2026 (4) TMI 803

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.... Standing Counsel). For The Respondent: (By Sri M.S. Sajeev Kumar, Advocate for Sri Aswin Prabhu S. D., Advocate For C/R1). C.A.V. JUDGMENT (PER: HON'BLE MR. JUSTICE K. V. ARAVIND) 1. Heard Sri. K. Aravind Kamath, learned Additional Solicitor General along with Sri. M. Unnikrishnan, learned Senior Standing counsel for appellants and Sri. M.S. Sanjeev Kumar, learned counsel for Sri. Aswin Prabhu S.D., learned counsel for caveator/respondent No. 1. 2. This intra-Court appeal is filed by the Revenue, impugning the order dated 29.10.2025 passed by the learned Single Judge in W.P. No.24835/2025. 3. The brief facts, in nutshell, are that the respondent imported 54 metric tons of betel nuts from Indonesia and filed Bill of En....

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....ent, has concluded that the samples are raw dried areca nuts and not roasted areca nuts. It is further submitted that, as per the said report, the samples have not undergone the process of roasting, but have only undergone partial drying. 4.1 It is contended that, in view of the ICAR report, the goods are liable to be provisionally assessed as raw areca nuts under Tariff Heading 080280. It is further submitted that, in terms of Section 14(1) of the Customs Act, 1962 (for short, 'the Act'), the transaction value of the goods is ordinarily to be adopted. However, sub-section (2) of Section 14 empowers the Board to fix tariff values for any class of imported goods, notwithstanding anything contained in sub-section (1). 4.2 In exercise of....

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....al determination of liability. It is further contended that the goods may be released only upon deposit of 100% of the duty, determined by treating the imported goods as raw areca nuts and by applying the tariff value notified under Section 14(2) of the Act in Notification No. 13/2025-Customs (N.T.) dated 13.03.2025. 4.6 Learned Additional Solicitor General further submits that, in terms of Notification No. 02/2025-26 dated 02.04.2025 issued by the Ministry of Commerce and Industry, Department of Commerce, Director General of Foreign Trade, roasted areca nuts are not covered under Tariff Item 08028090. 5. Per contra, Sri M. S. Sajeev Kumar, learned counsel appearing for Sri Aswin Prabhu S.D., learned counsel for the respondent submits....

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....ended that the Revenue has unnecessarily delayed both the release of the seized goods and the initiation of adjudication proceedings. 5.4 It is submitted that, having regard to the nature of the goods, the same are liable to be released. It is further contended that, in the absence of any notification under Section 14(2) of the Act fixing the tariff value for roasted areca nuts, Section 14(1) would apply, and therefore, the learned Single Judge was justified in directing release of the goods upon furnishing a bank guarantee to the extent of 25% of the invoice value. 5.5 Without prejudice to the aforesaid submissions, learned counsel for the respondent-petitioner submits that the respondent is willing to deposit a sum of Rs.20,00,000/-....

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....s subsection (2), which operates notwithstanding sub-section (1), empowers the Board to notify tariff values for any class of imported goods, in which event duty is chargeable with reference to such tariff value. In exercise of powers under Section 14(2), the Board has issued Notification No. 13/2025- Customs (N.T.) dated 13.03.2025, fixing the tariff value of areca nuts under Tariff Heading 080280 at USD 8140 per metric ton. 7.3 In order to examine the contention and apprehension of the Revenue regarding the genuineness and financial credibility of the respondent, this Court, during the course of hearing, directed the respondent to place its financial statements on record. Pursuant thereto, the respondent has produced the bank statement....

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....yet to be initiated by issuance of a show cause notice, and that such notice has not been issued in view of the pendency of the writ petition and the present appeal. 7.6 We find no justification in the said submission. The writ petition was filed seeking a direction for release of the goods, and there was no interim order restraining the authorities from initiating adjudication proceedings. The authorities had the benefit of the ICAR report as early as 16.06.2025. Having regard to the nature of the goods, which are perishable, prompt action was warranted. 7.7 On the one hand, the Revenue pleads the need to protect its interests; on the other hand, it has failed to discharge its obligation of initiating adjudication proceedings. Such i....