TaxTMI 
TaxTMI 
2026 (2) TMI 52
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....er, it is submitted that since the order is passed bereft of jurisdiction and the penalty which has been imposed is disproportionate, this Court has the jurisdiction and authority to examine the impugned order. 2.1 It is submitted by learned Advocate Mr. Dave that the petitioner is a local supplier who supplies natural diamonds to M/s. Universal Gems situated in Special Economic Zone (SEZ) at Sachin, Surat, is fastened with exorbitant penalty. It is submitted that the action of the respondents in passing the aforesaid order is without jurisdiction as both, i.e. the natural diamonds as wells as artificial (lab grown diamonds) are freely exported and hence the penalty which is imposed by the impugned order for felicitating the export of the diamonds by M/s. Universal Gems is required to be quashed and set aside. 2.2 In support of his submission learned advocate Mr. Dave for the petitioner has placed reliance on the decision of this Court in the case of Shangrila Latex Industries Ltd vs. Union of India 2016 (340) E.L.T. 465 (Guj.), judgement of the Andhra Pradesh High Court in the case of Commissioner of Customs & Central Excise, Hyderabad-II Vs. H.B. Cargo Services., 2011 (268)....
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....ms Authority are as under: "34. Discussion and Findings: I have gone through and carefully examined the facts and evidences available on record, defence submissions, records of personal hearing, the relevant legal provisions envisaged under the Customs Act, 1962, SEZ Act, 2005 and various rules made there under, the relied upon documents etc. I have carefully studied all the Statements of the persons recorded under Section 108 of the Customs Act, 1962 (which is not being reiterated for the sake of mere repetition), the fact that the said persons whose statements were recorded under Section 108 of the Customs Act, 1962 wherein they agreed with the facts, as follows, and also that each of their version fitted into the others admission during the recording of their Statements, which in crescendo corroborates the subject facts on record, listed as follows: XXX XXX XXX 34.2 I find that on the basis of information that M/s. Universal Gems was attempting to export Cut and Polished Natural Diamonds (CPD) in the guise of lab grown diamonds, two consignments covered under shipping bills bearing nos. 4004674 dtd. 21.05.2021 and 4004784 dtd. 25.05.2021 were ....
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....quantity of diamonds attempted to be exported under shipping bills which were amounting to (M/s. Universal Gems as 58089.13 carats) only 469.12 carats carats were lab grown diamonds and rest were natural diamonds. Hence, the total quantity of 99.2% of diamonds were natural diamonds which were being attempted and tried to be exported fraudulently in guise of Cut Polished lab grown diamonds. 4.5 The role described of the present petitioner by the authorities in felicitating such dubious export is as under: "35.1. I find that during the course of investigation, on scrutiny of "Keshav" mark Register resumed during search conducted at M/s Universal Gems, Unit no. 363 & 364, Plot no. 239, Surat SEZ. Sachin, Surat on 12.03.2022, it is found that on page No. 9 of the said register export wise transactions are hand written in the name of "Vijaybhai Gadhiya". In this admitted/confirmed that these entries are related to the supply of natural regard, Shri Vijay Ghanshyam Gadhiya in his statement dated 10.06.2022 diamonds to Shri Meet Kanubhai Kachhadiya from various diamond owners/traders through him; that on right side of this page, details of date wise export consignment of natur....
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....on 114 of the Customs Act. As per the wordings of the provision of Section 114 of the Customs Act, 1962, I hold that the penalty equal to the value of the subject goods is to be invoked in subject matter." 4.6 Thus, the complicity of the petitioner is established in the investigation. During the course of investigation, on scrutiny of "Keshav" mark Register resumed during search conducted at M/s. Universal Gems, Unit No. 363 364, Plot No. 239, Surat SEZ, Sachin, Surat on 12.03.2022, it is found that on Page No. 9 of the said register export wise transactions are hand written in the name of "Vijaybhai Gadhiya". In this regard, the petitioner in his statement dated 10.06.2022 admitted/confirmed that these entries are related to the supply of natural diamonds to Shri Meet Kanubhai Kachhadiya. The petitioner, in his statement dated 10.06.2022, has confessed that the entries of export of diamonds as lab grown diamonds are related to the supply of natural diamonds from Meet Kanubhai Kachhadiya, the proprietor of M/s. Universal Gems. Shri Kachhadiya, in his statement dated 28/29.05.2022 has admitted that all the diamonds are procured unauthorizedly into SEZ and the same were exported f....
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....ed by the exporter or the value as determined under this Act, whichever is the greater." 5.1 Section 114 of the Customs Act, 1962 imposes penalty for export of goods by "Any person", who does or omits to do any act or omission would render such goods liable for confiscation under Section 113 of the Customs Act, 1962 or "abets" the doing or omission of such an Act. Section 113 of the Customs Act, 1962 refers to confiscation of goods attempted to be improperly exported. The relevant section for the instant case are Section 113 (i)(ii) which is as under: "113 Confiscation of goods attempted to be improperly exported, etc. XXX XXX XXX (i) any goods entered for exportation which do not correspond in respect of value or in any material particular with the entry made under this Act or in the case of baggage with the declaration made under section 77;] (ii) any goods entered for exportation under claim for drawback which do not correspond in any material particular with any information furnished by the exporter or manufacturer under this Act in relation to the fixation of rate of drawback under section 75; 6. Thus, the petitioner was aware of all t....