2026-VIL-1190-CESTAT-MUM-CU
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CUSTOMS CESTAT Cases

Customs - Imposition of Redemption Fine and Penalty for Excess Surface Area in Imported Marble Slabs - The Appellant imported marble slabs with excess surface area marginally exceeding the prescribed tolerance limit, following which Customs rejected the declared transaction value and re-determined it, demanding differential duty along with redemption fine and penalty under Sections 111(l), 111(m), and 114A of the Customs Act, 1962 - Whether redemption fine and penalty are legally sustainable when the excess surface area results from differing measurement methodologies of non-uniform marble slabs and the Appellant does not contest the differential duty liability – HELD - The imposition of redemption fine and penalty is not legally sustainable because the excess surface area of approximately 3% beyond the prescribed 10% tolerance limit is reasonably attributable to the measurement methodology adopted by Customs, which measures the maximum length and maximum breadth of each slab thereby overstating the actual surface area of non-rectangular or broken slabs. The marginal overage does not evidence wilful misstatement or fraudulent intent - Penal consequence like confiscation generally require deliberate defiance of law, conscious disregard of obligation or dishonest conduct. The Sections 111(l), 111(m), and 114A are not strict liability provisions and require an element of mens rea, deliberate defiance of law, conscious disregard of obligation, or dishonest conduct. The fact that the Appellant was ready and willing to pay the differential duty from inception, accepted the measurement report without protest, and made no attempt to evade duty demonstrates the absence of mis-declaration or suppression - The orders-in-appeal confirming the redemption fine and penalty are set aside, with the Appellant remaining liable only for the differential customs duty – The appeal is allowed
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