2014 (6) TMI 191 - AT - Customs

Confiscation under Section 113(d) - Re export of goods - Revenue contends that in the airway bill, the goods are shown as polished diamonds whereas in the invoice submitted by the exporter it is shown as rough diamonds and therefore, there is a discrepancy between the two and hence, things are not in order - Held that - Airway bill is prepared by the Airlines. If they have committed an error in preparing the airway bill, no blame can be laid on the importer. In the invoice the impugned goods are clearly shown as rough diamonds and the value is also shown and the appellate and adjudicating authority have accepted the value given in the invoice for the purpose of adjudication. If that be so, they could not have taken a view that merely because in the airway bill, the goods are declared as polished diamonds, the import is not in order. - Following decision of Sahil Diamonds Pvt. Ltd. 2010 (4) TMI 1015 - Supreme Court of India - importer allowed to re-export the diamonds as per the procedure prescribed by the Board in the said circular - Decided in favour of assessee.

Summary

Issues:
Import of rough diamonds without Kimberley Process (KP) Certificate, Confiscation of diamonds, Penalty imposition, Compliance with Board Circular, Re-export permission.

Analysis:
1. Import of Rough Diamonds without KP Certificate: The case involved the import of rough diamonds by M/s. Sur Gems without the required Kimberley Process (KP) Certificate. The Customs department initiated proceedings and held the diamonds liable for confiscation under Section 113(d) of the Customs Act, 1962, and imposed a penalty under Section 112(a) of the Act. The appellant requested re-export of the diamonds, which was denied, leading to the appeal.

2. Compliance with Board Circular: The appellant's counsel argued that as per Board Circular No. 53/2003, import of rough diamonds must be accompanied by a KP Certificate. The circular allowed for a grace period of seven working days for arranging the certificate; failure to do so would result in re-export to the exporting authority. The appellant contended that denial of re-export violated the circular's directions, making the lower appellate authority's decision unsustainable.

3. Legal Precedent and Tribunal Decision: The appellant relied on the Tribunal's decision in the case of Sahil Diamonds Pvt. Ltd., where confiscation without a KP Certificate was deemed unwarranted. The Tribunal had allowed re-export without penalties, a decision upheld by the Apex Court. The appellant sought similar relief based on this legal precedent.

4. Judicial Analysis and Decision: The Tribunal analyzed the discrepancy between the airway bill and the invoice regarding the diamond's description. It noted that the importer should not be penalized for errors in the airway bill prepared by the Airlines. The Tribunal emphasized that the value and nature of the diamonds were correctly declared in the invoice, accepted by the authorities for adjudication. Citing the Sahil Diamonds case, the Tribunal set aside the confiscation order, allowing re-export as per the circular's procedure and nullifying the penalties imposed on the appellant.

5. Final Judgment: The Tribunal allowed the appeal, granting permission for re-export of the diamonds in line with the Board Circular's provisions. The penalties imposed were also set aside. The decision was based on legal precedents, proper documentation, and adherence to the circular's guidelines, ensuring fair treatment for the appellant in the importation process.