Tasha Gold Pvt Ltd Vs Principal Commissioner of Customs (CESTAT Delhi)
Conclusion: Goods even if there was any remote possibility of being found prohibited or restricted at the time of adjudication was there, could not be subjected to non release in terms of Section 110A, thus, the provisional release of 26 Gold Dore weighing 5 kg plus more, subject to certain conditions.
Held: Assessee-company had filed the present appeal against the letter/order addressed by the Respondent, wherein the Principal Commissioner of Customs rejected the request for provisional release of the impugned goods imported under B/E No. 3625730 dated 06.12.2022 under Section 110A of the Customs Act, 1962. In the impugned letter/order, the Respondent had mentioned that the provisional release of the impugned goods had been rejected, because – the imported goods fell under category of ‘prohibited goods’ of the Act, since the gold content of the imported goods was “found to be above 95% and the license issued by DGFT to the Appellant was for import of Gold Dore Bars (having gold content not exceeding 95%); CBIC Circular no. 35/2017 Customs dated 16.08.2017 in the guidelines for provisional release of seized goods pending adjudication under Section 110 A of the Act had prescribed that provisional release of the goods prohibited under the Customs Act, 1962 or any other Act for the time being in force should not be allowed. It was held that goods even if there was any remote possibility of being found prohibited or restricted at the time of adjudication was there, could not be subjected to non release in terms of Section 110A. Thus, the provisional release of 26 Gold Dore weighing 5 kg plus more, subject to the following conditions:- That the duty paid at the time of seeking release of goods of 15.20 crores approximately, even if voluntarily paid or paid under protest should not be sought for refund by assessee and shall remain available to the department till culmination of adjudication; One Gold Dore Bar weighing 4.24 kg would remain available with the department as security and should not be released including release for re-export if sought by the party till adjudication was over. Apart from above security the party should furnish a bond binding itself to pay equivalent of full value of consignment plus 20% in lieu of penalty thereon, to the department; That the provisional release by the department, should be done within two weeks of compliance and documentation of formalities as per para (1) and (2) above, by assessee.
FULL TEXT OF THE CESTAT DELHI ORDER
The Appellant has filed the present appeal against the letter/order dated the 03.08.2023 addressed by the Respondent, wherein the Principal Commissioner of Customs rejected the request for provisional release of the impugned goods imported under B/E No. 3625730 dated 06.12.2022 under Section 110A of the Customs Act, 1962 (“the Act”)
2. In the impugned letter/order, the Respondent has mentioned that the provisional release of the impugned goods has been rejected, because-
a. The imported goods fall under category of ‘prohibited goods’ of the Act, since the gold content of the imported goods is “found to be above 95% and the license issued by DGFT to the Appellant was for import of Gold Dore Bars (having gold content not exceeding 95%).
b. CBIC Circular no. 35/2017 Customs dated 16.08.2017 in the guidelines for provisional release of seized goods pending adjudication under Section 110 A of the Act has prescribed that provisional release of the goods prohibited under the Customs Act, 1962 or any other Act for the time being in force shall not be allowed.
Aggrieved by the above rejection of provisional release the Appellant however is challenging the impugned letter/order before uson the following grounds-
A. Impugned goods are not prohibited goods-
3. “Prohibited Goods” are defined in Section 2(33) of the Customs Act, 1962 as meaning “any goods the import or export of which is subject to any prohibition under this Act or any other law for the time being in force but does not include any such goods in respect of which the conditions subject to which the goods are permitted to be imported or exported have been complied with.” The Gold Dore bars which are imported by the appellant are therefore not ‘prohibited goods’ in accordance with the said definition.
4. Foreign Trade Policy (FTP) states that imports are free except when regulated by way restriction as laid down in ITC (HS). Gold Dore bars have conditions imposed and therefore fall under the category of restricted goods’. The appellant-company being a refinery was issued import license (with actual user condition) by the DGFT for import of Gold Dore Bars. Gold dore bars are imported under ITC (HS) for 7108 12 00, for which the only condition imposed is that Gold Dore is subject to actual user conditions by refineries. The said condition has been complied with by the Appellant.
5. The dispute in the present case is regarding the alleged non- compliance with Notification No. 12/2012-Cus., dated 17.03.2012. This notification was superseded in the year 2017 by Notification 50/2017- Customs dated 30.06.2017. Further, the notification whose benefit has been claimed by the Appellant is Notification No 96/2008-Cus dated 13.08.2008 and all required conditions under that notification are fulfilled by the Appellant. The Appellant has not claimed the benefit of Notification 50/2017- Customs dated 30.06.2017.
6. However, for the sake of abundant clarity, the compliance of conditions under Notification 50/2017- Customs dated 30.06.2017.7 are also discussed. Sl. No. 354 of Notification 50/2017- Customs dated 30.06.2017., on GDB having gold content not exceeding 95% requires conditions No. 9 and 40 to be fulfilled, the compliance regarding the same are as follows:
