Legal principle

A person who, with knowledge, abets or facilitates the export of goods mis-declared in the shipping bill is liable to personal penalty under Section 114 of the Customs Act, and writ interference is unwarranted where a statutory appeal exists, since 'the monetary incapacity of litigant cannot dilute the statutory provision of appeal.'

Court decision

The Court found no infirmity or illegality in the impugned order, no jurisdictional error and no violation of principles of natural justice or statutory provisions; it held that the petitioner was aware of M/s. Universal Gems' activities and abetted the export of natural diamonds as lab grown diamonds, for which permission under Rule 46 of the SEZ Rules, 2006 was absent, and that the petitioner facilitated the mis-declaration violating Section 50. The cited judgments were distinguished on facts. The writ petition was rejected, decided in favour of the Union of India, with the Court noting the petitioner had an alternative remedy of appeal and that 'the monetary incapacity of litigant cannot dilute the statutory provision of appeal.'

Facts

The petitioner, a diamond broker and local supplier, supplied natural diamonds to M/s. Universal Gems, an SEZ unit at Sachin, Surat, and was alleged to have facilitated its export of cut and polished natural diamonds declared as lab grown diamonds under shipping bills 4004674 (21.05.2021) and 4004784 (25.05.2021). Officers of DRI/SIIB detained and examined the consignments, and lab testing (IDI, Surat) showed that out of 58,089.13 carats only 469.12 carats were lab grown, i.e. about 99.2% were natural diamonds, with gross quantity mis-declaration (23,301.75 carats declared against 58,089.13 carats actually found). A search at Universal Gems led to seizure of documents including the 'Keshav' mark register containing export-wise entries in the petitioner's name, and statements were recorded under Section 108. After a show cause notice to various persons including the petitioner and personal hearing, the Additional Commissioner of Customs, Surat, by Order-in-Original dated 08.10.2025, imposed a personal penalty of Rs. 4,25,27,99,100 under Section 114. The petitioner filed this writ petition seeking quashing of that order.

Key provisions

• Section 114, Customs Act, 1962 — Penalty for attempt to export goods improperly etc
• Section 113, Customs Act, 1962 — Confiscation of goods attempted to be improperly exported
• Section 50, Customs Act, 1962 — Entry of goods for exportation
• Section 108, Customs Act, 1962 — Power to summon persons to give evidence and produce documents