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Issues:
1. Valuation of exported goods. 2. Application of Section 113(i) of the Customs Act, 1962. 3. Classification of goods as prohibited goods. 4. Imposition of fine and penalty. Analysis: Issue 1: Valuation of exported goods The appellants exported cut and polished diamonds with a declared value significantly higher than the actual value ascertained upon examination. The discrepancy in valuation led to the goods being over invoiced by a substantial amount. The Adjudicating Commissioner noted that the mis-declaration was not denied by the appellants but attributed to a mistake by the accounting staff. Consequently, the impugned goods were confiscated under Section 113(i) of the Customs Act, 1962, with a redemption fine and penalty imposed due to the explanation provided by the appellants. Issue 2: Application of Section 113(i) The argument raised by the appellants contended that Section 113(i) of the Customs Act, 1962, which pertains to dutiable goods, prohibited goods, and goods exported under claim of drawback, was not applicable in their case. However, the judgment cited the legal position established by the Apex Court in a previous case, clarifying that mis-declaration of value and over-invoicing, as seen in the present scenario, indeed classify the goods as prohibited under the Customs Act, 1962. Therefore, the application of Section 113(i) was deemed appropriate by the tribunal. Issue 3: Classification of goods as prohibited goods The tribunal referenced relevant legislation such as the Foreign Exchange Regulation Act, 1973, and the Foreign Trade (Development and Regulation) Act, 1992, to support the classification of the impugned goods as prohibited. The requirement to declare the correct export value under these laws, coupled with the mis-declaration and over-invoicing observed, solidified the characterization of the goods as prohibited under the Customs Act, 1962. This classification justified the imposition of penalties and fines by the Adjudicating Commissioner. Issue 4: Imposition of fine and penalty Considering the substantial value of the goods and the extent of overinvoicing, the tribunal upheld the Adjudicating Commissioner's decision to impose a redemption fine and penalty. Despite the appellants' argument for leniency, the tribunal found the Commissioner's approach to be reasonable and declined to reduce the fines and penalties. Consequently, the appeal was dismissed, affirming the decision regarding the fines and penalties imposed. In conclusion, the tribunal's judgment upheld the classification of the goods as prohibited due to mis-declaration and over-invoicing, leading to the application of Section 113(i) of the Customs Act, 1962. The fines and penalties imposed were deemed appropriate considering the circumstances, and the appeal was consequently dismissed.
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