Natural justice and lawful mining documents defeated absolute confiscation of exported garnet, penalty, and testing charges.

Absolute confiscation of exported garnet was unsustainable where the record showed purchase from a mining lease holder and transport under valid permits, but those documents were not properly considered. The confiscation order was also vitiated by breach of natural justice because it was passed immediately after notice despite time being granted to reply, without a fair opportunity to meet the allegations. A later trade facility instruction could not override earlier documentation supporting lawful mining provenance, and insistence on a Tamil Nadu district collector certificate was unjustified on the facts. The confiscation, penalty, and consequential testing charge demand were set aside, and release of the goods was directed.

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Issues: Whether the absolute confiscation of the exported garnet, the penalty, and the demand for testing charges were sustainable when the importer claimed legal mining provenance and challenged the order as passed in breach of natural justice.

Analysis: The goods were found to have been supported by documents showing purchase from a mining lease holder and transport under permits issued by the authorities in Andhra Pradesh, and those materials were not properly considered. The order of confiscation was passed the day after issue of the notice despite time being granted for reply, and the record did not show a fair opportunity to meet the allegations. The later trade facility instruction could not be applied to defeat transactions already covered by earlier documentation, and the insistence on a Tamil Nadu district collector certificate was not justified where the minerals were claimed to have been legally mined in Andhra Pradesh. On the facts, the goods were not treated as prohibited in a manner warranting absolute confiscation, and the consequences of confiscation and penalty could not stand.

Conclusion: The confiscation order, penalty, and consequential demand were unsustainable and were set aside; release of the goods was directed.

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