Case Law Details
Jain Grani Marmo Pvt Ltd Vs C.C.-Kandla (CESTAT Ahmedabad)
Introduction: In a significant ruling, the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) Ahmedabad has provided relief to Jain Grani Marmo Pvt Ltd, an entity embroiled in a customs duty demand over the alleged misdeclaration of weight in imported marble blocks. This decision sets an important precedent for understanding the nuances of trade practices and the rights of Export Oriented Units (EOUs) under customs law.
Detailed Analysis: Jain Grani Marmo Pvt Ltd, a 100% EOU engaged in the manufacture and export of marble slabs and tiles, found itself at the center of a legal tussle with the customs authorities. The department accused the company of misdeclaring the weight of rough marble blocks imported under Tariff Item 25151210, availing the benefits of Notification No. 52/2003-Cus as amended. The core of the dispute revolved around the claim that by declaring a lesser weight, Jain Grani Marmo violated specific policy circulars and exceeded the quantity/weight covered by their procurement certificate.
The tribunal examined various aspects of the case, including the applicability of policy circular No. 13(RE-08)/2004-2009 to EOUs, the interpretation of the Handbook of Procedures, and the established trade practices regarding the weight of imported marble blocks. Jain Grani Marmo argued that as a 100% EOU, it was exempt from customs duty for goods used in manufacturing for export, irrespective of their weight, citing previous legal decisions that supported their stance.
The crux of CESTAT’s ruling hinged on the understanding that the alleged excess weight of the imported marble blocks was a result of standard trade practices. It was acknowledged that the physical weight of rough marble blocks could exceed the declared weight due to their irregular shapes and the industry practice of charging based on an estimated usable weight rather than actual weight. Furthermore, the tribunal found no evidence to suggest that Jain Grani Marmo had misused the imported goods or diverted them from the intended manufacturing processes.
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