CESTAT Delhi- Customs Cannot Reclassify Goods Beyond Show Cause Notice

ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 03.07.2025

CESTAT Delhi- Customs Cannot Reclassify Goods Beyond Show Cause Notice

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Delhi, has held that customs authorities cannot travel beyond the scope of the Show Cause Notice (SCN) when classifying imported goods. The Tribunal ruled in favor of the appellant, setting aside the demand of Countervailing Duty (CVD) amounting to ₹27.74 lakh.

Case Background

• Importer: M/s. Dharampal Satyapal Ltd., Greater Noida
• Goods: Three machines – Crumbler DFZL-1500, Plansifter MPAK-228, and Discharge Airlock MPSJ-22/22
• Purpose: Used in processing Areca Nuts (supari) for manufacturing pan masala
• Declared Classification: CTH 84371000 (Machines for cleaning, sorting, or grading seeds or dried vegetables)
• Department’s Claim: Reclassification under CTH 84798200 (general-use crushing/sorting machines) attracting 12.5% CVD
• Two show cause notices were issued: Dated 08.02.2016 and 07.09.2016 — both alleging incorrect classification and short payment of duty

This Article has been written by Shri Ravi Shekhar Jha, Advocate Delhi High Court based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.

Source: CESTAT Delhi

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