Make Index Impex A Proprietorship ... vs Union Of India And 5 Ors on 10 August, 2023

[Cites 5, Cited by 0]

Bombay High Court

Make Index Impex A Proprietorship ... vs Union Of India And 5 Ors on 10 August, 2023

Bench: G. S. Kulkarni

2023:BHC-OS:8310-DB

903-wpl 33250-22.odt

Prajakta Vartak
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION

WRIT PETITION (L.) NO. 33250 OF 2022

Make Index Impex ..Petitioner
Vs.
Union of India & Ors. ..Respondents
__________

Mr. Vikram Nankani, Senior Advocate with Dr. Sujay Kantawala, Mr.
Swanand Ganoo, Ms. Tamanna Tavadia, Mr. Vikram Naik, Mr. Marmik
Kamdar i/b. Khaitan & Co. for Petitioner.
Mr. Devang Vyas, ASG with Smt. Shehnaz V. Bharucha and Mr. Ashutosh
Mishra for Respondent nos. 1, 8 and 10.
Mr. J.B. Mishra a/w. Mr. Ram Ochani for Respondent Nos. 2 and 3.
Mr. Kevic Setalwad, Senior Advocate with Mr. Subhash Bhalwal i/b. M/s.
Vyas & Bhalwal for Respondent no. 4.
Mr. Tushar Agrawal i/b. Mulani & Co. for Respondent No.6.
Mr. Aman Kacheria with Mr. Abdul Kader Lokhandwala i/b. Ms. Sukanya
Bhaumik for Respondent Nos. 7 & 9.
__________

CORAM : G. S. KULKARNI &
JITENDRA JAIN, JJ.
DATE : AUGUST 10, 2023

P.C.:

1. This petition under Article 226 of the Constitution of India came to

be filed by the petitioner being aggrieved by the actions of the Customs

Department (respondent Nos.2 & 3) of a refusal to clear the goods in

question namely the "Pigeon Peas" and "Soya bean" as imported by the

petitioner. These consignments were not being cleared by the customs

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authorities on the ground that the goods are genetically modified and

which if they exceed the permissible parameters cannot be permitted to be

cleared and / or they would be required to be re-exported. It is on such

premise, that the clearance of the goods being not accepted by the customs

authorities, coupled with the fact that the goods were suffering

demurrage / storage charges, causing a serious prejudice to the petitioner

not only on the rights of the petitioner as a importer but also that on

monetary losses being caused to the petitioner, the present petition came

to be filed on 17 October, 2022, praying for the following reliefs:-

"a) That the provisions of Environment Protection Act, 1986
and the Manufacture, Use, Import, Export and Storage of
Hazardous/Micro-Organism/Genetically Engineered Organisms
or Cells Rules, 1989 issued thereunder are not applicable in
relation to the impugned import of Soyabean;

b) That this Hon'ble Court be pleased to declare that the
provisions of Food, Safety and Standard Act, 2006 and the
Orders issued thereunder shall apply to import of Soyabean in
the present case;

c) That in the event of conflict between Environment
Protection Act, 1986 and the Food, Safety & Standard Act, 2006,
the later shall prevail over the former;

d) This Hon'ble Court be pleased to issue a writ of certiorari
or any other appropriate writ, order or direction quashing and
setting aside the illegal and arbitrary Seizure dated 4 th October
2022 | comprising of the Soyabean consignment totally weighing
17742 MT detailed in Bill of Entry Nos. Bills of Entry Nos.
2295860 dt. 03.09.2022; 2296035 dt. 04.09.2022, 2296076 dt.
04.09.2022, 2295993 dt. 04.09.2022, 2296070 dt. 04.09.2022;

e) In the alternative to prayer (d), that this Hon'ble Court be
pleased to issue a writ of Mandamus or a writ in the nature of

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Mandamus or any other appropriate writ or order or direction
under 'Article 226 of the Constitution of India to setting aside
the illegal and arbitrary Seizure dated 4" October 2022
comprising of the Soyabean consignment weighing 17742 MT
detailed in Bill of Entry Nos. Bills of Entry Nos. 2295860 dt.
03.09.2022; 2296035 dt. 04.09.2022, 2296076 dt. 04.09.2022,
2295993 dt. 04.09.2022, 2296070 dt. 04.09.2022 and issue out
of charge Certificate for home consumption;

f) In the alternative to prayer (d), that this Hon'ble Court be
pleased to issue a writ of Mandamus or a writ in the nature of
Mandamus or any other appropriate writ or order or direction
under Article 226 of the Constitution of India to assess the bills
of entry Nos. 2295696 dated 03.09.22, 2295821 dated
03.09.22, 2295572 dated 03.09.22, 2295697 dated 03.09.22,
2295752 dated 03.09.22 pertaining to the Pigeon Peas caego and
issue out of charge certificate for home consumption;

g) Pending admission, hearing and final disposal of the
Petition this Hon'ble Court be pleased to issue any order or
direction to the Respondent Authorities to unload the cargo
containing Soyabean consignment weighing 17742 MT detailed
in Bills of Entry Nos. 2295860 dt. 03.09.2022; 2296035 dt.
04.09.2022, 2296076 dt. 04.09.2022, 2295993 dt. 04.09.2022,
2296070 dt. 04.09.2022 and permit the same to be warehoused
in Custom Bonded Warehouse and subject to such terms and
conditions as required in law and as the Hon'ble Court deems fit
and proper;

h) that this Hon'ble Court be pleased, Pending admission,
hearing and _ final disposal of the Petition, to issue any order or
direction and permit the Petitioner to provisionally release .for
home consumption the Soya bean consignment weighing 17742
MT as detailed in Bill of Entry Nos. 2295860 dt. 03.09.2022;
2296035 dt. 04.09.2022, 2296076 dt. 04.09.2022, 2295993 dt.
04.09.2022, 2296070 dt. 04.09.2022 and subject to such terms
and conditions as required in law and as the Hon'ble Court
deems fit and proper;

i) that this Hon'ble Court be pleased, to issue any order or
direction to the Respondents and its officers to refrain from
taking any coercive actions against the Petitioners;

j) that this Hon'ble Court be pleased, pending the hearing
and final disposal of the Petition, issue any order or direction,
restraining the Respondents' by themselves, their officers,

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subordinates, servants and agents from taking any steps or
proceedings in pursuance of or in furtherance of the Seizure
Memo dated 4" October 2022 and investigation initiated issued
by Respondent No.2 such as but not limited to destruction, sale
or auction of the impugned goods;

k) for ad-interim reliefs in terms of the prayers (g) -- (j)
above;

l) for costs of this Petition;

m) for such further and other reliefs as the nature and
circumstances of the case may require."

2. Perusal of the record would indicate that from time to time the

proceedings were heard by different benches from October, 2022. A co-

ordinate Bench of this Court (K. R. Shriram & A.S. Doctor, JJ.) in its order

dated 20 October, 2022, accepted an ad-hoc arrangement arrived between

the parties, which was without prejudice to the rights and contentions of

the parties in regard to the warehousing of Pigeon Peas and Soya bean.

3. A substantive order recording the issues which fell for consideration

in the present proceedings was passed by a co-ordinate bench of this Court

on 20 January, 2023 (Nitin Jamdar & Abhay Ahuja, JJ.). In such order,

the contention as urged on behalf of Customs Department, that as per the

Import Policy, all imported goods are subjected to domestic laws, acts,

rules, orders, regulations, technical specifications, environmental and

safety norms as applicable to domestically produced goods, came to be

recorded. As also the further contention of the Customs Department that
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the imported soyabeans are genetically modified and the petitioner's

contention that though the goods are genetically modified, they are within

the permissible limits set out by the Food Safety and Standards Authority

of India (Respondent Nos.7 and 9) was recorded. Also the contention of

the Customs Department that the goods were not cleared by the Genetic

Engineering Approval Committee (for short, GEAC") under the

Environment Protection Act, 1986 which deals with genetically modified

food and genetically modified organism, was noted by the Court. In the

context in hand the Court also noted the relevant clause of the Import

Policy (i.e. Clause 6) as relied upon by the Customs Department. The

Court observed that considering the larger implications of the issue at

hand and as no specific stand of the Genetic Engineering Approval

Committee and the Ministry of Environment and Forests and Climate

Change (MoEF&CC) on the subject matter was on record, it was

appropriate that the Food Safety and Standards Authority of India, the

Genetic Engineering Approval Committee and the MoEF&CC be

impleaded as parties to the petition. Accordingly, the petitioner was

permitted to amend the petition to implead such additional respondents.

As this order has some relevance, we extract the order hereinbelow:-

"1. Heard the learned Counsel for the parties.

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2. The Petitioner is aggrieved by the stand taken by the
Respondent Customs Department of not clearing the
consignment of soyabeans imported by the Petitioner from
Mozambique.

3. According to the Customs Department as per the Import
policy, all imported goods are subjected to domestic laws, acts,
rules, orders, regulations, technical specifications, environmental
and safety norms as applicable to domestically produced goods.

4. The Respondent Customs Department states that the
imported soyabeans are genetically modified. According to the
Petitioner, though the goods are genetically modified, they are
within the permissible limits set out by the Food Safety and
Standards Authority of India. The Customs Department
contends that the goods have not been cleared by the Genetic
Engineering Approval Committee under the Environment
Protection Act, 1986 which deals with genetically modified food
and genetically modified organism. The clause in the Import
policy relied upon by the Customs Department read thus :

"6. Genetically Modified Food, Feed, Genetically
Modified Organism (GMOs) and Living Modified
Organisms (LMOs) Import of Genetically Modified
Food, Feed, Genetically Modified Organism (GMOs) and
Living Modified Organisms (LMOs) will be subject to
the following conditions :
(a) The import of GMOs / LMOs for the purpose of
(i) R & D;
(ii) Food;
(iii) Feed;
(iv) Processing in Bulk and
(v) For Environment release

will be governed by the provisions of the Environment
Protection Act, 1986 and Rules framed thereunder
(Environment Protection Act, 1986 and Rules framed
thereunder can be accessed from the website of the
Ministry of Environment & Forests : http://envfor.nic.in).

(b) The import of any Food, Feed, raw or processed
or any ingredient of food, food additives or any food
product that contains GM material and is being used
either for Industrial productions, Environmental release,
or field application will be allowed only with the approval
of the Genetic Engineering Approval Commitee

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(GEAC), set up by the Ministry of Environment &
Forests (the details of GEAC can be accessed from the
website link of the Ministry:http://www.envfor.nic.in/
divisions/csurv/geac/ geac_home.html).

(c) Institutes / Companies who wish to import
Genetically Modified material for R & D purposes will
submit their proposal to the Review Committee for
Genetic Modification (RCGM) under the Department of
Bio-Technology. In case the Companies / Institutes use
these Genetically Modified material for commercial
purposes, approval of GEAC is also required.

(d) At the time of import all consignments containing
products which have been subjected to Genetic
Modification will carry a declaration stating that the
product is Genetically Modified. In case a consignment
does not carry such as declaration and is later found to
contain Genetically Modified material, the importer is
liable to penal action under the Foreign Trade
(Development and Regulation) Act, 1992 (as amended
from time to time).

The Genetic Engineering Approval Commitee (GEAC)
has accorded 'one time approval' for import of GM
Soyabean oil (crude de-gummed / refined form) derived
from Round-up, Ready Soybean for the purpose of
consumption after refining. Therefore, above conditions
will not apply to the import of said Soyabean Oil till
further orders.
[Reference - Notification No.69 (RE-2007) / 2004-
2009 dated 27.12.2007]

5. The Petitioner contends that the Petitioner has the necessary
certification under the Plant Quarantine (Regulation of Imports into
India) Order 2003. The Petitioner also relies upon the order issued by
the Food Safety and Standards Authority of India dated 21 August
2020 and the Annexure 1 thereto which refers to soyabean as a
permissible import.

6. According to the Petitioner, as per the norms specified by the
Food Safety and Standards Authority of India the Petitioner has also
obtained the necessary certification from the exporting country,
Mozambique, that the consignment is not genetically modified. The
Petitioner also contends that the Petitioner cannot be driven to take
necessary No Objection from the authority under the Environment

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Protection Act and it is the Customs Department who should abide by
the clearances given under the Food Safety and Standards Authority
of India and the Plant Quarantine (Regulation of Imports into India)
Order 2003.

7. The Petitioner has sought to contend that the Food Standards
Act, 2006 being a later legislation would prevail over the
Environment Protection Act, 1986.

8. Considering the larger implications of the issue at hand and
that no specific stand of the Genetic Engineering Approval
Committee and the Ministry of Environment and Forests and Climate
Change (MoEF&CC) in respect of the subject matter is on record, it
would be appropriate that the Food Safety and Standards Authority of
India, the Genetic Engineering Approval Committee and the
MoEF&CC are impleaded in this Petition. Accordingly, we grant leave
to the Petitioner to add the Food Safety and Standards Authority of
India, the Genetic Engineering Approval Committee, Ministry of
Health & Family Welfare and MoEF&CC as party respondents.
Amendment to be carried out within a period of two days. Re-
verification is dispensed with.

9. If the Petitioner will give notice to the added Respondents and
file the affidavit of service, stand over to 31 January 2023."

4. Subsequent to the above orders, the proceedings had continued to

appear before the Court. We do not refer to all the orders, as they may not

be so relevant, suffice it to observe that by an order dated 19 April, 2023,

the Court recorded its observations on the affidavits which were placed on

record on behalf of the Ministry of Environment, Forest and Climate

(MOFF & CC), which stated that the Ministry of Environment had no

role in regulating the import of genetically modified food, including food

crops for direct use as food for consumption. Also considering the

contention as urged on behalf of respondent nos.1, 8 and 10 / the Genetic
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Engineering Appraisal Committee, the Court passed the following order:-

1. Heard the learned Counsel for the parties.

2. In this Petition, after we had directed, the Petitioner had joined the Ministry
of Environment, Forest and Climate Change and the Genetic Engineering
Appraisal Committee as party Respondent even though their presence was
necessary, and they ought to have been joined when the Petition was filed.

3. During the hearing, we were shown an affidavit sworn by Mr. Surender
Gugloth, Scientist, 'E' working in the Integrated Regional Office of the
Ministry of Environment, Forest and Climate (MOEF & CC) at Nagpur dated
9 March 2023. This affidavit is filed through the Advocate, who has filed a
note of appearance for Respondent Nos.1, 8 and 10, that is, the Union of India,
Ministry of Environment and the Genetic Engineering Appraisal Committee.
In this affidavit, in paragraph 13, the Deponent has stated that the Ministry of
Environment has no role in regulating the import of genetically modified food,
including food crops for direct use of food for consumption. The issue at hand
is regarding the import of soyabean. This affidavit though stated to be filed on
behalf of Respondent No. 8 - the Committee does not refer to the role of the
Genetic Engineering Appraisal Committee, which, according to the
Department of Customs, is more relevant; instead, a sweeping generalized
stand is taken. Therefore, when the Petition came up on board yesterday, the
Deponent of the affidavit was directed to remain present to explain.

4. The Deponent is present. The learned Counsel for Respondent Nos.1, 8 and
10 submits that this specific paragraph is incorrect and states an additional
affidavit would be filed. To a query to the Deponent as to whether he has filed
this affidavit on instructions of Respondent No.8 - the Committee, he has
answered in negative. The learned Counsel for Respondent Nos.1,8 to 10
sought to contend that since the Committee is under the Ministry of
Environment, an affidavit and appearance are filed. Though the Genetic
Engineering Appraisal Committee may fall under the general superintendence
of the Ministry of Environment, it is a distinct entity which a specified
specialized role. It is unclear whether the Advocate has the authority to
represent Respondent No.8. We place our strong dis-approval on record for this
state of affairs in an important issue such as this. How its litigation is handled
should be a matter of concern for the Government.

5. We direct that affidavit be filed by the Genetic Engineering Appraisal
Committee specifically regarding the commodities at hand and their role in
regulating import. Though the Petitioner has shown urgency in the matter and
we understand the anxiety, considering the importance of the issue, we are not
inclined to proceed without a specific stand of the Committee, which ought
to have been placed on record.

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6. We direct the Registry to forthwith send a copy of this order to the Secretary
of the Ministry of Environment, Forest and Climate Change and to the
Incharge of Genetic Engineering Appraisal Committee to draw their attention
to this state of affairs regarding the filing of this affidavit without instructions
and the appearance. The Registry shall also send a copy of this order by way of
an e-mail. The Registry shall also furnish a copy of this order to the Office of
the learned Additional Solicitor General to enable him to look into the filing of
appearance and the affidavit so that there is no confusion on the next date of
the hearing.

7. Stand over to 26 April 2023 at 2.30 p.m.

5. On the subsequent hearing of the proceedings, on 26 April, 2023

in its order passed by a co-ordinate bench of this Court, it was observed

that there is a divergence of views between three statutory bodies namely,

Customs Department, Food Safety and Standards Authority of India and

Genetic Engineering Appraisal Committee, which were performing

functions under Ministry of Environment, Forest and Climate Change.

The Court also recorded the contention as urged by the learned ASG that

he had taken a joint meeting of the statutory authorities to reconcile their

stand. The learned ASG had stated that import of genetically modified

Soyabeans can be segregated into two categories, one below 1% and other

above 1%. The learned ASG further stated that it will have to be

determined by a Laboratory which has the "method and food matrix wise

testing" of genetically modified soyabeans under National Accreditation

Board for Testing and Calibration Laboratory ("NABL"). The learned

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ASG also referred to the report received from the accredited laboratory -

Geo Chem Laboratory which recorded the extent of Genetic Modification

("GM") in the sample was below 1% and that such laboratory does not

have a facility of food matrix wise testing. The statement of the learned

ASG that it would be appropriate that sample of the consignment is tested

from a different Laboratory and on receipt of a report from such

laboratory, if it is found that the item as tested is below 1%, then the

option of provisional release can be considered also came to be recorded.

The contention on behalf of the petitioner that Geo Chem Laboratory is

an accredited laboratory, hence there was no reason why the report on

record needs to be discarded was also noted by the Court. The Court,

accepted the suggestion made by the learned ASG, that the sample which

is already drawn pursuant to panchanama dated 17 September, 2022

would be sent to another Laboratory. Thus awaiting the second

laboratory's report, the petition was adjourned. The Court accordingly

passed the following order:-

"1. Heard learned counsel for the parties.

2. This order is in continuation of orders which we have passed
from time to time. As we have recorded in the earlier orders dated 20
January 2023 and 19 April 2023, there is a divergence of views
between the three statutory bodies which are Respondents before us.
These the Customs Department, Food Safety and Standards Authority
of India and Genetic Engineering Appraisal Committee which are
performing functions under Ministry of Environment, Forest and
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Climate Change. In view of this divergence, we had requested learned
Additional Solicitor General to assist the court.
3. The learned ASG states that he has taken joint meeting of the
statutory authorities to reconcile their stand. The learned ASG states
that import of genetically modified Soyabeans can be segregated into
two categories : one is below 1% and other is above 1%. He states that
it will have to be determined from a Laboratory which has the method
and food matrix wise testing of genetically modified soyabeans under
National Accreditation Board for Testing and Calibration Laboratory
("NABL"). The learned ASG submits that the report which is on
record given by the accredited laboratory-Geo Chem Laboratory,
though states that the extent of Genetic Modification (GM) in the
sample is below 1%, this Laboratory does not have above mentioned
facility and therefore, it is appropriate that sample of the consignment
is tested from a different Laboratory and the learned ASG states if it is
found below 1%, then the option of provisional release can be
considered.

4. Learned Senior Advocate for the Petitioner has sought to
contend that Geo Chem Laboratory is an accredited Laboratory and
there is no reason why the report on record needs to be discarded.

5. Without going into the question of competence of Laboratory
considering the importance of the issue raised before us and the fact
that what is involved is genetically modified substance having larger
implications, we accept the suggestions of learned ASG, as it would be
a further precaution in this regard.

6. The learned ASG states that the sample which is already drawn
pursuant to panchanama of 17 September 2022 would be sent to the
Laboratory. We direct the concerned Laboratory to give a report to the
Customs Department as early as possible.

7. Hearing of this petition is deferred to 7 June 2023. To be
listed under the caption "For Directions".

8. The Central Government will also consider coming up with a
co-ordinating mechanism so that conflicts, such as the one which have
arisen before us can be avoided.

9. The learned counsel for the Petitioner states that the Port
Trust is not releasing the consignment of Pigeon Peas and
representations have been made in that regard. The Port Trust
Authority shall respond to this communication within period of one
week by way of written order and after the order is received, we permit
the Petitioner to amend the petition to incorporate, challenge the

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same, if the Petitioner is so indulged.

10. The learned Senior Advocate for the Petitioner states that if
the order passed by the Port Trust is adverse, liberty may be granted to
move to the vacation court. It is for the Petitioner to take the steps and
it is for the vacation court to consider the same if it is satisfied of the
urgency."

6. Thereafter the proceedings had remained pending for report of such

laboratory to be placed on record. When the proceedings were listed

before this Court on 19 June, 2023 considering the larger implications and

also the peculiar situation which would arise in non-clearance of the

imports, on such issues the Court passed a detailed order including

reflecting on such issues. The Court opined, that such issues are likely to

adversely affect the trade itself. The Court also observed that similar issues

on non-clearance of the goods had often reached the Courts, thereby

observing that there cannot be any uncertainty on the issues, which would

adversely affect the trade and the business, whichever may be the category

of goods, requiring a laboratory clearance, for which a robust mechanism

was the necessary. An assurance of the learned ASG, that these issues

would looked into by the Government, also came to be recorded. The

Court also recorded the stand of the parties that there was no hurdle for

clearance of pigeon peas, which could be cleared by the Petitioner, without

the same being entangled in the proceedings qua soyabean. The said order

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dated 19 June, 2023 is required to be noted which reads thus:-

"1. We could not be waiting any longer for the laboratory report,
which is intended to be placed on record, as observed by the Court
in its previous orders. The examination process of the samples by the
laboratory needs to be expedited. The concerned head of the
laboratory, who is looking into such issues, shall inform the
Competent Officer in writing as to how long the process would take
as per the estimation of the laboratory and the reasons thereof. We
would require a Competent Officer of the Respondent to place on
record an affidavit explaining as to the stage of the processing at the
laboratory and the further time required.

2. Little away from the issue in hand, we are, in fact, quite
perturbed to see that the trade itself is adversely affected on such
issues of goods arriving at the port and not getting cleared and
which are incurring demurrage. Further when the goods are of a
perishable nature and edible, different problems would arise. The
goods like in the present case being a soyabean consignment
certainly is adversely affected which is likely to frustrate the import.
Mr. Nankani, Senior Counsel for the Petitioner, on instructions,
states that large part of the cargo is likely to have become non-
consumable and would be required to be destroyed. If what Mr.
Nankani states is correct, this is a sorry state of affairs and certainly
not conducive to an effective trade. In such circumstances, in the
present case the anxiety of the Court as seen from the earlier orders,
was to the effect that the laboratory reports be made available
expeditiously.

3. We may also observe that similar issues have repeatedly
reached the Courts. In these circumstances, we are of the opinion
that there ought not to be any uncertainty on such issues, which
would adversely affect the trade and the business interest of the
importers, whichever may be the category of goods, requiring a
laboratory clearance. Also the policy of the Government is to have
effective trade practices. We would, therefore, intend that the
Government of India considers forming a centralized
agency/laboratory by appointing appropriate research persons in
different scientific fields or designate specific laboratories for the
different items reaching the ports requiring such tests. Such
provision / facility would assist the trade, whereby expeditious
laboratory reports can be facilitated, enabling clearance of the goods
being imported into the country. Any uncertainty of business on
such issues can be avoided and, in fact, effectively handled by such
experts agencies.

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4. The consignment of the petitioner has got stuck on issues
concerning the laboratory clearance. If this was the fate of the goods
to be imported, the Petitioner would have certainly had a second
thought to import such cargo. It would be not out of place to
observe that a bonafide businessman is not interested in litigation,
and more particularly, on such issues.

5. We, therefore, request the learned ASG who has fairly stated
that these issues would be looked into at the highest level, in the
appropriate department. We, accordingly, adjourn the proceedings
for two weeks to enable the learned ASG to obtain appropriate
instructions from the concerned laboratory and place the same on
record, as observed by us.

6. At this stage, Mr. Nankani submits that in so far as the
Pigeon peas are concerned, there is no hurdle for clearance of such
goods, which can be cleared by the Petitioner without the same
being entangled in the proceedings qua soyabean.

7. In such context, the Mumbai Port Authority has addressed a
letter dated 11th May 2023 to the Petitioner setting out the storage/
demurrage charges. As seen from the said letter, the Petitioner is
required to pay the balance amount of Rs,3,63,75,668/- upto 7 th
June 2023.

8. We are of the opinion that as soyabean cargo is now the
subject matter of clearance which is lying with the Mumbai Port
Authority, and as there is no issue in regard to the clearance of the
Pigeon peas, such goods need to be permitted to be cleared.

9. We accordingly order that the Pigeon peas be permitted to be
cleared by the Mumbai Port Trust for which the petitioner shall pay
storage / demurrage charges proportionate to the quantity of the
Pigeon peas being cleared. The petitioner shall accordingly make
payment of such charges to the Mumbai Port Trust, which shall be
without prejudice to the rights and contentions of the parties.
Needless to observe that on this count whatever demurrage is paid
by the petitioner, an account of the same shall be maintained by the
Mumbai Port Trust and the same shall be later reconciled.

10. Stand over to 3rd July 2023. High on Board."

7. Thereafter the proceedings were adjourned from time to time, when

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on 18 July, 2023, this Court heard the parties on the backdrop of the

earlier orders and on the Laboratory reports of Geo Chem Laboratories

Pvt. Ltd. as also the reply affidavit filed on behalf of respondent no.7-the

Food Safety and Standards Authority of India, as also the report of second

laboratory namely Kochi Laboratory, as relied upon by the Customs. The

Court noted the stand taken by the Genetic Engineer Appraisal

Committee (GEAC) as stated on affidavit, that the GEAC was dependent

on the test which would be undertaken by respondent nos.7 and 9

(FSSAI). The Court also recorded a statement as made in the affidavit of

Dr. Krishna Methekar filed on behalf of the FSSAI dated 17 March, 2023

in which the FSSAI stated that the sample was found to be complaint by

FSSAI's accredited Laboratory being the subject matter of relevant bills of

entry. The Court also recorded the contention as urged on behalf of the

FSSAI that there ought not to be an objection for clearance of the said

goods from the point of view of FSSAI Standards. The contention as

urged on behalf of the petitioner that the FSSAI had granted a certificate

to that effect, and therefore, clearance of the said goods ought to be

granted, was also recorded by the Court. However, the Court observed

that it was desirable that in terms of the observations as made by the

Court, a specific approval of the FSSAI and a statement to that effect,

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needs to be placed on affidavit on behalf of FSSAI-Respondent No.7. The

Court observed that FSSAI needs to file such affidavit as the Customs was

also dependent on the FSSAI, which is supposed to be the custodian on

food safety and standards and which would be seriously concerned for

clearance of such goods/items before they are put to human consumption.

In so far as the contention on behalf of Customs Department was

concerned, the Court observed that the customs department was also

struggling with lot of uncertainty on the issues, referring to the report of

the Kochi Laboratory. The Court however, observed that once the initial

stand of the GEAC itself is clear i.e. to call for the test report from the

FSSAI, then certainly, the role of the FSSAI was crucial. Peculiarly the

objection as urged on behalf of the Customs Department on the report of

the FSSAI and the assertion of the Customs Department that some more

tests are required to be undertaken on the basis of some questionnaire

which has received by Mr.Mishra, learned counsel for the Customs

Department from the Customs Officer, as placed on record was also noted.

However, what is significant is that in the context of such objection of the

Customs Department, a clear statement as made on behalf of the

petitioner by Mr. Nankani, learned Senior Counsel that the clearance /

home consumption of the Soybean was intended for extraction of oil, and

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that as per the certification of the FSSAI, the goods when permitted to be

cleared, they would not be released for any agriculture purpose on any

other purpose and the same would be used only for extraction of oil, came

to be recorded and accepted. The Court also accepted on record the office

memorandum dated 05 July, 2023 as tendered by Ms. Shehnaz Bharucha,

learned counsel for respondent nos.1, 8 and 10, as also recorded the

contents of paragraph 4 of the Office Memorandum, which stated that

permission for import of soybean was given by FSSAI which was interalia

established under Food Safety and Standards (FSS) Act, 2006 for laying

down science-based standards for articles of food to ensure availability of

safe and wholesome food for human consumption, also came to be

recorded being the stand taken on behalf of respondent nos.1, 8 and 10. It

would be imperative to note such order passed by this Court, which

recorded the said developments. The order dated 18 July, 2023 reads

thus:-

"1. On the backdrop of the earlier orders, we have heard
learned counsel for the parties. We have also perused the
laboratory reports of Geo Chem Laboratories Pvt. Ltd. as
annexed to the reply Affidavit filed on behalf of Respondent
No.7 the Food Safety and Standards Authority of India (for short
"the FSSAI"). We have also perused the laboratory report of the
Kochi Laboratory relied on behalf of the Customs.

2. Insofar as the stand taken by the Genetic Engineer
Appraisal Committee (GEAC) is concerned, it clearly appears
from its Affidavit that such a committee has nowhere come to any

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final conclusion in regard to the clearance of these goods on the
parameters being followed by it under para 6 of ITC (HS), 2017,
Schedule 1 - Import Policy, (General Notes regarding Import
Policy), as set out in para 5 of its Affidavit. The GEAC is
dependent on the test which would be undertaken by the FSSAI.

3. We have perused the Affidavit of Dr. Krishna Methekar
filed on behalf of the FSSAI dated 17th March 2023. In para
4(vii), the following statement is made in regard to the
Petitioner's consignment of Soybean.
"4(vii) It is respectfully submitted that vide order dated 12
th September 2016 wherein the order provides for drawing
of one homogeneous sample out of the commingled cargo
for multiple importers with same IGM Number, the Cargo
of soyabean having BOE No.2295860 dated 03.09.2022
IGM No.2320828 was scrutinized, visual inspection
conducted and sample was drawn. The sample was found
to be complaint by FSSAI's accredited Laboratory, due to
which the Soya beans consignments having Bill of entry
No.2295993, 2296035, 2296070, 2296076 was cleared
against the Bill of Entry No.2295860 dated 03.09.2022,
IGM No.2320828."

4. It is also argued before us on behalf of FSSAI that there
ought not to be an objection for clearance of the said goods from
the point of view of FSSAI Standards. The reply affidavit of
FSSAI has also noted various obligations of the FSSAI. It refers to
Section 22 which pertains to genetically modified goods, organic
goods, functional goods, proprietor goods, etc. and the regulation
of such products. However, what we note is that a specific
statement in such affidavit filed on behalf of the FSSAI has
remained to be made that the 'Soybean' sought to be cleared by
the Petitioner and subject matter of the present proceedings, in
no manner whatsoever would be harmful for human
consumption/health in whatever form, in the light of the
requirements and parameters of the FSSAI Act, 2006 and the
Rules framed thereunder, if these goods are permitted to be
cleared.

5. Mr. Nankani has stated that already the FSSAI has
granted a certificate to that effect, however, we would desire that
in terms of what we have observed specific approval and
statement to that effect needs to come on affidavit on behalf of
FSSAI-Respondent No.7. If FSSAI files such affidavit, in our
opinion, the Customs who is also dependent on such authorities
like the FSSAI who are supposed to be the custodians on food

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safety and standards who in our opinion would be seriously
concerned for such goods/items before they are put to human
consumption.

6. We may also observe that the customs department is also
struggling with lot of uncertainty on these issues, referring to the
report of the Kochi Laboratory. However, in our opinion, once
the initial stand of the GEAC itself is clear i.e. to call for the test
report from the FSSAI then certainly the note of the FSSAI
becomes crucial in such matters.

7. Accordingly, we expect such an Affidavit to be filed on
behalf of FSSAI on or before the adjourned date of hearing. Copy
of the Affidavit be served upon the parties.

8. We also record Mr. Mishra's objection on the report of the
FSSAI and his contention that some more test would require to
be undertaken on the basis of some questionnaire which he has
received from the department, whereby the department has asked
certain questions to the Kochi Laboratory. We may however
observe that as submitted by Mr. Nankani, that the clearance of
the Soybean is intended for extraction of oil and that if at all as
per the certification of the FSSAI, the goods are permitted to be
cleared, they would not be released for any agriculture purpose
on any other purpose and the same would be used only for
extraction of oil. Accepting such statement of Mr. Nankani, we
shall hear the parties on the adjourned date of hearing,
considering the Affidavit to be filed on behalf of Respondent
No.7-FSSAI.

9. Ms. Shehnaz Bharucha, learned counsel for Respondent
Nos.1, 8 and 10 has placed on record office memorandum dated
5th July 2023, in the context of the present petition. The said
office memorandum is taken on record and marked 'X' for
identification. Our attention is drawn by Ms. Bharucha to para 4
of the said office memorandum which reads thus:-
"4. In this regard, it is to apprise that permission for
import of soybean in this matter was given by FSSAI. The
FSSAI is established under Food Safety and Standards
(FSS) Act, 2006 for laying down science-based standards
for articles of food and to regulate their manufacture,
storage, distribution, sale and import, to ensure availability
of safe and wholesome food for human consumption and
for matters connected therewith or incidental thereto."

10. List the matter on 25th July 2023, High on Board.

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11. Permission to file Affidavit-in-rejoinder on FSSAI is
granted."

8. It is on such backdrop, the proceedings were thereafter substantively

heard on 07 August, 2023 when for the first time, Mr. Devang Vyas,

learned ASG having taken over charge at Mumbai, entered appearance in

the proceedings, on the backdrop of what had been transpired in the

matter so far. Elaborate submissions were made by the learned counsel for

the parties and on the discussion which had taken place during the course

of hearing, the Court recording the submission of learned ASG that he

would take appropriate instructions, so that further orders can be passed,

after hearing the parties, the proceedings were adjourned to 09 August,

2023 (yesterday). The order dated 07 August, 2023 is required to be

noted, which reads thus:-

"1. On the several orders passed on the earlier occasion,
Mr.Nankani has made elaborate submissions. Mr. Devang Vyas,
learned ASG is appearing for the first time in the present
proceedings after he has taken over as ASG at Mumbai, has also
made submissions. We have also heard Mr. Aman Kacheria,
learned Counsel for respondent Nos.7 and 9 - FSSAI on whose
contentions, we would make observations, in the later part of this
order and the other Counsel appearing for the respondents.

2. The primary question is whether the contention of the
petitioner in regard to the clearance of the soyabean as imported,
can be accepted in view of the observations as made by the Court
in the previous orders and the recent affidavit as filed on behalf of
FSSAI - respondent Nos.7 and 9.

3. In such context, apart from material on record, Mr.
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Nankani has brought to our notice a Tabulation of Imports,
which is sought to be obtained from the Ministry of Commerce
& Industry that soyabean (HS Code 12019000) was imported in
the quantity of 6,55,895.50MT in the year 2021-2022 and in
the quantity of 5,22,553.22MT in the year 2022- 23. We have
requested the learned ASG and Mr.Mishra, to keep ready
whatever material in this regard before the Court and, more
particularly, the details of the laboratory certificates on the basis
of which clearance was granted to the imports of the year 2021-
22 and 2022-23.

4. Mr. Vyas, learned ASG for Respondent Nos. 1, 8 and 10,
has also stated that, on the backdrop of today's discussion, he
would take appropriate instructions, so that further orders can be
passed after hearing the parties.

5. Mr. Bhalwal, learned Counsel for Respondent No.4,
intends to file rejoinder affidavit. The same be filed in the office
with proper pagination and served on all the parties.

6. We are also of the opinion that the affidavit dated 24 th
July 2023, filed on behalf of the FSSAI, in pursuance of our
order dated 18th July 2023, is not satisfactory. The said affidavit
ought to have been in terms of our observations made in
paragraph 3 of said order dated 18 th July 2023. Learned Counsel
for the FSSAI has stated that he shall place on record an
additional affidavit as expected in terms of our observations as
contained in the said order. Let such affidavit be placed on record
and served on all the parties."

7. We adjourn the proceedings to 9th August 2023. "High
on Board"."

9. Accordingly on 09 August, 2023, the Court had set down the

proceedings for hearing. Mr. Vyas, learned ASG had made his

submissions and informed the Court that considering the peculiar facts of

the case, the following approach can be adopted:-

i. The respondents be permitted provisional release of the

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goods, however, on the petitioner furnishing a bank guarantee for

the differential duty;

ii. The petitioner would also furnish a bond with appropriate

undertakings in regard to the payment of duty and other necessary

statements so as to co-operate in the investigation which is being

undertaken by the Customs authorities in regard to the exact

country of origin of imports, which would have a material bearing

in regard to the clearance of the goods from the duty perspective as

also on the nature of imports;

iii. That the petitioner shall also strictly adhere to the use and

consumption of the goods for the purpose of extraction of oil and

that the product as manufactured shall also be subjected to further

FSSAI clearance.

10. Mr. Nankani, learned senior counsel for the petitioner fairly

accepted the stand as taken by Mr. Vyas, the learned ASG, on the

provisional release of the Soyabean consignment be permitted.

11. On the above backdrop when the Court was about to pass an order,

the concern of the Court was primarily on stand taken on behalf of

respondent nos.1, 8 and 10 coupled with the fact that the FSSAI had taken
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a clear position that the import in question was permissible for home

consumption, as the same was within the norms and fulfillment of

standards of FSSAI under the provisions of the Act and the rules made

thereunder. In such context, the Court had intended to verify the

compliance of the observations as made by the Court in paragraph 4 of its

order dated 18 July, 2023, which was to the effect that the goods being

imported were safe for human consumption. It is in such context, the

Court noted that the affidavit filed on behalf of the FSSAI was not in

compliance on what was observed by the Court in paragraph 4 of the

order dated 18 July, 2023, and in such context, as a clear affidavit to that

effect was not placed by the FSSAI, the Court expressing its dissatisfaction,

had adjourned the proceedings for today, to enable FSSAI to place on

record clear affidavit in terms of what the Court expected in paragraph 4

of its order dated 18 July, 2023. The Court accordingly passed the

following order on 09 August, 2023 adjourning the proceedings today:-

". On the earlier occasion, we had adjourned the present
proceedings for today to enable the FSSAI to place on record a
short clarifcatory affdavit for the reason that although our order
dated 18 July 2023 was crystal clear, an affdavit in terms of our
observations in paragraph (4) of the said order, was not placed on
record. Thus, in our opinion, though it was to be only one
paragraph affdavit, however, even to place on record such an
affdavit, such a long time has been taken and that too on the
backdrop of series of earlier orders passed. In these circumstances,
we although quite unwillingly grant one more day's time to
FSSAI to place on record such affidavit by adjourning the

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proceedings for tomorrow. If such affdavit is not fled by the
FSSAI, we shall be constrained to pass further appropriate orders
and there shall be no other alternative.

2. Stand over to 10th August 2023 at 10.30 a.m. "High on
Board".

12. Today in compliance of our orders passed yesterday (09 August,

2023), affidavit of Mr. Sukant Chaudhary, Deputy Director, Food Safety

and Standards Authority of India is placed on record. In the context of our

order dated 18 July, 2023, in paragraph 4 such affidavit states thus:-

"4. That in view of the above, the answering Respondent
submits and brings on record before this Hon'ble Court that
'Soybean' sought to be cleared by the Petitioner and subject
matter of the present proceedings, in no manner whatsoever
would be harmful for human consumption/health in whatever
form, in the light of the requirements and parameters of the
FSSAI Act,2006 and the Rules framed thereunder, if these goods
are permitted to be cleared."

13. Accordingly, a clear stand of the FSSAI is on record that the

Soyabean sought to be cleared by the petitioner and subject matter of the

present proceedings, in no manner whatever would be harmful for human

consumption/health in whatever form, in the light of the requirements

and parameters of the FSSAI Act, 2006 and the Rules framed thereunder,

if the goods are permitted to be cleared.

14. Considering such clear position on record, we are of the opinion

that the approach as now sought to be adopted by the Customs
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Department and more particularly in the light of the position taken by

respondent no.1-Union of India, respondent no.8-Genetic Engineering

Appraising Committee as also respondent no.10-Ministry of Environment,

Forest & Climate Change and most significantly by respondent no.7-Food

Safety & Standards Authority of India, we are of the opinion that the

approach as suggested by Mr. Vyas, learned ASG and as noted by us above,

ought to be accepted, and the proceedings, without prejudice to the rights

and contentions of the parties on any of the issues, which may arise, be

disposed of by the following order:-

ORDER

i. The respondents are permitted provisional release of the goods, however, on the petitioner furnishing a bank guarantee for the differential duty;

ii. The petitioner shall also furnish a bond with appropriate undertakings in regard to the payment of duty and other necessary statements so as to co-operate in the investigation which is being undertaken by the Customs authorities in regard to the exact country of origin of imports, which would have a material bearing in regard to the clearance of the goods from the duty perspective as also on the nature of imports;

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iv. Needless to observe that the bank guarantee shall be furnished before clearance and it shall be subject to the further actions, if any, which shall be taken by the Customs Department. Mr. Mishra, learned counsel for the Customs Department, would submit that an endeavour shall be made to complete the investigation as expeditiously as possible and within a period of one month from today.

v. We keep open all contentions of the parties on any further proceedings including on issues of investigation, and the stand of the Department on any such issue.

vi. As we have noted, that as the goods were lying at the Mumbai Port, the Port Authority was impleaded as a party (respondent no.4 to the present proceedings). We have also recorded that the customs have cleared the Pigeon Peas, after the petitioner paying the demmurrage / storage charges as being to be charged by the Port Authority. It appears Page 27 of 29

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vii.     Ordered accordingly.

viii.    All contentions of the petitioner and that of the Port Authority are

expressly kept open.

15. The petition is accordingly disposed of in the above terms. No costs.

[JITENDRA JAIN, J.]                                     [G. S. KULKARNI, J.]




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