2019 (4) TMI 1190 - AT - Customs

Confiscation - Diamonds - whether, in the facts of the case, the diamonds in question are liable to be confiscated under Section 113(d) of the Customs Act, 1962? - HELD THAT - Section 113(d) specifically provides that the export goods are liable for confiscation, if they are exported or attempted to be exported contrary to any prohibition imposed by or under Customs Act or any other law for the time being in force. The fine of ₹ 20 lakhs on the appellants were imposed for the reason that the goods were liable for confiscation under Section 113(d). If the Appellant has done any act towards the exportation, namely, taking of the goods out of India and if the act or acts could be fitted in the course of such movement of the goods, or, in other words, the act could fall in the course of progress towards the actual physical taking of the goods out of India, the mischief of section 113(d) would be attracted. Admittedly the goods were booked for export by Perez Hender Valmore. It is not the case of DRI that the said Perez Hender Valmore has any link or relation or concern with the Appellant. There must be an act or acts, by the Appellant, done towards the actual physical movement of the goods with intention to take them out of India. According to DRI also, the said Shri Perez Hender Valmore and not the appellant, attempted to export 1641 pieces of cut and polished diamonds illegally by concealing the same in the courier packet by mis-declaring the contents and concealing the aforesaid diamonds in grey black coloured sports jacket of Nike brand and the said Perez Hander Valmore has no link with the Appellant. Section 113(d) ibid has no application on the facts of the present case. Therefore the goods/diamonds in question cannot be confiscated and are liable to be released unconditionally to the owner i.e. the Appellant - Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Confiscation of diamonds under Section 113(d) of the Customs Act, 1962.

Detailed Analysis:

Issue 1: Confiscation of diamonds under Section 113(d) of the Customs Act, 1962

The case involved the seizure of 616.547 carats of cut and polished diamonds from a courier company, concealed in a sports jacket for export to Italy. The diamonds were seized by the Directorate of Revenue Intelligence (DRI) based on intelligence received. The appellant, M/s. Dalumi Hong Kong Ltd., claimed ownership of the diamonds, stating they were imported for an exhibition and some were stolen during the event. The Commissioner of Customs initially ordered confiscation of the diamonds with an option for redemption by the courier company. Upon appeal, the Tribunal remanded the matter for further proceedings.

In the subsequent adjudicating order, the Commissioner ordered confiscation of the diamonds under Section 113(d) of the Customs Act, granting the appellants the option to pay a fine in lieu of confiscation. The appellants contended that there was no attempt to export the diamonds on their part and that confiscation under Section 113(d) could only be justified if there was an actual attempt to export the goods or bring them within the customs area for export.

The Tribunal analyzed the provisions of Section 113(d) which stipulate confiscation of goods attempted to be exported contrary to prohibitions under the Customs Act. It noted that the diamonds were not presented to the proper officer for inspection as required by regulations. The Tribunal emphasized that an "attempt" to export must involve physical movement of the goods out of India, and in this case, the act of attempting to export the diamonds was attributed to an individual not linked to the appellants. It was concluded that Section 113(d) did not apply to the appellants, and therefore, the diamonds could not be confiscated.

The Tribunal held that the diamonds in question should be released unconditionally to the owner, the appellant, and allowed the appeal in favor of the appellants.

In conclusion, the judgment centered on the interpretation of Section 113(d) of the Customs Act regarding the confiscation of diamonds attempted to be exported, highlighting the necessity for a direct link between the act of export and the party liable for confiscation. The decision emphasized the importance of meeting regulatory requirements and the need for a clear attempt by the party seeking to export the goods.