2024 (6) TMI 314 - HC - Customs

Provisional attachment order under PMLA - Gold released by the Customs Department - HELD THAT - The petitioner cannot be granted any reliefs against Ext. P17 order, in this writ petition. From the facts and circumstances of the case narrated above, it is clear that this Court had directed the release of 04.00 kg of gold imported by the petitioner in terms of an authorization issued to him under the provisions of the SEZ Act. The said finding is on the basis that the import was prior to the suspension of the authorization, which was on 19.08.2014. The letter of authorization was cancelled only on 27.03.2015. The Division Bench very clearly found that the 04.0kg of gold was imported by the petitioner when it had permission and authorization to do so in terms of the provisions contained in the SEZ Act read with the provisions of the Customs Act. The learned counsel appearing for respondent Nos. 3 and 6 is therefore, right in contending that the release of the gold/its value had no bearing, whatsoever, in the proceedings initiated by the Enforcement Directorate as the mandate of Enforcement Directorate is to recover/confiscate the proceeds of crime to the State. There is nothing in the law which prevents the Enforcement Directorate from doing so. Ext. P17 is only a provisional order and a final order has to be issued under Section 8 of the Act, within a period of 180 days from the date of Ext. P17 order. Ext. P17 order is dated 29.01.2024 and the petitioner has already filed his objections/reply to the same. The period for issuing a final order will expire by 27.07.2024. Petition dismissed.

Summary

Issues involved: Challenge to provisional attachment order u/s 5 of the Prevention of Money Laundering Act, 2002 (PMLA) based on release of gold by Customs Department.

Summary:
The petitioner challenged the Ext. P17 provisional attachment order u/s 5 of the PMLA, claiming that the amount paid by the Customs Department following court directions had been attached. The petitioner argued that since the court found no illegality in the import of gold, the value released by the Customs Department could not be considered proceeds of crime under the PMLA. Respondents contended that the attachment was provisional, pending adjudication, and if the amount was proven to be proceeds of crime, it could be attached under the PMLA. The court held that the release of gold by the court did not affect the Enforcement Directorate's authority to investigate potential money laundering. The petitioner was given the opportunity to contest the attachment before the Adjudicating Authority under the PMLA.

The court found that the release of gold was based on the petitioner's authorization under the SEZ Act, which was not suspended or canceled at the time of import. The court clarified that the release of gold did not impact the Enforcement Directorate's mandate to recover proceeds of crime. The provisional attachment order was to be finalized within 180 days, and the petitioner was directed to present their case before the Adjudicating Authority. The court dismissed the writ petition, allowing the petitioner to contest the attachment during the adjudication process without prejudice to the court's observations.