2014 (6) TMI 972 - AT - Customs

Confiscation of 10,510.60 Carats of rough diamonds valued under Section 111 (m) of the Customs Act, 1962 - penalty of ₹ 50 lakhs imposed upon the appellant under Section 112 (b) of the Customs Act, 1962 - Held that - As per Para 50(iv) of the OIO dt.15.10.2012 appellant has taken up during the adjudication proceedings that rough diamonds are over-valued and that the same should be re-valued by GJEPC Valuation Committee. The findings of the adjudicating authority in Para 59 of the OIO dt.15.10.2012 on valuation of the rough diamonds may not be appropriate in view of the case-law relied upon by the appellant. Secondly, appellant should be given an opportunity to explain his case that the seized/confiscated rough diamonds have been duly imported by him under regular Bills of Entry, when he is claiming the ownership of rough diamonds involved in these proceedings. The matter is therefore, required to be remanded to the adjudicating authority by setting aside the OIO dt.15.10.2012. It is directed that adjudicating authority should get the valuation of the seized rough diamonds done from an expert committee consisting of one member chosen by the appellant and the other member by the Revenue. Appellant should also be heard in the matter to explain their case that seized rough diamonds are out of the rough diamonds imported by the appellant under Bills of Entry. In view of the above observations, the appeal filed by the appellant is allowed by way of remand to the adjudicating authority. Adjudicating authority should dispose of the case within three months from the date of receipt of this order in de-novo adjudication as per the direction given in Para 4.1 above.

Summary

Issues:
1. Confiscation of rough diamonds under Section 111(m) of the Customs Act, 1962
2. Imposition of penalty under Section 112(b) of the Customs Act, 1962
3. Allegations of over-valuation of seized rough diamonds
4. Request for re-valuation by GJEPC panel
5. Defense of the order by the Revenue
6. Appeal for remand based on ownership claim and over-valuation arguments
7. Remand to adjudicating authority for re-valuation by an expert panel

Analysis:
The appeal in question pertains to the confiscation of 10,510.60 Carats of rough diamonds valued at Rs. 4,24,34,182 under Section 111(m) of the Customs Act, 1962, along with the imposition of a penalty of Rs. 50 lakhs under Section 112(b) of the same Act. The appellant, represented by an advocate, argued that the seized rough diamonds were legally imported and should not be liable for confiscation. Allegations of over-valuation were raised, requesting re-valuation by a GJEPC panel, citing a similar case precedent. The Revenue defended the order, asserting the correctness of the valuation and justification for absolute confiscation due to missing certificates.

Upon hearing both sides and examining the case records, the Technical Member noted the appellant's claim of ownership and the argument regarding over-valuation throughout the adjudication process. Citing a relevant case law, the Technical Member emphasized the need for re-valuation by an expert panel, as requested by the appellant. Consequently, the matter was remanded to the adjudicating authority for re-valuation by an expert committee, with one member chosen by the appellant and another by the Revenue. The appellant was granted the opportunity to explain the importation of the seized rough diamonds under regular Bills of Entry.

In conclusion, the appeal was allowed by remanding the case to the adjudicating authority for de-novo adjudication within three months, directing re-valuation by an expert committee as per the outlined procedure. The decision highlighted the importance of fair valuation and the appellant's right to present their case regarding the imported rough diamonds.