In a significant relief to importers of roasted areca nuts, the Bombay High Court stayed the operation of a controversial notification issued by the Directorate General of Foreign Trade (DGFT) that sought to change the tariff classification of the product.
The bench of Justice B.P. Colabawalla and Justice Amit S. Jamsandekar observed that the DGFT appeared to have exceeded its powers under the Foreign Trade (Development and Regulation) Act, 1992.
The petitioners challenged DGFT Notification No. 02/2025-26 dated April 2, 2025, which reclassified roasted areca nuts from Chapter Heading 20081920 (processed nuts and edible preparations) to Chapter Heading 08028090 (raw nuts).
According to the petitioners, this reclassification effectively altered the customs duty regime applicable to roasted areca nuts and amounted to a de facto amendment of the Customs Tariff, a power that lies exclusively with the Central Government under Section 11A of the Customs Tariff Act, 1975, not the DGFT.
They argued that the DGFT could restrict or prohibit imports under its regulatory powers, but it could not change tariff classifications, as that would usurp the legislative domain reserved for Parliament and the Ministry of Finance.
The bench found prima facie merit in the petitioners’ arguments. Quoting Section 11A of the Customs Tariff Act, 1975, the Court noted that only the Central Government, through a notification laid before Parliament, can amend the First Schedule of the Tariff Act.
By contrast, the DGFT derives its authority from Sections 3 and 5 of the Foreign Trade (Development and Regulation) Act, 1992, read with paragraphs 1.02 and 2.01 of the Foreign Trade Policy (FTP) 2023, which empower it to regulate imports through restrictions or prohibitions — but not to alter tariff classifications.
“None of these provisions, at least prima facie, permit the DGFT to issue a notification changing the classification of the goods from Chapter 20 to Chapter 08,” the bench held. “This power lies with the Central Government only under Section 11A of the Customs Tariff Act.”
Given these findings, the Court granted ad-interim relief in both petitions, staying the operation of Notification No. 02/2025-26 until further orders.
The Court also directed that the petitioners’ imported consignments of roasted areca nuts be provisionally released upon furnishing a bond in the format required by the Customs Department, without any other conditions. The bills of entrywill remain provisional until the final disposal of the case.
The Union of India and DGFT have been directed to file their affidavits-in-reply by November 4, 2025, and the petitioners have been granted leave to add the Customs Department as Respondent No. 3. The matter has been posted for further hearing on November 13, 2025, under the caption “ad-interim reliefs.”
The Court also hinted that it may dispose of the petitions finally at that stage, time permitting.
Case Details
Case Title: Shri. Indu Shekhar Versus Union of India & Anr.
Case No.: WRIT PETITION NO.5253 OF 2025
Date: 03/10/2025
Counsel For Petitioner: D. B. Shroff, Senior Advocate
Counsel For Respondent: Jitendra B. Mishra
Read More: DGFT Notifies Import Policy on Areca Nuts: Minimum Import Price Fixed at Rs. 351 per Kg
