The Customs, Excise and Service Taxes Appellate Tribunal (CESTAT), Hyderabad, recently overturned its decision to reclassify imported products of Jasmine Biotechnologies from bio-fertilizers to pesticides.
The court ruled that the customs authorities failed to provide convincing, reliable and legally justifiable evidence that the products were pesticides or prohibited goods.
A bench comprising Judicial Commissioner Angad Prasad and Technical Commissioner Ak Choteesh allowed four related appeals against the order of the Appellate Commissioner, Hyderabad.
The dispute concerns imported products declared as plant protection product “Jinbo K Bio-fertilizer/Exodus”, which fall under customs tariff no. 3101 0099.
The agency stated that the imported products contained matrine and related compounds. Therefore, under the Pesticides Act of 1968, these products must be classified as pesticides under Chapter 38 and subject to registration.
Customs authorities have accused the country of providing false information and violating the Pesticides Act based on laboratory reports from the Regional Centre for Organic Farming (RCOF) in Bangalore and the Indian Institute of Chemical Technology (IICT) in Hyderabad.
These goods were confiscated under Sections 111(d) and 111(m) of the Customs Act. Fines were also imposed under Sections 112(a) and 114AA.
However, the court found significant inconsistencies in the laboratory reports. The court noted that one of the reports explicitly stated that “the analysis results did not show any peaks associated with pesticides.”
”Once the laboratory itself has recorded the absence of pesticide peaks, the department cannot selectively rely on the presence of natural alkaloids to conclude that the product is an insecticide,” the judge said.
The court ruled that the mere presence of natural alkaloids does not automatically prove that an imported product is a pesticide.
The court also noted that the agency failed to provide evidence to support the commercial viability of the products, expert opinions, or marketing research reports—evidence that could prove that the products had received commercial recognition or were sold as pesticides.
The court further stated: “The Department failed to prove intentional concealment or misrepresentation. All imported goods were registered in accordance with official import declarations, accompanied by a description of the products and relevant supporting documents. These goods were not imported clandestinely.”
The court also held that the failure to cross-examine the authors of the technical report constituted a violation of the principle of natural justice.
”The penalties imposed under Sections 112(a) and 114AA of the Customs Act are wholly untenable as there is no evidence of wilful involvement and fraud, wilful forgery or wilful tax evasion,” the judge added.
The court held that the agency had failed to provide convincing, reliable and legally admissible evidence to support its claims and therefore found the reclassification of the products under Customs Tariff No. 3808 9199 to be unjustified.
Thus, the confiscation of property, the collection of taxes, the payment of fines, and the imposed sanctions were overturned. The appeal was granted.
Post time: May-19-2026
