Food manufacturer Largo, whose products include Tayto, has admitted it sold crisps containing a high amount of gluten in a packet that was supposed to be gluten-free.
The company has pleaded guilty to breaching food safety regulations - a criminal offence.
In May last year, a mother from Arklow, Co Wicklow, bought a 50g packet of O'Donnell's mature Irish cheese and onion, gluten-free crisps for her 10-year-old son.
However, she noticed he was beginning to suffer a reaction to the crisps when his ears started turning red.
The mother complained to the company and the HSE subsequently brought a case against the food manufacturer.
The case against Largo began at Navan District Court yesterday.
It was facing one count of breaching regulation 178 of food safety standards.
Judge Grainne Malone said that the case was "a very serious matter" and the court was told the maximum penalty on indictment in the circuit court was a €500,000 fine and/or three years in prison.
However, the judge accepted jurisdiction of the district court in the case.
Giving evidence, HSE environmental health officer Caitriona Sheridan said that, in order for a product to be labelled gluten-free, it was required to have a gluten content of less than 20 parts-per-milligram.
When the crisps that were the subject of the complaint were tested, they were found to have more than 700ppmg.
A second control sample of the product was also taken, which lab tests found had more than 100ppmg of gluten.
Two other complaints were made about the presence of gluten in the gluten-free products. The company decided not to send out two pallets of products, identified as containing the incorrect crisps.
Counsel for the company, Andrew Whelan, told the court the issue was identified as a malfunction in the line.
"My client's response to this had been 'hands up'," he said.
Mr Whelan told the court that Largo, which the court was told has an annual turnover of €90m, had spent €100,000 to remedy the problem and gluten-fee products were now packaged in a "totally segregated" production area.
"We are confident that this problem will not happen again," he said.
Operations director of the company John Hennessy and technical director Angela Blaney were in court but neither gave evidence.
Largo indicated it would be prepared to make a donation to a charity for people with coeliac disease.
However, the judge adjourned the case until December 16 to allow the mother of the victim to be present in court, if she wished, to witness the outcome of her complaint and outline the impact of the crime.
The court was told that it was generally people with coeliac who would suffer an adverse reaction to gluten.
Judge Malone also requested a medical report into the possible outcomes of a coeliac sufferer eating gluten, before issuing her judgment.