2010 (12) TMI 16 - SUPREME COURT

Rough diamonds - illegal import - search and seizure - confiscation and penalty - application of baggage rules - benefit of exemption notification for illegal import - revenue contended that, the benefit of the exemption notification cannot be extended to a person who/which had illegally imported rough diamonds into the country. - revenue further argued that the same could not be availed by those persons who did not have the licence to import diamonds, or who had smuggled rough diamonds into the country clandestinely without payment of duty. - Held that: - It is settled law that the notification has to be read as a whole. If any of the conditions laid down in the notification is not fulfilled, the party is not entitled to the benefit of that notification. The rule regarding exemptions is that exemptions should generally be strictly interpreted but beneficial exemptions having their purpose as encouragement or promotion of certain activities should be liberally interpreted.

`Smuggled goods' will not come within the definition of `imported goods' for the purpose of the exemption notification - . In the present case, it is the finding of the Bombay High Court that the respondent-firm had imported diamonds of foreign origin without a valid licence and that finding has become final. Therefore, we agree with the learned senior counsel Sri R.P. Bhatt on this aspect. The Tribunal, in our view, erred in holding that the situation was covered by the case of Associated Cements Company (2001 -TMI - 78729 - Supreme court of India) decided by this Court