2026-VIL-864-CESTAT-HYD-CU
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CUSTOMS CESTAT Cases

Customs - Classification of Agricultural Products containing Plant Alkaloids – Appellant declared imported products as bio-fertilizers under Chapter Heading 3101 0099 - Department reclassified them as insecticides under Chapter Heading 3808 9199 on the basis of laboratory reports showing presence of naturally occurring plant alkaloids such as Matrin, Oxymatrin, Dehydromatrin and Dehydrooxymatrin, and initiated confiscation proceedings under Section 111(d) and 111(m) of the Customs Act, 1962 with penalties under Section 112(a) and 114AA - Whether the imported goods could be classified as insecticides liable for confiscation without registration under the Insecticides Act, 1968 – HELD - The tariff classification cannot be determined on assumptions or isolated chemical presence and must consider composition, primary use, marketed identity and commercial understanding of the product. The laboratory reports merely identified presence of certain constituents without categorically certifying that the goods were insecticides within the meaning of Chapter 38 or the Insecticides Act, 1968. Significantly, one report expressly recorded absence of pesticides peaks, thereby undermining the department's allegation. The denial of cross-examination opportunity to the laboratory report authors violated principles of natural justice, rendering reliance on such technical reports legally unsustainable, particularly where such reports constitute the primary substantive evidence rather than mere corroborative evidence - Department failed to establish deliberate suppression or wilful mis-statement as the goods were imported through proper B/E with declared descriptions and supporting literature, demonstrating an interpretational dispute rather than clandestine misdeclaration. No evidence was produced that the imported goods were prohibited under law, banned for import, or caused any hazard - Reclassification of goods, confiscation under Section 111(d) and 111(m), Customs duty demands, and penalties under Section 112(a) and 114AA are unsustainable and set aside - The impugned orders are set aside and the appeal is allowed
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GSTAT Appeal filed wrongly...
By CA Vivek Jalan

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