No Duty Demand on Past Consignments Without Testing

Centax Editorial Board

April 2, 2026

• 2 min. read

Case Details: Vital Therapeutics Pvt. Ltd. vs. Commissioner of Customs (Seaport - Import), Chennai (2026) 40 Centax 140 (Tri.-Mad)

Judiciary and Counsel Details

S/Shri Ajayan T.V., Member (J) & M. Ajit Kumar, Member (T)
Shri G. Vidyadhar Reddy, Adv., for the Appellant.
Smt. O.M. Reena, Authorized Representative, for the Respondent.

Facts of the Case

Proceedings were initiated against the appellant, engaged in the trading of feed additives and related products, based on intelligence that goods declared as ‘Ascorbyl Polyphosphate’ were in fact ‘Ascorbic Acid’, leading to alleged misdeclaration and evasion of applicable duties. The department relied upon findings from certain live consignments where chemical testing indicated the presence of ascorbic acid and extended similar allegations to past consignments cleared earlier. The appellant contended that no samples were drawn or tested for the past consignments and that there was no evidence to contradict the declared description of goods in those cases. The matter was accordingly placed before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT).

CESTAT Held

The CESTAT held that the demand of duty on the past consignments was unsustainable in the absence of any testing or expert opinion establishing the composition of the goods. It was observed that reliance solely on country-of-origin certificates or the alleged appearance of goods was insufficient to conclusively determine their classification, particularly when the same was disputed. The tribunal further held that findings in respect of live consignments could not be automatically extended to past consignments without independent verification. It emphasised that the burden of proving misclassification rested upon the department, which had failed to discharge the same through cogent evidence. Accordingly, the demand of duty pertaining to the past consignments was set aside as not proved.

List of Cases Cited

Aban Loyd Chiles Offshore Ltd. v. Commissioner — 2006 (200) E.L.T. 370 (S.C.) — Relied on [Para 9.2]
Bhargavraj Rameshkumar Mehta v. Union of India — 2018 (361) E.L.T. 260 (Guj.) — Relied on [Para 6.6]
Commissioner v. Carrier Aircon Ltd. — 2006 (199) E.L.T. 577 (S.C.) — Relied on [Para 7.3.2]
Jain Shudh Vanaspati Ltd. v. Union of India — 1982 (10) E.L.T. 43 (Del.) — Relied on [Para 6.9]
O.T. Enasu v. Union of India — 2011 (272) E.L.T. 51 (Ker.) — Relied on [Para 8.3]
Om Prakash Bhatia v. Commissioner — 2003 (155) E.L.T. 423 (S.C.) — Relied on [Para 6.6]
Paras H. Shah v. Commissioner — Final Order Nos. 40810-40811/2025, dated 12-8-2025 by CESTAT, Chennai — Relied on [Para 8.6]
Ravindranatha Bajpe v. Mangalore Special Economic Zone Ltd. — AIR 2021 SC 4587 — Relied on [Para 8.4]
Sheikh Mohd. Omer v. Collector — 1983 (13) E.L.T. 1439 (S.C.) — Relied on [Para 6.6]
State of Kerala v. M.K. Mathew — (1978) 42 STC 348 — Relied on [Para 7.2.1]
State of Tamil Nadu v. Vinyl Cable Industries — 1993 (88) STC 430 Mad. — Relied on [Para 7.3.2]
Thomas Dana v. State of Punjab — 1999 (110) E.L.T. 63 (S.C.) — Relied on [Para 6.10]
Union of India v. Garware Nylons Ltd. — 1996 (87) E.L.T. 12 (S.C.) — Referred [Para 4]
Valeo India Pvt. Ltd. v. Commissioner — (2024) 18 Centax 301 (Tri. – Mad.) — Referred [Para 4]
Venkataraman T. Pai v. C.R. Shah — 1996 (81) E.L.T. 467 (Guj.) — Relied on [Para 8.4]