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TaxTMI 
TaxTMI 
TaxTMI 
2026 (5) TMI 24
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....022 passed by the Commissioner [Impugned order] is assailed in these appeals insofar as it pertains to each of the appellants. M/s. United Natural Stones, Udaipur [United] has assailed in its appeal the confirmation of demand of customs duty of Rs. 10,80,28,243/- under section 28(4) of the Customs Act, 1962 [Customs Act] invoking extended period of limitation covering the period 23.6.2016 to 12.1.2020 with interest under section 28AA of the Customs Act. It has also contested imposition of an equal amount as penalty under section 114A of the Customs Act. The other appellants have assailed the following personal penalties imposed on them: S. No. Appellant Appeal No. Penalty imposed (Rs.) 1 Ashok Kumar, Partner United Natural Stone C/51978/2023 1,00,00,000/- under section 114AA of the Act 2 Dharamveer Singh Kanda, Former Partner United Natural Stone C/51979/2023 10,00,000/- under section 114AA of the Act 3 Pratap Singh Kanda, Partner United Natural Stone C/51980/2023 25,00,000/- under section 114AA of the Act 4 Vikram Singh, Proprietor, Shree Shyam Stone C/51981/2023 20,00,000/- under section 114AA of the Act 5 Harmendr....
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....ails are as given in Table 3 of the SCN follows: Table -3 Year-wise analysis of import & Physical stock M/s United Natural Stones, Kaldwas, Udaipur (100% EOU) Year-wise analysis of import & physical stock (Dressed marble/marble slabs/tiles) Year Qty imported (MT) Assessed value of import (Rs.) (1) (2) (3) 2016-17 (wef 23.6.16) 3372.24 71259567.3 2017-18 1656.72 22399565 2018-19 5606.83 80940166.2 2019-20 4463.36 65503165 TOTAL 15104.15 240102463 Less Physical stock (Rough Marble blocks) available in unit during stock verification on 1011.01.2020 4325.221 4325.22 Less Physical stock (Dressed Marble blocks) available in unit during stock verification on 10-11.01.2020 (17.981 CBM) 48.75 49.74 (after considering SION norms) Less Physical stock (Marble slabs-2 cm) available in unit during stock verification on 1011.01.2020 (23733.337 sqm) 1286.82 1313.08 (after considering SION norms) Less Physical stock (Marble slabs-3 cm) available in unit during stock verification on 1011.01.2020 (12827.169 sqm) 1043.23 1064.52 (after considering SION norms) ....
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....d para 20.5 of the SCN] but the Commissioner has broken it into two parts- the first part being on account of imports being contrary to the FTP and the second part on account of diversion of imported marble [paras 5.14.3 and 5.15.4 of the impugned order] c) The demand on 8,351.58 MT of rough marble blocks was raised on the ground that they were diverted to the local market clandestinely. The SCN does not say that this marble was first received in the factory of United and then diverted. Unless the marble was received within the factory, the jurisdictional officer of United would have no jurisdiction and only the Commissioner of Customs at Mundra from where the goods were imported would have jurisdiction. However, the Commissioner rejected this submission on the ground that the goods were re-warehoused in the factory and then diverted. This goes beyond the SCN. d) As per table 33 of the SCN, the demand was raised on all marble blocks imported by United on the ground that DGFT notification no. 99 dated 20.11.2014 and DGFT notification no. 27 dated 17.9.2016 have been contravened. This assertion is not correct because as per para 6.01 (d) (i) of FTP and 6.01(g) of th....
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.... provision of section 138B of the Customs Act was not complied with. l) The exports of marble were got verified abroad through DRI and they were found to be genuine (para 5.7 of the impugned order). m) The impugned order also discussed some financial transactions between the United and some third parties and has drawn the conclusion that they reflect payments towards clandestinely removed and sold marble. Each of these financial transactions was legitimate and was explained by the United. In any case, none of these statements can be admitted in evidence as the provisions of section 138B of the Customs Act were not complied with. n) The impugned order holds that most of the exports made through third parties were of 'Fantasy Brown' and these were of Indian origin. Neither the shipping bills nor export invoices were provided as evidence. No expert opinion was taken from either from the Directorate of Mines and Geology of Government of Rajasthan or from the Indian Bureau of Mines to support the case of the department. United had, in fact, imported a number of 'Brown' marble blocks. Shri Ashok Kumar had, in his statement, confirmed that they had also imported....
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....n origin to M/s Granite & Marble Depot, USA. (iii) The same is the case with marble slabs sold to M/s Paradigm Rocks Private Limited, Tamil Nadu. M/s Paradigm Rocks Private Limited had exported Fantasy Brown slabs to M/s Granite Global Distribution, USA [pages 332 to 340 of the paper book volume 1]. (iv) M/s Pashupati Exports, Rajasthan have also exported polished brown fantasy marble slabs to the USA [page 354 to 428 of the paper book volume 1]. (v) There is evidence of diversion of imported goods and purchase of indigenous goods [para 5.14 (iii) page 231 of the appeal memo) - * M/s Shree Shyam Stone had deposited an amount of Rs. 1,46,73,365/- in the account of the appellant no. 1, for which no plausible reason was submitted during the investigation proceedings. * Advance payment of Rs. 28,63,910/- booked as Sundry Creditors in the account of M/s Shree Shyam Stone for the purchase of goods from appellant no. 1, meaning thereby that this was for the purchase of imported marble blocks [page 232 of the appeal memo]. * Marble blocks purchased and transported under nine e-way bills [page 727 & 728 of the paper book volume II] by M/....
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....locks were diverted and sold in the domestic market and marble slabs of 'Harmony Brown' made of Indian marble was exported thereby violating the actual user condition of the notification. 17. The next question is how has it been held that 'Harmony Brown' marble is available exclusively in India. Reliance for this is placed on Wikipedia and other information available on the internet. Reliance is placed on the statements of various third parties through which the exports were made that the exported marble was of 'Harmony brown'. Admittedly, United had also procured some marble blocks domestically. The SCN detailed the exports made by United through ten third parties during the relevant period in Table 16 (on page 45 of the SCN) and summarized that 1,584.13 MT of marble was exported by United through these ten parties. Since the total marble procured domestically by United during the relevant period was 196.88 MT (only during 2018-19) way less than the exports through third parties, it was inferred that United had exported indigenous marble blocks/ slabs through third parties and diverted the imported marble blocks (because Harmony brown marble was exported as per the statements w....
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.... the Commissioner admits them as evidence as per section 138B of the Act will they be relevant. 21. Therefore, the demand of duty on 8,351.58 MT of rough marble blocks said to have been diverted into domestic market after exporting marble slabs made of Indian marble cannot be sustained and needs to be set aside. 22. Thus, the demand of duty on either the goods which were still lying in stock or the rough marble alleged to have been diverted after exporting 'Harmony Brown' marble slabs procured domestically cannot be sustained. Penalty under section 114A 23. Section 114A of the Act reads as follows: Section 114A. Penalty for short-levy or non-levy of duty in certain cases. - Where the duty has not been levied or has been short-levied or the interest has not been charged or paid or has been part paid or the duty or interest has been erroneously refunded by reason of collusion or any wilful mis-statement or suppression of facts, the person who is liable to pay the duty or interest, as the case may be, as determined under sub-section (8) of section 28 shall also be liable to pay a penalty equal to the duty or interest so determined: Provided that ....