the two enactments as operating concurrently in distinct fields.

Section 144 authorises a Customs proper officer to sample imported goods for examination, testing, valuation or other purposes of the Customs Act; Section 25(1)(iii) of the FSS Act recognises that food imports must comply with that Act and other laws.

Section 89 of the FSS Act does not displace Customs’ independent powers where there is no direct inconsistency concerning food-safety standards.

The Court further held that evidentiary and procedural objections to sampling and testing should ordinarily be considered in the statutory Customs adjudication process.

The Court considered the Customs investigation to be an intelligence-led inquiry into alleged tariff misdeclaration and evasion, begun before the goods were routed to FSSAI’s Food Import Clearance System.

It held that determining whether the cargo was dried or roasted areca nut was necessary for Customs tariff classification and enforcement, and that Section 144 permitted Customs sampling for those purposes.

FSSAI’s role in food-safety clearance did not exclude Customs’ separate border-enforcement jurisdiction.

The Court also held that challenges to sample collection, chain of custody and laboratory reports could be addressed during show-cause adjudication, rather than by quashing the proceedings at the writ stage.

The Single Judge’s consequential directions were therefore considered to have exceeded the proper scope of judicial review.

Customs may sample food articles under Section 144 for Customs purposes.

The directions for compulsory fresh sampling, videography, fixed testing timelines, cargo release and demurrage waivers were vacated; Customs was directed to proceed with show-cause adjudication in accordance with law.

No order as to costs.