Marble vs Dolomite Dispute: CESTAT Rejects Reclassification Based on Samples of Other Importers

The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the Customs department cannot ignore their own laboratory test reports and instead rely on tests conducted on goods imported by other importers to reclassify products and raise duty demands. The bench of S.K. Mohanty (Judicial Member) and M.M. Parthiban (Technical Member) has observed that the Customs laboratory reports for seven consignments repeatedly described the goods as being composed of calcium and magnesium carbonates—precisely the composition associated with dolomite under applicable standards. The case arose from imports made by M/s Shri Parasnath Exports, Silvassa, between February 2018 and March 2021. The importer declared the goods as "Rough Dolomite Blocks" under Customs Tariff Item (CTI) 2518 1000 and claimed concessional customs duty benefits available for dolomite imports. However, the Directorate of Revenue Intelligence (DRI) initiated an investigation alleging that the importer had actually imported "Rough Marble Blocks" while misdeclaring them as dolomite blocks to avail lower customs duties. According to the DRI, the goods ought to have been classified under CTI 2515 1210, attracting substantially higher Basic Customs Duty (BCD) of 40% and IGST of 12%. Based on this allegation, a show cause notice was issued demanding differential customs duty of ₹2,03,16,943 along with interest, confiscation of goods, redemption fine, and multiple penalties against the importer, its partner, and other parties involved. The Commissioner of Customs accepted the DRI's case and passed an order confirming differential customs duty demand of ₹2.03 crore; interest liability; equal penalty under Section 114A of the Customs Act; redemption fine of ₹40 lakh; and additional penalties under Sections 112 and 114AA on the importer, partner Sampat Ostwal, customs broker and other individuals. The adjudicating authority relied heavily on Geological Survey of India (GSI) reports relating to samples drawn from consignments imported by other importers, which had described similar goods as "Dolomitic Marble." The appellants argued that in seven out of nine Bills of Entry, Customs authorities themselves had drawn representative samples at the time of import and sent them for testing to the Customs Revenue Control Laboratory (CRCL) and Deputy Chief Chemist (DYCC). The laboratory reports consistently recorded that the imported goods were composed of carbonates of calcium and magnesium, identifying them as "Dolomite." Several reports even specified the chemical composition, showing substantial percentages of calcium carbonate and magnesium carbonate, consistent with dolomite. The importer contended that when specific test reports for the actual imported goods existed, Customs could not disregard those reports and rely on tests conducted on consignments belonging to other importers. The CESTAT closely examined the competing tariff entries. While Heading 2515 covers marble and travertine, Heading 2518 specifically covers dolomite, whether or not calcined or sintered. The Tribunal observed that the dispute essentially revolved around determining whether the imported stone was marble or dolomite. The Tribunal further observed that: "The imported goods are identified in the chemical examination as 'dolomite' and not as 'marble'." It emphasized that the department had neither challenged nor disproved its own laboratory reports. Nor had it conducted any re-testing to contradict the findings. A crucial aspect of the ruling was the Tribunal's criticism of Customs authorities for relying on test reports relating to goods imported by entirely different importers. According to the Bench, once representative samples of the appellant's own goods had been tested and classified as dolomite, those reports could not be ignored in favour of test reports obtained from unrelated consignments. The Tribunal held that such an approach was legally unsustainable and contrary to settled principles governing tariff classification. The Bench also relied on an earlier Ahmedabad CESTAT decision in the case of NITCO Limited, which arose from the same DRI investigation involving similar allegations regarding marble and dolomite imports. In that case too, the Tribunal had held that classification must be based on actual laboratory reports relating to the imported goods rather than assumptions derived from other evidence. The Tribunal noted that the department had accepted that earlier ruling and had not challenged it further. Setting aside the Commissioner's order, the Mumbai Bench concluded that the department had failed to establish that the imported goods were marble blocks rather than dolomite blocks. Since the department's own laboratory reports identified the goods as dolomite, the reclassification under Heading 2515, the consequent differential duty demand of ₹2.03 crore, confiscation of goods, redemption fine and penalties could not survive. Case Details Case Title: Sampat Ostwal Versus Commissioner of Customs Citation: JURISHOUR-1573-CES-2026(MUM) Case No.: Customs Appeal No. 86354 of 2025 Date: 08.06.2026 Counsel For Appellant: Sanjay Singhal, Advocate Counsel For Respondent: Mahesh Patil, Authorized Representative Click Here To Read Order Read More: Customs Dept. Loses Rs. 5,000-Crore Adani Valuation Dispute as CESTAT Says Issue Already Settled

Marble vs Dolomite Dispute: CESTAT Rejects Reclassification Based on Samples of Other Importers

Membership Required

Latest articles

JURISHOUR | TAX LAW DAILY BULLETIN : 31 JULY, 2026

Ad Valorem Court Fee Mandatory Even When Appeal Challenges Only Solatium and Statutory Benefits in Land Acquisition Cases: Supreme Court

Civil Disputes Can’t Be Given Criminal Colour: Supreme Court Quashes Cheating, Criminal Breach of Trust Case in Failed Real Estate Joint Development Deal

Form 26AS Import Glitch Surfaces on ITR Due Date

More like this

JURISHOUR | TAX LAW DAILY BULLETIN : 31 JULY, 2026

Ad Valorem Court Fee Mandatory Even When Appeal Challenges Only Solatium and Statutory Benefits in Land Acquisition Cases: Supreme Court

Civil Disputes Can’t Be Given Criminal Colour: Supreme Court Quashes Cheating, Criminal Breach of Trust Case in Failed Real Estate Joint Development Deal

About us

Company

Categories