Neena Uppal vs. The Union Of INDIA

Held

The Court held that, prima facie, there was no justification for the Respondents to seize the imported goods and deny clearance, especially considering the binding CAAR ruling dated 24.02.2023, this Court's previous judgment in the Petitioner's own case allowing release of similar goods, and the favorable test reports from FSSAI and CRCL. The Court found that the imported goods, Menthol Scented Sweet Supari, appeared to be covered by the CAAR ruling and were fit for human consumption. Consequently, the Court directed the Respondents to permit clearance of the goods upon payment of duty/IGST applicable under CTH 21069030 and furnishing a bond towards the duty demanded in the show cause notice. The Court explicitly stated it was not adjudicating the merits of the show cause notice, leaving all contentions open for the Customs Authorities to decide in accordance with law. The Respondents were directed to provide the bond format within five days and permit clearance within seven days of the bond furnishing.

Facts

The Petitioner, Neena Uppal, imported Betel Nut product (Menthol Scented Sweet Supari) and sought clearance for home consumption under Bill of Entry No. 3383103 dated 20.07.2025, classifying it under CTH 21069030. This classification was previously confirmed by the Customs Authority for Advance Ruling (CAAR) on 24.02.2023, a ruling upheld by the Bombay High Court and the Supreme Court. Despite favorable test reports from FSSAI and CRCL indicating the goods are fit for human consumption and conform to regulations, the Respondent No. 5 seized the goods on 27.10.2025, alleging mis-classification. Subsequently, a show cause notice dated 10.12.2025 was issued proposing re-classification under CTH 08028090, demanding duty of Rs. 1,77,24,941/-, confiscation, and penalty.

Key Issues

1. Whether the seizure memo dated 27.10.2025 and the action of the Respondents in not permitting clearance of the imported goods are legal and valid, particularly in light of the binding CAAR ruling and this Court's previous judgments? (Section 28H, Section 28J of the Customs Act, 1962). The Petitioner argued that the seizure was unjustified given the prior CAAR ruling, this Court's judgment in her own case, and the FSSAI/CRCL reports confirming the goods' suitability for consumption and classification. The Petitioner contended that the Respondents' actions were arbitrary and contrary to established legal pronouncements. The Respondents argued for provisional release against a bond and bank guarantee for the differential duty, relying on the Madras High Court's decision in M/s. Genuine Spices vs. The Commissioner of Customs & Ors.