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2013 (8) TMI 433 - AT - CustomsSmuggling of goods - Cut & polished diamonds and Gold jewellery recovered from the baggage/person - Accounting procedures – penalty u/s 112 r.w.117 - Held that:- accounting procedure adopted by the assessee was proper and correct in the normal course of business and goods were not held liable for confiscation - no penalty was warranted under Section 112 r.w. Section 117 - The method of accounting had been explained by the employees of the said company in their various statements - It was stated that the system of accounting of stock by them was being followed by them since long and that even income tax authorities did not take any objection against this procedure - the allegation that they were having possession of unaccounted diamond was based on method of accounting adopted by them – The system was recognised in Gem & Jewellery trade. The Income Tax authorities which were more acquainted about the accounting procedure had also stated that the accounts of assessee were found to be correct and complete considering the submissions of the assessee and also acceptance method of accounting of revenue in past assessment years and in original assessment years - in all the case diamonds polished ones were entered in the next year - Income Tax office had also given its finding that no material had been found by any authority indicating that the assessee had made any advance for illegally importing diamonds - the diamonds recovered by the customs authorities and paid the customs duty as per the order of Settlement Commission - Thereafter it was found that accounting procedure followed by the assessee were proper and legally correct and there is no discrepancy in the stock of diamonds. Smuggling of goods – Held that:- Proceedings of confiscation of diamonds were dropped - No evidence had been brought on record by the department which establish that the assessee was involved in the activity of illegal import or smuggling of diamonds – no evidence on record to establish that any dutiable or prohibited goods were attempted to be illegally imported or were removed from the customs area to invoke Section 111(d) or 111(j) – Decided in favor of assesse.
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