CESTAT Chennai Upholds Denial of Customs Duty Exemption on Imported Chicken Sausages — Western Farm Fresh Pvt. Ltd. vs Commissioner of Customs

Background and Overview

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai, recently delivered a significant ruling in the matter of Western Farm Fresh Pvt. Ltd. Vs Commissioner of Customs, dismissing the appeal filed by the importer against the denial of customs duty exemption on imported chicken sausages. The order, pronounced in open court on 30.03.2026, reaffirms critical principles surrounding exemption notifications under customs law — particularly the necessity of strict compliance with prescribed conditions and the timely submission of supporting documentation.

This ruling carries substantial implications for importers who seek concessional duty benefits under customs notifications, especially when the eligibility criteria are explicitly restricted by the terms of the notification itself.

Facts of the Case

The assessee, Western Farm Fresh Pvt. Ltd., imported a consignment described as 'D&W Chicken Spicy Sausages' vide Bill of Entry No. 6592089 dated 19.04.2012. The goods were classified under CTH 16010000 and assessed to Basic Customs Duty (BCD) at 8% by invoking the benefit of Notification No. 125/2011-Cus. dated 30.12.2011 (Sl. No. 33). Additionally, CVD at 6% was levied on the Retail Sale Price (RSP) value, with Special CVD charged at Nil rate under the applicable notification.

The Revenue, upon examination, took the position that the assessee's claim for exemption under Notification No. 125/2011-Cus. was unsustainable. The basis for this objection was Note 2 of the said notification, which categorically excludes goods listed in its Annexure from the scope of the exemption benefit. Specifically, Sl. No. 233 of the Annexure covers goods falling under Sub-Heading 160100, which is precisely the sub-heading under which the imported goods were classified.

Consequently, the Department issued:

  • A Demand Notice dated 25.04.2013 under Section 28 of the Customs Act, 1962, and
  • A Show Cause Notice (SCN) dated January 2014 (date not specified) for alleged misdeclaration of RSP value.

Adjudication and First Appellate Proceedings

The Original Authority adjudicated the matter vide Order-in-Original No. 40985/2015 dated 28.08.2015, wherein it:

  • Rejected the RSP declared by the assessee as unsustainable on the basis of the SCN;
  • Confirmed the differential duty demand as proposed in the Demand Notice;
  • Imposed penalty on the assessee; and
  • Ordered confiscation of the imported goods.

Aggrieved by this outcome, the assessee preferred an appeal before the First Appellate Authority. During this stage, the assessee — for the first time — raised an alternate claim for exemption under Notification No. 26/2000-Cus. dated 01.03.2000, acknowledging (at least implicitly) that the primary claim under Notification No. 125/2011-Cus. was not tenable.