The Delhi High Court has demanded a response from the Central Board of Indirect Taxes and Customs (CBIC) regarding a plea that addresses the contentious classification of betel nuts under customs duty regulations. The petition, initiated by a customs house agent, argues that the current ambiguity over whether betel nuts should be subjected to a 100% or 50% basic customs duty has facilitated widespread misclassification and duty evasion, potentially costing the government substantial financial losses.
During the hearing, the petitioner’s advocate informed the court that despite prior complaints to the Central Vigilance Commission (CVC) and other senior government bodies concerning large-scale duty evasion enabled by this classification ambiguity, effective action has yet to be taken. The Supreme Court had previously provided clarifications on this issue, yet the problem persists.
Justices Prathiba M Singh and Dharmesh Sharma noted the absence of instructions from the authorities’ counsel, despite the advance copies of the petition being served. The court has given additional time for the respondents’ counsel to prepare and has scheduled the next hearing for February 27.
Advocate Kamini Lau, representing petitioner Bajrang Lal Sharma, highlighted the significant challenges customs agents face due to the unresolved classification issue. According to the petition, numerous customs house agents have experienced repeated harassment from a faction of customs officers. The National Customs Targeting Centre (NCTC) has received multiple complaints about the alleged misdeclaration and misclassification of imported betel nuts under various aliases like “boiled supari, API supari, chikni supari, and flavoured supari.”
The petition asserts that this misclassification has allowed importers to evade the full 100% basic customs duty by paying only 50%, circumventing the Minimum Import Price conditions set by the Directorate General of Foreign Trade. A complaint was lodged with the CVC in March 2022, calling for immediate action against a senior customs officer allegedly involved in facilitating duty evasion through these misclassifications, which continues to cause significant revenue loss.
