2008 (9) TMI 303

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.... Intelligence Officer of the Customs intercepted and interrogated him to find out whether he was carrying any contraband. The appellant replied in the negative. Unconvinced, the officer embarked on detailed examination of the appellant's baggage, whereupon it was found that 15 pieces of what appeared to be diamonds were kept concealed in the baggage. A jewellery expert and a Customs Appraiser checked the stones one by one and certified the nature and value of the goods. The stones were certified to be cut and polished diamonds. In answer to a query, the appellant admitted that he had no documentary proof of licit acquisition/possession of the diamonds. He admitted that he was attempting to smuggle the diamonds without declaring them to the ....

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....s (AIR) issued a show-cause notice to the appellant on 6-8-07 under Section 124 of the Customs Act read with Section 3(3) of the Foreign Trade (Development and Regulation) Act, 1992 for confiscating the seized goods under Section 113 as also for imposing penalty on him under Section 114 of the Customs Act. These proposals were contested. It was in adjudication of this dispute that the Commissioner of Customs passed the impugned order. The operative part of the Commissioner's order reads as under:- (i) I order absolute confiscation of the diamonds valued at Rs. 34,76,000/- seized from Shri Jaha Mohideen Ahmed Shaik Mohideen under Section 113 (d) & (h) of the Customs Act, 1962 read with Section 3(3) of the Foreign Trade (Development and Regu....

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....'s plea for redemption of the confiscated goods. It is not in dispute that the appellant had acted in violation of Section 7 of the Foreign Exchange Management Act (FEMA) by not declaring to the Reserve Bank of India the export value and other material particulars of the diamonds. Thereby, the appellant was offending Section 11 of the Customs Act also. The diamonds, which were attempted to be smuggled out of the country without the above declaration to RBI under FEMA and without declaration to the Customs authorities under the Customs Act, fell in the category of "prohibited goods" for purposes of Section 113 of the Customs Act. It was up to the confiscating authority to grant or not to grant option for redemption of the goods under Section....