Legal principle

A mere difference of opinion on classification or the benefit of an exemption notification, where the importer fully disclosed the goods and the claim, does not justify the extended period under Section 28(4).

Court decision

The Madras High Court allowed the writ petition on 17.09.2026 and set aside the order dated 13.02.2025. The Department may still take action otherwise permissible under Section 28, subject to the applicable limitation period. The court gave no view on the correct classification or IGST rate.

Facts

Bharat Luxindo Agrifeeds Pvt Ltd imported rice bran from Indonesia under a Bill of Entry dated 24.09.2020, classified it under tariff item 23024000, and paid IGST at Nil rate claiming Serial No.102 of Notification No.02/2017-Integrated Tax (Rate). The proper officer accepted it the same day. On audit, the Department said the goods attracted 5% IGST under Serial No.103B of Notification No.01/2017-Integrated Tax (Rate). It invoked the extended period under Section 28(4), alleging wilful misclassification, and by an ex parte order dated 13.02.2025 confirmed differential duty of Rs.5,14,380 with interest. The importer had already paid Rs.2,43,449 duty and Rs.83,520 interest on 30.12.2023. It filed a writ petition in the Madras High Court.

Key provisions

• Section 28(4), Customs Act, 1962 — Recovery of duties not levied or not paid or short-levied or short- paid or erroneously refunded