By TIOL News Service

MUMBAI, SEPT 17, 2015 : 623.13 carats of cut and polished diamonds valued at Rs. 31.65 lakhs were absolutely confiscated and penalties were imposed on Ms. Supaporn Vibbonwetwanich@ Ms.Kanchana, Mr. Nilesh B. Patel & Mr. Bhargav B. Patel of Rs.1 lakh, Rs.2 lakhs and Rs.5 lakhs respectively.

The appellants are before the Tribunal.

The sum and substance of the decade old case can be understood from the contents of the following application made before the Settlement Commission, Customs & Central Excise by Ms. Kanchana while admitting her duty liability of Rs. 2,11,415/- towards these seized goods and seeking immunity from imposition of any fine, penalty and prosecution under the Customs Act, 1962.

"1. One Courier parcel was sent by me, vide Fedex flight No. FX 0003 at C.S.I. Airport, Mumbai, in the name of one 'Shilpa Ben', vide Airway Bill NO. 8471 0932 6270.

2. In this courier parcel, declared as documents (of no commercial value), Cut & Polished diamonds (623.14 carats) worth FOB US $ 96,757.60 were neatly packed inside a Thai Directory, by making a cavity.

3. I wanted the diamonds to be cleared from Indian Customs without declaration.

4. I agree that i have deliberately mis-declared the goods covered vide the said courier parcel, for my own benefit. However, the said act was to encash the diamonds in the vast Indian Market, for licit importation of which I was not having any infrastructure in India.

5. I categorically say that though I work in M/s Bhargava Gems at Bangkok, neither Shri Nilesh B. Patel, nor Shri Bhargava Patel were aware of the fact that I had sent a courier parcel which contained diamonds. Nor any of them or any of the other noticees in the Show Cause Notice, is concerned with the seized diamonds.

6. I could not even inform them about having sent the parcel, as while I was about to make a call to India, I came to know that the courier parcel was seized by the Customs Authorities in India and that Shri Bhargava Patel was therefore inquiring from Shri Nilesh Patel, about the mis-declared courier parcel containing the diamonds. When Shri Nilesh Patel furiously inquired from me, I denied having any knowledge about the parcel, in the fear of loosing the good job, for having mis-utilised the Indian residential address of Shri Nilesh Patel and the name of Mrs. Shilpaben.

7. Several persons including their family and the courier people faced a lot of problems, which I regret.

8. I say that I have not conspired with M/s FEDEX or M/s Jeena & Company or any Customs officer.

9. A summons bearing no AKS/229/05 was received by me for appearance before the office of AIU, in connection with the said import of diamonds in a fraudulent manner. Vide letter dated 26-09-2005, I replied to the summons and informed the factual position to the AIU. A copy of the said letter is annexed hereto and marked as Exhibit-'A'. I claimed the diamonds and I also informed that I had invested my savings in these diamonds. I made efforts to recall the consignment, but I failed. I also informed that I chose to send the parcel at the Mumbai address of Shri Patel, in the name of "Shilpa Ben", as I knew them.

10. I say that I could have collected the parcel through "Mr. Jimmy" immediately upon delivery of the parcel at their residence, or could have even collected the same at the office of the courier company itself.

11. Vide this letter dated 26-09-2005, I categorically informed the officers of the Customs department that it was the first courier consignment sent by me.

12. A Show Cause Notice bearing F. No. SD/INT/AIU/UNI-2/2005/STF dated 29/09/2005 has been received by me. The said Show Cause Notice is not annexed and marked as Exhibit - 'B' is a copy of the Show Cause Notice bearing F. No. SD/INT/AIU/UNI-2/2005/STF dated 29/09/2005.

13. The imported diamonds have not been released, till the filing of the present Application, and continue to remain in seizure, since filing of the Bill of Entry no. 001330 dated 12-04-2005 filed by Jeena & Co. In form Courier Bill of Entry-III.

14. I say that I am owner of the seized diamonds and I am claiming the release of the diamonds, by accepting my true duty liability before this Hon'ble Commission. I say that I am not a habitual offender and I undertake that I will never indulge in such fraudulent practice in future.

15. I further say that in the true spirit of settlement I have disclosed my duty liability, which was not disclosed before the proper officer, I also say that the application fulfils all the parameters of section 127B of the Customs Act, 1962, and therefore this Hon'ble Commission can consider this application for settlement of the issues mentioned herein."

Incidentally, the Settlement Commission dismissed the application filed for settlement of the case by Ms. Kanchana as not sustainable.

Be that as it may, in view of the aforesaid admission made, the Bench while deciding the appeal filed by Ms. Kanchana observed thus -

+ We do not find any merit in her challenge to the imposition of penalty alleging it to be excessive.

+ Since the import of 'cut and polished diamonds' is not expressly prohibited under Section11of the Customs Act, 1962 or by any other statutory notification, we find merit in the ground that an option to redeem them on payment of fine in lieu of confiscation was mandatory. However, after conclusion of the hearing, on instructions, Advocate for Ms. Kanchna informed that now she will not avail the option of redemption even if granted. Therefore, we are not interfering with the order of absolute confiscation.

In the matter of appeals filed by Bhargava Patel and Nilesh Patel, the Tribunal observed -

"…Although, the Adjudicating Authority observed that Bhargav Patel made conflicting and contradictory statements, however, there is no dispute on the fact that the parcel from which the diamonds under seizure were recovered was booked in the name of his sister Smt. Shilpaben without her knowledge, and was sent from Bangkok by Ms. Kanchana. Ms. Kanchana admitted in her Settlement Application that she could not even inform the Mr. Bhargav Patel or Mr. Nilesh B. Patel about having sent the parcel by courier which contained diamonds. The adjudicating authority has recorded that Ms. Kanchana appears to have been pressurized to file an affidavit giving untenable grounds such as non dutiability of the seized diamonds and conflicting reasons for sending concealed diamonds for collection by Jimmy who was not even known to Shri Bhargav Patel or his parents in India. We find that on the contrary she admitted her duty liability not only before Settlement Commission but also during the adjudication proceedings. There is no cogent evidence to show that she was so pressurized and this finding is based only on suspicion. There is no document or material or circumstantial evidence showing that Bhargava Patel had placed any order either verbal or written, or made compensatory payment, for the seized diamonds. In view of the above, we find that role of Mr. Bhargav Patel and Nilesh Patel in the smuggling of the diamonds under seizure is not established even on preponderance of probability and penalties imposed on them are set aside."

In fine, the appeal filed by Ms. Kanchana was dismissed and those filed by Bhargav B. Patel and Mr. Nilesh Patel were allowed.

(See 2015-TIOL-1951-CESTAT-MUM)