TaxTMI 
TaxTMI 
2009 (10) TMI 389
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....n by the appellant around his neck, was recovered. The appellant claimed the said item to be worth around US$ 25,000. The officers detained the gold chain with diamonds-studded pendant under the reasonable belief that the same had been attempted to be smuggled into India and hence liable to confiscation under the Customs Act. In his statement given under Sec. 108 of the Customs Act, the appellant, inter alia, stated that he had been frequently visiting India; that he came to India for buying diamond jewellery, that he had visited India on a few occasions in the past; that this time he was intercepted by the officers of Customs after his Green Channel clearance; that he had told them that he had only 2 bottles of whisky in his pos session; that his baggage was examined by the Superintendent of Customs in the presence of witnesses; that the above gold chain with diamonds-studded pendant was recovered from his person; that he was wearing it on his neck as his personal jewellery; and that he had disclosed the value of the goods to be US$ 25,000. In that statement, the appellant also admitted the recovery, possession, carriage and non-declaration of the jewellery, as he was given to und....
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....he results of the investigations, the Addl. Commissioner of Customs of the Air Intelligence Unit issued a show-cause notice dated 12-10-2007 which was eventually followed by a corrigendum/addendum dated 30-7-08. The appellant was called upon to show cause to the Commissioner of Customs as to why the seized gold chain with 12 diamonds mounted on gold plate (pendant) valued at Rs. 1,20,35,000 (cif) should not be confiscated under Sec. 111(d), (1) and (m) of the Customs Act and also why penalty should not be imposed on him under Sec. 112 of the Act. In his reply dated 15-4-08, the appellant contested the above proposals on a few grounds. He submitted that the jewellery and diamonds were not pro hibited nor restricted in any manner under ITC (HS) classification of Export & Import items 2004-2009 and therefore, the goods in question were not liable to be confiscated under Sec. 111(d) of the Act. He also submitted that as diamonds were charged to 'Nil' rate of duty under the Central Excise Tariff Act and were fully exempted from payment of duty under the Customs Tariff Act, by virtue of Notification No. 21/02 dated 1-3-02 as amended by Notification No. 61/07 dated 3-5-07, the goods in....
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....e, it should be treated as his personal jewellery or personal effect which, under Rule 7 of the Rules 1998 is fit for clearance duty-free. The ld. counsel submits that, even before his client entered the Green Channel, he was intercepted and was denied opportunity to file a declaration. The appellant was entitled to clear the jewellery through Green Channel and to take it back on his return from India without any duty implication. In the context of making out a case that the jewellery in question was not to be considered as 'dutiable' goods, the ld. counsel has relied on the Hon'ble Supreme Court's judgment in Associated Cement Companies v. Commissioner of Customs [2001 (128) E.L.T. 21 (S.C.) = 2001 (4) SCC 593] wherein, it was held that any goods which was shown under the Customs Tariff Act to be chargeable to 'Nil' rate of duty and any goods which was not chargeable to any duty by virtue of an exemption Notification, was not be treated as 'dutiable' goods. In the context of claiming exemption for the jewellery in question, the ld. Counsel has particularly relied on the Circular No. 72/98-Cus., dated 24-9-98 as examined by the Hon'ble High Court of Delhi in the case of Pushpa Lakh....
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..... Commissioner of Customs, Delhi [2003 (155) E.L.T. 423 (S.C.)]. On the basis of the above materials, it is argued that this is a clear case of at tempted smuggling of diamonds and therefore, the order of confiscation and penalty is not liable to be interfered with. 4. We have given careful consideration to the submissions. Upon examination of the facts and evidences on record, the relevant provisions of the Baggage Rules and the manner in which this case was adjudicated upon by the Ld. Commissioner, we have found this to be a fit case for remand. But, before doing so, we have got to lay down certain guidelines. 5. Admittedly, the appellant is a US citizen (though of Indian Origin) and he has been visiting India off and on. By all means, he is a "tourist" within the meaning of the expression figuring under Rule 7 of the Baggage Rules 1998. According to the definition given under Rule 2(iii) "tourist" means - "a person not normally resident in India, who enters in India for a stay of not more than six months in the course of any twelve months period for legitimate non-immigrant purposes, such as touring, recreation, sports, health, fam....
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....the flight actually landed at 22.04 hours (10.04 p.m.) The question arises as to how, if the evidence adduced by the party has to be believed, the appellant came to be intercepted at the exit gate of the Arrival Terminal at 10 p.m. This question of fact has been clearly raised in this case. Purportedly, to have this issue settled in his favour, the appellant proposed to cross-examine all the parties to the panchanama proceedings including a officers of Customs and panch witnesses. It appears, certain reasons were stated by him as to why he should be permitted to cross-examine the above persons, in his reply to the show-cause notice. It appears from the Commissioner's order that the plea for cross-examination was disposed of in the following manner:- "(ii) He had not denied the recovery of the impugned article, worn on his neck, on his personal search. The primary issue involved was whether the said article was liable to duty or not and hence no prejudice was going to be caused to the passenger on rejection of cross-examination of the panchas. (iii) In the inward passenger general manifest submitted by the said air lines, the expected time of arrival of the said flight was dec....
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....chanama cannot be rendered invalid altogether by reason of any discrepancy with regard to time, we are not in a position to over-look the crucial importance of the time and stage at which the appellant was intercepted by the officers of Customs at the exit gate. The officers should necessarily record the time of interception of the passenger, seizure of the goods etc. correctly in the relevant panchanama. May be, if the cross-examination is allowed, the facts entered in the panchanama can come true also. In any case, rejection of the plea for cross-examination of the witnesses cannot be sustained on the grounds stated by the Commissioner in the above part of his order. 8. The document styled as invoice dated 22-10-89 issued by a New York trader is a part of the record before us. As rightly pointed out by the ld. SDR, this is not an authenticated invoice. It is open to the appellant to produce valid documentary proof of lawful acquisition of the jewellery. If he should be allowed duty-free clearance of the jewellery under Rule 7 of the Baggage Rules, he should establish that it is his personal effect which is reasonably required for the purpose of his tour to India. In this conte....