𝐀𝐚𝐝𝐫𝐢𝐤𝐚𝐚 𝐋𝐞𝐠𝐚𝐥 𝐒𝐞𝐫𝐯𝐢𝐜𝐞𝐬 (𝐀𝐋𝐒)

Author: Aadrikaa Legal Services (ALS)

CESTAT Mumbai Overturns Classification and Valuation Orders in Adulterated Diesel Dispute
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 24.12.2025

CESTAT Mumbai Overturns Classification and Valuation Orders in Adulterated Diesel Dispute

This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.comor on his Mobile +91-9999005379.

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Mumbai, recently delivered a significant judgment on December 19, 2025, addressing eight identical appeals concerning the classification and valuation of imported goods. The case revolved around the importation of goods declared as “penetrating oil-60” by eight appellants, which the Customs Department reclassified as “adulterated diesel” under Chapter Heading (CTH) 2710 1990, leading to enhanced valuation, penalties, and confiscation orders.

Background of the Case

The appellants, including companies such as M/s Auto Stores, Dashmesh Trade Impex, Amarjeet Enterprises, and others, had imported consignments of “penetrating oil-60 (for industrial use)” under CTH 3403 9900, which covers industrial lubricating preparations. However, based on intelligence gathered by the R&I Division of Customs, Mumbai, the Respondent-Department alleged that the goods were “adulterated diesel” and reclassified them under CTH 2710 1990, which pertains to petroleum oils containing more than 70% petroleum oil or oils obtained from bituminous minerals.

The Respondent-Department argued that the test reports indicated the presence of more than 70% petroleum hydrocarbons, which led to the conclusion that the goods were adulterated diesel. Consequently, the Department imposed enhanced duties, penalties, and redemption fines, and ordered the confiscation of the goods.

Key Arguments Presented

During the hearing, the appellants, represented by Advocate, argued that the Department failed to conclusively prove the reclassification of the goods. The test reports confirmed that the goods did not meet the requirements of high-speed diesel as per IS 1460:2025, but did not provide evidence of adulteration. The appellants contended that the burden of proof for reclassification lies with the Department, as established by the Hon’ble Supreme Court in previous rulings.

The appellants also highlighted that the issue of classification had already been settled by the Tribunal in favor of one of the appellants, M/s Ideal Impex, in a similar case involving the same product. The Tribunal had overturned the classification and valuation orders, holding that the goods were correctly classified under CTH 3403 9900.

Furthermore, the appellants argued that the alleged violation of Rule 30 of the Petroleum Rules, 2002, was not applicable to them as importers, as the rule pertains to the transportation of petroleum products in bulk by ships or vessels.

Tribunal’s Observations and Final Order 

The Tribunal carefully examined the arguments, test reports, and relevant legal provisions, including CTH 3403 and CTH 2710. It noted that the test reports were inconclusive and did not establish the presence of adulterated diesel. The Tribunal also emphasized that the burden of proof for reclassification was not discharged by the Department.

The Tribunal referred to its previous decision in the case of M/s Ideal Impex, which had set a judicial precedent for similar cases. It concluded that the imported goods were appropriately classified under CTH 3403 and that the Department’s reclassification and valuation were flawed.

In its final order, the Tribunal allowed all eight appeals, setting aside the orders passed by the Commissioner of Customs (Appeals), Mumbai-II, and granting consequential relief to the appellants.

Implications of the Judgment

This landmark decision by the CESTAT, Mumbai, underscores the importance of adhering to established legal principles in classification disputes. It reiterates that the burden of proof for reclassification lies with the Revenue Department and that inconclusive test reports cannot form the basis for altering the classification and valuation of imported goods.

The judgment also highlights the significance of judicial precedents in ensuring consistency and predictability in legal decisions. By upholding the precedent set in the case of M/s Ideal Impex, the Tribunal has reinforced the principle of fairness and uniformity in adjudicating similar cases. This ruling serves as a reminder to importers and regulatory authorities alike to ensure compliance with legal provisions and to base decisions on concrete evidence. It also provides clarity on the interpretation of tariff headings and the application of rules under the Petroleum Act, 1934, and Petroleum Rules, 2002.

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Source: CESTAT Mumbai

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December 24, 2025
CESTAT Delhi Sets Aside Allegations of Undervaluation and Customs Duty Evasion
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 24.12.2025

CESTAT Delhi Sets Aside Allegations of Undervaluation and Customs Duty Evasion

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

In a landmark decision, the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Principal Bench, New Delhi, has delivered a judgment in favor of M/s ABC Overseas, effectively setting aside allegations of customs duty evasion and undervaluation of imported goods. The case, which revolved around the import of LED TVs and Drywall Screws, has been a significant legal battle for the appellant.

Background of the Case

M/s ABC Overseas, a New Delhi-based importer and trader of goods, primarily deals in LED TVs and Drywall Screws. The company faced allegations from the Department of Customs regarding evasion of customs duty through undervaluation of imported goods. The dispute arose from the import of unbranded 17” and 19” LED TVs under Bill of Entry No. 4973274 dated 27.01.2018, and six past Bills of Entry from 2016 to 2018 for Drywall Screws.

The Department alleged that the imported goods were branded and undervalued, leading to evasion of customs duties. The case was built on comparisons between the declared transaction values and proforma invoices from unrelated third parties, as well as documents retrieved during investigations.

Key Arguments by the Appellant

The appellant, represented by legal counsels, argued that the goods imported under the live Bill of Entry were physically examined and found to match the commercial invoice and packing list. They contended that the TVs were unbranded, as only the LED panels had brand stickers, which were revealed after unscrewing the back panel. The appellant also highlighted that the certificate of origin, which contained incorrect details, was issued by the Government of Thailand and the error was later clarified by the foreign exporter.

Regarding the past Bills of Entry, the appellant argued that the Department’s reliance on proforma invoices from unrelated third parties was unjustified. They emphasized that the declared transaction values were accurate and supported by commercial invoices, packing lists, and payments made through official banking channels. The appellant also pointed out that the Department failed to provide contemporaneous export data or evidence of undervaluation.

Tribunal’s Observations and Final Decision

After hearing both parties and reviewing the evidence, the Tribunal made the following key observations:
1. Live Bill of Entry: The Tribunal noted that the goods were found to be in conformity with the commercial invoice and packing list during a 100% examination. It held that the Department’s allegations of undervaluation and misdeclaration were baseless, as the TVs were correctly declared as unbranded.
2. Past Bills of Entry: The Tribunal found that the Department’s reliance on proforma invoices from unrelated third parties was unreasonable. It emphasized that transaction value, as defined under Section 14 of the Customs Act, 1962, should be the basis for determining customs duty unless there is substantial evidence to reject it. The Tribunal also highlighted the lack of compliance with Section 138C of the Customs Act regarding the admissibility of electronic evidence.
The Tribunal concluded that the Department’s allegations were based on assumptions and lacked substantial evidence. It set aside the order rejecting the declared values and re-determining the transaction values, thereby allowing the appeal.

Key Takeaways

This judgment underscores the importance of adhering to legal procedures and evidentiary requirements when investigating allegations of customs duty evasion. It also highlights the significance of transaction value as the primary basis for determining customs duty, as per Section 14 of the Customs Act, 1962. The decision is a major victory for M/s ABC Overseas, reaffirming the principle that allegations must be backed by concrete evidence and not mere assumptions. It serves as a reminder to importers and authorities alike about the importance of transparency, compliance, and adherence to legal norms in customs-related matters.

Source: CESTAT Delhi

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December 24, 2025
Madras High Court Declares GST Notifications Illegal
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 23.12.2025

Madras High Court Declares GST Notifications Illegal

This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.comor on his Mobile +91-9999005379.

On December 17, 2025, the Madurai Bench of the Madras High Court delivered a landmark judgment in favor of Tvl Voylla Fashions Private Limited, represented by its authorized signatory. The case, W.P. (MD) No. 36017 of 2025, challenged the validity of two GST notifications issued by the Union of India: Notification No. 09/2023-Central Tax dated 31.03.2023 and Notification No. 56/2023-Central Tax dated 28.12.2023. The court ruled these notifications as vitiated and illegal, marking a significant victory for the petitioner.

Background of the Case

The petitioner, Tvl Voylla Fashions Private Limited, filed a writ petition under Article 226 of the Constitution of India, seeking a writ of certiorari to quash the impugned notifications and the consequential assessment order passed by the Assistant Commissioner (ST) (FAC) for the assessment year 2019-2020. The petitioner argued that the notifications violated several constitutional provisions, including Article 14, 246A, and 265, and were ultra vires Section 168A of the Central Goods and Services Tax Act, 2017.

The petitioner contended that the notifications were issued retrospectively, curtailing the limitation period for assessment and adjudication under the CGST Act. This, they argued, was contrary to the Supreme Court’s order dated January 10, 2022, which excluded the period from March 15, 2020, to February 28, 2022, for the purpose of calculating the limitation period under Section 73 of the CGST Act.

Key Arguments and Court Observations

During the hearing, the learned counsel for the petitioner and the Additional Government Pleader representing the respondents presented their arguments. The court noted that the issue raised in this case had already been addressed in a previous judgment delivered on June 12, 2025, in W.P. Nos. 17184 of 2024, where the court had categorically held that:
1. The authorities under the CGST Act are entitled to exclude the period from March 15, 2020, to February 28, 2022, while calculating the limitation period under Section 73 of the CGST Act, as per the Supreme Court’s order under Article 142 of the Constitution.
2. The impugned notifications were vitiated and illegal for several reasons:
  - They curtailed the limitation period contrary to the Supreme Court’s order under Article 142.
  - They were based on erroneous assumptions and misconceptions about the scope and effect of the Supreme Court’s order.
  - They arbitrarily extinguished the vested rights of action available to authorities under the CGST Act.
  - Notification No. 56/2023 was issued without the recommendations of the GST Council, violating the statutory mandate.
The court also highlighted issues such as the violation of principles of natural justice, lack of jurisdiction, and errors apparent on the face of the record.

The Court’s Decision

After considering the submissions and referring to the earlier judgment, the Honorable Justice ruled in favor of the petitioner. The court declared the impugned notifications as vitiated and illegal and set aside the consequential assessment order dated August 28, 2024. The court directed the authorities to treat the impugned order as a show cause notice and allowed the petitioner to submit objections within 8 weeks. The authorities were instructed to pass fresh orders after providing the petitioner an opportunity for a hearing.

Implications of the Judgment

This judgment is a significant victory for taxpayers and businesses, as it reinforces the importance of adhering to constitutional principles and statutory mandates while issuing notifications under the GST framework. The court’s decision highlights the following key points:
1. Protection of Vested Rights: The judgment ensures that taxpayers’ rights are not arbitrarily curtailed by retrospective notifications that diminish the limitation period for assessment and adjudication.
2. Adherence to Supreme Court Orders: The ruling underscores the importance of complying with the Supreme Court’s directives, particularly those issued under Article 142 of the Constitution.
3. Role of the GST Council: The judgment reiterates the statutory requirement for the GST Council’s recommendations before issuing notifications, ensuring transparency and accountability in the decision-making process.
Conclusion

The Madurai Bench of the Madras High Court has once again demonstrated its commitment to upholding the rule of law and protecting the rights of taxpayers. The victory of Tvl Voylla Fashions Private Limited serves as a reminder to authorities to exercise their powers within the bounds of the law and constitutional principles. This case sets a precedent for future challenges to arbitrary and retrospective notifications, ensuring a fair and just taxation system for all stakeholders.

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Source: Madras High Court

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December 23, 2025
CESTAT Chennai Upholds Classification of MIKO-3 (Robotic System) as Automatic Data Processing Unit under CTH 84714190
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 23.12.2025

CESTAT Chennai Upholds Classification of MIKO-3 (Robotic System) as Automatic Data Processing Unit under CTH 84714190

This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.comor on his Mobile +91-9999005379.

In a landmark decision, the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) Chennai has ruled in favor of M/s RN Chidakashi Technologies Pvt. Ltd., upholding the classification of their product, MIKO-3, as an Automatic Data Processing Unit (ADPU) under Customs Tariff Heading (CTH) 84714190. This decision marks a significant win for the company, which had been embroiled in a legal battle over the classification of its innovative product.

The Case at a Glance

M/s RN Chidakashi Technologies Pvt. Ltd., a company specializing in the import and manufacture of advanced robotic products under the brand name ‘MIKO,’ faced challenges from the customs authorities regarding the classification of their MIKO-3 model. While the company classified MIKO-3 as an ADPU under CTH 84714190, the customs authorities argued that the product should be classified as an “electronic toy” under CTH 9503, which attracts a higher Basic Customs Duty (BCD) of 60%.

The dispute arose when the Faceless Assessment Group rejected the company’s classification and imposed penalties, fines, and reclassification of the product as a toy. The company appealed against these decisions, citing technical specifications, certifications from the Ministry of Electronics and Information Technology (MeitY) and the Bureau of Indian Standards (BIS), and a favorable ruling from the Mumbai Bench of CESTAT in a similar case.

Key Arguments and Observations

The case revolved around whether MIKO-3, a social robot designed for learning, entertainment, and interaction, should be classified as an ADPU or an electronic toy. The company argued that MIKO-3’s primary function is data processing, with features such as artificial intelligence, face and speech recognition, autonomous navigation, and emotional intelligence. While the product is marketed to children, the company emphasized that its capabilities extend beyond mere amusement, making it a sophisticated learning and interaction tool.

The Tribunal noted that the Mumbai Bench had previously ruled in favor of the company, stating that MIKO-3 meets the essential requirements of an ADPU as outlined in Note 5(A) of Chapter 84 of the First Schedule to the Customs Tariff Act, 1975. The Tribunal criticized the customs authorities for relying on superficial observations, such as the product’s packaging and its appeal to children, rather than considering its technical features and certifications.

The Final Verdict

After reviewing the evidence and arguments, the CESTAT Chennai concluded that the classification declared by the company under CTH 84714190 was correct. The Tribunal emphasized that the customs authorities had failed to provide sufficient evidence to justify reclassifying MIKO-3 as an electronic toy. Consequently, the impugned orders were set aside, and the appeals were allowed with consequential benefits as per the law.

Implications of the Ruling

This decision is a significant victory for M/s RN Chidakashi Technologies Pvt. Ltd. and sets a precedent for the classification of advanced robotic products in India. It highlights the importance of considering technical specifications and expert opinions in classification disputes, rather than relying on superficial observations. The ruling also underscores the need for customs authorities to adhere to established legal principles when challenging classifications.

As technology continues to evolve, the distinction between toys and advanced devices like social robots becomes increasingly important. This case serves as a reminder of the complexities involved in classifying innovative products and the need for a nuanced approach that reflects their true nature and functionality.

Conclusion

The CESTAT Chennai’s decision to uphold the classification of MIKO-3 as an ADPU is a testament to the importance of fair and informed adjudication in customs disputes. It not only provides relief to M/s RN Chidakashi Technologies Pvt. Ltd. but also paves the way for a more accurate and progressive approach to product classification in the future. This ruling is a win for innovation and a step forward in recognizing the transformative potential of advanced technologies in India.

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Source: CESTAT Chennai

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December 23, 2025
CESTAT Mumbai Upholds Doctrine of Merger and Non-Applicability of Limitation Act in Customs
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 22.12.2025

CESTAT Mumbai Upholds Doctrine of Merger and Non-Applicability of Limitation Act in Customs

This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.comor on his Mobile +91-9999005379.

In a landmark decision, the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Mumbai Regional Bench, has once again reinforced the principles of the doctrine of merger and the non-applicability of the Indian Limitation Act, 1963, to proceedings before quasi-judicial authorities. This decision, delivered on December 15, 2025, in the case of Commissioner of Customs, Nhava Sheva-II vs. ADF Foods Ltd., has significant implications for exporters and the customs framework in India.

Background of the Case 

The case revolved around the conversion of Shipping Bills from one export promotion scheme to another under Section 149 of the Customs Act, 1962. ADF Foods Ltd., the respondent, had sought the conversion of Shipping Bills spanning over a decade. While the Commissioner of Customs allowed the conversion for three years, the request for the remaining period was denied, citing Article 137 of the Indian Limitation Act, 1963. The exporter challenged this decision, and the Tribunal ruled in favor of the exporter on June 26, 2025, stating that the Limitation Act does not apply to such conversion requests under Section 149 of the Customs Act.

Subsequently, the Commissioner of Customs filed an appeal to quash the order allowing conversion for three years. This appeal was dismissed by the Tribunal, which upheld the validity of the Commissioner’s original order and reiterated its earlier decision favoring the exporter.

Key Takeaways from the Tribunal’s Decision
1. Non-Applicability of Limitation Act to Quasi-Judicial Authorities: The Tribunal emphasized that the Limitation Act, 1963, applies only to proceedings in courts and not to quasi-judicial authorities or tribunals unless explicitly stated. This was supported by authoritative judgments, including M.P. Steel Corporation and Kerala State Electricity Board vs. T.P. Kunhaliumma. Section 149 of the Customs Act does not prescribe a time limit for the conversion of Shipping Bills, making the imposition of a three-year limitation period unsustainable.
2. Doctrine of Merger: The Tribunal highlighted that its previous order allowing the conversion of Shipping Bills for the entire 10-year period had merged with the Commissioner’s order permitting conversion for three years. As a result, the respondent department could not reopen the matter, as the principles of res judicata applied.
3. Invalidity of Circular Restrictions: The Tribunal also addressed the restrictions imposed under Clause 3(e) of Circular No. 36/2010, which prohibited conversion if the exporter had availed benefits under any Export Promotion Scheme. It held that such restrictions were not in conformity with Section 149 of the Customs Act and had been struck down by various High Courts, including the Gujarat High Court in the M/s. Lykis Ltd. case.
4. Exporter’s Rights: The Tribunal reaffirmed that exporters are entitled to convert Shipping Bills from one scheme to another if it benefits them, provided they reverse any benefits already availed under the previous scheme along with applicable interest. This decision aligns with previous judicial pronouncements, such as the Commissioner, Customs ICD, GRFL vs. M/s. Bectors Food Specialities Ltd. case.
Implications for Exporters and the Customs Department

This judgment is a significant win for exporters, as it clarifies their rights under Section 149 of the Customs Act and protects them from arbitrary restrictions imposed through circulars. It also underscores the importance of adhering to the principles of natural justice and the doctrine of merger in customs proceedings.

For the customs department, the ruling serves as a reminder to ensure that decisions and circulars align with the statutory provisions of the Customs Act. It also highlights the need for careful consideration before challenging orders that have already been adjudicated by higher authorities.

Conclusion

The CESTAT’s decision in this case is a testament to the judiciary’s commitment to upholding the rights of exporters and ensuring that administrative actions are consistent with the law. By dismissing the appeal and validating the conversion of Shipping Bills for the entire 10-year period, the Tribunal has set a precedent that will guide future cases involving similar issues. This judgment is a step forward in creating a fair and transparent customs framework that supports India’s export-driven economy.

Source: CESTAT Mumbai

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December 22, 2025
Gujarat High Court Quashes DRI Seizure of Imported Distillate Oil
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 22.12.2025

Gujarat High Court Quashes DRI Seizure of Imported Distillate Oil

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

In a significant ruling, the High Court of Gujarat at Ahmedabad has delivered a judgment in favor of Noya Infrastructure LLP and other petitioners, quashing the seizure memos issued by the Directorate of Revenue Intelligence (DRI) regarding the detention of imported bulk liquid cargo of Distillate Oil. The judgment, delivered on December 9, 2025, by Honourable Justice, marks a pivotal moment in the interpretation of Indian Standards for petroleum products and the application of the “most akin” test for classification under the Customs Tariff Act, 1975.

Background of the Case

The petitioners, including Noya Infrastructure LLP, Sweven Impex, and One Chemical Company, are engaged in the trading and import of industrial oils, including Distillate Oil. The case arose when the DRI seized their imported cargo of Distillate Oil at Pipavav Port, Amreli, Gujarat, citing a Test Report dated September 30, 2025, which claimed that the samples did not meet the requirements of Distillate Oil as per IS 16731:2019. The report also stated that the samples had characteristics of diesel fraction with a small amount of heavier hydrocarbons, leading to allegations of mis-declaration during import.

The petitioners challenged the seizure, arguing that the Test Report was inconclusive and that similar cargo detained at Kandla Port had been provisionally released based on expert opinions from the Central Revenues Control Laboratory (CRCL). They contended that the ambiguity in the test results and the lack of definitive conclusions should operate in their favor, as per the “most akin” test established by the Supreme Court in the case of Gastrade International vs. Commissioner of Customs, Kandla.

Key Issues in the Case

The court analyzed the following key issues:
1. Cloud Point Parameter: The Test Report indicated that the cloud point of the petitioners’ cargo did not meet the specified value of -16°C, as it was recorded at -6.2°C and -5.4°C. However, the court noted that the relevance of the cloud point depends on the climatic conditions and the intended use of the fuel, as clarified by the CRCL in a similar case at Kandla Port.
2. Diesel Fraction Characteristics: The Test Report stated that the samples had characteristics of diesel fraction with a small amount of heavier hydrocarbons. However, the court observed that the report did not definitively conclude that the cargo was diesel, and similar findings in the Kandla case had led to the release of the cargo.
3. Application of the “Most Akin” Test: The court emphasized the importance of the “most akin” test for classification, as established by the Supreme Court. It held that the ambiguity in the test results and the lack of definitive conclusions meant that the cargo should be classified as Distillate Oil, as it bore the closest resemblance to this category.
The Court’s Decision 

After a detailed analysis of the facts, test results, and expert opinions, the High Court ruled in favor of the petitioners. The court quashed the seizure memos issued by the DRI and directed the authorities to release the detained cargo of Distillate Oil stored at Pipavav Port. The court also instructed the petitioners to file an end-use certificate with the Customs authorities, as was done in the Kandla case.

Implications of the Judgment

This landmark judgment has significant implications for the import and classification of petroleum products in India. It reinforces the importance of applying the “most akin” test for classification under the Customs Tariff Act, ensuring that ambiguity in test results does not unfairly penalize importers. Additionally, the ruling highlights the need for consistency in the treatment of similar cases across different ports and authorities.

The judgment also underscores the importance of expert opinions and scientific analysis in determining the classification of goods. By relying on the CRCL’s clarification and the Supreme Court’s precedent, the High Court has set a strong example of fair and transparent adjudication in cases involving complex technical parameters.

Conclusion

The High Court of Gujarat’s decision to quash the seizure of Distillate Oil is a victory for the petitioners and a step forward in ensuring fairness in the import and trade of petroleum products. This judgment not only provides relief to the petitioners but also sets a precedent for future cases involving similar disputes. It serves as a reminder that regulatory authorities must base their actions on clear and definitive evidence, and that ambiguity should not lead to unjust penalties for businesses.

Source: Gujarat High Court

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December 22, 2025
Kerala High Court Grants Bail in High-Profile NDPS Cases
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 22.12.2025

Kerala High Court Grants Bail in High-Profile NDPS Cases

This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.comor on his Mobile +91-9999005379.

The Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPS Act), is a stringent law in India aimed at combating drug trafficking and abuse. Bail applications under this Act often involve complex legal arguments, especially when constitutional rights and procedural lapses are in question. In this blog, we will explore two recent bail applications heard by the High Court of Kerala, shedding light on the legal provisions and judicial reasoning involved.

Case 1: Bail Application No. 12213 of 2025 

Background:

The petitioner was the first accused in a case registered under Crime No. 147/2025 by Air Customs at Calicut International Airport. The charges against her included possession of contraband substances such as Hydroponic Ganja and Amphetamine-laced chocolates, punishable under Sections 20(b)(ii)(C), 22(c), 23(c), 28, and 29 read with Section 8(c) of the NDPS Act.

Key Legal Issues:

The petitioner argued that her detention exceeded the permissible 24-hour limit under Article 22(2) of the Constitution of India and Section 48 of the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023. She was taken into custody on 13.05.2025 at 11:45 PM, but her arrest was recorded only on 15.05.2025 at 10:00 AM, and she was produced before the Magistrate later that day. The petitioner relied on the precedent set in Appellant vs. Inspector, Narcotic Control Bureau [2025 KER 60624], which emphasized the importance of adhering to constitutional provisions regarding detention.

Court’s Observations:

Justice noted that the petitioner was detained beyond 24 hours without proper authority, violating constitutional provisions. The court emphasized that the time of detention must be reckoned from the moment the accused was initially taken into custody, which in this case was 11:45 PM on 13.05.2025.

Order:

The court granted bail to the petitioner, subject to the following conditions:
1. Execution of a bond for Rs. 1,00,000 with two solvent sureties.
2. Appearance before the Investigating Officer as required.
3. No intimidation or influence on witnesses or tampering with evidence.
4. No commission of similar offenses while on bail.
5. Permission from the jurisdictional court required to leave India.
Case 2: Bail Application No. 12138 of 2025 

Background:

The petitioner was accused of Crime No. OS 178/2025 by Air Customs at Calicut International Airport. She was charged under Sections 20(b)(ii)(C), 22(c), 23(c), 28, and 29 of the NDPS Act for allegedly carrying 23.429 kilograms of Hydroponic Ganja in her baggage while traveling on an Etihad flight.

Key Legal Issues:

The petitioner contended that her arrest violated Article 22(1) of the Constitution and Section 48 of the BNSS, 2023, as the grounds of arrest were not properly communicated to her or her nominated person. The prosecution argued that the arrest intimation was served to a friend of the petitioner via phone, but the court found no evidence of compliance with the statutory mandate.

Court’s Observations: Justice the importance of effectively communicating the grounds of arrest to the accused and their nominated person, as required by Article 22(1) and Section 48 of the BNSS. The court emphasized that non-compliance with these provisions renders the arrest unconstitutional.

Order:

The court granted bail to the petitioner with the following conditions:
1. Execution of a bond for Rs. 1,00,000 with two solvent sureties.
2. Appearance before the Investigating Officer on specified days.
3. Surrender of passport or submission of an affidavit if no passport exists.
4. Cooperation with the investigation.
5. No influence on witnesses or tampering with evidence.
6. No commission of similar offenses while on bail.
7. Violation of any conditions may lead to cancellation of bail.
Relevant Sections of the NDPS Act 
1. Section 20(b)(ii)(C): Punishment for the production, manufacture, possession, sale, purchase, transport, warehousing, use, consumption, import, or export of cannabis in commercial quantities.
2. Section 22(c): Punishment for the possession of psychotropic substances in commercial quantities.
3. Section 23(c): Punishment for the illegal import/export of narcotic drugs and psychotropic substances in commercial quantities.
4. Section 28: Punishment for attempts to commit offenses under the NDPS Act.
5. Section 29: Punishment for abetment and criminal conspiracy related to offenses under the NDPS Act.
6. Section 8(c): Prohibition of certain operations such as production, manufacture, possession, sale, purchase, transport, and use of narcotic drugs and psychotropic substances, except for medical or scientific purposes.
Conclusion

These cases highlight the importance of adhering to constitutional and statutory provisions during arrests under the NDPS Act. The courts have consistently emphasized the need for proper communication of the grounds of arrest to ensure the protection of fundamental rights. The judgments also underline the balance between enforcing stringent drug laws and safeguarding individual rights. As the legal landscape evolves, it is crucial for law enforcement agencies to ensure compliance with procedural safeguards to uphold the rule of law.

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Source: Kerala High Court

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December 22, 2025
CESTAT Delhi Sets Aside Reclassification of Handheld Barcode Scanners
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 20.12.2025

CESTAT Delhi Sets Aside Reclassification of Handheld Barcode Scanners

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

In a recent ruling by the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), New Delhi, a significant decision was made regarding the classification of imported goods. The case involved M/s Proffer IT Consultancy Private Limited, which had imported handheld barcode scanners and faced a dispute over their classification under the Customs Tariff Act, 1975. This blog delves into the details of the case and the implications of the judgment.

The Case Overview

M/s Proffer IT Consultancy Private Limited, a company specializing in IT solutions, imported handheld barcode scanners under Customs Tariff Heading (CTH) 8471 6050, which covers “Scanners” and is exempt from Basic Customs Duty (BCD). However, the customs authorities reassessed the goods under CTH 8517 1300, classifying them as “Smartphones,” which attract a 20% BCD. This reclassification resulted in a differential customs duty demand of INR 8,47,416.

The company argued that the primary function of the imported devices was barcode scanning and data processing, which are essential for supply chain management, inventory tracking, and logistics operations. While the scanners had additional features like WiFi, SIM slots, Bluetooth, and cameras, these were deemed ancillary to their primary function.

The Tribunal’s Observations

The tribunal examined the classification dispute in detail, considering the General Rules of Interpretation (GRI) of the Customs Tariff Act, Chapter Notes, and trade parlance test. Here are the key observations:
1. Primary Function of the Product: The tribunal emphasized that the principal function of the imported devices was barcode scanning and data processing, not communication. The additional features like SIM slots and calling capabilities were deemed supplementary and not the primary purpose of the devices.
2. Customs Tariff Classification: The tribunal analyzed the definitions under CTH 8471 and CTH 8517. It concluded that the imported goods met the criteria of “automatic data processing machines” under CTH 8471, as their primary function was scanning and data processing.
3. Trade Parlance Test: The tribunal highlighted that the goods were recognized in the market as barcode scanners, primarily used by warehouses and logistics companies for inventory management. The trade perception of the product supported its classification under CTH 8471.
4. Physical Characteristics: The tribunal noted that the scanners were larger than typical smartphones and had a handle for handheld use, which is not a feature of mobile phones. This further supported the argument that the devices were scanners rather than smartphones.
The Final Verdict

After considering all the evidence, the tribunal set aside the customs authorities’ decision to classify the goods as smartphones under CTH 8517. It ruled that the imported handheld barcode scanners should be classified under CTH 8471 6050, making them eligible for exemption from Basic Customs Duty. Consequently, the appeals filed by M/s Proffer IT Consultancy Private Limited were allowed, and the differential duty demand was quashed.

Key Takeaways

This case highlights the importance of accurate classification under the Customs Tariff Act, as it directly impacts the duty payable on imported goods. It also underscores the significance of the principal function of a product in determining its classification. Businesses importing goods should ensure that their products are correctly classified to avoid disputes and additional costs.

Moreover, the ruling reinforces the relevance of the trade parlance test, which considers how a product is perceived and used in the market. This test can be a crucial factor in resolving classification disputes.

Conclusion

The CESTAT’s decision in favor of M/s Proffer IT Consultancy Private Limited sets a precedent for similar cases involving the classification of multifunctional devices. It serves as a reminder for businesses to thoroughly understand the Customs Tariff Act and ensure proper documentation to support their claims. This case also highlights the importance of legal expertise in navigating complex customs regulations and protecting business interests.

Source: CESTAT Delhi

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December 20, 2025
Delhi High Court Directs Customs Department to Ensure Transparency in Order Issuance
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 20.12.2025

Delhi High Court Directs Customs Department to Ensure Transparency in Order Issuance

This Article has been written by Shri Ravi Shekhar Jha, Advocate based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.comor on his Mobile +91-9999005379.

In a significant development, the Delhi High Court has issued directives to the Customs Department to ensure transparency and accountability in the issuance of official orders and communications. The judgment, delivered on December 11, 2025, by Justice, addresses procedural lapses in the Customs Department and emphasizes the importance of proper documentation and accountability in administrative processes.

Background of the Case

The case revolves around a petition filed by M/s Guru Kirpa Enterprises under Article 226 of the Constitution of India, challenging an order dated July 26, 2025, issued by the Office of the Commissioner of Customs (Export), ICD, Tughlakabad. The petitioner sought amendments to shipping bills under Section 149 of the Customs Act, 1962, to rectify an inadvertent error in declaring CESS amounts. The petitioner argued that the omission had led to the inability to claim refunds for the CESS paid on consignments of energy drinks purchased in 2024.

This was the second round of litigation for the petitioner, as the first petition had resulted in a court directive for the Customs Department to consider the petitioner’s representation and supporting documents. However, the Customs Department rejected the request, citing the absence of evidence on the e-sanchit platform to support the amendment request.

Key Observations by the Court

During the hearing, it was revealed that the impugned order was signed by a Superintendent instead of the official who had passed the order, Assistant Commissioner . The Court expressed concern over this procedural lapse, stating that orders must be signed by the officials who pass them, with their name and designation clearly mentioned. The lack of such information undermines accountability and raises doubts about the authenticity of the orders.

The Court referred to its earlier judgment in Qamar Jahan v. Union of India, where it had approved a Standard Operating Procedure (SOP) for the Customs Department in baggage cases. The SOP mandates that the name and designation of the officer passing the order must be clearly mentioned, along with physical or digital signatures. The Court emphasized that this practice should extend to all orders and communications issued by the Customs Department, not just those related to baggage cases.

Court’s Directions

The Delhi High Court directed the Customs Department to ensure that all future orders and communications include the name and designation of the official passing the order. It also recommended the use of physical or digital signatures to enhance the authenticity of the documents. The Court clarified that while administrative convenience may allow other officials to communicate the orders, the name and designation of the actual decision-maker must not be misrepresented.

Implications of the Judgment

This judgment is a step forward in ensuring transparency and accountability in government processes. By mandating clear identification of officials responsible for decisions, the Court has reinforced the importance of procedural integrity in administrative actions. The ruling is expected to streamline operations within the Customs Department and prevent procedural ambiguities that could lead to disputes or delays.

Conclusion

The Delhi High Court’s decision in this case highlights the judiciary’s role in upholding transparency and accountability in administrative processes. It serves as a reminder to government departments to adhere to established procedures and maintain the highest standards of governance. As the case progresses, it will be interesting to see how the Customs Department implements these directives and addresses the petitioner’s concerns regarding the amendment of shipping bills.

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Source: Delhi High Court

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December 20, 2025
CESTAT Chandigarh Overturns Customs Broker License Suspension
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 19.12.2025

CESTAT Chandigarh Overturns Customs Broker License Suspension

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

In a landmark decision, the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Chandigarh, has ruled in favor of M/s Secon Logistics Pvt. Ltd., setting aside the suspension of their Customs Broker License. This decision, pronounced on December 17, 2025, brings relief to the appellant after a prolonged legal battle lasting over three years.

Background of the Case

The case originated from an incident in December 2020, when M/s Secon Logistics Pvt. Ltd., acting as a customs broker, filed Bills of Entry for goods declared as “light melting scrap” on behalf of M/s Goyal Steel Industries. Upon examination by the Directorate of Revenue Intelligence (DRI), the goods were found to be dry dates instead of the declared scrap. This led to the seizure of the goods and subsequent investigations, including the arrest of the customs broker’s director, Mr. Jatinder Kumar.

The Commissioner of Customs, Ludhiana, suspended the customs broker license of M/s Secon Logistics Pvt. Ltd. on February 5, 2021, under Rule 16(1) of the Customs Broker Licensing Regulation (CBLR), 2018. A series of hearings and legal proceedings followed, culminating in the issuance of a Show Cause Notice (SCN) for revocation of the license on November 10, 2021.

Key Arguments in the Case

The appellant, represented by a team of advocates, argued that the suspension and subsequent proceedings violated the mandatory timelines prescribed under the CBLR, 2018. Regulation 16 requires a personal hearing within 15 days of suspension, followed by an order within the next 15 days. Regulation 17 mandates that a notice for revocation must be issued within 90 days of the “offence report.” The appellant contended that these timelines were not adhered to, rendering the proceedings invalid.

The appellant also maintained that they had acted within the provisions of the CBLR, 2018, and had no knowledge of the misdeclaration of goods. They argued that the import documents, including the Pre-Shipment Inspection Certificate (PSIC), were in order, and the alleged violations were committed by the importer, M/s Goyal Steel Industries.

On the other hand, the Revenue argued that the appellant had committed serious violations, including failure to verify the legitimacy of the importer, misdeclaration of goods, and non-compliance with regulations. They also cited the Supreme Court’s extension of timelines during the COVID-19 pandemic as a justification for the delay in issuing the SCN.

CESTAT’s Observations and Decision 

After hearing both sides, the CESTAT found that the timelines prescribed under the CBLR, 2018, are mandatory and must be strictly adhered to. The Tribunal cited multiple judgments from various High Courts, which have consistently held that violations of these timelines render the proceedings invalid. The Tribunal also noted that the appellant had already suffered due to the suspension of their license for over three years, which had severely impacted their livelihood.

While the Tribunal acknowledged certain lapses on the part of the customs broker, it emphasized the importance of proportionality in imposing penalties. It referred to the Delhi High Court’s judgment in the case of Ashiana Cargo Services, which cautioned against disproportionate penalties that unjustly restrict a customs broker’s ability to conduct business.

In conclusion, the CESTAT set aside the impugned order and directed the restoration of M/s Secon Logistics Pvt. Ltd.’s customs broker license within four weeks.

Key Takeaways
1. Adherence to Timelines: The case underscores the importance of adhering to the strict timelines prescribed under the CBLR, 2018, for suspension and revocation proceedings.
2. Proportionality in Penalties: The Tribunal highlighted the need for penalties to be proportionate to the violations, taking into account the impact on the livelihood of the customs broker.
3. Legal Precedents: The decision aligns with previous High Court rulings that emphasize the mandatory nature of timelines under the CBLR, 2018.
Conclusion

The CESTAT’s decision in favor of M/s Secon Logistics Pvt. Ltd. is a significant development in the realm of customs regulations. It serves as a reminder to both customs brokers and authorities about the importance of adhering to legal procedures and timelines. This case also highlights the need for a balanced approach in penalizing violations, ensuring that penalties are fair and proportional.

Source: CESTAT Chandigarh

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December 19, 2025