TaxTMI 
TaxTMI 
2008 (3) TMI 127
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....ent of redemption fine and imposed penalties on the appellant company and the Chairman of the said company. 2. Since both the appeals are arising out of the common order-in-original, they are being disposed of by a common order. 3. The relevant fact that arises for consideration are on 29/02/99, the appellant Suraj Diamonds (India) Ltd., (appellant company) imported a parcel of rough diamonds from Sharjah and declared the same as rough diamonds. The said goods were imported as per IGM No.5768 Line No.1 dated 24/04/99 under Airway Bill No.16068163620 dated 24/04/99 and the goods were shipped vide Invoice No.R0002/9990 dated 24/04/99 by M/s.Viraj Holdings Ltd., Sharjah. The duty free clearances of said go....
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....ed by the appellants and came to the following conclusion:- "It is hard to believe that a person like Shri Laxmanbhai, who claim to be in diamond cutting and polishing business for 20 years commit blunder of not recognizing diamonds even after testing the same with diamond tester. Thus, it can be reasonably concluded that the over valuation has been done with the intention to remit extra foreign exchange by importing worthless goods under the guise of diamonds. Shri Jitin Mehta's claim that he has been cheated is only to alleviate the responsibility of over valuation and in this act of over valuation Shri Laxmanbhai has actively abetted Shri Jatin Mehta. It is clear that M/s.Suraj Diamonds (India) Ltd., in which Shri Jatin Meht....
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....s his submission that one debit is made in REP licence, it is loss to the appellant company. It was submitted that on the date of examination itself the appellant company disowned the consignment and relinquished the title. He draws our attention to the various statements recorded by the authorities of the different persons to submit that the appellant company and the Director of the company were not at all aware that the "semi precious stones" will be coming in place of "rough diamonds". He submits that it is an admitted fact that the goods are exempted from payment of duty by Notification No.20/99-Cus on production of REP licence. If it is so, there cannot be any penalty on the appellant company as well as the Director o....
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....s a sister concern of the appellant company. He submits that the current appellant company and the Chairman being in the diamond trade for so many years should have first inspected the consignment, before importing them. He submits that it is beyond anybody's imagination that diamonds which are sought to be imported were allowed for an inspection by an individual, who was not known to the Chairman of the company or anyone in the company. He submits that the question of mens rea does not arise in the case of penalty to be imposed under Section 112 of the Customs Act, 1962. He submits that once the goods were misdeclared, which is not disputed, than the consequential penalties would follow. 7. In rejoinde....
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....also on record that Shri Jatin Mehta has never seen the diamonds but entered into transaction for importing the said diamonds on a belief and the word of Shri. Ranjeet R. Parekh and Laxman Patel. The statements of Laxmian Patel and Ranjeet R. Parekh also do not indicate that they were aware of the fact that "semi precious stones" will be shipped in place of "rough diamonds". In the above backgrounds, it is to be seen whether the appellant company and the Chairman of the company were under the bonafide belief as to the consignment imported by them is of rough diamonds or not. 10. It can be seen from the order of the adjudicating authority that the appellant company filed the bill of entry, submitted the documents like invoices, airwa....
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....ssions made by the Ld. SDR that over-valuation was resorted to remit extra foreign exchange, we find that it is undisputed, that the appellant is a Star exporter and is having a turn over of more than Rs.400 crores in import and export business, they would not take a risk of endangering their status as a Star Export House for the miniscule amount of Rs.2.00 crores, as is involved in this case. 13. It is undisputed that rough diamonds are exempted from payment of duty by Notification No.20/99 dated 28/02/99, if REP licenses are produced. The REP licence, which were produced by the appellant company were undisputedly valid licences. If the licences, which were submitted by the appellant company were valid licen....