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Shri Jorabhai Valabhai Rabari, Shri Premabhai Jethabhai Attya Versus Commissioner of Customs, Ahmedabad

2016 (8) TMI 924 - CESTAT AHMEDABAD

Imposition of penalty - Section 112(b) of Customs Act, 1962 – rough diamonds – Kimberley Process Certificate – seizure – confiscation – Held that: - the appellants had brought the subject Rough Diamonds from Kenya illicitly and the same were recovered and seized from them - penalty imposable under section 112(b) of the customs act,1962. - Quantum of penalty – Held that: - the subject Rough Diamonds should be valued by two experts, one chosen by the appellants and one by the Revenue from a pa .....

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5-2016 - Dr. D.M. Misra, Member (Judicial) and Mr. P.M. Saleem, Member (Technical) For Appellant (s) : Shri P.P. Jadeja, Consultant For Respondent (s) : Dr. J. Nagori, Authorised Representative ORDER These appeals are filed by Shri Jorabhai Valabhai Rabari (Jorabhai for short) and Shri Premabhai Jethabhai Attya (Premabhai for short), aggrieved by the impugned OIO No. 18/Commr/DRI/2012 dated 31.10.2012 wherein Commissioner of Customs, Ahmedabad, inter-alia, imposed penalty of Rs. One Crore each o .....

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cheme has been evolved to deal with the issue of conflict diamonds (blood diamonds) which are basically rough diamonds whose trade is prohibited by the United Nations Security Council because the proceeds of that trade are used by Rebel Movements and their allies to finance conflicts aimed at undermining legitimate governments. KP Certificate identifies a shipment of rough diamonds as being in compliance with the requirements of the KPCs. Since the subject Rough Diamonds were not accompanied by .....

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at the outset itself submits that the appellants are innocent and were not involved in the smuggling of Rough Diamonds. He submits that the allegation is that the appellants had smuggled the Rough Diamonds through Mumbai International Airport in the intervening night of 12/13.04.2011 and were intercepted at Surat alongwith the subject Rough Diamonds when they had taken the same to Surat Diamond Market for sale. Learned Consultant argued that the said allegation is a fabricated one and the said d .....

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nd the burden of proof in town seizure for non-notified goods lies on the department. He also contended that the value of the seized Rough Diamonds have been fixed at exorbitantly high level by DRI so as to impose huge penalties on the appellants and that valuation of the same has not been done in accordance with the established practice of the department. He submitted that Ahmedabad Bench of the Tribunal had decided an identical issue of valuation of seized Rough Diamonds in the case of Pravink .....

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193) ELT 289 (Tri. Mumbai)]. In the case of Sagar Impex, the Tribunal had held that the valuation should be done by independent expert committee consisting of one member chosen by the appellant and the other by the department. Learned Consultant also submitted that it is the regular practice of the department at Precious Customs Cargo Complex (PCCC) Mumbai that diamonds including Rough Diamonds are valued on routine basis by experts empanelled by the Commissionerate from a select list of experts .....

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the seized Rough Diamonds in the lines of the earlier decisions of the Tribunal in the case of Pravinkumar Ratanbhai Ajudiya vs. Commissioner of Customs, Ahmedabad and Sagar Impex vs. Commissioner of Customs (Airport) Mumbai (supra). The Learned Consultant also raised the issue of whether DRI Ahmedabad and Commissioner of Customs, Ahmedabad have jurisdiction in this case, as the goods were imported/smuggled through Mumbai International Airport. However, when Bench queried about Bail proceedings .....

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ependent traders/ would be purchasers of the rough diamonds, in addition to the statements of the appellants. He also strongly refuted the so called retraction made by the appellants before the Chief Judicial Magistrate in which the appellants had stated that they had not even gone to Kenya. He also pointed out that the said statements in their bail applications were rejected by the CJM. Moreover, the appellate authorities had also dismissed the said contention of the appellants and rejected the .....

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valuation has been done as per current market value, it supports the seizure value of the Rough Diamonds. He further argued that the penalty of Rs. One Crore each imposed on the appellants are justified and the same is not dependant on the value of seized goods. 6. We have carefully considered the arguments of both sides and examined the records and evidences. It is observed from the seizure Panchnama dated 22.4.2011 (written in local language - Gujarati), that the Panchas have stated that they .....

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Diamonds were brought in the same bags on 12.4.2011 from Nairobi to Mumbai and without declaring at the Airport. They further informed that since the said Rough Diamonds are of Zimbabwe origin and were smuggled, they do not have any such legal documents and KPC. Thereafter, the officers in the presence of Panchas, Shri Jorabhai and Shri Premabhai and others, opened the bags and recovered the Rough Diamonds which were examined in detail and valued by Shri Abhay Desai, Appraiser of Customs Hira Bo .....

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nd 03.00 AM by Kenyan Airways and after staying there they left Nairobi on 12.4.2011 and arrived at Mumbai early Morning at 02.30AM as per Indian local time on 13.4.2011. They further stated that both of them had carried one big bag. Further Shri Premabhai stated that the Rough Diamonds brought from Nairobi were neither declared before Customs Authority at Nairobi nor before the Customs Authority at Mumbai and also stated that they brought the said Rough Diamonds duly wrapped in plastic packets .....

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anchnama that they have received one original copy of the Panchnama under their signature dated 22.4.2011. A perusal of the statements of Shri Jorabhai and Premabhai both dated 22.4.2011 revealed that after giving their personal and family details alongwith their educational qualification and career particulars, they have confirmed the details of the seizure Panchnama dated 22.4.2011 referred to above. Shri Jorabhai has stated that after bringing the said diamonds from Nairobi on 12.4.2011 they .....

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etanbhai and settle the deal. They also met one Shri Munnabhai in Surat who is also a diamond broker. He was also shown samples of said Rough Diamonds. The deal could not be settled with him as he also offered very low price than what they expected. The officers intercepted them when they were on their way to the office of Chetanbhai. The statement of Shri Premabhai dated 22.4.2011 is in conformity with the statement of Shri Jorabhai. His statement is more elaborate and more detailed and major p .....

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at night on 22.4.2011 and that they denied that they were caught with any blood diamond and no such diamonds were brought by them without any KP Certificate and they are innocent. Their bail applications were rejected by the CJM Court vide order dated 03.5.2011 on the ground of false averment being found in the memo of application. 7. The passport entries and the information furnished by the Customs and Immigration authorities confirm that the appellants had left for Nairobi on 12.03.2011 and r .....

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t which time he was shown some Rough Diamonds but the deal could not be finalized as the price quoted by the appellants was around 60 $ per carat, which was very high. He also disclosed in the said statement that he again met the appellants on 15.04.2011 and 18.04.2011 at Surat in his office and that the appellants showed him the packet of Rough Diamonds of Zimbabwe origin with them and quoted the price of about USD 43 to 45 per carat and they informed him that they had a large quantity of Rough .....

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e the Rough Diamonds were shown by the appellants. He also corroborated the visit of Shri Premabhai to the office of Shri Chetan B. Shah on 15.4.2011 at which time a packet of Rough Diamonds were shown by Shri Premabhai who wanted to sell the same at negotiable price of around USD 43-45 per carat. Shri Dharnendra Rasiklal alias Monu, proprietor of M/s. Mili Gems in his statement dated 04.5.2011 corroborated that Shri Jorabahi and Shri Premabhai visited his office at Surat on 21.04.2011 and showe .....

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ion of the facts and evidences in the case, we find force in the findings of the adjudicating authority that the appellants had brought the subject Rough Diamonds from Kenya illicitly and the same were recovered and seized from them. Therefore, we do not find any reason to interfere with the impugned order-in-original in this respect. Consequently, we also hold that penalty is imposable on the appellants under Section 112(b) of the Customs Act, 1962. 9. However, as regards the quantum of penalty .....

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were valued initially at the time of seizure Panchnama by Customs Appraiser working at Hira Bourse, Surat. It is not clear from the records the expertise of the said Appraiser, whether he is a diamond expert valuer. The contentions of the appellants that the department should have followed the established practice and procedures for valuation of Rough Diamonds has considerable force. It is observed that there is a Panchnama dated 28.04.2011 on records which states that DRI had called two Diamon .....

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31.7.2015, wherein DRI was directed to produce a certificate for the present market value of the said goods. Accordingly, the goods were examined by two government approved expert panel members of Gem and Jewellery Export Promotion committee (GJEPC), Surat on 06.08.2015. The subject Rough Diamonds were found to be 48590.957 carat valued at USD 14,29,110.57 as on 06.08.2015. In accordance with the exchange rate of USD of ₹ 64.10 as on 06.08.2015, the total value worked out to ₹ 9,16,0 .....

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