Customs Act, 1962 – Mis-declaration – Classification of Goods – Advance Authorization Scheme – Differential Duty – Redemption Fine – Penalty – Customs Tariff Heading 0511 9190 – Customs Tariff Heading 3504 0099 – Notification No. 96/2009.
High Court of Kerala
Dr. Justice A.K. Jayasankaran Nambiar & Mr. Justice P.M. Manoj
Cus. Appeal Nos. 2/2025 & 5/2024; June 26, 2025
The High Court of Kerala adjudicated appeals arising from a dispute over the classification of imported goods as ‘fish protein’ versus ‘decalcified fish scale’ under the Customs Act, 1962. The appellant, Nitta Gelatin India Ltd., imported goods declared as ‘fish protein’ under the advance authorization scheme, which were later classified by the Customs Department as ‘decalcified fish scale’ under Customs Tariff Heading 0511 9190, leading to a demand for differential duty, confiscation, redemption fine, and penalties. The CESTAT partially upheld the classification but set aside the differential duty, fine, and penalties for past imports (42 consignments) while sustaining the duty demand for 9 consignments under provisional assessment. The High Court held that the mis-declaration did not violate the conditions of the advance authorization scheme, as the scheme allowed a nil rate of duty regardless of classification under Chapter 5 or 35. Relying on Titan Medical Systems Pvt. Ltd. v. Collector of Customs (2003), the Court ruled that the Customs authorities could not deny the benefit of Notification No. 96/2009 due to mis-declaration when the licensing authority had not canceled the authorization. The demand for differential duty, redemption fine, and penalties was set aside for all consignments, as the classification had no bearing on the legality of imports under the advance authorization scheme.
