2007 (8) TMI 725 - HC - Customs

Summary

Issues involved:
The issues involved in the judgment are:
1. Confirmation of demand of duty and penalty by CESTAT
2. Confiscation of diamonds and imposition of redemption fine by CESTAT
3. Liability for confiscation of diamonds by CESTAT

Confirmation of demand of duty and penalty by CESTAT:
The High Court considered whether the CESTAT was correct in confirming the demand of duty amounting to Rs. 12,31,86,708 and penalty of an equivalent amount. The Court examined the facts and circumstances of the case in this regard.

Confiscation of diamonds and imposition of redemption fine by CESTAT:
Another issue before the Court was whether the CESTAT was right in ordering the confiscation of 10,631.39 carats of diamond and imposing a redemption fine of Rs. 43 lakhs. The Court analyzed the facts and circumstances related to this aspect of the case.

Liability for confiscation of diamonds by CESTAT:
The third issue involved whether the CESTAT was correct in concluding that 63,078.35 carats of diamonds are liable for confiscation. The Court deliberated on the facts and circumstances surrounding this particular issue.

The Court further deliberated on the conditions to be imposed for the grant of interim relief. After hearing the contentions of both parties, the Court noted that the respondents were in possession of diamonds valued at around Rs. 4.3 crores. The appellants argued that these diamonds could be retained by the customs authorities until the appeal is disposed of. On the other hand, the respondents contended that proper security should be provided by the appellants.

After considering the arguments presented by both parties, the Court granted interim relief in favor of the appellants. The relief was subject to certain terms, including the appellants depositing Rs. 2 crores with the respondents within four weeks. Additionally, the diamonds valued at Rs. 4.3 crores were to remain with the respondents as security until the final disposal of the appeal and for a specified period thereafter. The appellants were also required to furnish a bond in respect of the building in favor of the respondents, to be kept alive until the hearing and final disposal of the appeal and for a specified period thereafter.