TaxTMI 
TaxTMI 
2016 (8) TMI 924
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....d be accompanied by Kimberley Process Certificate. The Kimberley Process Certificate Scheme has been evolved to deal with the issue of conflict diamonds (blood 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. KP Certificate identifies a shipment of rough diamonds as being in compliance with the requirements of the KPCs. Since the subject Rough Diamonds were not accompanied by the mandatory Kimberley Process Certificate, the same were seized by the officers. After investigation, a show cause notice dated 10.10.2011 was issued proposing confiscation of the said Rough Diamonds and imposition of penalties on Shri Jorabhai and Shri Premabhai among others, which culminated in the impugned Order-in-Original. Aggrieved by the penalty imposed on them, the appellants are before us. 3. Heard both sides and perused the records. 4. Learned Consultant appearing for the appellants at the outset itself submits that the appellants are innocent and were....
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....sis by experts empanelled by the Commissionerate from a select list of experts nominated by Gem and Jewellery Export Promotion Committee (GJEPC). PCCC handles lion's share of the diamond trade of India. However, in the instant case, the rough diamonds were valued by a Customs Appraiser. He contended that the appellants from their personal knowledge are of the opinion that the value of the seized Rough Diamonds is in the range of 3 to 4 crores only instead of the value Rs. 10.16 Crores fixed by DRI. He, therefore, pleaded that the department may be directed to re-value the seized Rough Diamonds in the lines of the earlier decisions of the Tribunal in the case of Pravinkumar Ratanbhai Ajudiya vs. Commissioner of Customs, Ahmedabad and Sagar Impex vs. Commissioner of Customs (Airport) Mumbai (supra). The Learned Consultant also raised the issue of whether DRI Ahmedabad and Commissioner of Customs, Ahmedabad have jurisdiction in this case, as the goods were imported/smuggled through Mumbai International Airport. However, when Bench queried about Bail proceedings etc., the learned consultant submitted that he is not pressing the issue of jurisdiction. 5. O....
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....te - to which they said 'NO' and they told that the Rough Diamonds were brought in the same bags on 12.4.2011 from Nairobi to Mumbai and without declaring at the Airport. They further informed that since the said Rough Diamonds are of Zimbabwe origin and were smuggled, they do not have any such legal documents and KPC. Thereafter, the officers in the presence of Panchas, Shri Jorabhai and Shri Premabhai and others, opened the bags and recovered the Rough Diamonds which were examined in detail and valued by Shri Abhay Desai, Appraiser of Customs Hira Bou(r)se, Surat. The Panchas stated in the last portion of the Panchnama that thereafter, when asked by the DRI officers in their presence to Shri Jorabhai and Shri Premabhai to produce documents and KPC for Rough Diamonds of Zimbabwe origin, totally weighing 48637.525 carats valued at Rs. 10,16,68,077/-, both stated that they do not have any purchase bill, import documents such as Bill of Entry, KPC and further stated that they had gone to Nairobi on 12.03.2011 by early morning flight at around 03.00 AM by Kenyan Airways and after staying there they left Nairobi on 12.4.2011 and arrived at Mumbai early Morning at 02.3....
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....Shri Jorabhai. His statement is more elaborate and more detailed and major portion of the same is in question- answer format. Shri Jorabhai and Shri Premabhai were arrested on 23.04.2011 and produced before the Hon'ble Chief Judicial Magistrate Court at Surat on 23.04.2011. They preferred a Bail Application on 26.4.2011 and, inter-alia, submitted that the Hon'ble Court has asked the accused whether they were beaten and in reply to the same they stated that they were threatened by DRI officers and forced to sign the statements at Noon on 22.4.2011 and another one at night on 22.4.2011 and that they denied that they were caught with any blood diamond and no such diamonds were brought by them without any KP Certificate and they are innocent. Their bail applications were rejected by the CJM Court vide order dated 03.5.2011 on the ground of false averment being found in the memo of application. 7. The passport entries and the information furnished by the Customs and Immigration authorities confirm that the appellants had left for Nairobi on 12.03.2011 and returned to India on 12/13.4.2011 through Mumbai International Airport, after a stay of abou....
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....nd they had not contradicted their earlier statements. 8. On careful examination of the facts and evidences in the case, we find force in the findings of the adjudicating authority that the appellants had brought the subject Rough Diamonds from Kenya illicitly and the same were recovered and seized from them. Therefore, we do not find any reason to interfere with the impugned order-in-original in this respect. Consequently, we also hold that penalty is imposable on the appellants under Section 112(b) of the Customs Act, 1962. 9. However, as regards the quantum of penalty imposed on the appellants by the adjudicating authority, we find force in the arguments of the learned Consultant that the valuation of the seized Rough Diamonds has not been done properly and consequently the amount of penalty is also not determined appropriately. Though there is force in the contention of the learned AR that penalty is not directly proportional to the value of the seized rough diamonds; however, the value has a bearing on the quantum of the penalty. The subject Rough Diamonds were valued initially at the time of seizure Panchnama by Customs Appraiser wo....