2019 (10) TMI 598 - HC - Customs

Confiscation of imported goods - Uncut Diamonds - lack of jurisdiction of Commissioner - HELD THAT - While the petitioner impugns Ext.P11 order on various ground including the lack of jurisdiction of the Commissioner in directing a confiscation of goods that were eventually covered by the Kimberly Certificate prescribed for the purposes of its import, a delay in adjudication of the matter would prejudicially affect the petitioner, who has been permitted to re-export the goods by Ext.P11 order. Without prejudice to the right of the petitioner to impugn Ext.P11 order, to the extent it imposes a penalty and redemption fine in lieu of confiscation on the petitioner, before the appellate authority in appropriate proceedings, the petitioner is permitted to re-export the imported diamonds on the strength of the Kimberly Process Certificate now produced by him as Ext.P10, and subject to his paying the penalty and redemption fine under protest before the respondents. Petition disposed off.

Summary

Issues:
1. Confiscation of 'Uncut Diamonds' under Customs Act, 1962.
2. Lack of jurisdiction of the Commissioner in directing confiscation.
3. Delay in adjudication affecting the petitioner.
4. Permission to re-export the goods.
5. Imposition of penalty and redemption fine.

Analysis:

1. The petitioner Company, involved in retail sale of Gold and Diamond jewellery, challenged Ext.P11 order confiscating 'Uncut Diamonds' imported under Bill of Entry No. 8034440 dated 13.9.2018 under Section 111 (d) of the Customs Act, 1962. The order granted an option to redeem the goods on payment of a fine of &8377; 10,00,000 for re-export within 30 days with the Kimberly Process Certificate. Additionally, a penalty of &8377; 1,00,000 was imposed under Section 112 (a) of the Customs Act.

2. The petitioner contested Ext.P11 order on grounds including lack of jurisdiction of the Commissioner in directing confiscation of goods covered by the Kimberly Certificate for import. The court noted that a delay in adjudication could harm the petitioner, who was allowed to re-export the goods by Ext.P11 order.

3. Considering the circumstances, the court permitted the petitioner to re-export the imported diamonds based on the Kimberly Process Certificate produced as Ext.P10. The petitioner was required to pay the penalty and redemption fine under protest to the respondents. Upon payment, the respondents were directed to allow re-export without delay.

4. The judgment allowed the petitioner to challenge Ext.P11 order regarding penalty and redemption fine before the appellate authority. If the petitioner appealed to the Customs, Excise and Service (Tax) Appellate Tribunal within one month from the judgment, the Tribunal would treat the appeal as timely filed and proceed with expeditious adjudication.

5. The writ petition was disposed of accordingly, granting permission for re-export while preserving the petitioner's right to contest the penalty and redemption fine before the appellate authority.