2018 (3) TMI 649 - AT - Customs

Import of gold - N/N. 57/2000-Cus dated 8.5.2000 - enforcement of bond for different duty liability - Penalty - Held that - Admitted fact is that except in one case, the bond which is involved in the present case relates to the period prior to pre-amended notification - Nowhere in the pre-amended EXIM Policy or circular the condition of production of BRC by the importing /nominated agencies has been stipulated. Such stipulation apparently was brought in with effect from 1.4.2008 in the amended EXIM Policy which was later followed by the Circular dated 24.7.2008 of the Board. The impugned order cannot ask for the compliance of the condition which was later on introduced in the Policy for the import / bond executed which was made earlier - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Enforcement of bond for duty liability on import of gold for export
- Imposition of penalties for non-compliance with Policy provisions
- Requirement of Bank Realisation certificate (BRC) for jewellery exports
- Interpretation of Policy provisions and circulars regarding proof of export
- Applicability of circular dated 24.7.08 on import of duty-free gold
- Legal justification for enforcing bond and imposing penalties

Analysis:
The appeals were filed against the Order-in-Appeal of the Commissioner regarding the enforcement of bonds for duty liability and penalties imposed on the appellant for non-compliance with Policy provisions. The appellant, a Government undertaking, imported duty-free gold for export as per notification No.57/2000-Cus. The dispute arose when the Revenue insisted on the production of Bank Realisation certificate (BRC) for jewellery exports, alleging a violation of Policy provisions. The appellant argued that the Policy requirements during the relevant time did not mandate the production of BRC, except for post-amendment imports. They cited a Tribunal decision to support their stance that the Customs cannot demand BRC from nominated importers of gold. The Tribunal concurred, emphasizing that the bond conditions were not altered post-amendment, thus rejecting the enforcement of bond and penalties.

The Revenue contended that the circular dated 24.7.08 should be considered clarificatory and applicable retrospectively. They argued that the appellant, having imported duty-free gold, was bound by all conditions, including the circular. However, the Tribunal, after hearing both parties, examined the bond conditions and relevant Policy provisions. It noted that the requirement of producing BRC was introduced post-amendment, not applicable to the bond executed earlier. The Tribunal found no legal basis for enforcing the bond condition retrospectively and imposing penalties on the appellant. Consequently, the impugned order was deemed unsustainable and set aside, allowing the appeals.

In conclusion, the Tribunal's judgment focused on the interpretation of Policy provisions, the retrospective application of circulars, and the legal justification for enforcing bonds and penalties. By analyzing the timing of amendments, bond conditions, and Policy requirements, the Tribunal ruled in favor of the appellant, emphasizing the importance of aligning enforcement actions with the relevant provisions in force at the time of import.