Tribunal upholds Rs. 10,00,000 penalty for purchasing diverted diamonds

The Tribunal upheld the penalty of Rs. 10,00,000/- imposed on the appellant under Section 112(a) of the Customs Act, 1962 for purchasing diamonds clandestinely diverted from SEEPZ. The appellant's involvement in the transactions was confirmed by various individuals' statements, leading to the dismissal of the appeal. The penalty was deemed justified due to the significant quantity and value of the diamonds involved.

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Issues Involved:
1. Imposition of penalty under Section 112(a) of the Customs Act, 1962.
2. Alleged clandestine diversion of diamonds and precious metals.
3. Reliability and availability of evidence, specifically 18 computer printouts.
4. Credibility of statements made by various individuals involved.

Issue-wise Detailed Analysis:

1. Imposition of Penalty under Section 112(a) of the Customs Act, 1962:
The appeal and stay application were filed against the imposition of a penalty of Rs. 10,00,000/- on the appellant under Section 112(a) of the Customs Act, 1962. The penalty was imposed because the appellant was found to have purchased diamonds clandestinely diverted from SEEPZ, thereby violating Notification No. 177/94-Cus. and the EXIM Policy. The Tribunal upheld the penalty, stating that the appellant was actively involved in the clandestine purchase of diamonds over a period of two years.

2. Alleged Clandestine Diversion of Diamonds and Precious Metals:
The Revenue's case began with an investigation into M/s. Neelkamal Jewellery Exports Ltd., a unit in SEEPZ, which was importing diamonds and precious metals duty-free for manufacturing export goods. It was found that the unit had diverted a large quantity of these materials into the domestic market. The investigation revealed that the appellant had purchased these clandestinely diverted diamonds. Statements from various individuals, including the director of Neelkamal Jewellery Exports Ltd., confirmed the appellant's involvement in these transactions.

3. Reliability and Availability of Evidence, Specifically 18 Computer Printouts:
The appellant's counsel argued that the 18 documents mentioned in Ms. Bengali's statement were not provided to the appellant, which hindered their ability to make submissions. The Tribunal noted that these printouts were not listed in the relied-upon documents and were not available with the department despite efforts to locate them. However, the Tribunal found that the absence of these documents was not fatal to the case, as the clandestine activities were corroborated by other evidence and statements.

4. Credibility of Statements Made by Various Individuals Involved:
The appellant's counsel contended that the statements of Shri Bhupendra Kapadia were unreliable due to variations. However, the Tribunal found no contradictions in the statements concerning the appellant and deemed them reliable. The Tribunal also noted that Ms. Bengali's statements were consistent and supported by other evidence. The appellant had the opportunity to cross-examine Ms. Bengali but did not do so, which led the Tribunal to accept her statements as true and correct. Additionally, the confrontational panchnama confirmed the appellant's involvement in the transactions.

Conclusion:
The Tribunal upheld the penalty imposed on the appellant, concluding that the appellant was actively involved in purchasing clandestinely diverted diamonds from SEEPZ. The Tribunal dismissed the appeal, stating that the penalty amount was justified given the substantial quantity and value of the diamonds involved.

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