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Tag: #SurbhitImpexPvt.Ltd.

CESTAT Mumbai Overturns Customs Duty and Penalties on Food Grade Sodium Tri-Poly Phosphate Imports
Aadrikaa Legal Services (ALS) – IDT Tax I Arbitration I Litigation

Date: 04.05.2026

CESTAT Mumbai Overturns Customs Duty and Penalties on Food Grade Sodium Tri-Poly Phosphate Imports

This Short Article has been prepared & written by Advocate Ravi Shekhar Jha-Delhi High Court, New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com .

The Surbhit Impex CESTAT Mumbai case is a significant legal dispute involving the importation and classification of Sodium Tri-Poly Phosphate (STPP), specifically regarding its grade (food vs. industrial) and the applicability of anti-dumping duty (ADD). The case highlights the complexities of customs law, laboratory testing, and the burden of proof in determining the correct classification of imported goods.

Background of the Case

Surbhit Impex Private Limited (formerly B.M. Jain & Sons Private Limited) imported 150 metric tons of STPP, declared as food grade, from Sheetal Enterprises, Hong Kong, China. The imports were classified under Customs Tariff Item (CTI) 2835 3100, and two Bills of Entry were filed. Customs authorities, suspecting mis-declaration to avoid ADD, initiated investigations and ordered laboratory testing to verify the grade of the imported STPP.

Investigations and Laboratory Testing
- Customs Intelligence: Customs developed intelligence suggesting importers were mis-declaring STPP grade to evade ADD imposed by Notification No. 58/2011-Customs.
- Sample Testing: Samples were sent to multiple laboratories:
  - CRCL (Central Revenue Control Laboratory): Unable to test for grade.
  - FSSAI Authorized Laboratory (Envirocare Labs): Tested for physical appearance, P2O3, pH, and bulk density. Reported conformity to food grade parameters. FSSAI issued a No Objection Certificate (NOC).
  - Central Food Laboratory, Pune: Lacked equipment for STPP analysis.
  - Chemotest Laboratory: Tested for water insoluble matter, pH, phosphorous, tri-poly phosphate content, and particle size. Concluded the sample was industrial grade, citing overlapping parameters and lack of distinctive tests for food grade.
Customs Actions and Legal Proceedings
- Seizure and Show Cause Notice: Based on Chemotest’s report, customs seized the goods and issued a show cause notice proposing confiscation, ADD demand, and penalties under various sections of the Customs Act.
- Adjudication: The original authority confirmed the proposals, including confiscation, ADD demand, and penalties.
- Appeals: Surbhit Impex and its Managing Director appealed, arguing that FSSAI’s NOC and Envirocare’s report should prevail, and that Chemotest’s findings were inconclusive and not recognized by FSSAI.
Key Legal Issues
- Grade Determination: The central issue was whether the imported STPP was food grade (exempt from ADD) or industrial grade (subject to ADD).
- Burden of Proof: The Tribunal emphasized that the burden of proof lies with the customs authorities to demonstrate that the goods are not food grade.
- Laboratory Accreditation: Both Envirocare and Chemotest were NABL & FSSAI accredited, but only Envirocare’s report was recognized by FSSAI for food safety.
Tribunal Findings and Decision
- Laboratory Reports: The Tribunal found that Chemotest’s report was inconclusive, as the tested parameters overlapped and did not definitively prove the goods were not food grade. Envirocare’s report, endorsed by FSSAI, confirmed conformity to food grade standards.
- Legal Precedents: The Tribunal cited Supreme Court decisions (e.g., Gastrade International v. Commissioner of Customs, Kandla) that benefit of doubt should be given to importers when evidence is inconclusive.
- Notification Interpretation: Final ADD notifications explicitly excluded food grade STPP from ADD, supporting the appellants’ position.
- Outcome: The Tribunal set aside the impugned order, allowed the appeals, and disposed of the miscellaneous application. The goods were deemed food grade, exempt from ADD, and penalties/confiscation were overturned.
Implications and Lessons
- Importance of Accredited Testing: Only tests recognized by relevant authorities (FSSAI) should be used for classification affecting duty liability.
- Burden of Proof: Customs must provide clear, conclusive evidence when challenging importers’ declarations.
- Legal Clarity: The case reinforces the need for precise legal and scientific standards in customs classification and duty assessment.
Conclusion

The Surbhit Impex CESTAT Mumbai case underscores the critical role of laboratory testing, regulatory standards, and legal principles in customs disputes. It serves as a precedent for importers and customs authorities, emphasizing the necessity of conclusive evidence and proper accreditation in determining the grade and duty liability of imported goods.

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Source: CESTAT Mumbai

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May 4, 2026
CESTAT Mumbai Quashes Anti-Dumping Duty
ALO Law Office- IDT Tax I Arbitration I Litigation

Date: 07.02.2026

CESTAT Mumbai Quashes Anti-Dumping Duty

Adv Ravi Shekhar Jha

This Article has been written by Advocate Ravi Shekhar Jha-BALLB & LLM (Constitutional Law) based in New Delhi. The views expressed are based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.comor on his Mobile +91-9999005379.

In a landmark decision, the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Mumbai, has set aside the Order-in-Original No. 305/2023-24/Commr/NS-I/CAC/JNCH dated 29.03.2024, passed by the Commissioner of Customs (NS-I), Jawaharlal Nehru Customs House (JNCH), Nhava Sheva. This decision comes as a significant relief for the appellants, including Surbhit Impex Pvt. Ltd. (SIPL) and its associated entities, who were facing allegations of overvaluation of imported goods and evasion of Anti-Dumping Duty (ADD).

Background of the Case

The case revolved around the import of 38 consignments of melamine by SIPL and B.M. Jain & Sons Pvt. Ltd. (BMJSPL), which had merged with SIPL as per an NCLT order dated 06.05.2022. The Directorate of Revenue Intelligence (DRI), Mumbai Zonal Unit, initiated an investigation based on intelligence reports, alleging that the appellants had deliberately inflated the declared value of imported melamine to evade ADD. The Commissioner of Customs subsequently passed an order confirming the rejection of the assessable value, imposing ADD, penalties, and redemption fines.

The appellants challenged the order before the CESTAT, arguing that the transaction value of the imported goods was rejected without valid reasons. They contended that the declared value was higher than the international market price and that the Department had relied on questionable evidence, including electronic data and rubber stamps, without proper verification or cross-examination.

Key Arguments by the Appellants
1. Rejection of Transaction Value: The appellants argued that the rejection of the declared transaction value under Rule 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 was impermissible. They highlighted that the declared value was higher than the international market price, and the Department failed to provide valid reasons for rejecting the transaction value.
2. Admissibility of Electronic Evidence: The appellants challenged the admissibility of electronic evidence retrieved during the investigation, citing procedural lapses in its seizure and examination. They argued that the evidence was in editable format and could have been tampered with, and that the necessary compliance under Section 138B and 138C of the Customs Act was not met.
3. High Sea Sales Transactions: The appellants emphasized that 27 out of the 38 consignments were purchased on a legally valid High Sea Sale basis, and there was no evidence to suggest that the declared value was manipulated to evade ADD.
4. Purpose of ADD: The appellants argued that the sole purpose of ADD is to counteract unfair international trade practices and protect domestic industries, not to generate revenue. They contended that the Department’s reliance on the ICIS price list was flawed, as it did not represent actual transaction values.
Key Arguments by the Respondent 

The Respondent, represented by Additional Commissioner, argued that the investigation revealed a deliberate attempt to evade ADD through artificial inflation of CIF value, use of a dummy intermediary, and fabrication of invoices. The Respondent relied on electronic evidence, including email communications and editable invoices, to substantiate the allegations.

CESTAT’s Observations and Final Order 

After a detailed examination of the case, the CESTAT bench comprising Hon’ble (Member Judicial) and Hon’ble (Member Technical) found several flaws in the order passed by the Commissioner of Customs. The key observations included:
1. Improper Application of Rule 12: The Tribunal noted that Rule 12 of the Customs Valuation Rules does not empower the proper officer to reduce the declared value to a lower level for imposing ADD. The rejection of the transaction value was deemed impermissible as the declared value was higher than the alleged international market price.
2. Lack of Evidence: The Tribunal observed that the Department failed to provide cogent evidence to substantiate the allegations of overvaluation and evasion of ADD. The electronic evidence presented was deemed inadmissible due to procedural lapses in its seizure and examination.
3. Purpose of ADD: The Tribunal emphasized that ADD is a remedial measure designed to protect domestic industries from unfair trade practices, not a tool for revenue generation. The reliance on the ICIS price list was found to be inconsistent with the principles of Customs Valuation under the General Agreement on Tariffs and Trade (GATT).
4. Extended Period of Investigation: The Tribunal noted that the extended period of investigation was not justified, as the Department was aware of the transactions and had assessed the Bills of Entry at the first check.
Based on these findings, the CESTAT set aside the order passed by the Commissioner of Customs and allowed the appeals with consequential relief.

Implications of the Judgment

This judgment is a significant win for importers, as it reinforces the principles of fair valuation under the Customs Valuation Rules and GATT guidelines. It highlights the importance of adhering to procedural requirements for the admissibility of evidence and underscores the need for the Department to provide concrete proof when alleging evasion of duties.

The decision also serves as a reminder that ADD is not a revenue-generating tool but a measure to protect domestic industries from unfair trade practices. Importers can take solace in the fact that the Tribunal has upheld the importance of transaction value and rejected arbitrary valuation methods.

Conclusion

The CESTAT Mumbai’s decision in favor of Surbhit Impex Pvt. Ltd. and other appellants sets a precedent for similar cases involving allegations of overvaluation and evasion of ADD. It underscores the need for transparency, adherence to legal procedures, and the importance of evidence in quasi-judicial proceedings. This judgment is a testament to the robust legal framework that governs customs valuation and anti-dumping measures in India, ensuring fairness and justice for all stakeholders.

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Source: CESTAT Mumbai

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February 7, 2026