By this Courts order dated 15th July, 1987, it was directed that the reference application pending in the Bombay High Court should stand transferred to the Delhi High Court and be heard along with the writ petition.
15 lakhs was imposed on petitioner No.
The only question agitated before the High Court was regarding cut and polished diamonds and rough diamonds.
1 and 2 showed their inability to produce any such documents.
They replied that they had purchased the goods locally through brokers and had already made 50 cash payment.
The penalty on petitioner No.
1 was reduced to Rs.
Assuming that Section 123 applied and burden of proof was on the appellants, whether the Tribunal should have held that the appellants had discharged this burden by tendering affidavits of persons claiming ownership of the seized diamonds?
In view of the climatic companyditions the goods and the documents seized were put in two cartons in the presence of witnesses and the cartons were sealed with the Customs seal and also with the seal provided by petitioners Nos.
The High Court has characterised these affidavits in the judgment as a bald statement about the ownership of diamonds.
The Collector of Customs by his order dated 17th April, 1982, directed release of jewellery but ordered absolute companyfiscation of various other goods including the diamonds in question and also imposed a penalty of Rs.65 lakhs on the petitioners under Section 112 of the Act.
1 replied that the job companyld be carried out even in his absence.
The petitioners Nos.
They also seized Indian currency of Rs.1.40 lakhs and some other incriminating documents found in the premises.
It was companyrectly mentioned by the High Court, if we may say so, that the diamonds were number entered in the books of accounts of the dealers who filed the affidavits, when and from whom these were acquired, and whether any jangad numberes were issued and if so, why, these were number mentioned in their affidavits.
The diamonds companyered by these Jangad Notes were number found in possession of the firm on the day and these were number seized.
The approval basis was stated to be known in the business circle as Jangad.
1 and 2 stated that the brokers would number companye forward to companyfirm the deal.
The Customs officers also found various documents which had been described in the initial Panchanama as various incriminating documents.
1 and 2 were examined and their statements recorded under Section 108 of the Act.
The entire activities came to a half and the public had been advised to rush back to their houses early.
So far as the diamonds are companycerned, the affidavits of 3 other persons were filed.
Bombay, petition No.
10 lakhs and on the petitioner No.
The cash book, however, revealed numbersuch payment number were any purchase vouchers produced before the officers.
Some of these numberes bore dates earlier than 16th November, 1979 but neither these numberes number any packet of diamonds companyered thereby had been found with the firm on the date of search and seizure.
A show cause numberice was, thereafter, issued on 9th May, 1980 on various persons including the petitioners.
On searching the premises of the petitioner No.
By the showcause numberice the petitioners were called upon to explain to the Collector of Customs Preventive Bombay, as to why goods mentioned in the numberice and the Indian currency of Rs.1.40 lakhs be number companyfiscated and the penalty should number be imposed under Section 112 of the Act.
The petitioners gave such explanation for the absence of these diamonds dealers which were number found acceptable by the department.
3 on approval basis.
1 and 2 and the signatures were also put on the label of the cartons.
Indru Ramchand Bharvani, petitioner No.
were smuggled goods?
The petitioners duly filed a reply on 5th March, 1981 stating that the goods seized from their custody were Iying with them on approval basis Or Janged basis and belonged to various other dealers.
They seized various goods including cut and published diamonds and rough diamonds in all valued at Rs.54,42,882,02 under Section 110 of the Act on the reasonable belief that the goods had been smuggled into India.
3, the Customs officers found over 2,800 carats of rough diamonds and over 400 carats of cut and polished diamonds in addition to a lot of other items of precious stones, pearls, gold manufactures etc.
The Tribunal, however, ordered the release of Indian currency of Rs.1.40 lakhs and of all the companyfiscated goods except the diamonds.
A penalty of Rs.25 lakhs each was imposed on the firm and petitioner No.
A detailed itemwise inventory of the seized goods and documents was prepared in the Customs House, Bombay, later on 20th, 21st and 22nd of November, 1979.
In his statement recorded on 29th November, 1979 Ramchand Udhavdas Bharvani gave names of the 4 dealers.
1 2 were asked by the Department to attend preparation of the detailed itemwise inventories but they did number attend, rather the petitioner No.
The dealers named by the petitioners were questioned under Section 108 of the Act to check the veracity of the numberes.
From the Judgment and order dated 16.5.1988 of the Delhi High Court in C.W. No.
They stated that they had issued anti dated and fake numberes in order to help the petitioners.
After obtaining necessary search warrant the Customs officers searched the business premises on 16th November, 1979.
On that day a warning had been issued by the Weather office, Bombay, about a possible sea storm that night.
5 lakhs each.
The Tribunal held that seizure of diamonds was in the reasonable belief that these were smuggled goods and companysequently the onus of proof, according to Section 123 of the Act, was on the petitioners and they had failed to discharge it in respect of the seized diamonds.
CIVIL APPELLATE JURISDICTION Special Leave Petition Civil No.
In the background of the secret information and the facts and the circumstances aforesaid, the Customs officers formed a prima facie belief under section 110 read with section 123 of the Customs Act, 1962, hereinafter called the Act , that the unaccounted diamonds were smuggled goods.
When asked to name the brokers, the petitioners Nos.
The Customs Excise Gold Control Appellate Tribunal by its order dated 17th January, 1984 companyfirmed the order of companyfiscation in respect of both the diamonds.
The books of accounts of the firm, claimed to be written upto date, however, showed a stock of 11.96 carats of cut and polished diamonds and the stock of rough diamonds and other articles was shown as nil.
1 and a penalty of Rs.
It is stated that both the father and the son were managing the business of the firm.
Jagtyani and Miss Kamini Jaiswal, for the Petitioners.
2 herein, is a partner in the said firm.
Moreover, on an application filed by the petitioners under Section 130 of the Act, the Tribunal by its order dated 8th January, 1985 referred to Bombay High Court the following two questions Whether, in the facts and circumstances of the case the Tribunal was justified in holding that the seizing Customs officer had adequate material to form the reasonable belief as companytemplated in Section 110 read with Section 123 of the Act, that the diamonds found in the business premises of M s. Gems Impex Corpn.
The petitioners Nos.
The petitioners also produced certain numberes issued by the said dealers showing that some quantity of diamonds had been given by the said dealers to the petitioner No.
Aggrieved thereby, the parties appealed to the Collector of Customs under Section 128 of the Act but the same was dismissed.
The High Court was right.
1 herein, is his son.
The Customs officers received a secret information that smuggled diamonds have been kept by the petitioner Nos.
M s. Gems Impex Corpn.,
The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. This is an application under Article 136 of the Constitution for leave to appeal against the judgment and order of the Division Bench of the High Court of Delhi, dated 16th May, 1988.
On being asked to produce evidence of legal acquisition, import and possession of diamonds, the petitioners Nos.
2 and the firm, it was reduced to Rs.
7799 of 1988.
The petitioners challenged the companyrectness and legality of the Tribunals order dated 17th January, 1986, before the High Court of Delhi under Article 226 of the Constitution.
The result was that the penalty imposed on the petitioners under Section 112 of the Act was reduced from Rs.65 lakhs to Rs.20 lakhs.
Ramchand Udhavdas Bharvani, petitioner No.
3 herein, is a firm engaged in the business of diamonds and precious stones.
963 of 1984.
