TaxTMI 
TaxTMI 
2016 (1) TMI 552
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....nce indicated that most of the firms of the syndicate had establishments both at Mumbai and Surat, and on import the said consignments were cleared at 'nil' rate of duty under Notification No. 21/2002-Cus. dated 1.3.2002 as amended. The said consignments were meant for laundering money and money remitted overseas against such consignments were hawala payments either to cover the differential cost of the other imports or to park money abroad for other unlawful activities. 2.2 On the above intelligence, consignment of rough diamonds which had arrived under the MAWB No. 017687722655 dated 18.05.2003 of Emirates Flight EK-500 of 18.05.2003 were identified and marked for investigation. Enquiry with Bharat Diamond Bourse, Mumbai revealed that the said consignment comprised of 26 individual consignments consisting 33 packages, and consigned to different parties at Mumbai. Out of the aforesaid 26 consignments, 13 consignments (consisting of 20 packages) were already examined and cleared by the customs. The remaining 13 consignments were lying in the custody of Custodian, MMTC Ltd. The said 13 remaining consignments were detained under detention memo dated 21.5.2003 for the purpo....
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....Raj Gems Pvt. Ltd. Mumbai, (iii) M/s M/s Madhur Gems Pvt.Ltd. Mumbai and (iv) M/s Sundaram Gems Pvt. Ltd, Mumbai were searched. During the search no documents pertaining to import, purchase or sale of rough diamonds were found in any of the office premise. Thereafter, several statements of the Directors of the importers were recorded. The rough diamonds were seized immediately on 8.7.2003 on the plea that they were liable for confiscation under the provisions of the Customs Act. Statements of various individuals were recorded. 2.5 A show-cause notice was issued after investigations proposing therein as to why the diamonds contained in 13 consignments shall not be confiscated absolutely under Section 111(d) and Section 111(m) of the Customs Act, 1962 and why penalty should not be imposed on the appellants. 2.6 The show cause notice was adjudicated and the order in original dated 11.3.2005 was passed by the Commissioner of Customs, CSI Airport, Mumbai confirming the proposed re-determined value, confiscating the rough diamonds absolutely and imposing penalties. 2.7 Being aggrieved by the order passed on 11.3.2005, the Appellants filed appeals before this Tribunal, which whil....
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....9323 59455056.00 1422849.60 3 SS 54/14.05 dt. 14.05.03 71748 64585792.00 5567616.00 4 ED/DXB/04/02/03 dt. 14.05.2003 86850 27944400.00 1592400.00 5 CK 116 dt. 19.05.2003 4891 27968263.00 961299.00 Total Value 234440143.00 11536716.60 (B) IMPORTER M/s. RAJ GEMS PVT. LTD. Sr. NO. Invoice No. & date/Bill of Entry No. and date Quantity (in carats) Declared value (in Indian Value determined (in Indian Rs.) 1 SS 50/14.05 dt 14.05.03 75000 63000000.00 1800000.00 2 CK-108 DT 18.05.03 50009.26 58814122.00 1200222.24 3 CK-109 DT 18.05.03 45010.89 48352919.00 984892x32 4 25/2003 dt. 09.05.2003 29264.59 36623171.00 2130014.24 5 24/2003 dt 09.05.2003 29898.06 37415927.00 4902903.00 Total Value 244206139.00 11017371.81 (C) IMPORTER M/S. SUNDARAM GEMS PVT. LTD. Sr. NO. Invoice No. & date/Bill of Entry No. and date Quantity (in carats) Declared value (in Indian Value determined (in Indian Rs.) 1 101475 dt 26.05.03 21663.45 34840937.00 ....
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.... Rs. 40,00,000/- (Rupees Forty Loki-is) on Shri Anil Jain, Director, M/s Raj Gems Pvt. Ltd., under Section 112(a) of the Customs Act, 1962. (x) I impose personal penalty of Rs. 15,00,000/- (Rupees Fifteen Lakhs) on Shri Nitin Shah, Director, M/s Raj Gems Pvt. Ltd., under Section 112(a) of the Customs Act,1962. (xi) I impose personal penalty of Rs. 40,00,000/- (Rupees Forty Lakhs) on Shri Uttamchand Jain, Director, M/s Sundaram Gems Pvt. Ltd., under Section 112(a) of the Customs Act, 1962. (xii) I impose personal penalty of Rs. 20,00,000/- (Rupees twenty lakhs) on Shri Bhanwarlal Jain, Director M/s Sundaram Gems Pvt Ltd. under Section 112010 the Customs Act, 1962. (xiii) I impose personal penalty of Rs. 20,00,000/- (Rupees twenty lakhs) on Shri Sampatraj Jain, Director, M/s Madhur Gems Pvt. Ltd., under Section 112(a) of the Customs Act,1962. (xiv) I impose personal penalty of Rs. 20,00,000/- (Rupees twenty lakhs) on Shri Ravi Choradia, proprietor, M/s Anuj Exports Pvt. Ltd. under Section 112(a) of the Customs Act, 1962." 2.9 Aggrieved by the same, these appeals were filed by the appellants. 2.10 On account of this difference of opin....
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....tally exempt from duty under Serial No. 180A of Notification No. 21/2002-Cus dt. 01.03.2002. Upon the goods being detained by DRI on account of issue of valuation, the appellants took up the matter with the suppliers who offered to take back the goods in view of the dispute of valuation. There were inconsistencies in the statements of the different panel members. The learned Commissioner had wrongly observed that there was a unanimous decision of the panel members. The constitution of the panel and the qualifications of the panel members are questionable. It was further submitted that as the valuation report submitted by the panel of member is not reliable, therefore, the goods are not liable for confiscation under Section 111(d) and (m) of the Customs Act,1962. It was also submitted that as rough diamonds are freely importable without a license and the same were totally exempt from duty, the question of imposition of penalty under Section 112 of the Act, does not arise. The decisions of this Tribunal in the case of Sahil Diamonds vs. CC -2010 (257) ELT 310 (Tri-Ahmd.) which was affirmed by the Hon'ble Supreme Court as reported in 2010 (257) A 22 (SC) was relied upon. He also r....
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....ion of India vs. Ram Bahadur Durgaprasad (1969 (1) SCC 91]. (ii) Union of India Aazadi Bachao Andholan [2004 (10)SCC 1] (iii) Associated Cement Co vs. Collector [2001 (128) ELT 21] (iv) Eicher Tractors Ltd. vs. Commissioner of Customs, Mumbai [ 2000 (122) ELT 321 (S.C.)] (v) Commissioner of Customs vs. Frontline Printers Ltd [2007 (211) ELT 545] (vi) Commissioner of Customs vs. Deval Enterprises [2007 (209) ELT 378)] (vii) Gujarat Ambuja Exports Limited vs. Commissioner [2008 (222) ELT 427] (viii) Commissioner of Customs vs. Mahalaxmi Gems [2002 (144) ELT 548 (Tri) Hon'ble Supreme Court affirmed the said decision reported in [2008(231) ELT 198 (SC)] (ix) Hargovind Das K. Joshi vs. Collector [1992 (61) ELT 172 (S.C.)] (x) Suraj Diamonds vs. Commissioner of Customs [2008 (86) ELT 400] (xi) Wooltex Associates vs. Commissioner of Customs [1998 (90) ELT 245 (Tri)] (xii) Sij Electronics Comp. Tech. Pvt. Ltd. vs. Commission of Customs, Kochi [2001 (129) ELT 528 (Tri.Bang)] (xiii) Siris Aqua Ltd. vs. Commissioner of Central Excise, Hyderabad [2000 (15) ELT 186 (Tri)] (xi....
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.... (T)] (v) Radhey Shyam Ratanlal vs. C.C.(Adj.), Mumbai [2009(238) ELT 14 (S.C.)] (vi) Prakash Sancheti vs. CC, Ahmedabad [2013(292) ELT 273 (T)] (vii) Naveen Jain vs. CC [2001(134) ELT 32 (Del)] (viii) Sagar Impex vs. CC (Airport), Mumbai [2006 (193) ELT 289 (T)] (ix) Shree Tirupati Plastic vs. CC [1989 (41) ELT 512 (T)] (x) Malaysia Arcade Agencies vs. C.C. Cochin [2004 (173) ELT 55 (T)] (xi) Board Circular No. 53/2003-Cus dated 23/6/2003. (xii) CC (Sea), Chennai -I, Vs. Baburam Premchand [2015(315) ELT 348 (Mad)] (xiii) CC & CE, Delhi - IV vs. Achiever International [2012(286) ELT 180 (Del)] (xiv) CCE, Ahmedabad vs. Ramesh Food Products [2004 (174) ELT 310 (SC)] (xv) Qazi Shabbir Mustafa vs. CC., Mumbai [2004 (176) ELT 227 (T)] 6. We have carefully considered the submissions made by the Appellants as well as by the revenue and also perused the records. Broadly, the following issues arise in the instant case for determination - (a) Whether the allegation of mis-declaration of value is sustainable? (b) Whether the imported rough diamonds are liable to confiscation....
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....as stated that he consulted other panel members before giving his opinion on the value. Shri. Mehul Shah and Shri. Sudhir Mehta stated that all panel members were present at the same time for inspection whereas Shri. Rupen Kothari stated that all members were not present at the same time and only some were present. As regard country of origin of the diamonds Shri. Dilip Lakhi has stated that the valuation was done on the basis of country of origin of diamonds. Shri. Amrish Parikh stated that country of origin was ascertained but that is not important for arriving at the correct value. Shri. Mehul Shah stated that country of origin was verified from the invoice. Shri. Sudhir Mehta stated that country of origin makes very small difference to the value and that he found out country of origin by looking at the diamonds. Shri. Rupen Kothari has stated that country of origin makes no difference to the value and that the country of origin was not ascertained. Shri. Nilesh Shah has stated that they asked the country of origin but they were not told about that. Therefore in view of above inconsistent stand taken by different members of the panel there is no unanimity on the issue whether th....
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.... the GJEPC report on the valuation, the observations made by the Ld. Commissioner in the impugned order that there was unanimous decision of the panel members is incorrect. There are several serious inconsistencies in the version of the members of the expert panel and moreover the report was not signed by all the members of the expert panel. In light of above serious discrepancies, the valuation report given by the panel of GJEPC cannot be considered as reliable and on the basis of such discrepant report valuation of rough diamonds arrived at is not acceptable. In the impugned order the Ld. Adjudicating authority has heavily relied upon the valuation report of GJEPC and since the same is under serious doubt due to various discrepancies as stated above the whole foundation of valuation made out in the show cause notice gets demolished. 6.2 We find that as per the standing orders issued by the Commissioner of Customs Airport which are amended from time to time and which give list of names of experts to whom reference is to be made, in the present case the panel of members has not been constituted in accordance with such standing orders. We do not find any explanation given as why ....
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....ny contemporaneous evidence that the invoices were either fabricated or fake or that any relationship existed between the importer and the exporter. We entirely agree with the view taken by the Tribunal that the transaction value has to be accepted until and unless it is shown by some contemporaneous evidence that the price declared in the invoice was not the correct price. 9. The Appeal is accordingly dismissed. Parties shall bear their own costs. We find that the facts of the above case are similar to the facts in present case. In the present case also there is no evidence that the invoice issued by supplier are either fake or fabricated or that there exist any relationship between supplier and the importer. In the given fact Hon'ble Apex Court accepted the transaction value therefore the above decision is squarely applicable to the present case. 6.3 In another case on the similar issue decided by this Tribunal in the case of Sahil Diamonds (supra) which was affirmed by Hon'ble Apex Court as reported in [2010 (257) ELT A22 (SC)].In the said judgment Hon'ble Tribunal given following findings: 19. We also take note of the various discrepanc....
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....so reflects the same value and there is no dispute or doubt about the correctness of the said KP certificate. In the case of M/s. Mahalaxmi Gems v. CC, Mumbai, 2002 (144) E.L.T. 548 (Tri.-Mum.), Tribunal, while dealing with the identical dispute, has observed that in the absence of any cogent evidence, enhancement of the value of the rough diamonds based upon the panel consisting of employees of the department and members of the diamond trade, cannot be resorted to. For better appreciation, we reproduce Para 3 of the said judgment. "3. It is debatable whether the members of the diamond trade would be independent witnesses with regard to the valuation of goods imported by another member of the same trade. In such matter one cannot overlook the fact of competition among these members and expect a member of the panel to rise above such consideration taken impartially. It is however, not necessary for us to rest our decision upon the tack of impartiality of this panel. The fact remains that the value of the goods that was declared was the transaction value. The genuineness of the invoice that the appellant produced has not been questioned. It has not been alleged that....
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....rted rough diamonds and the absence of the same would invite absolute confiscation. For better appreciation, we reproduce Paras 22.1, 22.2, 22.3 and 22.4 of the impugned order. "22.1 The international certification scheme for rough diamonds entitled: "Kimberly Process Certificate Scheme" was adopted in a Ministerial meeting held at Interlaken, Switzerland, on 05th November, 2002. India is a signatory to the undertaken Declaration. The scheme has been evolved to deal with the issue of conflict diamonds which are basically rough diamonds whose trade is prohibited by the United Nations Security Council, because the proceeds of that trade are used by rebel movements and their allies to finance conflicts aimed at undermining legitimate governments. 22.2 KP certificate is a forgery resistant document with a particular format which identifies a shipment of rough diamonds as being in compliance with the requirements of Certification Scheme (i.e. KPCS). The KP certificate inter alia contains the details of country of origin, the certificate number, date of issuance, date of expiry, issuing authority, the details of importer and exporter, carat weight/mass, value in US $, n....
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....ra), further provides that in case of rough diamonds become liable for confiscation under Section 111 of the Customs Act to any contravention, they should be absolutely confiscated by Customs." 24. --------- 25. --------- 26 . As regards penalty, we take note of the Tribunal's decision in case of Suraj Diamonds (India) Ltd . v. CC (Airport) Mumbai, 2008 (227) E.L.T. 471 (Tribunal) = 2008 (86) RLT 400 wherein Tribunal by taking note of the precedent decisions in case of M/s. Nalakath Spices Trading Co., 2007 (213) E.L.T. 283 (Tribunal) = 2007 (80) RLT 797 (CESTAT-Bang.), Shree Subhadra Industries v. CCE Chennai, 2001 (137) E.L.T. 1405 (Tri.-Chennai) and M/s. Jay AR Enterprises, 2007 (210) E.L.T. 459 (Tribunal) = 2007 (79) RLT 291 (CESTAT-Chennai) has held that inasmuch as import of rough diamonds were exempted from payment of duty and were not dutiable, no penalty can be imposed under the provisions of Section 112 of the Customs Act, 1962. By following the above decision of the Tribunal, we hold that no penalty is imposable upon any of the appellant. In any case, having held that the value as declared by the appellant was correct value, imposition of p....
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....se the Commissioner has erred in treating the KPC, issued by the overseas supplier as a document prescribed under the Customs Act, 1962 to arrive at an erroneous finding that Rule 11 of FTDR Rules was violated. The KPC is not a document, such as Bill of Entry, which is prescribed under the Act. The requirement of imports of rough diamonds being accompanied by a KPC flows from Chapter 2 of the Foreign Trade Policy and it is not a document prescribed under the Customs Act, 1962. The department could not show any provision under the Customs Act, 1962, which prescribes submission of KPC as a declaration by the importer. Moreover, the Appellants were not the owner of the goods. It is seen that the case of the respondent is that the Appellant Companies had made applications to the GJEPC for validation of the KPC received from the overseas supplier required for the import of rough diamonds. It is undisputed that thereafter, neither the appellants claimed ownership over the goods, nor paid to the supplier, nor did they file a bill of entry. Moreover, where no Bill of Entry is filed, there is no declaration of value in terms of Sec. 14 of the Act. The Hon'ble Supreme Court of India in t....
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....titutes the act us reus of a criminal attempt. The sufficiency of the actus reus is a question of law which had led to difficulty because of the necessity of distinguishing between acts which are merely preparatory to the commission of a crime, and those which are sufficiently proximate to it to amount to an attempt to commit it. If a man buys a box of matches, he cannot be convicted of attempted arson, however clearly it may be proved that he intended to set fire to a haystack at the time of the purchase. Nor can he be convicted of this offence if he approaches the stack with the matches in his pocket, but if he bends down near the stack and lights a match which he extinguishes on perceiving that he is being watched, he may be guilty of an attempt to burn it. It was further held that the test for determining whether the act of the accused person constituted an attempt or preparation is whether the overt acts already done are such that if the offender changes his mind and does not proceed further in its progress, the acts already done would be completely harmless. In (1970) 72 Born. LR 575, Yusuf Abdulla Patel v. R.N. Shukla, it was held that a person commits the offence or attempt....
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....bed forms have been furnished. The evidence specified have also been given. Therefore prima facie there was no contravention of s.12(1). What is said against the respondents is that the invoice price mentioned by them in the declarations which means that the concerned goods were exported without furnishing the declarations required by s. 12(1). It is not possible to accept this argument. The declarations given to satisfy the requirements of s. 12(1) though they do not correctly furnish all the information asked for in the form. Such declarations cannot be considered as non-est." 6.8 Heavy reliance was placed by the Department on the decision of the Tribunal in the case ofPrakash Sancheti vs. Commissioner of Customs, Ahmedabad (2013 (292) ELT 273 (Tri-Ahmd.), which has been stayed till disposal of the appeal admitted there against by Hon'ble Gujarat High Court vide its order 20.06.2013 in Civil Application no. 544 of 2011 in Appeal No. 1236 of 2011. It is seen that the aforesaid decisions of the Hon'ble Supreme Court were not brought to the notice of the Tribunal. Moreover, in the said decision in Prakash Sancheti(supra) the importer had confessed his participation in the....