Talbros Sealing Material Private Limited Vs Additional Commissioner of Customs Export & Anr. (Delhi High Court)
The petitioner filed a writ petition under Article 226 of the Constitution of India challenging the Order-in-Original dated 25 June 2025 passed by the Office of the Commissioner of Customs (Export). The impugned order involved demands and recoveries against the petitioner in relation to exports of sealing materials, including rubberised cork gaskets, rubber gaskets, and machinery components. The petitioner had previously deposited IGST for some exports and obtained refunds, which led to the issuance of a Show Cause Notice (SCN) on 6 August 2024.
The Department contended that the petitioner had misclassified products under HSN 40169340 instead of HSN 45041010 and sought to recover inadmissible drawback amounts and export benefits previously obtained. The petitioner submitted replies to the SCN, and a hearing was conducted prior to the issuance of the impugned order.
The operative portion of the impugned order included the following key directions:
1. The classification of cork gaskets and rubberised cork gaskets in shipping bills dated 18 May 2023 and 1 June 2023 was revised to HSN 45041010.
2. The exported goods were held to be confiscated under Section 113 of the Customs Act, 1962, with redemption fines of Rs. 2,50,000 and Rs. 30,000 imposed under Section 125.
3. Claims for IGST, Drawback, and RoDTEP in both shipping bills were rejected and directed to be recovered, including applicable interest.
4. Penalties of Rs. 3,00,000 each were imposed under Sections 114(iii) and 114AA of the Customs Act for acts of willful omission and commission.
5. Any pending or sanctioned drawback or export incentives were to be withheld and adjusted against recoveries of excess export benefits.
The petition raised two primary issues. The first related to the classification of the goods, and the second concerned whether the SCN could have been issued by the Customs Department, or whether only the GST Department had authority under the IGST Act. Reliance was placed on Sections 2(12), 5, 7(5), and 20 of the IGST Act, with the petitioner arguing that demands under the IGST Act must be raised by a proper officer notified under Section 73 of the CGST Act.
