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2023 (12) TMI 755 - AT - CustomsRejection of request for provisional release of the impugned goods - Gold - prohibited goods or not - alleged noncompliance with Notification No. 12/2012-Cus., dated 17.03.2012 - HELD THAT - In instant case, three samples were subjected to test at various stages. Firstly, as per the requirement of the impugned notification before importing the goods from source country from the Lab of mining company which is placed at page 49 of the paper book. Secondly, we find that at the running page 56 of the paper book, Customs had drawn a sample and obtained report while granting discharge of the cargo on 24.02.2023 which found the purity to be 94.70 which was conformity with the report of mining which company is available - the last report of the CRCL obtained by DRI which is a running page 21 ( to be termed as 3rd report) indicates slightly higher percentages in three samples than the prescribed 95% but largely within the tolerance limits of /.25 indicated by the CRCL itself and its reply of RTI. Further, the report based on which seizure has been made has subjected sample to a test other then Fire Assay Method as is prescribed by BIS. It is found that out of 27 Gold Bars admittedly 1 bar below was 5kg i.e. of 4.240 kg which is claimed to be erroneously imported due to error on the part of exporter by the appellants and the same in any case shall not be allowed to be imported under the conditions of Notification No. 50/2015-Cus dated 30.06.2017 or Notification No. 96/2008-Cus. Further, we also find that the appellants had initially claimed benefit of Notification No. 96/2008-Cus dated 13.08.2008 based on the country of origin being of Republic of Rwanda. However, on the behest of Investigating Agency and under protest to get release of consignment, they paid duty under protest on TR-6 challan No. 446 dated 21.12.2022. However, the goods were not released to them detention was converted into seizure - it is found that the differential duty which was paid on the goods which were to be released but eventually not released was to the extent of 15.20 Crores (approx) which is with the department available for any appropriation, if so needed - it is further found that the another Gold Bar 4.240 which cannot be subjected to claim of exemption at present. The fate of the same whether being eligible for re-export are not has to be decided by the adjudicating authority, at the time of adjudication, the same will have a value exceeding Rs. 2.5 crores - the availability of this amount of security exceeding Rs. 17.5 crores along with execution of bond of full value of the goods should suffice to safeguard the interest of revenue. The goods even if there is any remote possibility of being found prohibited or restricted at the time of adjudication is there, cannot be subjected to non release in terms of Section 110A. In view of foregoing the provisional release of 26 Gold Dore weighing 5 kg plus more allowed, subject to the conditions imposed - appeal disposed off.
Issues Involved:
1. Whether the impugned goods are "prohibited goods." 2. Validity of reliance on CBIC Circular No. 35/2017 to deny provisional release. 3. Whether goods can be categorized as "prohibited" only after adjudication. 4. Compliance with conditions of Notification No. 96/2008-Cus. 5. Validity of the seizure of the entire consignment. 6. Authority of law for the collection of customs duty on prohibited goods. 7. Denial of provisional release despite duty payment. 8. Arbitrariness of the entire proceeding. Summary: A. Impugned Goods are Not Prohibited Goods: The appellant argued that the imported Gold Dore bars are not "prohibited goods" as per Section 2(33) of the Customs Act, 1962, and are instead "restricted goods" under the Foreign Trade Policy (FTP). The appellant complied with the conditions of the import license issued by DGFT. The dispute revolves around compliance with Notification No. 12/2012-Cus, superseded by Notification 50/2017-Cus. The appellant fulfilled conditions under Notification No. 96/2008-Cus and provided necessary documentation, including assay certificates and packing lists. The appellant also highlighted a genuine error regarding one gold bar weighing less than 5 kg, which was declared at the time of import. B. Invalidity of Reliance on CBIC Circular No. 35/2017: The appellant contended that reliance on CBIC Circular No. 35/2017 to deny provisional release is contrary to Section 110A of the Customs Act. The appellant cited judicial precedents, including the Delhi High Court's judgment in Additional Director General (Adjudication) v. Its My Name Pvt. Ltd., which held that the circular is void as it contradicts the parent statute. C. Goods Categorized as "Prohibited" Only After Adjudication: The appellant argued that the categorization of goods as "prohibited" is subject to adjudication. The High Court of Madras in Al Qahir International v. Commissioner of Customs, Tuticorin, held that goods could not be termed as prohibited until adjudication is completed. The appellant submitted that the impugned gold is not prohibited as all required documents were provided, and the gold content was within permissible limits. D. Compliance with Notification No. 96/2008-Cus: The appellant claimed the benefit of Notification No. 96/2008-Cus for preferential tariff on imports from Lesser Developed Countries (LDC), specifically from the Republic of Rwanda. The appellant provided a Certificate of Origin and other necessary documentation to claim the exemption. The appellant argued that they are not required to fulfill conditions under Notification No. 50/2017-Cus as they did not claim its benefit. E. Invalid Seizure of the Entire Consignment: The appellant argued that only goods liable for confiscation under Section 111 of the Customs Act could be seized. The entire consignment should not be detained because one gold bar was found to be below the prescribed weight. The appellant cited judicial precedents to support their argument that the seizure of the entire consignment is invalid. F. Collection of Customs Duty on Prohibited Goods Without Authority of Law: The appellant submitted that customs duty is payable on goods imported into India, and the import is complete only when goods are cleared for home consumption. Since the goods were declared prohibited by DRI, customs duty should not be collected. The appellant argued that the duty paid should be refunded as its collection was without authority of law. G. Denial of Provisional Release Despite Duty Payment: The appellant paid customs duty under protest seeking the release of goods but the goods were detained. The appellant argued that the gold dore bars are not prohibited goods and should be provisionally released under Section 110A of the Customs Act. The appellant highlighted the business urgency and the compliance with the conditions of import. H. Arbitrariness of the Entire Proceeding: The appellant argued that the entire proceeding is arbitrary as the test report relied upon was not provided, previous consignments were never held as prohibited, and the collection of duty followed by seizure is arbitrary. The appellant cited multiple test reports showing compliance with gold content requirements and argued that the reliance on one test report is arbitrary. Department's Case: The department argued that the appellant violated conditions of Notification No. 50/2017-Cus by importing a gold dore bar weighing less than 5 kg and not submitting the packing list of the miner. The department questioned the genuineness of the assay certificate and relied on CRCL test reports showing gold content above 95%. The department contended that the goods are restricted and the import license conditions were not met, making the goods prohibited. The department also argued that the appellant must comply with conditions under Notification No. 50/2017-Cus and the import policy. Tribunal's Decision: The tribunal considered the rival submissions and various materials. It allowed the provisional release of 26 gold dore bars weighing 5 kg or more, subject to conditions including non-refund of duty paid and furnishing a bond. One gold dore bar weighing 4.24 kg will remain with the department. The tribunal emphasized maintaining balance and protecting the interests of both parties until the adjudication is completed. The appeal was disposed of accordingly.
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