COMMISSIONER OF CUSTOMS (IMPORT) vs. STONEMAN MARBLE INDUSTRIES & ORS

CIVIL APPEAL No. 4371/2004Supreme Court[2011] 1 S.C.R. 54521 January 2011Bench: 2 JudgesAuthor: D.K. JAIN, A.K. PATNAIK11 pages
AI SummaryDismissed

What were the facts?

The assessee, Stoneman Marble Industries & Ors., imported rough marble blocks classified under sub-heading 2515.12 of the Customs Tariff Act, 1975. The imports were made without the required import licence and, in some instances, the quantity and price were mis-declared. Consequently, the imported goods were confiscated under Section 111(d) of the Customs Act, 1962. The importers were offered redemption of goods upon payment of a redemption fine under Section 125 and a penalty under Section 112(a). The Customs, Excise and Gold(Control) Appellate Tribunal (CEGAT) partly allowed the importers' appeals, reducing the redemption fine and penalty to 20% and 5% of the CIF value respectively, finding the facts similar to a previous judgment. The Revenue applied to the High Court under Section 130A for a reference of questions of law, which the High Court rejected, holding no question of law arose. The Revenue appealed this rejection to the Supreme Court.

What did the Supreme Court hold?

The Supreme Court held that the High Court was justified in declining to issue a direction to the Tribunal to make a reference under Section 130A of the Customs Tariff Act, 1975. On the first issue, the Court reiterated that it is for the party applying for reference to clearly state the question of law. The Revenue failed to assail the Tribunal's finding that the facts in the instant cases were similar to those in the cited judgment. The Court emphasized that unless the correctness of facts, on the basis of which an inference is drawn by the Tribunal, is put in issue, a question of law does not arise. The Revenue did not discharge its burden by specifically challenging the Tribunal's finding as perverse. On the second issue, while acknowledging that a standard formula cannot be laid down for redemption fines and penalties, the Court found that when a fact-finding body like the Tribunal returns a finding that the facts are similar, and this finding is not questioned, the uniform levy of fines and penalties in such cases cannot be construed as laying down an absolute formula. The Revenue's failure to challenge the Tribunal's factual finding as perverse meant no question of law arose. Therefore, the appeals were dismissed.

What were the issues?

1. Whether a question of law arises from the Tribunal's order when the Revenue does not assail the Tribunal's finding that the facts in the present cases are similar to those in a cited judgment, thereby not challenging the factual basis of the Tribunal's inference, as required under Section 130A of the Customs Tariff Act, 1975? Assessee's Contention: The judgment does not record specific arguments from the assessee regarding this issue. The High Court's decision, upheld by the Supreme Court, implies that the assessee's position was that no question of law arose. Revenue's Contention: The Revenue contended that questions of law arose from the Tribunal's order and sought a reference to the High Court under Section 130A. They argued that the Tribunal's finding of similarity in facts was not sufficient to prevent a question of law from arising, especially concerning the imposition of redemption fine and penalty. 2. Whether the uniform levy of redemption fine and penalty in cases where the Tribunal finds the facts to be similar, and such finding is not questioned as perverse, can be construed as laying down an absolute formula, thereby raising a question of law under Section 130A of the Customs Tariff Act, 1975? Assessee's Contention: Not recorded. Revenue's Contention: The Revenue argued that a standard formula for imposing redemption fines and penalties cannot be laid down, and uniform application in similar cases might constitute such a formula, raising a question of law.

Which sections of the Income-tax Act were involved?

Section 130-A,Section 111 (d),Section 112,Section 125

AI-generated summary — verify with the full judgment below

(2011] 1 S.C.R. 545 COMMISSIONER OF CUSTOMS (IMPORT} A \/. ---< STONEMAN MARBLE INDUSTRIES & ORS. .... (Civil Appeal Nos. 4371-4383 of 2004 etc.} JANUARY 21, 2011 8 [D.K. JAIN AND A.K. PATNAIK, JJ.) ~ CUSTOMS TARIFF ACT, 1975: ...

Section 130-A - Application by Revenue - Held: It is for c the party applying for reference to clearly state the question of law which he seeks to be referred -In the instant case, the Revenue did not assail the Tribunal's finding to the effect that the facts in the instant case were similar to those in the cited judgment - Unless the correctness of facts, on the basis D wherein an inference is drawn by the Tribunal, is put in issue, ~ a question of law does not arise from its order - Revenue did not discharge its burden u/s 130-A in as much as it did not specifically challenge the Tribunal's finding as being perverse - Therefore, the High Court was justified in declining to issue E direction to the Tribunal to make a reference u/s 130A.

Section 111 (d), 112 and 125 - Confiscation of imported '1--- goods - Redemption fine and penalty - HELD: A standard formula cannot be laid down for imposition of redemption. fine and penal

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 111 (d)

All 30 judgments and leading authorities on Section 111 (d) →

Recent GST High Court judgments

Search GST case law →