2023 (11) TMI 72 - AT - Customs

Seeking provisional release of seized goods - crude gold bullion seized from the office - prohibited goods or not - gold seized from the appellant s premises was allegedly procured from importers who have diverted imported gold to the local market contrary to the conditions and restrictions placed on such imports - HELD THAT - The contentions of the appellant that the gold is in crude form and does not bear foreign marking, and hence it is not yet proved to be of foreign provenance. The same has been seized as a part of investigation from the appellant s premises. Appellant claims to have provided proof of their licit origin and of having been properly recorded in their books of account and informed to the Department in their periodic returns, but these could only be considered during adjudication and hence, no views expressed at this stage. But the matter has not been adjudicated even after a lapse of more than one and half years - the balance of convenience would be to ensure that the Department s interests are secured while the appellant is also allowed to continue with its business. The Hon ble High Court of New Delhi in its judgment in Its ADDITIONAL DIRECTOR GENERAL (ADJUDICATION) VERSUS M/S. ITS MY NAME PVT. LTD. 2020 (6) TMI 72 - DELHI HIGH COURT has held that the power and jurisdiction of the Tribunal hearing the appeal, is coequal with the powers exercised by the adjudicating authority. The Hon ble High Court has held that a Bank Guarantee of an amount of around 30% of the value of the goods seized along with a Bond for the full value of the seized goods containing an auto renewal clause to be a sufficient safeguard for the interest if Revenue. It would serve the interest of the Revenue and the appellant to follow the said terms and conditions while ordering release of the impugned goods provisionally as per Section 110A of the Customs Act 1962 - the release of the seized goods is ordered, for which the appellant may furnish a bond, for the full value of the seized goods, along with a Bank Guarantee containing an auto renewal clause for an amount of 30% of the value of the seized goods subject to the condition that the premises of the appellant would be kept open for inspection by the Revenue, at all reasonable hours, and all utilization/sale of the gold/gold jewellery shall be duly accounted for. The impugned order is therefore set aside - appeal disposed off.

Summary

Issues Involved:
1. Seizure of crude gold bullion by DRI officers during search and seizure operations at the appellant's premises.
2. Request for release of the seized crude gold bullion.
3. Rejection of the request for release of seized gold by the Principal Commissioner of Customs.
4. Appeal against the rejection order filed by the appellant.

Seizure of Crude Gold Bullion:
The appellant, engaged in the local trade of gold and silver bullion and jewellery, had their premises searched by DRI officers who seized 3516 grams of crude gold bullion. The appellant claimed that the seized stock was duly accounted for and submitted supporting documents on the date of search and seizure.

Request for Release of Seized Gold:
The appellant sought the release of the seized crude gold bullion, which was not granted by the authorities initially. Subsequently, the appellant approached the High Court through Writ Petitions, leading to directions for the lower authority to reconsider the release request.

Rejection of Release Request:
The Principal Commissioner of Customs rejected the request for provisional release of the seized gold, citing that the gold was allegedly procured from importers who diverted imported gold to the local market, making it 'prohibited goods' under the Customs Act 1962. The Commissioner feared that provisional release could defeat the purpose of absolute confiscation.

Appeal Against Rejection Order:
The appellant appealed the rejection order, arguing that the gold was duly recorded in their books of account and should be provisionally released. The appellant highlighted a judgment from the High Court of New Delhi to support their claim.

The Tribunal considered the arguments presented by both sides and noted that the gold seized was in crude form without foreign markings, indicating it may not be of foreign origin. The Tribunal refrained from making a definitive judgment pending adjudication but emphasized the need to balance the interests of the Department and the appellant.

The Tribunal referenced a judgment from the High Court of New Delhi regarding the release of seized goods, suggesting the provision of a Bank Guarantee and Bond as safeguards. Following this guidance, the Tribunal ordered the provisional release of the seized goods upon the appellant furnishing a bond for the full value of the goods and a Bank Guarantee for 30% of the value, with specified conditions for inspection and reporting to the Revenue.

In conclusion, the Tribunal set aside the impugned order and disposed of the appeal by directing the release of the seized goods under the outlined terms and conditions to safeguard the interests of both the Revenue and the appellant.