By TIOL News Service

AHMEDABAD, OCT 20, 2016: THE officers of DRI intercepted two persons Jorabhai & Premabhai on 22.04.2011 at Surat and recovered 48637.525 carats of Rough Diamonds of Zimbabwe origin, valued at Rs.10,16,68,077/.

Incidentally, import duty is NIL, however, import of Rough Diamonds are restricted and should be accompanied by Kimberley Process Certificate. Since the subject Rough Diamonds were not accompanied by the mandatory Kimberley Process Certificate, the same were seized.

The said two persons mentioned that the rough diamonds belonged to Narendra Raval.

A SCN dated 10.10.2011 was issued proposing confiscation of the rough diamonds and imposition of penalties on all the three persons. However, the department could not serve the show cause notice on Narendra Raval as he was a Kenyan citizen residing in Nairobi (Kenya).

The adjudicating authority ordered absolute confiscation of the seized rough diamonds and imposed penalty of Rs. One Crore each on all the three persons.

Aggrieved by the said order, all the three persons preferred separate appeals before the Tribunal. Narendra Raval pleaded that neither the SCN nor the O-in-O was served on him. In the case of the appeal filed by Narendra Raval, the Tribunal remanded the matter to the adjudicating authority and consequently, the impugned O-in-O was issued wherein a penalty of Rs. One Crore was again imposed u/s 112 (a) of the Customs Act, 1962.

Narendra Raval is before the CESTAT in the second round of proceedings.

After considering the submissions made, the Bench noted that the case against the appellant is built upon three types of evidences -

A. Call Detail Records (CDR),

B. Statements of Chetanbhai V. Shah and Ajaybhai M. Khambhadiya and their depositions during the cross-examination;

C. Statements of Jorabhai and Premabhai dated 22.4.2011.

Against each of these alleged evidences, the Bench made the following observations -

+ What had transpired in the telephonic conversations is not available. It is not disputed by either side that Shri Jorabhai/ Shri Premabhai knew Shri Narendra Raval and had returned to India after a stay of more than one month in the guest house of Shri Narendra Raval in Nairobi. Shri Premabhai stated during the cross-examination that Shri Narendra Raval wanted to start an orphanage in India and also told him to look for some place in Gujarat; and except for that they had no other talk or dialogue or business. Under the facts and circumstances of the case, it cannot be concluded that there was something extraordinary and incriminating just by the fact of having a number of telephonic conversations.

++ The statements of Shri Chetanbhai V. Shah and Shri Ajaybhai M. Khambhadiya are to the effect that they have visited Nairobi on 25.3.2011 at which time Shri Jorabhai/ Shri Premabhai had shown some rough diamonds to them at the guest house of Shri Narendra Raval. Their initial statements do not indicate any role of Shri Narendra Raval. However, in their cross-examination they mentioned that during their meeting with Shri Jorabhai/ Shri Premabhai on 25.3.2011, Shri Narendra Raval was present. However, this deposition by them has been proved to be factually incorrect as the Passport entries and the certificate given by the Assistant Commissioner (Head of Investigation) Union Republic of Tanzania establishes that Shri Narendra Raval was out of Kenya from 23.03.2011 to 27.03.2011. Hence this evidence cannot be relied upon.

++ The statement of Shri Premabhai dated 22.04.2011 mentions that the rough diamonds seized from their possession were brought from Shri Narendra Raval for sale in India and sale proceeds were to be remitted back to Shri Narendra Raval.

++ However, they have stated in their Bail Application on 26.04.2011 before the Hon'ble Chief Judicial Magistrate that these statements were recorded by the officers of DRI by force and they deny whatever is said in the said statements. Both of them, during their cross-examination had also averred that their statements dated 22.4.2011 were prepared by the officers and they were forced to sign. Both of them, inter-alia, denied any role of Shri Narendra Raval in the smuggling of the said rough diamonds.

++ There is no supporting or corroborating evidence to establish the role or involvement of Shri Narendra Raval in the smuggling of the seized Rough Diamonds. Hence the evidentiary value of the said statement of Shri Premabhai is considerably weakened as far as it relates to the role of Shri Narendra Raval.

++ We, therefore hold that the department has failed to establish that Shri Narendra Raval is involved in the illegal import or smuggling of seized Rough Diamonds brought by Shri Jorabhai and Shri Premabhai. [Vinod Solanki - 2009-TIOL-01-SC-FEMA, A. Tajudeen - 2014-TIOL-85-SC-FEMA, Harischaran Kurmi vs. State of Bihar - (1964) 6 SCR 623 refers.]

The appellant had also raised the issue of jurisdiction of Customs Act to foreign citizen and to territory beyond India. However, the Bench held that the said issue was academic as it was deciding the issue on merits.

The order was set aside and the appeal was allowed.

(See 2016-TIOL-2738-CESTAT-AHM)