Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(CESTAT) 49

CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL
Dilip Gupta, President, P.V. Subba Rao, Member (Technical)
M/s Marble City India Limited – Appellant
Versus
Principal Commissioner of Customs – Respondent
CUSTOMS APPEAL NO. 50093 OF 2025 | CUSTOMS APPEAL NO. 50092 OF 2025 | CUSTOMS APPEAL NO. 50225 OF 2025 | CUSTOMS APPEAL NO. 50847 OF 2025 | CUSTOMS APPEAL NO. 52306 OF 2024 | CUSTOMS APPEAL NO. 50868 OF 2025

Advocates:
Shri B.L. Narasimhan, Ms. Nupur Maheshwari, Shri Dhruv Matta, Ms. Simone Jain
Shri Ranjan Prakash, Shri Rajesh Singh

Penalties under the Customs Act cannot be imposed without clear evidential support for wrongdoing, emphasizing procedural correctness and natural justice.

Headnote:(A) Customs Act, 1962 - Sections 111 and 112 - Appeal against penalties for import of rough marble without valid licenses - Appeals of Marble City and related parties to contest show cause notice and penalties imposed based on discrepancies in licensing and import records. Court finds multiple customs officers processed the imports correctly and thus, no solid basis for claims of improper conduct was established. (Paras 2, 15, 27)

(B) Principle of natural justice - Appellant’s rights to defense were compromised by the non-provision of critical documents as directed by the Delhi High Court. Court stresses necessity for proper evidential basis before imposing substantial penalties. (Paras 11, 18, 26)

Facts of the case:
The appellants contested orders imposing penalties for importing rough marble blocks without adequate licenses, challenging the sufficiency of the evidence provided in the show cause notice and alleging non-compliance with a High Court order regarding document provision.

Findings of Court:
The court determined that the administrative processes within Customs were followed and that assumptions made by Customs lacked evidential support. Therefore, penalties could not be justified. (Paras 27, 28)

Issues: The court examined the validity of penalties under sections of the Customs Act, the effect of non-provision of documents on the appellant's defense, and whether assessments made by customs officers involved were proper. (Para 25)

Ratio Decidendi: The court held that in the absence of direct evidence of wrongdoing involving any collusion or negligence by Customs officers, the original orders imposing penalties were unjustified. Emphasized the requirement of evidential backing for enforcement actions in customs law. (Paras 24, 26)

Result: Impugned orders set aside; all appeals allowed.

Table of Content
1. investigation established discrepancies in import licenses. (Para 8 , 10)
2. administrative processes for customs clearances were adequately followed. (Para 15 , 19)
3. penalties require concrete evidence of wrongdoing. (Para 24 , 26)

P.V. SUBBA RAO

All these appeals assail the same impugned orders.

Customs Appeal No’s. 50093, 50092, 50225 and 50847 of 2025 were heard on 18.11.2025. Customs Appeal No’s. 52306 of 2024 and 50868 of 2025 were heard on 19.11.2025 and orders were reserved.

2. M/s. Marble City India Ltd, Marble city and its Director Shri Saket Dalmia, Dalmia M/s Vimal Forwarders Pvt. Ltd., M/s Shirdi Sai Shipping Services, M/s Professional Impex Pvt. Ltd. and M/s Maas Infra and Logistics Ltd. filed these six appeals to assail the orders dated 30.9.2024 and 08.10.2024, impugned orders passed by the Principal Commissioner deciding the proposals made in the show cause notice dated 17.1.2014, SCN issued by the Directorate General of Revenue Intelligence, DRI to assail the penalties imposed on them.

3. Marble City was formed by amalgamation of two companies M/s. P G Industries Ltd, PG and M/s. Priceless Overseas Limited, Priceless to whom the SCN was issued. During the period (December 2003 to April 2008), both PG and Priceless were in the business of importing, processing, stocking and selling rough marble blocks/slabs and Shri Dalmia was their Director. During the relevant period, import of rough marble blocks was restricted under the Foreign Trade Policy and they could be imported only on a Special Import Licence, SIL issued by the Director General of Foreign Trade, DGFT

4. If rough marble was imported and a Bill of Entry was filed and thereafter it was found that either the importer had no SIL or that the SIL did not cover the full quantity of the imported marble, it will be liable confiscation under section 111 of the Customs Act, 1962 , Act and the importer will be liable to penalty under section 112 of the Act.

5. Before dealing with the facts of this case, it will be necessary to review the typical processing of imports. When goods are imported and a Bill of Entry is filed (under section 46 of the Act) for home consumption, the Bill of Entry passes through four Customs officers:

a) Customs Appraiser of the Appraising Group in the Custom House who assesses the Bill of Entry and submits to the Assistant Commissioner or Deputy Commissioner of the group;

b) The Assistant Commissioner or Deputy Commissioner of the Appraising Group in the Custom House assesses the Bill of Entry under section 17 of the Act;

c) The Customs Examiner examines the goods physically in the import shed to ensure what is imported is what has been declared in the Bill of Entry and other papers, writes an examination report and if necessary, refers the matter back the Assistant Commissioner in the Appraising Group (examination is also a part of assessment); and

d) The customs ‘out of charge’ officer issues an order permitting their clearance for home consumption under section 47 of the Act.

6. If it is found that import of the goods requires a licence and the importer had no valid licence to cover the import, the Assistant Commissioner or Deputy Commissioner of the group will typically adjudicate the matter and confiscate the goods under section 111 of the Act and impose penalties after issuing a show cause notice under section 124 of the Act. If any of the other four officers notices the lack of the required licence, he will refer it to the Assistant Commissioner or Deputy Commissioner of the Group for adjudication. Whenever goods are confiscated, as per section 125, the officer may, if the goods are prohibited and shall in respect of other goods, give the importer an option of redeeming them by paying a fine in lieu of confiscation (it is commonly known as redemption fine).

7. While the Bills of Entry are filed online on the Indian Customs Electronic Data Interface System, ICES the adjudication process starting from issuing the SCN (oral o

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