Bombay High Court Stays DGFT's Notification on Roasted Areca Nuts Classification

Court Rules DGFT Lacks Authority to Alter Goods Classification, Grants Ad-Interim Relief to Petitioners

The Bombay High Court has issued a significant ruling on October 3, 2025, staying a notification issued by the Director General of Foreign Trade (DGFT) that sought to modify the classification of Roasted Areca Nuts. This decision came in response to Writ Petition Nos. 5253 and 6170 of 2025 filed by Shri. Indu Shekhar and others against the Union of India.

The contentious notification, No. 02/2025-26 dated April 2, 2025, aimed to reclassify Roasted Areca Nuts from Chapter Heading 20081920 to Chapter Heading 08028090 under the Customs Tariff Act, 1975. The petitioners contended that such a reclassification power resides solely with the Central Government under Section 11A of the Customs Tariff Act, 1975, and not with the DGFT under the Foreign Trade (Development and Regulation) Act, 1992.

In their arguments, the petitioners highlighted that the Madras High Court had already granted a stay on the notification, reinforcing their case for a similar relief. The Bombay High Court, presided over by Justices B. P. Colabawalla and Amit S. Jamsandekar, found substantial merit in the petitioners' claims, acknowledging that the DGFT overstepped its authority by attempting to alter the goods classification.

The court granted ad-interim relief, effectively suspending the operation of the impugned notification. It further allowed the petitioners to provisionally release imported Roasted Areca Nuts upon furnishing a bond as required by the Customs Department, with no additional conditions attached.

The court's order emphasized the urgency of addressing the matter due to the perishable nature of the Roasted Areca Nuts. The next hearing is scheduled for November 13, 2025, where the court indicated the possibility of resolving the writ petitions, contingent on time constraints.

This ruling underscores the judiciary's role in ensuring that statutory powers are exercised within the confines of the law, protecting stakeholders from administrative overreach.

Bottom Line:

Notification modifying the classification of goods under Customs Tariff Act, 1975 cannot be issued by the Director General of Foreign Trade (DGFT) under the Foreign Trade (Development and Regulation) Act, 1992 as such power is vested exclusively with the Central Government under Section 11A of the Customs Tariff Act, 1975.

Statutory provision(s): Customs Tariff Act, 1975 - Section 11A; Foreign Trade (Development and Regulation) Act, 1992 - Sections 3 and 5; Article 14 and 19 of the Constitution of India.

Shri. Indu Shekhar v. Union of India, (Bombay)(DB) : Law Finder Doc Id # 2797708