February 28, 2026 : The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has set aside a differential customs duty demand of ₹3.47 crore raised against Myntra Jabong India Pvt Ltd, holding that the extended limitation period under Section 28(4) of the Customs Act, 1962 cannot be invoked in a mere classification dispute in the absence of wilful suppression with intent to evade duty.
The appeal arose from an Order-in-Original dated 31 August 2023 passed by the Principal Commissioner of Customs (Imports), ICD Tughlakabad, which had confirmed a differential duty demand of ₹3,47,37,530 with interest, appropriated the amount already deposited, ordered confiscation of goods under Section 111(m), and imposed penalty under Section 114A of the Customs Act. The demand related to imports made between 9 August 2017 and 3 October 2019.
Myntra Jabong, an online fashion and lifestyle retailer operating through its e-commerce platform, had imported various types of knitted men’s jackets during the relevant period. The goods were declared under tariff entries attracting basic customs duty at 20 percent. According to the department, the jackets had full front openings with slide-fastening zippers, a feature that was not specifically mentioned in the Bills of Entry and which, in its view, warranted classification under different tariff items. On this basis, Customs authorities alleged misclassification and short payment of duty.
An investigation was initiated after examination of a consignment. While disputing the department’s stand on classification, the appellant deposited the differential duty along with applicable interest prior to issuance of the show cause notices and informed the department accordingly. Despite this, three show cause notices were issued invoking the extended five-year limitation period under Section 28(4) on the allegation that the importer had wilfully suppressed material facts by not fully describing the goods.
Before the Tribunal, the central question was whether the extended limitation could be invoked. The Bench comprising Justice Dilip Gupta, President, and Ms. Hemambika R. Priya, Member (Technical), observed that the dispute essentially revolved around interpretation of tariff entries. It held that classification of goods is a matter of belief and interpretation, and merely because the department holds a different view does not mean that the importer has suppressed facts.
The Tribunal noted that the descriptions in the Bills of Entry were based on invoices and packing lists provided by overseas suppliers and that consignments had been physically examined by Customs authorities. It further recorded that the entire differential duty and interest had been paid prior to issuance of the show cause notices. In these circumstances, the allegation of wilful suppression with intent to evade duty could not be sustained.
Rejecting the Principal Commissioner’s reasoning that intent to evade was not necessary under Section 28(4), the Tribunal relied on Supreme Court jurisprudence to hold that the expression “wilful misstatement or suppression” carries a mental element. For the extended period to apply, there must be a deliberate act intended to evade payment of duty. A mere omission, misdescription, or difference in classification, without evidence of intent, is insufficient.
The Bench concluded that even assuming there was some deficiency in disclosure, the absence of intent to evade duty barred invocation of the extended limitation period. Once the demand under Section 28(4) was found unsustainable, the consequential confiscation under Section 111(m) and penalty under Section 114A also could not survive.
Accordingly, the Tribunal set aside the impugned order dated 31 August 2023 and allowed the appeal.
Case Title: Myntra Jabong India Pvt Ltd vs. Principal Commissioner of Customs ACC (Imports)
Case Number: Customs Appeal No. 55846 of 2023
Decision Date: 27 February 2026
