2025 (7) TMI 1553

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....t Importer entities imported "cut and polished diamonds mixed with small quantity of broken diamonds" by mis-declaring them as "broken diamonds" and overvalued them abnormally to remit the excess foreign exchange overseas either to cover differential cost of other imports or to park money abroad for unlawful activities. Importer entities were being owned and controlled by Shri Dulraj Jain and Shri Rajesh Kalra; Shri Punabhai Patel is the actual owner of the above consignments of diamonds imported by the importers from Hong Kong based companies and the books of accounts maintained by the importer entities were nothing but paper transactions. He admitted to the circular trading of diamonds. 2.1. Shri Punabhai Patel has exported the diamond....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

..../Airport & ACC/101/2016 dated 31.03.2016 and penalty of Rs 5,94,096/- was imposed on the Appellant in terms of Section 114 of the Customs Act, 1962, however, goods exported by the Appellant were not confiscated. 3.2. Upon appeal, the Commissioner of Customs (Appeals) vile KOL/CUS(AIRPORT)/136/2020 dated 02 01 2020 upheld the Order dated 31.03.16. However, penalty was reduced to Rs 4,50,000/- under Section 114 of the Customs Act, 1962. The Appellant has filed the present appeal against penalty confirmed in the above Order-in- Appeal dated 02.01.2020. 4. The Appellant submits that no penalty under Section 114 of the Customs Act, 1962 can be imposed without ordering confiscation of the goods exported by him. This is the fundamental error....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....s and perused the appeal documents. 7. The Appellant submits that no penalty under Section 114 of the Customs Act, 1962 can be imposed without ordering confiscation of the goods exported by him. 8. In this case, I find that a penalty of Rs.4,50,000/- has been imposed on the appellant, under Section 114 of the Customs Act, 1962, without confiscation of the export consignment of the appellant. For ready reference, the said Section 114 is reproduced below: SECTION 114. Penalty for attempt to export goods improperly, etc. Any person who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 113, or abets the doing or omission of such an act, shall ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....Section 113. Therefore, I agree with the submission of the appellant that without confiscation under Section 113, no penalty can be imposed under Section 114. As there is no confiscation of the goods exported, I find that penalty under Section 114 of the Act is not imposable in this case. 8.2. I find that while addressing this very issue arising out of the very same SCN, recently, this Tribunal in case of another Appellant, Shri. Prakash Goti, Director of Dharmanandan Diamonds Private Limited vide Final Order No. 76490/2025 dated 10.06.25 in Appeal No. C/75406/2020 has set aside the penalty imposed. In that case, this Tribunal has held that (a) penalty under Section 114 is incorrectly imposed, when the imported goods were never held liab....