Dinesh Pratapchand Shah Vs Commissioner of Customs (CESTAT Mumbai)
CESTAT Mumbai reduces penalty on importer for lacking special license in 2000, citing failure to verify profit margin as directed & SC judgment; CESTAT Cuts Penalty for Marble Importer in Decades-Old Case; Tribunal Finds Directives on Profit Margin Verification Unfulfilled; CESTAT Reduces Penalty in Old Marble Case.
Mumbai: The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Mumbai, has reduced the penalty imposed on an importer in a case dating back to 2000 concerning the import of rough marble slabs without a required special license.
The appellant, Dinesh Pratapchand Shah, a partner in the since-dissolved firm M/s. Bono Marble, had imported the marble in February 2000. The import required a special license if the value met a certain threshold (USD 450/MT CIF), which the declared value initially did not, but was later enhanced to by customs with the appellant’s agreement. The goods were confiscated, but allowed to be redeemed on fine, and an initial penalty of Rs. 65,000 was imposed.
Following an appeal by Revenue seeking higher penalties and a subsequent appeal by the appellant against an increased penalty, the case was remanded by the Tribunal in 2005. The 2005 order specifically directed the original adjudicating authority to verify the profit margin on the import transaction and consider the appellant’s submissions on this point when deciding the penalty quantum.
However, in the order passed in August 2021 following this remand, the original authority imposed a penalty of Rs. 4,00,000, maintaining the redemption fine.
Before CESTAT, the appellant argued that the 2021 order failed to comply with the 2005 Tribunal direction regarding profit margin verification. They pointed out that calculations showing losses were submitted but not considered by the adjudicating authority.
CESTAT agreed that the calculation of profit margin, which indicated losses, was not taken into consideration by the original authority, indicating that the directions of the 2005 remand were not carried out. Referring to the principles regarding penalty quantum, including the Supreme Court judgment in Stonemann Marble Industries [2011 (264) ELT 3 (SC)], the tribunal found it appropriate to reduce the penalty.
Taking the facts and circumstances into account, CESTAT modified the impugned order, reducing the penalty under Section 112(a) from Rs. 4,00,000 to the original amount of Rs. 65,000. The redemption fine of Rs. 2,50,000 was not altered. The appeal was partially allowed.
FULL TEXT OF THE CESTAT MUMBAI ORDER
