ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 12.08.2025
CESTAT Mumbai- Customs authorities cannot overstep their jurisdiction by questioning MEIS benefits without the DGFTβs intervention
The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Mumbai, recently delivered a significant judgment in the case of Heranba Industries Ltd. vs. Commissioner of Customs, NS-II, Nhava Sheva. This case revolved around the classification of exported goods under the Merchandise Export India Scheme (MEIS) and the jurisdiction of customs authorities to demand recovery of export benefits. β The Tribunalβs decision not only clarified the scope of jurisdiction under the Foreign Trade Policy (FTP) but also reinforced the principles of limitation in adjudication proceedings.
Background of the Case
Heranba Industries Ltd., a manufacturer of pesticides and insecticides, exported products under the MEIS scheme, claiming benefits at 3% of the Free on Board (FOB) value based on their classification under specific tariff headings (CTH 38089910/38089990). β The Directorate General of Revenue Intelligence (DRI) and the Special Intelligence and Investigation Branch (SIIB) later alleged misclassification, claiming the products should have been classified under different headings (CTH 38086100/38086200/38086900), which were either ineligible for MEIS benefits or entitled to a lower rate of 2%. β
The customs authorities issued two separate show cause notices (SCNs) for overlapping periods, invoking the extended period of limitation and demanding recovery of MEIS benefits. β The second SCN, issued by SIIB, became the subject of this appeal.
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 Mumbai
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