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TMI Blog2016 (8) TMI 924X X X X Extracts X X X X X X X X Extracts X X X X ..... r. P.M. Saleem, Member (Technical) For Appellant (s) : Shri P.P. Jadeja, Consultant For Respondent (s) : Dr. J. Nagori, Authorised Representative ORDER These appeals are filed by Shri Jorabhai Valabhai Rabari (Jorabhai for short) and Shri Premabhai Jethabhai Attya (Premabhai for short), aggrieved by the impugned OIO No. 18/Commr/DRI/2012 dated 31.10.2012 wherein Commissioner of Customs, Ahmedabad, inter-alia, imposed penalty of Rs. One Crore each on Shri Jorabhai and Shri Premabhai under Section 112(b) of Customs Act, 1962. 2. Brief facts of the case are that the officers of DRI intercepted Shri Jorabhai and Shri Premabhai on 22.4.2011 at Surat and recovered 48637.525 carats of Rough Diamonds of Zimbabwe origin valued at ₹ 10,16,68,077/- (market value). Import duty is nil on Rough Diamonds. However, import of Rough Diamonds are restricted and should be accompanied by Kimberley Process Certificate. The Kimberley Process Certificate Scheme has been evolved to deal with the issue of conflict diamonds (blood diamonds) which are basically rough diamonds whose trade is prohibited by the United Nations Security Council because the proceeds of that trade a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g authority in its order No. A/11203/2014 dated 24.06.2014 that the valuation of the seized Rough Diamonds should be done by an expert committee consisting of one member chosen by the appellant and the other member by the Revenue. In this decision, the Bench had relied upon the decision of the Mumbai Bench of CESTAT in the case of Sagar Impex vs. Commissioner of Customs (Airport) Mumbai [2006 (193) ELT 289 (Tri. Mumbai)]. In the case of Sagar Impex, the Tribunal had held that the valuation should be done by independent expert committee consisting of one member chosen by the appellant and the other by the department. Learned Consultant also submitted that it is the regular practice of the department at Precious Customs Cargo Complex (PCCC) Mumbai that diamonds including Rough Diamonds are valued on routine basis by experts empanelled by the Commissionerate from a select list of experts nominated by Gem and Jewellery Export Promotion Committee (GJEPC). PCCC handles lion s share of the diamond trade of India. However, in the instant case, the rough diamonds were valued by a Customs Appraiser. He contended that the appellants from their personal knowledge are of the opinion that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are justified and the same is not dependant on the value of seized goods. 6. We have carefully considered the arguments of both sides and examined the records and evidences. It is observed from the seizure Panchnama dated 22.4.2011 (written in local language - Gujarati), that the Panchas have stated that they were called to DRI office on 22.4.2011 wherein they found in addition to DRI officers two persons named Shri Jorabhai and Shri Premabhai alongwith two bags. The said Shri Jorabhai and Shri Premabhai informed them that the bags belonged to them which they had brought alongwith them from Navsari. Thereafter the officers in the presence of panchas asked Shri Jorabhai and Shri Premabhai whether they have any invoice or document and KP Certificate - to which they said NO and they told that the Rough Diamonds were brought in the same bags on 12.4.2011 from Nairobi to Mumbai and without declaring at the Airport. They further informed that since the said Rough Diamonds are of Zimbabwe origin and were smuggled, they do not have any such legal documents and KPC. Thereafter, the officers in the presence of Panchas, Shri Jorabhai and Shri Premabhai and others, opened the bags ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of rough diamonds to Shri Chetanbhai in his office at Hirabazar, Surat. During negotiations the price of the diamonds offered was very low. Thereafter again they came to Surat on 22.4.2011 for showing the said rough diamonds to Shri Chetanbhai and settle the deal. They also met one Shri Munnabhai in Surat who is also a diamond broker. He was also shown samples of said Rough Diamonds. The deal could not be settled with him as he also offered very low price than what they expected. The officers intercepted them when they were on their way to the office of Chetanbhai. The statement of Shri Premabhai dated 22.4.2011 is in conformity with the statement of Shri Jorabhai. His statement is more elaborate and more detailed and major portion of the same is in question- answer format. Shri Jorabhai and Shri Premabhai were arrested on 23.04.2011 and produced before the Hon'ble Chief Judicial Magistrate Court at Surat on 23.04.2011. They preferred a Bail Application on 26.4.2011 and, inter-alia, submitted that the Hon'ble Court has asked the accused whether they were beaten and in reply to the same they stated that they were threatened by DRI officers and forced to sig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Monu, proprietor of M/s. Mili Gems in his statement dated 04.5.2011 corroborated that Shri Jorabahi and Shri Premabhai visited his office at Surat on 21.04.2011 and showed him a packet of Rough Diamonds who wanted to sell the same at the negotiable price at around USD 44-45 per carat and stated that they have a large quantity of Rough Diamonds of Zimbabwe origin. Others have also corroborated the above. It is observed that these statements have not been retracted. Further, some of these persons were cross-examined during adjudication proceedings by the representative of the appellants and they had not contradicted their earlier statements. 8. On careful examination of the facts and evidences in the case, we find force in the findings of the adjudicating authority that the appellants had brought the subject Rough Diamonds from Kenya illicitly and the same were recovered and seized from them. Therefore, we do not find any reason to interfere with the impugned order-in-original in this respect. Consequently, we also hold that penalty is imposable on the appellants under Section 112(b) of the Customs Act, 1962. 9. However, as regards the quantum of penalty imposed on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umar Ratanbhai Ajudiya vs. Commissioner of Customs, Ahmedabad and Sagar Impex vs. Commissioner of Customs (Airport) Mumbai (supra) had held that the valuation should be done by a panel of two independent experts of GJEPC, one selected by the department and another by the appellants. Following the said decisions, we are of the opinion that the subject Rough Diamonds should be valued by two experts, one chosen by the appellants and one by the Revenue from a panel of experts nominated by GJEPC and these experts should value the subject Rough Diamonds as per the value prevalent at the time of seizure of the subject rough diamonds. On the basis of the said value fixed by the experts, and the role of the appellants, the quantum of penalty should be re-quantified. We find that this matter, therefore, has to be remanded to the original adjudicating authority for the said limited purpose. 10. In view of the above, the impugned order-in-original is upheld except for the quantum of penalty on the appellants which is to be re-determined by the original adjudicating authority as per the directions above. 11. Appeals are partly allowed to the extent of redetermination of value and qu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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