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2013 (8) TMI 506 - AT - CustomsImport of low quality rough diamonds - prohibited goods - Misdeclaration of Value Overvaluation Confiscation of goods Penalties Imposed - Revenue was of the view that the value of the rough diamonds was misdeclared and the value declared was highly exaggerated Whether the over-invoicing as claimed by the department was to be upheld and whether the value revised as per the provisions of Section 14 of Customs Act, 1962 Held that:- The transaction value cannot to be accepted until and unless it was shown by some contemporaneous evidence that the price declared in the invoice was not the correct price - the department had shown from the contemporaneous evidence that the invoices were either fabricated or fake or that any relationship existed between the importer and the exporter sufficient evidence had been gathered to show that the price was inflated. Liability of consignments to confiscation Whether the consignments of rough diamonds were liable for absolute confiscation u/s 111(d) and 111(m) of the Customs Act, 1962 Held that:- The value had been misdeclared and therefore the value declared had to be rejected - We have also taken note of the provisions of the Section 111(d) of Customs Act, 1962 and have already noticed that goods were to be treated as the ones which were prohibited for import under the Exim Policy - Therefore the goods were liable to confiscation u/s 111(d) of Customs Act, 1962. Absolute Confiscation - Whether absolute confiscation was warranted in the case Held that:- It was not only that the parties concerned had attempted to import rough diamonds at highly exaggerated value but also they attempted to manipulate the records and mislead the department that there was a mistake in preparation of invoice The extent of over-invoicing was so high that the actual value of the goods was found to be 3.56% of the actual It would not be fair on to consider the past activity for the purpose of deciding whether goods have to be absolutely confiscated or not - Om Prakash Bhatia v. CC, Delhi [2003 (7) TMI 74 - SUPREME COURT OF INDIA] - the rough diamonds had to be held as prohibited under the law - But the extent of over-valuation which if allowed would have resulted in repatriation of foreign currency itself would show that this was a case where no lenient view was called for - Therefore the decision to absolutely confiscate the rough diamonds under seizure had to be upheld - reduction of value of rough diamonds imported and the revised value determined by the Commissioner was upheld - the order of absolute confiscation u/s 111(d) of Customs Act, 1962 was also upheld. Whether all the assesses were liable to penalty u/s 112(a) of the Customs Act, 1962 - Held that:- As the values of the goods to be imported was highly inflated and the same was also proved beyond doubt - thus Penalties were also imposed u/s 112(a) of Customs Act Decided against assesses.
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