TMI Blog2020 (3) TMI 492X X X X Extracts X X X X X X X X Extracts X X X X ..... DA Mines, Zimbabwe for supply of rough diamonds prior to 17.11.2010 and in pursuance of same MBADA obtained KPC No. ZW 000114 dt. 12.11.2010. The KPC was duly issued by the Zimbabwean Authorities for diamond in question in support of C.D. Jewels. There is no reference of any date as to from which the diamonds from Marange area are to be allowed. It does not contain the date of excavation, sourcing or purchase date of diamonds by any intermediary or the first buyer from Marange. It simply states that if the goods are accompanied by KP Monitor certificate the goods of Marnage Origin are to be permitted for exports. The most important aspect to be observed that the intention of KPC Certification and the office memorandum issued by the Ministry of the commerce was to stop the trade of conflicting diamonds - Once the diamonds were KPC Certified and such certificates were not repudiated by the KPC organisation, in that case the goods cannot be prohibited for trade. Consequentially the impugned goods cannot be termed as prohibited goods and will not fall into the category of smuggled goods. The fact of KPC Certificates which holds that the goods were KPCC Compliant and the aforesai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against impugned Order-in-Original No. AHM-CUSTM-000-COM-002-17-18 dt. 04.07.2017 passed by Commissioner of Customs, Ahmedabad. The brief facts of the case are that M/s SRDSIL had imported rough diamond from its subsidiary M/s SRDSIL, FZE, UAE for which filed 5 bills of entry dt. 18.11.2011 and 20.11.2011 and under cover of invoice no. 10159 dt. 16.11.2011 wherein two KP Certificates (Kimberely Process Certificate) Nos. ZW 000114 DT. 12.11.2010 and EC 00276664 dt. 22.07.2011 were mentioned. The diamonds were declared to be of mixed origin. The said diamonds were procured by M/s SRDSIL, FZE, UAE from M/s CD Jewels, DMC, UAE who in turn had procured them from M/s MBABDA Diamonds Pvt. Ltd. through Mineral Metal Trading Corporation of Zimbabwe vide invoice no. PD006/01/11 dt. 20.02.2011 and KP Certificate No. ZW 000114 dt. 12.11.2010 and the remaining diamonds were procured from another local diamond trader M/s Alliance Impex, FZE, UAE vide Invoice No. LOC/0254/2011-2012 dt. 16.11.2011 and KP Certificate No. EC 00276664 dt. 22.07.2011 issued by the authorised officer of the European Community Kimberley Process Certificate Import confirmation office. Based upon investigation the Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the provisions of Section 111 (d), (m) (o) of the Customs Act, 1962,. He also imposed penalty under section 112 (a) and Section 114AA of the Customs Act upon M/s SSDIL and penalty u/s 112 (a) upon Shri Asit Mehta. Aggrieved M/s SSDIL and Shri Asit Mehta has filed appeals against confiscation of goods and imposition of penalties. The revenue has also filed appeal for enhancement of redemption fine and penalties imposed under Section 112 (a) and Section 114AA. 2. Learned Advocate Shri Rohan Shah appearing for both the Appellants submits that the impugned order is not sustainable. The adjudicating authority has wrongly considered the date of sale invoice i.e 20.01.2011 as date of procurement which is subsequent to 17.11.2010. Theterms procure has wrongly been equated with term sale and even with date of sale. In absence of any definition of term procure , the same cannot be equated with term sale . It is well settled both commercially and legally that raising of an invoice is based on commercial factors agreed between the parties and the date of raising an invoice has no necessary co-relation with the date of sale of goods. The documents shows that the diamonds were proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtificate has been obtained fraudulently. 2.1 The Learned Counsel submits that as apparent from the facts, M/s CD Jewels had placed orders on MMCZ i.e Minerals Marketing Corporation of Zimbabwe for supply of rough diamonds in early November (prior to 17.11.2010) after which MMCZ applied for and obtained KPC No. ZW 000114 dt. 12.11.2010. The KPC No. ZW 000114 dt. 12.11.2010 which contains the name of supplier, the name of purchaser and the quantity of diamonds clearly evidences that there was an order placed by CD Jewels on MMCZ prior to 12.11.2010 and certainly prior to 17.11.2010. The diamonds were subsequently invoiced by MMCZ vide invoice no. PD006/01/11 dt. 20.01.2011. However the placing of order and sale thereof by MMCZ to CD Jewels took place prior to 17.11.2010 and hence the impugned order has incorrectly concluded that the facilitation provided vide OM dt. 19.08.2011 is not available to the Appellants. He relies upon the following documents to show that the diamonds were received prior to 17.11.2010 : (i) Letter dt. 16.08.2011 by CD Jewels to Mr. Abbey Chikane, KP Monitor, South Africa which requested that it be certified that the diamonds purchased by M/s CD Jewel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the GJEPC (Gujarat Jem Export Promotion Council) has not followed the procedure of redressal prescribed under KPCS. The import of diamond was not prohibited at the time of their import into India as the same were imported into India on dt. 18.11.2011 and 21.11.2011 during which period there was no ban. During the period 2010 2011, the KPCS investigated issues relating to rough diamonds originating from various mines including Marange Mines in Zimbabwe at length and the impugned goods has been certified after such exercise. That the diamonds are not of Zimbabwe origin but of mixed origin as stated in KPC certificates. That the UAE authorities issued 5 KPCs on 17.11.2011 and 20.11.2011 after perusing the various documents submitted by SRDSIL FZE alongwith their application seeking issuance of the KPCs. The UAE KP Authority also examined sample of diamonds exported to India. These KPCs therefore evidence that there was no contravention of the KPCs provisions and issued KPCs after due process. He submits that the Office memorandum dt. 24.11.2011 issued by the Ministry of Commerce lifted ban unconditionally if the imported goods had the requisited KPCs with them. The OM dt. 24.11.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... procured by the Appellant from CD Jewels were clearly identified as procured by M/s CD Jewels with undisputed KPCs . When the KPC Certificate has identified the diamonds the buyer M/s C.D. Jewels and the seller even before 17.11.2010, it is very much clear that the transaction of procurement of such jewels was already in process and in the line of such procurement the diamonds were invoiced and sold through MMCZ to CD Jewels and then to the Appellant. Had the KP Certificate not been identified the buyer of goods and would have been post 17.11.2010, it would have led to conclusion that the goods were procured post 17.11.2010, but when the procurement was already in place as the seller and the buyer and even the KP Certificate recognised the goods in transaction prior to 17.11.2010 and such KP Certificate has not held to be void, it has to be construed that the goods were already procured. Further the OM dt. 19.08.2011 does not create any bar on the impugned goods as the OM dt. 24.11.2011 states that in KPCS (Kimberley Process Certification Scheme) an agreement on resumption of exports of rough diamonds mined from KP Compliant mines in the Marange area in Zimbabwe including MBADA has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... From the above letter at para 4, it clearly appears that impugned consignments were pending in Zimbabwe as of 18.07.2011 there KPC No. ZW000114 was issued on 12.11.2010. Further KPC Nos 22648, 22650, 22665, 22668 and 22663 were issued by the UAE KP authority in respect of impugned consignments, which are scanned below. 4.1 We also find that the Minerals Marketing Corporation of Zimbabwe (MMCZ) has also certified the goods to be conflict free as apparent from their letter dt. 20.01.2011 In such circumstances and facts as above the goods cannot be held to be banned. 4.2 Further the Kimberly Process certificate ZW 0001114 shows the diamonds to be conflict free which is as under : 4.3 We find that the fact of KPC Certificates which holds that the goods were KPCC Compliant and the aforesaid documents unequivocally proves that the diamonds were procured by CD jewels before 17.11.2010. Unless and until such procurement was in process, there would not have been any KP certification and even the certificates show the buyer of goods as CD Jewels. Thus when the contracting parties and the authorities concerned with the certifi ..... 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