Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(CESTAT) 1906

CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
Dilip Gupta, President, P. Anjani Kumar, Technical Member
Vanesa Cosmetics Pvt. Ltd. – Appellant
Versus
Principal Commissioner of Customs – Respondent
Customs Appeal No. 55715 of 2023

Advocates:
For the Appellants/Petitioners: Karan Chandna
For the Respondents: M.K. Shukla

The extended period of limitation under Section 28(4) of the Customs Act, 1962 cannot be invoked on grounds of misclassification purely based on self-assessment, unless there is concrete evidence of willful suppression or active intent to evade duty, neither of which is established by legitimate classification disputes.

Headnote:(A) Customs Act, 1962 - Section 28(4) and Section 111(m) - Extension of limitation period - Misclassification of goods - Classification dispute involving self-assessment does not automatically imply wilful misstatement or suppression of facts with intent to evade duty.

(B) Appellate Jurisdiction - Scope of Show Cause Notice - Authority cannot travel beyond the allegations set out in the show cause notice.

(C) Evidence - Statements under Section 108 of the Customs Act - Procedural requirements under Section 138B must be strictly adhered to before relying on such statements in adjudication.

(D) Confiscation - Misclassification vs. Mis-declaration - Mere wrong classification in a Bill of Entry does not warrant confiscation under Section 111(m), which pertains to the mis-declaration of the nature/description of goods.

Facts of the case:
The appellant, engaged in the import of cosmetic components, was issued a show cause notice alleging that they willfully misclassified imported goods to evade customs duty. The department sought to invoke the extended period of limitation under Section 28(4) of the Customs Act, 1962, alleging suppression of facts and willful misstatement. The appellant contested this, arguing that the dispute was a genuine classification issue and that no intent to evade duty existed.

Findings of Court:
The Tribunal found that a mere difference in classification opinion does not establish willful suppression or intent to evade duty. The court further noted that the adjudicating authority had traversed beyond the scope of the original show cause notice and failed to follow mandatory procedural steps for relying on witness statements.

Issues: Whether the extended period of limitation under Section 28(4) was correctly invoked, and whether the imported goods were liable for confiscation under Section 111(m) of the Customs Act.

Ratio Decidendi: In an era of self-assessment, the importer's view on classification, if disclosed, cannot be termed as willful suppression. Unless intent to evade is established through specific evidence, the extended period of limitation cannot be invoked. Furthermore, misclassification as a matter of legal opinion is distinct from substantive mis-declaration of goods that triggers confiscation.

Result: Appeal allowed.

Table of Content
1. factual basis of disputes regarding misclassification and invocation of extended limitation. (Para 1 , 2 , 3 , 4 , 5 , 6)
2. summary of contentions by the parties concerning the legality of the extended period of demand. (Para 7 , 8)
3. analysis of self-assessment powers and limited grounds for invoking the extended period of limitation. (Para 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18)
4. final determination on the non-applicability of confiscation for classification errors and setting aside the impugned demand. (Para 19 , 20 , 21)

JUSTICE DILIP GUPTA

M/s Vanesa Cosmetics Pvt Ltd¹the appellant has filed this appeal to assail the order dated 28.06.2023 passed by the Principal Commissioner of Customs, ICD (Import) TKD²the Principal Commissioner to the extent it confirms the demand of customs duty of Rs. 13,67,324/- for import made through ICD (Import), TKD and demand of customs duty of Rs. 12,08,439/- for import made through Delhi Air Cargo/ACC Import with interest and penalty under section 114A of the Customs Act, 1962³the Customs Act. The order also holds that the goods are liable to confiscation under 111(m) of the Customs Act.

2. The appellant is primarily engaged in the business of sales and supplies of perfume and scent sprays of various brand names such as Denver, Envy, Force, Hamilton, Honour and Noir.

3. A show cause notice dated 04.07.2022 was issued to the appellant under section 28(4) of the Customs Act alleging wrong classification of the items imported by the appellant and demanding differential duty with interest and penalty.

4. The description of the items imported by the appellant the Customs Tariff Item⁴CTI declared by the appellant and the CTI proposed by the department are reproduced below:

S.No.	Item Description	CTI declared by appellant	CTI by department
1	Empty Plastic Container (Packing Material for Cosmetic)	39231090	96161020
2	Empty Perfume Bottle/Container	39233090	96161020
3	Plastic Cap	39235090	96161020
4	Actuator/empty Plastic Container/white Insert/Insert Orifice	39269099	96161020
5	Empty Glass Bottle of Vibrant Colours/ Coting Bottle + Gold Hotstamping	70109000	96161020
6	Metal Ring	73269099	96161020
7	Metal Ring	76169990	96161020
8	Metal Ring	83099090	96161020
9	Actuator	84249000	96161020
10	Actuator/ Valve	84818090	96161020

5. The show cause notice also invoked the extended period of limitation contemplated under section 28(4) of the Customs Act. The relevant portions of the show cause notice are reproduced below:

“15. From the statements of Sh. Vijesh Gupta recorded under Section 108 of the Customs Act, 1962, it is evident that he was aware of the nature of the goods and its classification and he intentionally wrongly classified the imported goods in the import documents. These facts are also substantiated with the statement dated 09.12.2021 of Sh. Surendran K., Director of M/s Three Aces Global Logistics Pvt. Ltd., he in his statement had also admitted that they used to file bill of entry on the basis of declaration approved by the importer i.e. M/s Vanesa Cosmetics Pvt. Ltd., as and when importer had made correct declaration they had filed the Bill of entry of imported goods in correct CTH and when goods are mis-declared they used to suggest CTH accordingly. Hence, it was the importer who was solely responsible for mis classification. His own admission also suggests that he was well aware with the nature of impugned goods. The import documents of M/s Vanesa Cosmetics Pvt. Ltd. (i.e. Invoice and packing list) submitted by the Customs Broker, in his statement dated 09.12.2021 contained "VLCC" in item description. Moreover, the Customs Broker was also marking the emails to the representative of M/s VLCC Personal Care Products Ltd. These facts indicated that both the importer as well as the Customs Broker were aware of the end use of these imported products for VLCC.

Thus, it appears that provisions of Section 28(4) relating to wi

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2026 Supreme(Online)(CESTAT) 1906

CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNALDilip Gupta, President, P. Anjani Kumar, Technical MemberVanesa Cosmetics Pvt. Ltd. – AppellantVersusPrincipal Commissioner of Customs – RespondentCustoms Appeal No. 55715 of 2023

CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
Dilip Gupta, President, P. Anjani Kumar, Technical Member
Vanesa Cosmetics Pvt. Ltd. – Appellant
Versus
Principal Commissioner of Customs – Respondent
Customs Appeal No. 55715 of 2023