Mukka Proteins: CESTAT quashes ₹15.24 crore duty (2026)

What CESTAT decided and why it matters

The Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Bangalore Regional Bench, has set aside a customs duty demand of ₹152.43 million against Mukka Proteins Limited. The tribunal held that the Customs Department did not establish undervaluation with cogent evidence. The ruling relates to a long-running dispute on valuation of imported fish meal. For investors, the order is material because it removes a disclosed contingent liability and also eliminates linked exposures such as interest, redemption fine, and penalties arising from the same demand. The company indicated that the relief can potentially free up cash that may have been held against the earlier order. The tribunal’s decision was communicated through the company’s stock exchange disclosure dated August 6, 2026.

Orders, appeals, and the scope of relief

CESTAT’s final orders are numbered 20934–20937/2026 and are dated June 24, 2026. The tribunal allowed all four appeals filed by Mukka Proteins and three other appellants. It also dismissed the differential customs duty demand, unquantified interest, redemption fines, and penalties imposed earlier by the Commissioner of Customs, Mangalore. The order explicitly records that the quantified claim of ₹152.43 million, along with unquantified interest and the interest-linked Section 114A penalty, no longer subsists. Mukka Proteins is entitled to consequential relief in accordance with law, as recorded in the order. The net outcome is a clean set-aside of the demand on merits due to lack of evidence on undervaluation.

Potential refund of amounts already appropriated

Along with the set-aside, the filing notes that Mukka Proteins may be eligible to seek a refund of ₹7.50 million that had been appropriated under the previous Order-in-Original. The refund, if pursued, is subject to applicable statutory procedures. The tribunal’s order itself does not state an automatic payout; it indicates consequential relief according to law. For shareholders, the refund point is relevant because it suggests there may have been cash outflow or adjustment already made against the earlier demand. The company’s ability to recover the amount will depend on procedural compliance and any timelines under the relevant customs law framework.

Stock exchange disclosure and compliance

Mukka Proteins disclosed receipt of the CESTAT order to stock exchanges on August 6, 2026. The company stated the disclosure was made under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The timing matters because the tribunal’s order is dated June 24, 2026, while the market disclosure came in early August. This is consistent with how companies typically report receipt of formal orders and their implications once documentation is received and evaluated. The disclosure positions the order as a litigation resolution with balance sheet implications.

Key facts at a glance

Other customs proceedings investors are tracking

Separately, Mukka Proteins has disclosed a Bond Enforcement Order from the Commissioner of Customs, Mangaluru. The text references a demand of ₹176.70 million plus applicable interest, described as arising from alleged non-submission of Export Obligation Discharge Certificates under the Advance Authorisation Scheme. It also mentions Bond Enforcement Order No. 26/2025-26 received on December 29, 2025, demanding customs duty recovery of ₹76.70 million plus interest, linked to alleged non-compliance under DGFT advance licence scheme requirements. The company stated it is examining the order and evaluating legal remedies, including submission of relevant documents and exploring remedies under law. It also stated that, except for the customs duty amount and applicable interest mentioned, there is no other expected impact on financials or operations.

Export incentives show cause notice

Mukka Proteins also received a Show Cause Notice from the Office of the Commissioner of Customs, Mangaluru, demanding recovery of ₹3.037 million in export incentives. The notice alleges failure to provide proof of foreign exchange realization for certain exports. The claimed recovery includes ₹1.708 million in Duty Drawback and ₹1.328 million in RoDTEP. The company stated it is reviewing the notice, preparing a response, and plans to file its reply within the stipulated time frame. It also disclosed the development to NSE and BSE in line with SEBI requirements.

GST litigation outcome: nil demand order

On the GST side, Mukka Proteins disclosed that it concluded a litigation matter with the State Tax Officer, Porbandar, with a final order dated December 18, 2025. The final order, issued under Section 73 of the CGST/GGST Act, 2017 along with Form GST DRC-07, dropped all proceedings and reflected zero demand. The matter originally involved a demand notice for FY 2021-22 of ₹1,410.60 million, which was later reduced to ₹2.716 million in a Show Cause Notice before being fully resolved with nil tax, interest, penalty, or late fee payable. The company’s disclosure stated that no financial liability subsists pursuant to the final order.

Financing and corporate actions disclosed

The text also notes that Mukka Proteins shareholders approved issuance of 20,000,000 convertible warrants aggregating up to ₹4,700 million through a postal ballot. While the CESTAT relief reduces one contingent liability, the warrant issuance is a separate capital-raising decision and sits alongside the company’s broader strategic and compliance updates. The same set of disclosures also referenced a deferred proposed acquisition of Mukka Proteins Vietnam Co., Ltd. to June 30, 2026, pending regulatory approvals.

Market impact and why this order is significant

From a market perspective, CESTAT’s set-aside removes a quantified customs duty exposure of ₹152.43 million and extinguishes linked unquantified interest and penalties tied to that proceeding. It also opens the door, subject to procedure, for a potential refund of ₹7.50 million that had been appropriated earlier. The practical effect is that one major customs valuation dispute has been resolved in the company’s favour at the appellate tribunal level. At the same time, investors will likely continue to monitor the separately disclosed Bond Enforcement Order and the export incentive show cause notice, as these are distinct matters with their own legal and factual tracks.

Conclusion

CESTAT’s June 24, 2026 order gives Mukka Proteins relief from a ₹152.43 million customs duty demand related to alleged undervaluation of imported fish meal, with consequential relief available under law. The company disclosed the receipt of the order on August 6, 2026. Next updates to watch include any procedural steps on the potential ₹7.50 million refund and the company’s stated legal response to the separate customs and export incentive proceedings already disclosed to the exchanges.