CESTAT Mumbai Ruled that the goods were correctly classified as ‘Rough Dolomite Blocks’ under CTI 2518 1000

Aadrikaa Legal Services (ALS) – IDT Tax I Arbitration I Litigation

Date: 10.06.2026

CESTAT Mumbai Ruled that the goods were correctly classified as ‘Rough Dolomite Blocks’ under CTI 2518 1000

A recent decision by the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Mumbai, has brought clarity to the classification and duty assessment of imported stone blocks, specifically concerning the distinction between ‘Rough Dolomite Blocks’ and ‘Rough Marble Blocks.’ The case, involving Shri Parasnath Exports and its partner Sampat Ostwal, highlights the complexities of customs classification, the importance of scientific testing, and the legal standards for evidence and natural justice in customs proceedings.

Background of the Case

Shri Parasnath Exports, a regular importer of stone blocks for processing into marble slabs, declared their imports as ‘Rough Dolomite Blocks’ under Customs Tariff Item (CTI) 2518 1000, availing duty exemptions accordingly. However, the Directorate of Revenue Intelligence (DRI) alleged that these goods were actually ‘Rough Marble Blocks’ (CTI 2515 1210), which attract significantly higher customs duties (40% BCD and 12% IGST).

Key Allegations by DRI

• The DRI claimed mis-declaration and misclassification, asserting that the goods were dolomitic marble, not dolomite.
• Investigations included factory searches, document scrutiny, and reliance on test reports from the Geological Survey of India (GSI) on similar imports by other companies.
• A show cause notice demanded reclassification, confiscation, differential duty of over Rs. 2 crore, and heavy penalties on the importers and associated parties.

The Appellants’ Defense

• The importers argued that their goods were tested by the Customs Revenue Control Laboratory (CRCL), which confirmed the composition as dolomite (carbonates of calcium and magnesium).
• They contended that test results from other importers’ consignments could not override direct test results of their own goods.
• The appellants also cited previous favorable tribunal decisions (notably in the NITCO Limited and Stonex India cases) and pointed out that the department had accepted those outcomes.
• They challenged the denial of cross-examination of GSI officers and the reliance on secondary evidence.

Legal and Technical Analysis

Customs Tariff and Classification Rules

• The Customs Tariff Act, 1975, and its General Rules for Interpretation (GIR) require classification based on the goods’ actual characteristics, supported by scientific evidence.
• CTI 2515 1210 covers marble blocks, while CTI 2518 1000 covers dolomite blocks. The distinction hinges on mineral composition and physical properties.

Laboratory Test Reports

• Seven separate test reports from CRCL for the importers’ consignments confirmed the goods as dolomite, with specific percentages of calcium and magnesium carbonates.
• The tribunal emphasized that when direct test reports are available, they must take precedence over reports from similar but unrelated consignments.

Judicial Precedents

• The tribunal referenced earlier decisions where similar disputes were resolved in favor of the importers based on direct laboratory evidence.
• It reiterated that the burden of proof for reclassification lies with the customs authorities, and each consignment must be assessed on its own merits.

Principles of Natural Justice

• The tribunal criticized the denial of cross-examination and the reliance on electronic evidence without proper certification, citing Supreme Court guidelines on admissibility of electronic records.

Tribunal’s Findings and Final Order

• The CESTAT Mumbai set aside the order of the Commissioner of Customs, holding that the goods were correctly classified as ‘Rough Dolomite Blocks’ under CTI 2518 1000.
• All demands for differential duty, confiscation, and penalties were quashed.
• The tribunal stressed that consistent legal standards must be applied, especially when identical issues have been previously adjudicated.

Implications for Importers and Customs Practice

1. Scientific Evidence Prevails: Direct laboratory test reports on the actual goods are decisive for classification.
2. Burden of Proof: Customs authorities must substantiate reclassification with specific evidence for each consignment.
3. Natural Justice: Importers are entitled to cross-examination and proper procedural safeguards, especially regarding electronic evidence.
4. Consistency in Adjudication: Once a legal issue is settled in similar circumstances, authorities should not take contrary positions without new evidence.

Conclusion

This CESTAT Mumbai ruling reinforces the primacy of scientific testing and due process in customs classification disputes. It provides a clear precedent for importers facing similar allegations and underscores the need for customs authorities to adhere strictly to legal and procedural standards. The decision is a significant reference point for the stone import industry and customs practitioners alike.

Source: CESTAT Mumbai

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