B V JEWELS Vs. COMMISSIONER OF CUSTOMS AIRPORT CHHATRAPATI SHIVAJI INTERNATIONAL AIRPORT SAHAR MUMBAI

JUDGEMENT

(1.) This is an appeal under Section 130 of the Customs Act, 1962 (hereinafter referred to as the said Act) from the order dated 21/12/2006 of the Customs Excise and Service Tax Appellate Tribunal (hereinafter referred to as "CESTAT"). This appeal was admitted on 14/8/2007 on the following substantial questions of law:

(2.) The CESTAT by its impugned Order dated 21 /12/2006 held that there was a shortage of 72095.55 Carats of diamonds (after taking into account/giving credit to the explained High Value Diamonds and Broken Diamonds) which had been imported without payment of duty by availing of Not. No. 177/94-Cus dated 21/10/1994. This resulted in upholding the demand of duty of customs to the extent of Rs.12,31,86,708/-. Further an equivalent penalty of Rs.12,31,86,708/- under Section 114A of the said Act was also imposed upon the Appellant. The impugned Order also upheld the confiscation of 10631.39 Carats of diamonds with an option to redeem the same on payment of Rs.43/- lakhs as redemption fine under Section 125 of the said Act. This was on account of the fact as the diamonds were found in the possession of the Appellant but not supported by any documents of its licit import. The impugned Order also upheld the confiscation of 63078.35 Carats of diamonds which have been exported as a part of studded jewellery but without any proof of its licit import. The aforesaid finding was arrived at on the basis of the interpretation of Notification No. 177/94-Cus dated 21/10/1994, Export-Import Policy -1997-2002 and Hand book of Procedure -1997-2002 as applicable to Gem and Jewellery unit situated in an Export Processing Zone.

(3.) Briefly, the facts leading to the present appeal are as under: