Law, Judgments & Legal Insights.

Import Stalemate Ends: DGFT Reversal Resolves Areca Nut Classification Dispute

In a welcome relief for trade stakeholders, the Bombay High Court has disposed of two significant writ petitions challenging the classification of Roasted Areca Nuts. The matter, which had left importers in legal limbo for months, reached a resolution following a policy reversal by the Directorate General of Foreign Trade (DGFT).

The petitions were initiated by Shri Indu Shekhar (Proprietor of INS Consultancy) and Shri Tabani Javed (Proprietor of Noble Enterprises), who contested a 2025 notification that threatened to disrupt the classification of their imported goods.

The Conflict: Authority vs. Administrative Action

The legal controversy centered on Notification No. 02/2025-26, issued on April 2, 2025. The DGFT had sought to shift the classification of Roasted Areca Nuts from ITC (HS) Code 20081991 to 08028090. Petitioners argued that this move was ultra vires —procedurally improper under the Constitution of India—as the power to determine and change such classifications rests exclusively with the Central Government under Section 11A of the Customs Tariff Act, 1975.

Representing the petitioners, Senior Advocate Mr. D. B. Shroff argued that the unilateral reclassification by the DGFT exceeded its legal mandate, creating uncertainty in customs valuation and import feasibility.

A Pivot in Policy

In October 2025, the court had initially granted ad-interim relief, allowing petitioners to provisionally clear their consignments under bond. The situation evolved on October 15, 2025, when the DGFT issued a new notification (No. 43/2025-26) effectively shifting the classification of Roasted Areca Nuts back to its original Chapter-20 status.

With the primary grievance addressed by the fresh notification, the petitioners informed the court that the core issue was resolved.

Key Observations

The court acknowledged the shift in policy as the mechanism for the petitions' closure:

* "It appears that after the passing of the order dated 3rd October 2025, the DGFT have come up with a new Notification... by this new Notification, the classification of Roasted Areca Nuts has once again been shifted back to Chapter-20."

* "In light of this new development, Mr. Shroff... stated that the grievances raised in the above Petition have now been duly redressed."

* "We direct that those Bills of Entry will now be finally assessed, keeping in mind the new Notification dated 15th October 2025 issued by the DGFT."

Implications for Trade

The High Court has formally ordered the final assessment of the pending Bills of Entry in accordance with the latest DGFT directive. By disposing of the petitions, the court has effectively settled the immediate regulatory hurdle. For industry participants, the case serves as a reminder of the limits of delegated legislation and the importance of strictly adhering to the division of powers between administrative bodies and the Central Government under the Customs Tariff framework.

With this judgment, the long-standing uncertainty surrounding the import of Roasted Areca Nuts has been laid to rest, providing much-needed clarity for future customs filings.

---

The matter was heard by a division bench comprising Justice B. P. Colabawalla and Justice Amit S. Jamsandekar.