Additional Director General (Adjudication) Vs Its My Name Pvt Ltd (Delhi High Court)
Conclusion: Tribunal’s power and jurisdiction of hearing an appeal against an order of provisional release was coequal with the power exercised by the adjudicating authority. Tribunal had the power to direct provisional release of gold jewellery, seized as well as to fix the terms.
Held: In the present case, the gold was imported, seeking exemption from payment of duty under the Advance Authorisation scheme and the Exhibition Export scheme. Show Cause Notice issued to assessee-company by the ADG, DRI, to, does not propose any duty demand, but seeks, instead, to confiscate the seized gold, gold jewellery and silver. The total value of the said gold, gold jewellery and silver had been reckoned, in the Show Cause Notice, to be ₹ 28,23,82,357/–. ADG, DRI, rejected the request, of assessee-company, for provisional release of the seized gold, gold jewellery, and silver by opining that it would be premature to arrive at any conclusion, about the provisional release of seized goods, before completion of adjudication proceedings. CESTAT permitted provisional release of gold jewellery, seized at the Indira Gandhi International Airport and of gold, gold pieces, gold dust, gold jewelry, and silver, seized from the workshop/office premises of assessee-company. Authority contended that the Tribunal erred in allowing the provisional release of the seized gold, gold jewelry, and silver. It was held that the power and jurisdiction of Tribunal, hearing an appeal against an order of provisional release, was coequal with the power exercised by the adjudicating authority. Tribunal, therefore, had the power to direct provisional release, as well as to fix the terms thereof. In the present case, no question of substitution, by Tribunal, of its view, for the discretion of the adjudicating authority, arose, as the adjudicating authority, i.e. ADG, DRI, vide his order dated 4th October, 2019, never proceeded to fix any terms for provisional release, but held, instead, that it would be premature to arrive at any conclusion, about provisional release of the seized goods, before completion of adjudication proceedings. Tribunal held that this view was palpably untenable, and amounted to a complete negation of Section 110A. Needless to say, there should be no misuse or illegal diversion of the gold, gold jewellery and silver, being provisionally released to assessee. For this purpose, the premises of assessee would be kept open for inspection by the appellant, at all points of time, and all utilization/sale of the gold, gold jewellery or silver should be duly accounted for.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
1. This appeal, at the instance of the Additional Director General (Adjudication), Directorate of Revenue Intelligence (DRI) (hereinafter referred to as “the ADG, DRI”), assails Final Order No. 51470/2019, dated 13th November, 2019, passed by the Customs, Excise and Service Tax Appellate Tribunal (hereinafter referred to as “CESTAT”) in Customs Appeal No. 52593 of 2019 which, in turn, was preferred, before the learned Tribunal against Order-in-Original, dated 4th October, 2019 passed by the appellant.
2. Vide order dated 29th January, 2020, this appeal was admitted on the following substantial questions of law:
“(i) Whether the CESTAT can substitute its view for the discretion of the Adjudicating Authority U/S 110A?
(ii) Whether the appellate jurisdiction of the CESTAT against an order passed u/s 110A is restricted to examining whether such an order has been passed after duly considering the law in respect of provisional release and not pass arbitrarily?
(iii) Whether the appellant is entitled to provisional release of the seized gold in question in view of the facts and circumstances of this case?”
Though, as noted hereinabove, three questions of law were framed by this Court, Question No. (iii) effectively subsumes Questions No. (i) and (ii).
A Brief Factual Overview
Relevant statutory provisions/Notifications
3. Exemption to imports under Advance Authorisation scheme
3.1 Notification 18/2015-Cus, issued under Section 25(1) of the Customs Act, exempts, completely, from all Customs duties, materials imported into India against a valid Advance Authorisation issued by the Directorate General of Foreign Trade (DGFT) in terms of para 4.03 of the Foreign Trade Policy 2015-2020 (hereinafter referred to as “the FTP”), subject to following the procedure prescribed in the Notification.
3.2 The Advance Authorisation Scheme is one of the export promotion schemes, contained in the FTP, and contemplates allowing of duty-free imports, under a valid Advance Authorisation issued by the DGFT. Para 4.03(a) of the FTP reads thus:
“Advance Authorisation is issued to allow duty free import of input, which is physically incorporated in export product (making normal allowance for wastage). In addition, fuel, oil, catalyst which is consumed / utilized in the process of production of export product, may also be allowed.”
4. Duty-free re-import of jewellery, exported for participation in exhibitions abroad
4.1 Para 4.46 of the FTP permits export of jewellery, for participation in exhibitions abroad, and reads thus:
“4.46 Export Promotion Tours/ Export of Branded Jewellery
(i) Nominated Agencies and their associates, with approval of Department of Commerce and with approval of Gem & Jewellery Export Promotion Council (GJEPC), may export gold / silver / platinum jewellery and articles thereof for exhibitions abroad.
(ii) Personal carriage of gold / silver / platinum jewellery, precious, semiprecious stones, beads and articles and export of branded jewellery is also permitted, subject to conditions as in Handbook of Procedures.”
4.2 Re-import of jewellery, exported abroad, is permitted, duty-free, under S. No. 5 of the table contained in Notification 45/2017-Cus dated 30th June, 2017, subject only to the satisfaction, of the Assistant/Deputy Commissioner of Customs, that the re-imported jewellery is the same as that which was exported. Notification 45/2017-Cus, to the extent it is relevant for the purposes of the present controversy, is reproduced thus:
“In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962) the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the goods falling within any Chapter of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) and specified in column (2) of the Table below when re-imported into India, from so much of the duty of customs leviable thereon which is specified in the said First Schedule, and the whole of the, integrated tax , compensation cess leviable thereon respectively under sub-section (7) and (9) of section 3 of the said Customs Tariff Act, as is in excess of the amount indicated in the corresponding entry in column (3) of the said Table.
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