2017 (6) TMI 195 - AT - Customs

Misdeclaration of goods - substitution of high-quality cut and polished diamonds with those of inferior quality to the extent of 1184.61 carats, the attempt to remove 1095.43 carats of cut and polished diamonds - non-accountal and illicit removal of capital goods from the said unit - Held that - the records are not available for verification. However, the data document submitted by the appellant can be subject to computation for arriving at the stock of goods-in terms of cut, clarity, caratage - Without an appropriate finding on this aspect, we are hamstrung in rendering justice in accordance with law. The adjudicating authority is directed to complete this process within three months - appeal allowed by way of remand.

Summary

Issues:
Challenge to order-in-original invoking sections 111 and 113 of Customs Act, 1962 for confiscation of goods, imposition of duty and penalties, compliance with remand order, alleged substitution of diamonds, discrepancies in stock records, violation of Export Processing Zone scheme, lack of verification from departmental records.

Analysis:
The judgment pertains to an appeal challenging an order-in-original issued by the Commissioner of Customs (General) that invoked sections 111 and 113 of the Customs Act, 1962. The order confiscated 'cut and polished diamonds' and capital goods, imposed duties and penalties, and involved the redemption of some confiscated goods upon payment of fines. The appeal was filed by a company that had undergone a name change. The matter had been remanded back to the original authority by the Tribunal previously for retesting seized goods and verification of import details.

The proceedings were initiated against the appellant for alleged substitution of high-quality 'cut and polished diamonds' with inferior ones, attempted removal of diamonds and capital goods, and non-accountal of goods. The appellant contended that the terms of the remand order were not complied with, but the adjudicating authority had discussed the shortage in value and quantity in detail.

It was established that some goods had been seized illicitly, and there was a systematic substitution of diamonds. The judgment highlighted the procedural requirements under the Export Processing Zone scheme and noted discrepancies in maintaining the distinction between domestic and zone operations.

The appellant's submissions were not verified from departmental records as directed by the Tribunal due to unavailability of records, leading to a lack of appropriate findings. The adjudicating authority was directed to complete the verification process within three months. Consequently, the impugned order was set aside, and the matter was remanded for a fresh hearing to consider submissions and allegations.

In conclusion, the appeals were allowed by way of remand, emphasizing the need for proper verification and compliance with the remand order for a just decision in accordance with the law.