2016 (1) TMI 552 - CESTAT MUMBAI

Over-valuation of rough diamonds imported from Dubai/Hong Kong - consignments were cleared at 'nil' rate of duty under Notification No. 21/2002-Cus. dated 1.3.2002 as amended. - Allegation that the said consignments were meant for laundering money and money remitted overseas against such consignments were hawala payments either to cover the differential cost of the other imports or to park money abroad for other unlawful activities.

Held that:- Initially in the show cause notice the DRI has alleged that the overvaluation of the rough diamonds is for the purpose of money laundering, remittance of money overseas to cover the differential cost of other imports or to park money abroad for other unlawful activities. However in the entire investigation, not a tip of evidence in support of this allegation was adduced. There is no evidence of laundering of money, parking or to cover the differential cost of other imports or any unlawful activities unearthed on the part of appellants. This also makes the case of the appellant strong that the value declared by them is solely for the purpose of remittance towards the import of rough diamonds.

There is no mis-declaration of the value of the rough diamonds in question - since mis-declaration of value is not established. It is not required to consider whether the mis-declaration of value would render the goods as 'prohibited goods'. - Confiscation and penalty set aside - Decided in favor of appellants.