NSE/BSE Codes: NSE: MUKKA, BSE: 544135

Summary of Key Information:

Nature of Event / Disclosure:

Disclosure of favorable final order received from Customs, Excise & Service Tax Appellate Tribunal (CESTAT) regarding customs duty litigation, made under Regulation 30 of SEBI Listing Obligations and Disclosure Requirements Regulations, 2015.

Involved Parties / Authorities:

  • Commissioner of Customs, Mangalore (opposing party)
  • Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Bangalore Regional Bench (adjudicating authority)
  • Mukka Proteins Limited and three other appellants

Date / Timeline of Event:

  • Import period: September 2014 to October 2015
  • Show Cause Notice date: 19 December 2017
  • Initial adjudication order: 24 July 2019
  • First CESTAT order: 03 March 2022 (matter remanded)
  • Order-in-Original date: 30 April 2024
  • Final CESTAT order date: 24 June 2026
  • Company intimation date: 06 August 2026

Brief Description of Outcome / Dispute:

The litigation pertained to the valuation of imported fish meal and consequential demand of differential customs duty, interest, redemption fine and penalties. The Customs Department alleged undervaluation and misdeclaration of goods imported under the Advance Authorisation Scheme. The CESTAT ultimately set aside the entire demand, holding that the Department failed to establish undervaluation with cogent evidence and that the demand was not sustainable.

Impact of Outcome:

Financial Impact:

The quantified demand of ₹15,24,30,536 (customs duty, interest, redemption fine and penalties) has been completely set aside by the CESTAT order. The company may be entitled to seek consequential refund of approximately ₹75,00,000 previously paid, subject to any further appeal or proceedings initiated by the Department.

Operational / Business / Strategic Impact:

The favorable outcome removes a significant contingent liability from the company's financial position. It validates the company's import valuation methodology and compliance with customs regulations during the 2014-2015 period. No operational disruptions or compliance requirements are indicated as a result of this outcome.

Other Implications:

The successful defense against customs allegations may positively impact the company's reputation regarding regulatory compliance. The precedent set by the CESTAT order may provide guidance for similar cases in the future.

Next Steps / Required Actions:

The company is entitled to seek consequential relief/refund in accordance with law. The outcome is subject to any further appeal or proceedings that might be initiated by the Customs Department against the CESTAT order.