The Supreme Court set aside a customs penalty of ₹425,27,99,100 after finding that the adjudication order relied on non-existent, falsely cited, or AI-hallucinated authorities in proceedings concerning the misdeclaration of natural diamonds as lab-grown diamonds. The matter was remanded for fresh adjudication by an officer of the same rank, other than the officer who passed the original order, with the Court emphasising that AI may assist adjudication but cannot replace human decision-making or verification.
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