2026-VIL-144-CESTAT-CHE-CU
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CUSTOMS CESTAT Cases

Customs - Classification of “Squid Liver Powder / Squid Meal Powder” - The appellants imported "Squid Liver Powder" claiming classification under CTH 2301 as fish/mollusc meal unfit for human consumption. The Department reclassified the goods under CTH 2309 as "Preparations of a kind used in animal feeding", leading to demand of differential duty, interest, and penalties - Whether the impugned goods are classifiable under CTH 2301 or CTH 2309 – HELD - The impugned goods are correctly classifiable under CTH 2309 as "Preparations of a kind used in animal feeding". The goods contained substantial quantities (40-50%) of soyabean meal, a vegetable-origin protein source, in addition to the squid liver paste. Relying on the composition, manufacturing process, and the intended use of the goods as feed ingredient, it is held that once the product ceases to be a simple meal obtained from animal/mollusc material and becomes a formulated mixture of animal and vegetable nutrients, it falls outside the scope of Heading 2301 and squarely classifies under Heading 2309. The decisive factor is the deliberate formulation and functional suitability of the product as compounded feed, rather than the predominance of a single ingredient – Further, the SCNs specifically identified the proposed reclassification from CTH 2301 to CTH 2309, alongwith the factual and legal reasons. The notices adequately put the appellants on notice of the Department's case and the grounds for the proposed action. The Show Cause Notice is not required to reproduce an adjudication order in advance, and that substantive compliance with principles of natural justice is sufficient – The reclassification of the imported goods under CTH 2309, the demand of differential duty, interest, and penalties are upheld - The appeals are rejected - Invocation of Extended Period of Limitation - The appellants argued that the extended period under Section 28(4) of the Customs Act cannot be invoked as the dispute was only regarding classification – HELD - The non-disclosure of the substantial soyabean content (40-50%) in the goods constituted suppression of material facts, which justified the invocation of the extended period of limitation. The composition of the goods was a determinative factor for classification, and the mere clearance under RMS did not absolve the appellants of their statutory obligation to make a true and complete declaration. The suppression of facts relating to the nature and characteristics of goods, even in matters of classification, would permit invocation of the extended period - Penalty and Confiscation - The Tribunal upheld the imposition of penalty under Section 114A and confiscation under Section 111(m) of the Customs Act. It held that once the conditions for invoking the extended period under Section 28(4) were satisfied, the penalty under Section 114A necessarily followed as a statutory consequence. Further, the mis-declaration of the composition of the goods, which had a direct bearing on classification and duty liability, rendered the goods liable to confiscation under Section 111(m).
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