Shivshakti Enterprises imported two consignments of roasted areca nuts and, as the law requires for any food item entering India, had them examined by the Food Safety and Standards Authority of India. FSSAI issued a no-objection certificate confirming the goods met food safety standards. That should ordinarily have been the end of the regulatory gatekeeping on the food-safety side, clearing the way for the goods to be released once customs duty and classification formalities were sorted out.
Customs did not see it that way. It sent its own samples to the Central Revenue Control Laboratory for testing and, even after that testing was done, permitted only a provisional release of the consignments, and only on condition that the importer execute a bond and furnish a bank guarantee of Rs 40 lakh. The department's position was that an FSSAI no-objection certificate settles food safety but says nothing about the correct customs tariff classification of the goods, so Customs remained free to hold the consignments pending its own satisfaction on that separate question.
The importer took the matter to the Bombay High Court, where a Division Bench of Justices M.S. Karnik and Sandesh D. Patil found the issue squarely covered by the court's own recent decision in NBG International Private Limited v. Union of India, a case that had dealt with an identical stand-off over imported roasted areca nuts earlier in the year. In NBG International, the court had held that once FSSAI's authorised officers examine samples and issue a no-objection certificate confirming compliance with the Food Safety and Standards Act, 2006, Customs cannot simply disregard that finding in favour of a contrary report from its own revenue laboratory.
Applying that principle, the Bench in Shivshakti Enterprises quashed the seizure memo and the provisional release order to the extent that they insisted on the Rs 40 lakh security deposit or bank guarantee. The court's reasoning treated the FSSAI clearance as determinative on the food safety question that the detention was ostensibly protecting against, leaving no legitimate basis for Customs to keep goods locked up, and an importer's working capital tied up in a bank guarantee, once that question had already been answered by the body statutorily empowered to answer it.
Customs had tried to draw a line between food safety clearance and tariff classification, arguing the two are legally distinct and that an FSSAI certificate cannot resolve a dispute over which heading of the Customs Tariff Act the goods fall under. The court's order did not accept that distinction as a reason to keep the consignments detained on a security deposit; whatever classification dispute remained could be argued and resolved without continuing to hold the goods hostage to it.
The decision extends a line of reasoning that began with the Bombay High Court's earlier ruling in Make Index Impex v. Union of India, concerning imported soybeans that Customs had alleged were unfit for human consumption, and that the High Court there resolved the same way: once FSSAI takes a clear position that goods satisfy the food safety law, Customs cannot adopt a contrary position on the same question. Petitioners in the present case also pointed to similar rulings reportedly followed by the Calcutta, Punjab and Haryana, and Madras High Courts, suggesting the principle is becoming a settled cross-jurisdictional position rather than one confined to Bombay.
For importers of food products who routinely run into this friction between FSSAI clearance and customs detention, the order gives a concrete, recently reaffirmed precedent to challenge a bank guarantee or security deposit condition imposed after FSSAI has already cleared the goods. It also signals to the department that an in-house laboratory report contradicting an FSSAI no-objection certificate will not, on its own, justify prolonging detention, since the statutory scheme treats FSSAI as the competent authority on food safety and expects Customs to work within that finding rather than around it.
The repeated appearance of roasted areca nuts in this line of litigation is itself telling. The commodity sits at an awkward intersection of food safety regulation and customs tariff classification, since its treatment and packaging determine both how it is taxed and whether it clears as a food product fit for consumption. Each time Customs has tried to use a classification dispute as a reason to keep such consignments detained after FSSAI clearance, the Bombay High Court has pushed back in essentially the same terms, which should, over time, reduce the department's appetite for repeating the tactic on this particular commodity.