Customs Penalty Over Urea Classification

Paradeep Phosphates has been fined ₹93.59 crore following an adjudication order by the Commissioner of Customs, Goa. The penalty stems from the reclassification of seven consignments of Prilled Urea. The adjudicating authority determined that the imports did not qualify as Technical Grade Urea because the biuret content exceeded 0.80%. As a result, the goods were classified as Fertilizer Grade Urea, which falls under a prohibited import category without specific permissions.

The order was received by the company on August 20, 2026. Paradeep Phosphates stated it believes it is fully compliant with applicable laws and will pursue legal recourse against the order.

Penalty Breakdown

The total financial liability amounts to ₹93.59 crore, comprising:

  • Redemption fine: ₹23.26 crore
  • Penalty under Section 112(a)(i) of the Customs Act: ₹46.52 crore
  • Penalty under Section 114AA: ₹23.81 crore

The assessable value of the goods is ₹465.23 crore.

Company Response

Paradeep Phosphates disputed the classification, noting that independent surveyors at the load port had reported biuret content within limits. The company argued that post-clearance factory tests used for the decision did not follow prescribed sampling procedures under IS 1781:2022.

The company stated that the order is not expected to have a material operational impact on its ongoing business.