2011 (8) TMI 908 - AT - Customs

Penalty - Appellant admitted that diamonds smuggled into India - As per custom act Fine is available in lieu of confiscation - Held That - Penalty is reduced to Rs 5,00,000/- Penalty - Held That - No evidence on record to show person was having any knowledge regarding illicit import of the diamonds in question. Thus penalty cannot be imposed.

Summary

Issues involved:
Smuggling of diamonds, Confiscation of seized diamonds, Imposition of penalties, Redemption fine, Knowledge and involvement of individuals in smuggling activities

Detailed Analysis:

Smuggling of Diamonds:
The case involved the interception of an individual carrying cut and polished diamonds concealed in baggage at the airport. The individual admitted to bringing the diamonds to raise money for building a house in India. Further investigation revealed the involvement of other individuals in arranging the travel and handling the diamonds. The seized diamonds were not claimed by the alleged owner, leading to a dispute over ownership and liability.

Confiscation of Seized Diamonds:
The Customs authorities issued a Show Cause Notice for the confiscation of the seized diamonds and imposition of penalties. The adjudicating authority ordered the confiscation of the diamonds and imposed significant penalties on the individuals involved in the smuggling activity. The appellants contested the confiscation and penalties, seeking the release of the diamonds on payment of a redemption fine.

Imposition of Penalties:
The penalties imposed on the appellants were based on their admissions of involvement in smuggling activities. The appellant who admitted to carrying the diamonds for monetary consideration and a free air ticket had a penalty of Rs 20,00,000/- reduced to Rs 5,00,000/-. However, the penalty imposed on the other individual, who claimed to have no knowledge of the smuggling, was set aside as there was no evidence of his involvement in the illicit import of diamonds.

Redemption Fine and Ownership Dispute:
The appellants sought the release of the seized diamonds on payment of a redemption fine, arguing that the import of diamonds was not prohibited. However, the tribunal found that since the alleged owner of the diamonds did not claim them and did not appear before the investigating officer, there was no merit in releasing the diamonds to the appellants on payment of a redemption fine.

Knowledge and Involvement of Individuals:
The tribunal considered the statements of the individuals involved in the smuggling activity. While one appellant admitted to carrying the diamonds at the instructions of another individual for monetary gain, the other appellant claimed to have been working as a personal assistant and had no knowledge of the illicit import of diamonds. The penalty imposed on the latter was set aside due to lack of evidence linking him to the smuggling activity.

In conclusion, the tribunal upheld the confiscation of the seized diamonds and the imposition of penalties, with a reduction for one appellant based on his admission of involvement. The ownership dispute and lack of evidence regarding the involvement of one appellant led to the setting aside of the penalty imposed on him.