Seizure of Gem and Jewellery Stocks, Viz., Gold, Silver, Diamond, Precious & Semi-Precious Stones of Gem and Jewellery Exporters – Clarification Reg - Customs - 091/2000

Circular No. 91 /2000-Cus 20th November 2000. F.No.305/73/2000-FTT Government of India Ministry of Finance Department of Revenue Subject : Seizure of Gem and Jewellery Stocks, Viz., Gold, Silver, Diamond, Precious Semi-Precious Stones of Gem and Jewellery Exporters - Clarification Reg. I am directed to invite your attention on the above-mentioned subject and to state that representations have been received from trade and industry as also the Ministry of Commerce highlighting the hardships being faced by the exporters of Gem Jewellery on account of seizure of gem and jewellery stocks for long periods. Such seizures are effected by Customs authorities on the basis of information that the stock of gem and jewellery is either smuggled or the same is in excess of the legally imported stock and generally such stock is seized pending verification of import documents etc. Most of the time these stocks have to be eventually released, but the verification process takes long time. It has been stated that seizure of goods for long periods results in default in fulfillment of export obligation by the exporters, rendering them liable to penal action under various provisions of the Exim Policy. It also damages the image of the country in general and the exporters in particular in the overseas markets. Further, the diamond trade is heavily dependent on bank finance and any long duration seizures of stock in trade, make exporters default in their payment commitments to the banks, which in turn may make bankers become very cautious in their extending credit to this important export oriented sector. 2. The matter has been examined by the Board. Considering Government's emphasis on export promotion, it has been decided that seizure of gem and jewellery stock of the exporters shall not be effected for merely technical offences or on flimsy grounds, especially, where it does not eventually warrant confiscation of goods or prosecution. In such instances, cases may be booked under the provisions of Customs Act, 1962 and required investigation may be done expeditiously without effecting seizure of the stock of gem and jewellery. In such cases the stock of gem and jewellery may be detained pending completion of investigation. The investigation may be completed as expeditiously as possible, and in any case not more than 90 days. However, where it becomes absolutely necessary to seize the goods on the basis of prima-facie investigation/evidence etc, the same may be done, but at the same time, efforts should be made to lift the seizure within seven days after completing due formalities for proper safeguard of revenue interests. In such cases, a detailed report may be sent to the Ministry explaining the reasons for seizure of goods including reasons fro non-release thereof. This would enable the Ministry to examine the case in proper perspective and take a fair view of things. 3. Kindly acknowledge receipt of this Circular. Difficulties, if any, faced in the implementation of the above circular, may be brought to the notice of the Board at an early date.