S. S. GARG :

The present appeal is directed against the Provisional Release Order No. 10/2025-26 dated 16.01.2026 passed by the Principal Commissioner of Customs, Ludhiana whereby the learned Principal Commissioner has passed following order:

(i). I order for provisional release of impugned goods imported vide BoE No. 8008083 25.01.2025 and seized vide seizure memo dated 01.09.2025. The importer shall furnish a Bond equal to the assessable value of the impugned goods i.e. Rs. 1,51,63,762/- (Rupees one crore fifty one lakh sixty three thousand seven hundred sixty two only) to bind himself to pay in case of any duty demand/ fine/ penalty/ interest as may be leviable on such goods, subsequently in adjudication.

(ii). The importer is required to furnish Bank Guarantee/ Security (containing clause binding the issuing Bank to keep it renewed and valid till payment of full liability in this case, or in the event of non-renewal of bank guarantee, the guaranteed amount be credited to Govt. account by the bank on its own) of Rs. 1,63,64,732/- (Rupees one crore sixty three lakh sixty four thousand seven hundred thirty two only) as security covering payment of any possible future liabilities of Duties)/penalties/ fines payable against the said goods.

2. Briefly stated facts of the present case are that the Appellant filed a Bill of Entry No. 8008083 dated 25.01.2025 and declared the description of the subject goods as “Areca Nuts” classified under CTH 08028090. The Appellant imported the said goods from Thanulak Trading Pvt Ltd, 342/2/C, Gonawala Road, Kelaniya, Sri Lanka. The details of goods are as follows:

2.1 The Appellant filed the Warehouse Bill of Entry which was assessed at Faceless Assessment Group with Warehouse Bond and Bank Guarantee subject to the verification of Certificate of Origin (‘COO’). The Department of Commerce, Sri Lanka, vide their letter dated 14.05.2025, confirmed the authenticity of the COO bearing Ref. No. CO/ISFTA/2025/20011. After the verification of country of origin, re-assessment was done and Bill of Entry was registered and the goods were taken up for examination.

2.2 Thereafter, the samples were drawn in the presence of the authorized representative for the Appellant and sent to CRCL, New Delhi, vide Test Memo No. 1273856 dated 02.05.2025, for determining the fitness for human consumption under the Food Safety and Standards Act, 2006, and for confirmation of the composition/classification of the goods. The CRCL, New Delhi vide its Test Report dated 04.07.2025 reported as under:

(i). The sample as received is in the form of dark brown coloured hard cut pieces of split nuts of irregular size and shape. It has the characteristics of Betel nut/Areca nut as per Regulation No. 2.3.55 of Food Safety & Standards Regulation 2011 and IS 16962:2018. Based on the physical appearance, colour and moisture content of the sample, it is roasted areca nut.

(ii). The tested parameters of the sample do not meet the requirement for Area nut/Betel nut as per Food Safety and Standards Regulation (FSSR 2011) in respect of Damaged Nuts (exceeds the limit of 12%) and hence the sample may not be considered as fit for human consumption.

2.2.1 Thereafter, the Appellant vide their letter dated 09.07.2025 intimated their disagreement to the findings of the CRCL, New Delhi and requested for re-testing from any FSSAI notified laboratories/referral lab. The competent authority considered the request of the Importer/Appellant and directed to send the samples to CRCL, New Delhi for re-testing. The Importer/Appellant refused to sign the test memo for re-testing and then the goods imported against Bill of Entry No. 8008083 dated 25.01.2025 were seized vide Seizure Memo dated 01.09.2025 under Section 110 of the Customs Act, 1962 on a reasonable be