In a search conducted in the office premises of Zebra Ltd., large quantity of rough diamonds was recovered. It was found that these were imported without a license. After adjudication, penalty was imposed on Zebra Ltd. a

The facts of the case are similar to that of M.Ambalal & Co. v. Commissioner of Customs (2011) where it was observed that the wording of the exemption notification was clear that the benefit of the exemption envisaged is for those goods that are imported. According to Section 2(25) of the Customs Act 'imported goods' has been defined to mean '...any goods brought into India from a place outside India but does not include goods which have been cleared for home consumption.' It is necessary that the above definition is read along with Section 11, Section 111 and Section 112 of the Act, which provide for detection of illegally imported goods and prevention of the disposal thereof, confiscation of the goods and conveyances and imposition of penalties respectively. Under Section 111(d) of the Act, any goods which are imported contrary to any prohibition imposed by or under this Act or any other law for the time being in force shall be liable for confiscation. In this case, the goods which have been seized cannot be imported into India without a license under the Import Control Act and therefore goods so imported cannot, be treated to be lawfully 'imported goods' within the definition of that term in Section 2(25) of the Act. Therefore, Zebra Ltd. shall not be entitled to the benefit of the notification. Thus, contention of Zebra Ltd. is not correct.