HC asks CVC to file reply on plea against customs officers in issue of misclassification of betel nuts for customs duty

New Delhi | The Delhi High Court has sought the Central Vigilance Commission's response on a plea alleging corruption by senior customs officers relating to purported misclassification of betel nuts for the purpose of customs duty.

A bench of Justices Prathiba M Singh and Rajneesh Kumar Gupta issued a notice to the Central Vigilance Commission (CVC) on a petition, which also sought to resolve the issue of alleged misclassification of betel nuts for the purpose of customs duty.

The court also asked the Central Board of Indirect Taxes and Customs (CBIC) to file an affidavit in the matter.

"Considering the nature of the matter, let a comprehensive affidavit be filed by the CBIC in this case, as to whether any clarification is required or not in respect of the issues raised in the previous order within four weeks," the bench said.

It said the question of maintainability of the petition is left open and to be considered on the next date of hearing on May 8.

The petitioner, a customs house agent (CHA), claimed that the ambiguity on whether betel nuts would attract 100 per cent or 50 per cent basic customs duty has allegedly resulted in large-scale misclassification, enabling duty evasion and causing significant financial harm to the government.

The court was informed by the petitioner's advocate that complaints have also been filed with the Central Vigilance Commission and other higher authorities in the government for action to be taken against the officers, who are allegedly engaging in large scale duty evasion on the basis of this ambiguity in spite the clarification provided by the Supreme Court.

The petition has levelled allegations of corruption against senior custom officers.

It was alleged that the officers were indulging into large scale misdeclaration and misclassification of supari/ acranuts.

The court had earlier called for the stand of the CBIC on the plea.

It had said if no decision has already been taken on the complaints, it should be taken on an "early date".

Advocate Kamini Lau, representing petitioner Bajrang Lal Sharma, said the issue has created enormous difficulties for CHAs like the petitioner as no decision has been taken despite repeated complaints against the senior officials.

The plea said the petitioner, along with several CHAs, are facing repeated harassment from a group of customs officers, even as the National Customs Targeting Centre (NCTC) received multiple complaints regarding the alleged misdeclaration and misclassification of imported betel nuts under various names such as "boiled supari, API supari, chikni supari and flavoured supari", being wrongly classified.

It claimed this misclassification allowed importers to evade the 100 per cent Basic Customs Duty (BCD) by paying only 50 per cent BCD and also bypass the Minimum Import Price (MIP) conditions set by the Directorate General of Foreign Trade.

The plea said the petitioner submitted a complaint to the Central Vigilance Commission (CVC) in March 2022, seeking urgent intervention against a senior custom officer for his alleged involvement in duty evasion in collusion with others as the ongoing clearance of goods through misclassification was causing significant revenue loss.

However, the respondent departments failed to take any effective action, thereby allowing the duty evasion scam to continue unchecked, it claimed.

The petition has arrayed the Centre through the Ministry of Finance, CBIC, CVC and the Directorate General of Vigilance, Customs and Central Excise as respondents.