Bharat Shah’s firm to pay `24 crore for illicit diamond procurement | mumbai | Hindustan Times
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Bharat Shah’s firm to pay `24 crore for illicit diamond procurement

mumbai Updated: May 15, 2012 01:06 IST
Mohan K Korappath
Mohan K Korappath
Hindustan Times
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In a victory to Customs authorities, the Bombay high court upheld a Customs Excise and Service Tax Appellate Tribunal (CESTAT) order asking a diamond export unit, in which Bharat Shah is a partner, to cough up around Rs24 crore and surrender diamonds weighing around 73,000 carats.


The Customs had gathered intelligence about alleged illicit procurement of diamonds and duty evasion amounting to crores of rupees by BV Jewels twelve years ago. Accepting the custom’s demand, the CESTAT had imposed a duty of Rs12.31 crore and a penalty of an equivalent amount on the firm. The tribunal had also upheld the Customs’ notice of confiscation of unaccounted diamonds weighing 10,631.39 carats and diamonds weighing 63,078.35 carats that were found less, in violation of a December 1994 Customs notification.

A division bench of justice JP Devadhar and justice MS Sanklecha, on Monday, noted that the proceedings against the company were based on intelligence inputs. A survey by officers of Sahar Customs in February 2000 had revealed that the company was not maintaining proper records and accounts, resulting in detection of certain excess and shortages of cut and polished diamonds without payment of duty.

Following a detailed inquiry, the Customs had issued a notice in June 2005, which was challenged by the company before the tribunal. The firm was granted relief by the tribunal following which the Customs authorities moved the Supreme Court in 2003.

In 2004, the Supreme Court remanded the case back to the tribunal to work out the details of the alleged shortage and value of the diamonds following which the tribunal passed an order in 2006, which has led to the current appeal.

The company argued that the alleged shortage and illicit procurement of diamonds cited by the Customs is based on incorrect particulars. In the absence of any corroborative evidence, it is incorrect to allege that there has been a clandestine removal of diamonds as they are under Customs’ surveillance. Counsel for the Customs, Advait Sethna, argued that the documents for the exported material should tally with the imported material. Minor differences can be understood, but how do you explain a shortage of 73,000 carats.

The court has stayed the order for eight weeks.

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