Authority: High Court at Calcutta

Order Date: 15.10.2026

Case Overview

  • Parties: Additional Director General, Directorate of Revenue Intelligence, Kolkata (Appellant) vs. M/s Credence International & Ors. (Respondents); also Commissioner of Customs (Preventive), Customs House, Kolkata as appellant in a connected application.
  • Background: Credence International (IEC: AJLPK2889F) imported a foreign‑origin consignment of areca nuts from Belawan Port, Indonesia. The cargo arrived under Import General Manifest No. 1152662 on 31.08.2025 at Kolkata Port and was transshipped in‑bond to ICD Durgapur. On 11.09.2025 the importer filed Bill of Entry No. 4451174 declaring the goods as “Roasted Areca Nuts” under Customs Tariff Heading (CTH) 20081991, comprising three containers (TIDU5213432, TIDU5229125, TIDU5228026) weighing 84.48 metric tons with an assessable value of Rs 1,12,21,197.
  • Allegations: Intelligence indicated that the importer had misdeclared prohibited foreign‑origin dried areca nuts (CTH 080280) as roasted areca nuts to evade the DGFT Minimum Import Price (MIP) regime and to obtain lower customs duty. DRI issued an Alert Notice on 15.09.2025, detained the cargo, and prevented its entry into the Food Import Clearance System (FICS) on ICEGATE.
  • Customs Action: Customs officers examined the cargo on 22.09.2025, recorded statements under Section 108 of the Customs Act, and drew representative samples under Section 144 on 24.09.2025. Samples were sent to the National Food Laboratory (NFL), Kolkata, which on 26.09.2025 reported the samples unsafe under Section 3(1)(zz) of the FSS Act because of mould, insect infestation and excessive aflatoxin. The three containers were seized under Section 110(1) on 07.10.2025.
  • Re‑testing: Upon the importer’s request, samples were sent to the Central Revenues Control Laboratory (CRCL), New Delhi. Initial CRCL report (18.12.2025) labelled the goods “other than roasted areca nut”. Redrawn samples on 22.01.2026 and 20.02.2026 led to final CRCL reports dated 12‑13.03.2026 confirming misdeclaration and unfit‑for‑human‑consumption status. A show‑cause notice was issued on 11.09.2026.
  • Writ Petition: Credence International filed writ petitions (W.P.O. No. 263 of 2026) seeking fresh sampling exclusively by FSSAI‑authorized officers under Section 47(5) of the Food Safety and Standards (FSS) Act, 2006. The Single Judge dated 15.07.2026 held that only FSSAI officers could draw samples, declared Customs sampling illegal, quashed NFL and CRCL reports, and ordered fresh sampling at CFL Kolkata.
  • Revenue Appeal: The revenue (DRI/Customs) appealed, arguing that the Single Judge erred by giving the FSS Act a sweeping overriding effect that eclipsed Section 144 of the Customs Act, thereby stripping Customs of its statutory anti‑fraud powers.
  • Legal Submissions: Counsel for the revenue emphasized the distinct legislative fields of the Customs Act (border‑enforcement, fiscal protection) and the FSS Act (public‑health). They cited Section 25(1)(iii) of the FSS Act, CBIC Notification No. 26/2022‑Customs (N.T.), and the plenary power of Section 144. They also highlighted that misdeclaration of dried areca nuts as roasted nuts creates liability under Sections 111(m), 112 and 114AA of the Customs Act.
  • Importer's Submissions: Counsel for Credence International contended that the goods were lawfully imported, complied with the MIP, and that sampling authority resides exclusively with FSSAI officers under Section 47(5) and Regulation 13(1) of the FSS (Import) Regulations, 2017. They argued that DRI’s unilateral sampling was illegal and that the seizure under Section 110(1) was void.
  • Laboratory Findings: Both NFL and CRCL independently concluded the cargo was misdeclared and unsafe (mould, insects, aflatoxin exceeding permissible limits). The revenue argued that quashing these expert reports undermines revenue protection and public health.
  • Judicial Reasoning (Court): The Court held that the Customs Act and the FSS Act operate in concurrent, non‑conflicting fields and must be read harmoniously. Section 144 gives Customs officers plenary power to sample imported goods for fiscal purposes, irrespective of the goods’ edible nature. Section 25(1)(iii) of the FSS Act expressly requires compliance with any other law, including the Customs Act. The Court rejected the Single Judge’s view that the FSS Act completely overrides Customs’ powers.
  • Key Findings:
  • Customs may lawfully draw samples under Section 144 even for food articles before the Bill of Entry is routed to FICS.
  • FSSAI’s exclusive sampling applies only after a Bill of Entry is transmitted to the Food Import Clearance System.
  • Executive instructions (e.g., CBIC Instruction No. 04/2026‑Customs) cannot curtail statutory powers conferred by Parliament.
  • The laboratory reports were valid and should not have been quashed.
  • The directions for compulsory fresh sampling, videography, fixed 5‑day laboratory timelines, cargo release within 24 hours and demurrage waivers exceeded the writ petition’s scope and substituted statutory procedure.

Final Outcome

  • The judgment and order dated 15.07.2026 are set aside to the extent they declared FSSAI officers the sole competent authority for sampling and quashed the Customs sampling and laboratory reports.
  • A Proper Officer of Customs may lawfully draw samples under Section 144 of the Customs Act for classification, valuation and anti‑fraud investigation, even when the imported goods are food items.
  • All directions mandating fresh FSSAI sampling, videography, 5‑day testing timelines, immediate cargo release and demurrage waivers are vacated.
  • The Customs authorities shall continue the pending show‑cause notice adjudication in accordance with the Customs Act.
  • No order as to costs; the appeal and connected applications are disposed of.

Topics: Court Judgment, Customs Sampling Powers, Food Import Regulation