CESTAT Chennai Dismisses Western Farm Fresh Appeal, Rules Exemption Not Available For Imported Sausages

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) on 30 March, held that a claim for exemption under a customs notification cannot succeed when the goods are specifically excluded and prescribed conditions are not met.

A Bench comprising Judicial Member P. Dinesha and Technical Member Vasa Seshagiri Rao (Technical Member) dismissed the appeal filed by Western Farm Fresh (P) Ltd. against the Department. The Tribunal stated:

“We find that there is no dispute as regards the withdrawal of the benefit vide Note 2 to Notification No.125 supra and hence, clearly, the Appellant's claim for the benefit was not in order.”

Western Farm Fresh had imported “D&W Chicken Spicy Sausages” under CTH 16010000 and initially claimed concessional duty under Notification No. 125/2011-Cus. The Department denied the benefit, noting that goods under Heading 160100 were specifically excluded by Note 2 read with the Annexure to the notification.

The adjudicating authority confirmed the demand of differential duty, rejected the declared retail sale price, and imposed penalty and confiscation. The first appellate authority upheld this order, prompting the present appeal before the Tribunal.

Before the Tribunal, Western Farm Fresh argued that it could claim exemption under an alternate notification, i.e., Notification No. 26/2000-Cus., as the claim under Notification No. 125/2011-Cus. was inadvertent. The Tribunal rejected this claim due to lack of supporting documents.

The Bench observed that exemption notifications must be strictly construed, and exclusion clauses must be given full effect. The goods imported by the appellant clearly fell under a category excluded from Notification No. 125/2011-Cus.

On the alternate claim, the Tribunal emphasised that exemption benefits require fulfillment of prescribed conditions and production of necessary documents. Relying on the Supreme Court judgment in Dilip Kumar & Company, the Tribunal reiterated that exemption notifications are to be interpreted strictly.

The Tribunal further held that additional documents cannot be entertained at a later stage unless proper procedure under Rule 23 of the CESTAT Procedure Rules is followed. Since the appellant failed to produce documents before the lower authorities and did not justify the failure, the alternate claim was rightly rejected.

On limitation, the Tribunal confirmed that the demand notice was issued within the period prescribed under Section 28 of the Customs Act.

Finding no infirmity in the impugned order, the Tribunal dismissed the appeal.

Appearance for the Appellants: Shri Hari Radhakrishnan, Advocate

Appearance for the Respondent: Ms. Rajni Menon, Authorized Representative