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  • Quashing of Criminal Proceedings under the Food Safety and Standards Act, 2006

    Quashing of Criminal Proceedings under the Food Safety and Standards Act, 2006

    Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration

    Date: 10.08.2026

    Quashing of Criminal Proceedings under the Food Safety and Standards Act, 2006

    This Short Article has been prepared & written by Advocate Madhumita Jha-Bombay High Court. The views expressed are based on her interpretation of the law. She can be reached at her email id jhamadhumita27@gmail.com .  

    A recent judgment by the Delhi High Court has brought closure to long-standing criminal proceedings against various parties involved in the sale and distribution of MAGGI Noodles, stemming from the nationwide food safety controversy of 2015. This article provides a detailed overview of the case, the legal arguments, and the court’s reasoning that led to the quashing of the prosecutions.

    Background: The MAGGI Noodles Controversy

    In May 2015, Food Safety Officers in Delhi collected samples of MAGGI Noodles from retail outlets as part of a nationwide sampling exercise. The samples were tested, and initial reports from the Food Analyst indicated that the lead content in the masala tastemaker exceeded the permissible limit of 2.5 ppm. Additionally, some samples were alleged to be misbranded due to the β€œNo Added MSG” label.

    These findings led to criminal complaints against retailers, suppliers, and the manufacturer, NestlΓ© India Limited, under the Food Safety and Standards Act, 2006 (FSS Act). The accused sought to quash these proceedings, arguing that the basis for prosecution was no longer valid.

    Legal Proceedings and Arguments

    Petitioners’ Submissions

    1. Invalidity of Laboratory Reports: Petitioners argued that the prosecution relied solely on Food Analyst reports from laboratories that were neither NABL accredited nor notified under Section 43 of the FSS Act, as required by law. This position was supported by the Bombay High Court’s 2015 judgment, which set aside the nationwide ban on MAGGI Noodles for similar reasons.
    2. Subsequent Testing and Judicial Findings: Following the Bombay High Court’s directions, fresh samples were tested by accredited laboratories, all of which found the lead content within permissible limits. The Supreme Court also directed testing by the Central Food Technological Research Institute (CFTRI), which confirmed the product’s safety.
    3. Supersession of State Laboratory Reports: Under Section 46(4) of the FSS Act, the Referral Food Laboratory’s report supersedes the Food Analyst’s report. Since the Referral Laboratory found the product compliant, the original reports lost evidentiary value.
    4. Abuse of Process: Petitioners contended that continuing the prosecution would be an abuse of the court’s process, as the scientific foundation of the case had been undermined by subsequent findings and judicial pronouncements.

    State’s Submissions

    1. Procedural Compliance: The State argued that all sampling and testing procedures were followed as per the FSS Act, and the accused had the opportunity to seek referral analysis but did not exercise this right.
    2. Validity of State Laboratory: The State maintained that, under transitional provisions, State Food Testing Laboratories could continue functioning until formal notification and accreditation, which was later obtained.
    3. Independence of Criminal Proceedings: The State asserted that the criminal complaints were independent and should proceed to trial, as the issues involved required evidence and could not be decided summarily.

    Court’s Analysis and Findings

    The High Court examined the entire sequence of events and legal developments:

    1. Judicial Scrutiny of Laboratory Reports: The Bombay High Court and Supreme Court had already scrutinized the validity of the laboratory reports and directed fresh testing by accredited and notified laboratories.
    2. Referral Laboratory Findings: The CFTRI, a Referral Laboratory, found the lead content within permissible limits. The Supreme Court directed that these findings should form the basis for adjudication.
    3. Erosion of Prosecution’s Foundation: The court noted that the prosecution was based solely on the original Food Analyst’s reports, which had been superseded and discredited by subsequent scientific and judicial review.
    4. Abuse of Process: Continuing the criminal proceedings would serve no useful purpose and would amount to an abuse of the court’s process, as the very foundation of the prosecution had eroded.

    The court also referenced similar decisions by the Himachal Pradesh and Uttarakhand High Courts, which quashed prosecutions arising from the same controversy.

    Conclusion and Impact

    The Delhi High Court allowed the petitions, quashing the criminal complaints, summoning orders, and all consequential proceedings. This judgment reinforces the importance of scientific rigor, statutory compliance, and judicial oversight in food safety prosecutions. It also provides clarity for businesses and consumers regarding the standards and processes that must be followed in such cases.

    The decision marks a significant closure to the MAGGI Noodles controversy, emphasizing that prosecutions cannot continue when their scientific and legal basis has been invalidated by subsequent authoritative findings.

    Aadrikaa Legal Services is a trusted legal and regulatory support partner providing end-to-end legal solutions to law firms, corporate organizations, and businesses across India. We specialize in paralegal services, litigation support, tax and regulatory matters, delivering reliable, efficient, and result-oriented legal assistance.

    Our services include comprehensive paralegal support, drafting and documentation, legal research, case management, litigation handling, and representation support across various judicial and quasi-judicial forums. We also assist in direct and indirect tax matters, customs, GST, corporate regulatory compliance, and legal advisory.

    Source: Delhi High Court

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  • Delhi High Court Strikes Down Retrospective Withdrawal of Export Incentives

    Delhi High Court Strikes Down Retrospective Withdrawal of Export Incentives

    Aadrikaa Legal Services (ALS) – IDT Tax I Arbitration I Litigation

    Date: 04.07.2026

    Delhi High Court Strikes Down Retrospective Withdrawal of Export Incentives

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email idΒ intelconsul@gmail.com . Β 

    A recent judgment by the Delhi High Court has significant implications for exporters and the administration of export incentive schemes in India. The case, involving Malik Tanning Industries and M/s Kavish Impex Pvt. Ltd. versus the Union of India, addressed the legality of a retrospective circular issued by the Directorate General of Foreign Trade (DGFT) that curtailed export incentives under the Focus Product Scheme (FPS).

    Background: The Focus Product Scheme and the Dispute

    The Focus Product Scheme (FPS), part of the Foreign Trade Policy (FTP) 2009-2014, was designed to incentivize exports of products with high export intensity or employment potential. Exporters of notified products, as listed in Appendix 37D of the Handbook of Procedures, were entitled to Duty Credit Scrips equivalent to 2% of the Free on Board (FOB) value of their exports.

    Malik Tanning Industries and Kavish Impex exported polyester printed and dyed fabrics, which were classified as “Technical Textiles – Woven Fabrics of Synthetic Filament Yarn” under ITC (HS) Code 5407. These products were eligible for FPS benefits at the time of export, and the exporters had already received and utilized the incentives.

    The Controversial Circular

    On 21 October 2011, DGFT issued Policy Circular No. 42, which retrospectively limited FPS benefits for “Technical Textiles” to only 33 items, effective from 1 April 2011. This excluded many products, including those exported by the petitioners, from the incentive scheme. The authorities subsequently demanded the return of Duty Credit Scrips or refund of the duty amounts with interest from the exporters.

    Legal Issues Examined

    The core legal questions addressed by the Court were:

    1. Can DGFT issue a circular that retrospectively withdraws export incentives already granted under the Foreign Trade Policy?
    2. Does DGFT have the authority to amend the list of eligible products for incentives with retrospective effect?

    Court’s Analysis and Findings

    1. Nature of DGFT’s Powers

    • The Foreign Trade Policy is framed by the Central Government under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992.
    • DGFT’s role is limited to implementing the policy and clarifying procedural or interpretational doubts, not making substantive policy changes.
    • Section 6(3) of the Act specifically excludes the delegation of policy-making powers under Section 5 to DGFT.

    2. Retrospective Policy Changes

    • The Court held that neither the Central Government nor DGFT can make or amend policy with retrospective effect unless expressly empowered by the statute.
    • The Supreme Court’s precedents were cited, emphasizing that vested or accrued rights cannot be taken away by retrospective policy changes unless clearly authorized by law.

    3. Interpretation of “Technical Textiles”

    • The Court found the classification of “Technical Textiles – Woven Fabrics of Synthetic Filament Yarn” under ITC (HS) Code 5407 to be clear and unambiguous.
    • The impugned circular did not clarify an ambiguity but instead substantively restricted the scope of eligible products, which is beyond DGFT’s powers.

    4. Vested Rights and Constitutional Protection

    • The benefits already availed by the exporters constituted vested rights, protected under Article 300A of the Constitution (right to property).
    • The attempt to recover incentives already granted was found to be unlawful.

    Judgment and Impact

    The Delhi High Court set aside the DGFT’s circular and the subsequent demand letters, ruling that:

    • DGFT cannot retrospectively withdraw export incentives already granted under the Foreign Trade Policy.
    • Any substantive change to the list of eligible products must be prospective and made by the Central Government, not DGFT.
    • Exporters who had already received FPS benefits for eligible products at the time of export cannot be asked to return them due to later policy changes.

    Conclusion

    This judgment reinforces the principle that government authorities cannot retrospectively alter or withdraw benefits granted under statutory policies unless explicitly authorized by law. It provides much-needed certainty and protection for exporters relying on government incentive schemes, ensuring that vested rights are not arbitrarily taken away.

    Connected Matter

    Delhi High Court Quashes Retrospective Withdrawal of MEIS Benefits for FIBC Exporters

    Source: Delhi High Court

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  • Delhi HC Ruled on MEIS Benefits: Customs Authorities Cannot Override DGFT Classification for Handcrafted Stone Exporters

    Delhi HC Ruled on MEIS Benefits: Customs Authorities Cannot Override DGFT Classification for Handcrafted Stone Exporters

    Aadrikaa Legal Services (ALS) – IDT Tax I Arbitration I Litigation

    Date: 15.06.2026

    Delhi HC Ruled on MEIS Benefits: Customs Authorities Cannot Override DGFT Classification for Handcrafted Stone Exporters

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    A recent judgment by the Delhi High Court has brought significant clarity to the legal landscape surrounding the classification and export benefits for handcrafted stone articles under the Merchandise Exports from India Scheme (MEIS). This article provides a comprehensive overview of the case, the legal arguments, and the implications for exporters and policymakers.

    Background: The Dispute Over Classification and MEIS Benefits

    The controversy arose when exporters of handcrafted stone and marble articles, such as rolling boards, mortars, and pestles, faced objections from customs authorities regarding the classification of their products. Exporters had long classified these goods under ITC(HS) 68159990, a residual category for stone articles, and claimed MEIS benefits accordingly. However, a 2019 communication from the Central Board of Indirect Taxes and Customs (CBIC) suggested these products should be classified under CTH 6802, which did not attract MEIS benefits.

    This led to audit objections, demands for refund of MEIS benefits, and issuance of summons to exporters, prompting legal challenges by several exporters, including M/s Sharma International and M/s Amit Exports.

    Key Legal Issues Examined

    1. Classification of Handcrafted Stone Articles

    • Exporters argued that their products, being handicrafts, rightfully belonged under ITC(HS) 68159990, which was eligible for MEIS rewards (initially 5%, later increased to 7%).
    • Customs authorities contended that these goods should be classified under CTH 6802, which pertains to worked monumental or building stone and does not attract MEIS benefits.

    2. Authority to Decide Classification and Benefits

    • The court examined whether customs authorities could override the classification accepted by the Director General of Foreign Trade (DGFT) and demand refunds of MEIS benefits.
    • The Foreign Trade Policy (FTP) 2015-20 explicitly states that the DGFT’s decision on classification is final and binding.

    3. Procedural Fairness and Audit Objections

    • The exporters challenged the audit objection letters, arguing they were issued without proper opportunity to be heard and were based on predetermined conclusions.
    • The court found that the audit process did not comply with the principles of natural justice or the prescribed audit regulations.

    4. Recovery of Benefits Under Customs Act Sections 28 and 28AAA

    • The court analyzed whether the recovery of MEIS benefits could be justified under these sections, which require proof of collusion, wilful misstatement, or suppression of facts.
    • No such allegations were substantiated against the exporters.

    The Court’s Findings and Ruling

    1. Finality of DGFT’s Classification: The court held that only the DGFT or the licensing authority under the Foreign Trade (Development and Regulation) Act (FTDR Act) has the power to suspend or cancel MEIS certificates. Customs authorities cannot unilaterally question or override the DGFT’s classification or the validity of MEIS scrips.
    2. Invalid Audit Objections and Summons: The audit objection letters and subsequent summons were quashed. The court found that the process was arbitrary, lacked procedural fairness, and did not follow the statutory requirements for audit and recovery.
    3. Refund of Amounts Collected: The court directed the authorities to refund amounts collected from the exporters during the disputed proceedings.
    4. Scope for DGFT Action: While the court did not make a final determination on the correct classification, it clarified that any future action regarding the validity of MEIS certificates must be initiated by the DGFT, not customs authorities.

    Implications for Exporters and Policymakers

    • Exporters: Those dealing in handcrafted stone articles can rely on the DGFT’s classification for MEIS benefits unless and until the DGFT itself revises its position through due process.
    • Customs Authorities: Cannot independently revoke MEIS benefits or demand refunds without a prior determination by the DGFT regarding misrepresentation or fraud.
    • Policy Clarity: The judgment reinforces the need for clear, coordinated action between customs and trade authorities to avoid conflicting interpretations and ensure exporters are not subjected to arbitrary demands.

    Conclusion

    This judgment is a significant precedent for the export sector, especially for handicraft exporters. It upholds the primacy of the DGFT in matters of export classification and benefit eligibility, ensures procedural fairness, and protects exporters from retrospective and arbitrary recovery actions by customs authorities.

    The decision also highlights the importance of inter-agency coordination and adherence to statutory processes in the administration of export incentive schemes.

    Connected Matter

    CESTAT Chennai Ruled on EPCG Third-Party Export Obligations and Customs Penalties

    Source: Delhi High Court

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  • Delhi High Court Ruled on Retrospective Application of Limitation Period for Customs Duty Refunds

    Delhi High Court Ruled on Retrospective Application of Limitation Period for Customs Duty Refunds

    Aadrikaa Legal Services (ALS) – IDT Tax I Arbitration I Litigation

    Date: 29.05.2026

    Delhi High Court Ruled on Retrospective Application of Limitation Period for Customs Duty Refunds

    This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .  

    The Delhi High Court’s decision in the case of Sony India Pvt. Ltd. v. Commissioner of Customs, New Delhi addresses a crucial question in Indian customs law: Can a limitation period for refund claims, introduced by an amending notification, be applied retrospectively to goods imported before the notification was issued? This article provides a detailed analysis of the case, its background, legal arguments, and the implications of the court’s ruling for importers and customs authorities.

    Background of the Case

    Sony India Pvt. Ltd., a major importer and distributor of electronic and IT products, imported goods between December 1 and December 5, 2007. At the time, Notification No. 102/2007-Cus exempted certain goods from the Special Additional Duty of Customs (SADC) under Section 3(5) of the Customs Tariff Act, 1975, provided specific conditions were met. Notably, this original notification did not specify any time limit for filing refund claims.

    On August 1, 2008, Notification No. 93/2008-Cus amended the original notification, introducing a one-year limitation period for filing refund claims from the date of payment of duty. Sony India filed a refund claim on December 11, 2008, for SADC paid on its December 2007 imports. The customs authorities partially allowed the claim but rejected refunds for four Bills of Entry, citing the new one-year limitation period.

    Legal Issues and Arguments

    The central legal issue was whether the one-year limitation period introduced by the amending notification could be applied retrospectively to imports made before its issuance.

    Appellant’s Arguments (Sony India)

    • No Limitation in Original Notification: The original notification (102/2007) did not prescribe any time limit for refund claims.
    • No Retrospective Application: The amending notification (93/2008) introducing the limitation period should not apply to goods imported before its issuance.
    • Accrual of Right: The right to claim a refund arises only after the subsequent sale of imported goods and payment of sales tax/VAT, which is a market-driven event outside the importer’s control.
    • Legal Precedents: Cited Supreme Court judgments (e.g., New India Insurance v. Shanti Misra) stating that limitation laws in force at the time of cause of action apply, and new limitation laws cannot extinguish existing rights unless expressly stated.
    • Date of Payment: Argued that the date of payment should be the date when the TR-6 challan is stamped (i.e., when the government receives the funds), not the date of the demand draft.

    Respondent’s Arguments (Customs Authorities)

    • Application of Amending Notification: Insisted that the one-year limitation period applied to all refund claims, including those for goods imported before the notification.
    • Section 27 of Customs Act: Argued that the general refund provisions and limitation periods under the Customs Act should apply.

    Court’s Analysis and Findings

    The High Court undertook a detailed examination of the statutory framework and the intent behind the SADC and the relevant notifications:

    • Nature of SADC: The SADC is designed to counterbalance sales tax/VAT on like goods sold in India, ensuring a level playing field for domestic and imported goods.
    • Accrual of Refund Right: The right to claim a refund arises only after the importer sells the goods and pays the applicable sales tax/VAT. Thus, imposing a limitation period from the date of duty payment could unfairly extinguish the right before it even accrues.
    • Section 3(8) of the Customs Tariff Act: While this section incorporates refund provisions from the Customs Act, it does so only “so far as may be applicable.” The court held that the limitation period under Section 27 does not automatically apply to SADC refunds.
    • Legislative Authority: The court emphasized that substantive rights, such as limitation periods affecting refund claims, must be imposed by legislation, not by subordinate notifications.
    • Retrospective Application: The amending notification could not retrospectively impose a limitation period on refund claims for goods imported before its issuance.

    Key Excerpts from the Judgment

    “To uphold a limitation period starting from the date of payment of duty, as prescribed in the amending notification, would amount to allowing the commencement of a limitation period for refund claims before the right of refund has even accrued.”

    “The imposition of a period of limitation for the first time, without statutory amendment, through a notification, therefore could not prevail.”

    Outcome

    The Delhi High Court ruled in favor of Sony India, holding that:

    • The one-year limitation period introduced by Notification No. 93/2008-Cus cannot be applied retrospectively to goods imported before its issuance.
    • The refund claims for SADC paid on such imports are not time-barred by the amending notification.
    • The appeal was allowed, and the limitation period in the amending notification was read down to this extent.

    Implications of the Ruling

    • For Importers: Importers who paid SADC on goods imported before August 1, 2008, can claim refunds without being restricted by the one-year limitation period introduced later.
    • For Customs Authorities: Limitation periods affecting substantive rights must be clearly provided by legislation, not merely by notifications or circulars.
    • Legal Precedent: The judgment reinforces the principle that subordinate legislation cannot curtail substantive rights unless expressly authorized by the parent statute.

    Conclusion

    The Delhi High Court’s decision in the Sony India case is a significant precedent in customs law, clarifying the limits of subordinate legislation and protecting importers’ rights to claim refunds. It underscores the importance of legislative clarity and the protection of accrued rights against retrospective curtailment by administrative notifications.

    Source: Delhi High Court

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