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Issues:
1. Allegations of illegal import and export of diamonds 2. Validity of statements made by individuals 3. Burden of proof under Section 123 of the Customs Act 4. Evidence presented by the Department 5. Analysis of the Commissioner's order 6. Confiscation under Section 113(d) of the Act 7. Timing and validity of show cause notice amendment Analysis: 1. The case involved allegations of illegal import and export of diamonds based on a statement by Ashok V. Shah. The show cause notice alleged illegal import and export of diamonds, leading to confiscation and penalties against certain individuals. The Collector upheld the allegations, ordering confiscation of the diamonds with an option for redemption on payment of a fine. The appeal challenged this order. 2. The appellant's advocate argued that all export documentation was in order, with evidence of lawful possession and acquisition of the goods. He claimed that Ashok V. Shah's statement was made under duress and coercion, later retracted in an affidavit. However, the DRI failed to produce this affidavit despite requests, leading to doubts about the validity of the statement. 3. The issue of burden of proof under Section 123 of the Act was raised, with the appellant claiming that the burden shifted back to the Department due to amendments excluding diamonds from the section's provisions. The appellant provided evidence of legal acquisition, challenging the Department's reliance on Ashok V. Shah's statement. 4. The evidence presented by the Department primarily relied on Ashok V. Shah's statement, which did not conclusively prove illegal importation of the diamonds. The Department failed to establish the unlawful source of the diamonds or their smuggled nature, casting doubt on the basis of the allegations. 5. The Commissioner's order was criticized for lacking analysis on crucial points, such as the failure to interrogate Arvind Shah and the absence of evidence supporting the allegations of illegal import and export. The proceedings did not provide sufficient justification for the decision to confiscate the diamonds. 6. The issue of confiscation under Section 113(d) of the Act was raised without clear evidence or analysis supporting the claim. The lack of connection between illegal import and export further weakened the Department's case for confiscation under the relevant sections. 7. The timing and validity of the show cause notice amendment invoking Section 123 were questioned, as it was made nearly a year after the initial notice. This delay raised concerns about the legality of the amendment and the potential limitation of the show cause notice itself. In conclusion, the Tribunal found that the proceedings lacked substantial evidence to prove the diamonds were smuggled or illegally exported. The impugned order was deemed unsustainable, leading to the allowance of the appeal with consequential relief.
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