High Penalty under Customs Act Imposed on Importer of Rough Marble for Failure to Produce Special Import License: CESTAT reduces Penalty [Read Order]

The Mumbai bench of the Customs, Excise & Service Tax Appellate Tribunal( CESTAT), while allowing the appeal, reduced the high penalty imposed under the Customs Act on the importer of rough marble for the failure to produce a special import license.

Dinesh Pratapchand Shah, the appellant, imported rough marble slabs and filed a Bill of Entry bearing No.106647 on 01.02.2000.  The value declared by the appellant was USD 290.50/- (CIF) per MT.  During the relevant period, the import of marble slabs was allowed only against a special import license, provided the CIF value per MT was USD 450/- or more. 

Since the appellant did not have a special import licence, the matter was adjudicated through an orderr-in-original dated 10.02.2000 through which the value was enhanced to USD 450/- per MT (CIF) for the ssment.  The same was agreed to by the appellant. The goods were confiscated and were allowed to be redeemed on payment of  fine of Rs 2,50,000/- and penalty of Rs.600/- was imposed on the appellant under Section 112(a) of the Customs Act, 1962. 

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The Revenue filed appeal before the Tribunal praying for an increase in the redemption fine and penalty.  The Tribunal vide final order dated 30.05.2002 remanded the matter for fresh adjudication.

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Counsel for the appellant has submitted that the Tribunal has passed final order dated 04.07.2005 against order-in-original dated 23.10.2004 remanding the matter to the original authority.  The original authority through order dated 06.08.2021 has imposed redemption fine of Rs.2,50,000/- and penalty of Rs.4,00,000/-.  He has further argued that the directions of the Tribunal passed in order dated 04.07.2005 through which the matter was remanded to verify margin of profit were not carried out. 

He has further submitted that in order-in-original , it is stated that the appellant had submitted calculation of profit margin duly certified by Chartered Accountant showing that the appellant had incurred losses and that it means that there was no profit and in spite of the said factual position, the original authority has imposed high penalty that establishes that the original authority has not carried out the directions of this Tribunal and, therefore, the said order is bad in law.

The calculation of profit margin relevant period were submitted to the original authority.  However, the original authority has not taken into consideration the contents of the same.  The issue regarding quantum of penalty has already been decided by  Supreme Court in the case of Stonemann Marble Industries. 

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A single bench of Anil G. Shakkarwar, Member (Technical) modified the impugned order to the extent reducing the penalty from Rs.4,00,000/- to Rs.65,000/- under Section 112(a) of Customs Act, 1962 and refused to interfere with the imposition of redemption fine of Rs.2,50,000/-.

To Read the full text of the Order CLICK HERE

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