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TMI Blog2010 (12) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... toms Department, on the basis of specific information, a large quantity of rough diamonds was recovered. The partner of the respondent-firm, Shri Maganbhai Patel was neither able to offer any satisfactory explanation nor produce any documents in relation to the import of the said diamonds, and the diamonds were seized by the officers in the reasonable belief that they are liable for confiscation under the provisions of the Act. After investigation, a Show Cause Notice was issued to the respondent and others wherein confiscation of the seized diamonds was proposed. After adjudication, the adjudicating authority passed an order confiscating the seized diamonds under Section 111(d) of the Act. However, an option was given to the respondent to redeem the seized goods on payment of redemption fine. The respondent was also asked to pay the appropriate duty on the said confiscated diamonds which were allowed to be released on payment of redemption fine. In addition, penalty was also imposed on the respondent under Section 112 of the Act. Being aggrieved by the aforesaid order, the respondent had preferred an appeal before the Tribunal. The Tribunal, by its order dated 29.12.1995, disposed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... E(b) of the Act. 3) Shri R.P. Bhatt, learned senior counsel appearing for the Revenue, submitted that the benefit of the exemption notification cannot be extended to a person who/which had illegally imported rough diamonds into the country. He further argued that the same could not be availed by those persons who did not have the licence to import diamonds, or who had smuggled rough diamonds into the country clandestinely without payment of duty. Per contra, Dr. Surat Singh, learned counsel for the respondent-firm, would contend that there is no infirmity in the order passed by Tribunal since the Tribunal, by placing reliance on the principles laid down by this Court, has granted relief to the respondent-firm. 4) The three issues that falls for our consideration and decision are :- (a) Whether the benefit of the exemption notification has been rightly granted to the respondent-firm by the Tribunal. (b) Whether the declaration made under the KVS Scheme and the subsequent payment of amount quantified under the said Scheme by the respondent-firm vis-`-vis the release of the diamonds that were confiscated by the department. (c) Whether the Baggag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, all goods imported into or exported from India are liable to Customs duty unless the Customs Act itself or any other law for the time being in force provides otherwise. The rate of duty is fixed by the Customs Tariff Act, 1975. "Import" and "Imported Goods" means that if goods are brought into India, meaning thereby into the territory of India from outside, there is import of goods and the goods become imported goods and become chargeable to duty upto the moment they are cleared for home consumption. The word `importer' has been defined in the Act as importer in relation to any goods at any time between their importation and the time when they are cleared for home consumption includes any owner or any person who holding himself out to be importer. The word `smuggling', in relation to goods, means any act or omission which will render such goods liable to confiscation under Section 111 or Section 113 of the Act. 8) Section 11 of the Act enables the Central Government to prohibit importation or exportation of goods either absolutely or subject to conditions as specified in the notification, the import or export of the goods of any specified description. Section 11A to 11G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. Rough diamonds Nil 10) It is settled law that the notification has to be read as a whole. If any of the conditions laid down in the notification is not fulfilled, the party is not entitled to the benefit of that notification. The rule regarding exemptions is that exemptions should generally be strictly interpreted but beneficial exemptions having their purpose as encouragement or promotion of certain activities should be liberally interpreted. This composite rule is not stated in any particular judgment in so many words. In fact, majority of judgements emphasize that exemptions are to be strictly interpreted while some of them insist that exemptions in fiscal Statutes are to be liberally interpreted giving an apparent impression that they are contradictory to each other. But this is only apparent. A close scrutiny will reveal that there is no real contradiction amongst the judgements at all. The synthesis of the views is quite clearly that the general rule is strict interpretation while special rule in the case of beneficial and promotional exemption is liberal interpretation. The two go very well with each other because they relate to two different sets of circumstances. &nb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, adjudicating authority was not justified in directing the respondent for payment of duty under the Act for release of the confiscated goods. We find no merit in the contention. The goods become exempted goods provided all the conditions of the notification are fulfilled. If any condition of the notification is not fulfilled, goods are not exempted goods. [See Union of India Vs. Ganesh Metal Processors Industries - 2003 (151) ELT 21] 13) In short, question before us is whether goods that are smuggled into the country can be read within the meaning of the expression `imported goods' for the purpose of benefit of the exemption notification. We are of the view that `smuggled goods' will not come within the definition of `imported goods' for the purpose of the exemption notification, for the reason, the Act defines both the expressions looking at the different definitions given to the two classes of goods: imported and smuggled, and we are of the view that if the two were to be treated as the same, then there would be no need to have two different definitions. 14) In order to understand the true meaning of the term `imported goods' in the exemption notificati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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