TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 978
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....ked as an Accountant with one Diamond Trading Company M/s. Yash Corporation, Opera House, Mumbai. The appellant worked there for about 4 years up to 2007. During this period, he learnt about the traits of diamond trading. From the middle of 2007 onwards, he started working independently under the name and style of M/s. Roop Impex, from his home. 2.1. The appellant used to do trading only as an agent or middleman on a small margin of 5 paisa per dollar. As per the prevailing practice in the trade, the broker also issues his own cheque to the supplier/seller and collects the value of the sold goods in his name after the delivery. 2.2. In the diamond trade, the appellant came into contact with Shri Punabhai Vallabbhai Chandpara (also known as Patel) who has been in diamond trade for the last several decades. Shri Patel also had an office in the same building wherein he was working as an employee with one merchant. 2.3. During the course of business, the appellant also came into contact with Directors/Financers of Chirayu Impex Pvt. Ltd and Amrapali Exim Pvt. Ltd., whose common Directors were Yuvraj Rajendra Singh and Vikas Tara Singh. The appellant was introduced to these com....
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.... the alleged offence. The appellant submits that in the findings, both the lower authorities have merely held that the appellant was the link between Punabhai Patel and Dharmesh Patel, but the impugned order has not explained as to how and in what manner this link can make the appellant liable for penalty, which has not been brought out on record; hence it is submitted that imposition of penalty is unsustainable. Further, the appellant points out that in paragraph 8 of the impugned order, it has been observed that the appellant failed to remain present when summoned and therefore certain incorrect inference has been drawn that the appellant was aware about over-valuation of the goods for circular trade. In this context, the appellant submits that merely because he did not allow both the parties to meet, mens rea cannot be attributed to the effect that the appellant has played a role in the alleged offence. It is the appellant's submission that it therefore appears that the findings are based on conjectures and surmises and it is an established rule of law that penalty cannot be imposed on assumptions and presumptions; that no evidence has been brought on record to prove mens rea. T....
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.... his reliance on the decision in the case of M/s Sundaram Gems Pvt Ltd and others [2016-TIOL-87-CESTAT-MUM]. Reliance has also been placed upon the decision of the 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) A22 (SC) . The appellant has also relied on the decision in the case of Mahalaxmi Gems v. CC [2008 (231) ELT 198 (SC)]. 3.5. Further reliance has been placed by the appellant on the Final Order No. 76490 of 2025 dated 10.06.2025 passed by this Tribunal, wherein on similar facts and circumstances, this Bench has set aside the penalty imposed on Shri Prakash Goti under Section 114 of the Customs Act, 1962. 3.6. It is also the case of the appellant that penalty cannot be imposed on him under the provisions of section 112 of the Customs Act, as the ingredients required for imposing penalty under the said section do not exist in this case. In the present case, the appellant submits, the Department has not been able to produce any corroborative evidence to prove the appellant's role in the alleged mis-declaration and hence the penalty imposed on him in the impug....
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....to be set aside on this ground itself. 6.2. From a perusal of the impugned order, it is also seen that other than the statements, not a single corroborative evidence has been produced by the department to support the allegations made. In this regard, we refer to the judgment of the Hon'ble Apex Court in the case of A. Tajudeen, reported in 2014-TIOL-85-SC-FEMA, wherein it has been held that such statements ought not to be readily believable, unless there is independent corroboration of certain material aspects of the said statements, through independent sources. As there is no other evidence against the appellant other than the statements, we are of the opinion that the appellant cannot be implicated in the offence, merely on the basis of such statements only. 6.3. In the present case, penalty has been imposed on the appellant under the provisions of Section 112 of the Customs Act,1962. However, we find that there is neither any prohibition in force nor duty is payable and also the value sought to be alleged is lesser than the value declared; also no duty is evaded. Thus, we find that none of the criteria as mentioned in Section 112 of the Customs Act, 1962 stand attracte....
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....ons. Therefore, a criminal complaint No. 39530/2014 dated 01.07.2014 was filed under Section 174 & 175 of the Indian Panel Code, 1860 read with Section 108 of Customs Act, 1963 against him in the Court of Hon'ble Chief Judicial Magistrate, Surat. After, filing the above said complaint, he appeared before DRI, Surat and his statement was recorded. So, it is very clear that he was aware of the fact that an inquiry against him is being conducted by the DRI, Surat in the case of illegal circular trade of Broken Diamonds in the guise of cut and polished diamonds to siphoning the excess foreign exchange. Further, in his voluntary statement he admitted that the seized consignments were grossly overvalued and purpose was to send the illegal money outside India through normal banking channels. He also admitted that he never allowed Shri Punabhai Patel and Shri Dharmesh Singh to meet as this would have deprived him of his agreed commission, which clearly proves his mens rea. His role is thereby established in conducting criminal act of circular trading of broken and polished diamonds mixed with broken diamonds at the time of filing of Entry, thereby evading Custom Duty, grossly overvalued an....