2008 (9) TMI 303 - AT - Customs

Smuggling of Diamonds Confiscation of goods - appellant was proceeding to board a Bangkok-bound flight at Chennai Airport after emigration clearance and crossing the Customs barrier, an Air Intelligence Officer of the Customs intercepted and interrogated him to find out whether he was carrying any contraband. The appellant replied in the negative. Unconvinced, the officer embarked on detailed examination of the appellant s baggage, whereupon it was found that 15 pieces of what appeared to be diamonds were kept concealed in the baggage. Appellant was detained under COFEPOSA on 14-3-2007. This detention was, however, revoked later on Held that the revocation of COFEPOSA detention did not detract from the gravity of the offence committed by the appellant - The confiscation is perfectly justifiable Case remanded for proper valuation of diamonds to impose fine.

Summary

Issues: Attempted smuggling of diamonds, confiscation of goods, redemption of confiscated goods, discretion under Section 125 of the Customs Act, remand of the case

Attempted Smuggling of Diamonds:
The appellant was intercepted at Chennai Airport with concealed diamonds. The stones were certified to be cut and polished diamonds, and the appellant admitted to attempting to smuggle them without declaring to Customs. The Commissioner ordered absolute confiscation of the diamonds valued at Rs. 34,76,000 under relevant sections of the Customs Act, Foreign Trade Act, and FEMA. The Tribunal upheld the confiscation, stating the evidence clearly indicated the appellant's conscious attempt to smuggle the diamonds.

Confiscation of Goods:
The Commissioner also ordered the confiscation of other material objects under Section 119 of the Customs Act and imposed a penalty of Rs. 3,50,000 on the appellant under Section 114 of the Customs Act. The Tribunal found no valid ground against the confiscation of the diamonds, upholding the decision based on the gravity of the offense committed by the appellant under the Customs Act.

Redemption of Confiscated Goods - Discretion under Section 125:
The Tribunal noted that under Section 125 of the Customs Act, the Commissioner had discretion to consider the appellant's plea for redemption of the confiscated goods. The appellant's violation of FEMA and Customs Act made the diamonds fall under the category of "prohibited goods." The Tribunal found that the Commissioner did not give the appellant an opportunity to state his defense against absolute confiscation as required by law. Therefore, the case was remanded to the Commissioner for a fresh decision on redemption of the goods.

Remand of the Case:
The Tribunal set aside the impugned order, except for the confiscation of the diamonds, and allowed the appeal by way of remand for a fresh decision by the Commissioner. The Commissioner was directed to exercise discretion judiciously under Section 125(1) of the Customs Act, determine a reasonable amount of fine for redemption of the diamonds, and redetermine the penalty to be imposed under Section 114 of the Customs Act. The appellant was to be given a reasonable opportunity to be heard before any decision was made.