2023 (5) TMI 1072 - HC - Customs

Provisional release of the gold seized from the factory/warehouse - unaccompanied baggage - main contention of the respondent-Review Petitioner is that the quantity of 25299.68 grams gold jewellery was imported as baggage and that the requirement of filing of a B/E, which emanates from Section 46(1) of the Customs Act, in Chapter VII thereof, does not apply to baggage, in view of Section 44 - HELD THAT - There were positive findings of fact, by the learned Tribunal, that the imported jewellery had been appraised and found to be the same as the jewellery which had earlier been exported - in exercise of the jurisdiction vested in us by Section 130 of the Customs Act, we could not revisit these findings, absent perversity, which we did not find to exist. Save and except for the consignment of 25299.68 grams forming subject matter of the present review petition, the decision of the learned Tribunal is upheld to permit provisional release of the remaining gold and gold jewellery, on furnishing of enhanced B/G. The finding of the learned Tribunal regarding the identity of the imported gold jewellery with the exported jewellery also extends to the 25299.68 grams gold jewellery forming subject matter of the present review petition. By operation of Notification 45/2017-Cus, therefore, the plaintiff would, prima facie, be entitled to duty free clearance of the imported jewellery. The only ground on which we had extended differential treatment to the 25299.68 grams gold jewellery, from the remaining gold seized in the warehouse/godown of the review petitioner and at the Airport, was that the B/E relating to the 25299.68 grams gold jewellery was unsigned by the customs authorities. We are convinced, prima facie, apply to the said gold jewellery in the first place. Moreover, the Show Cause Notice issued to the review petitioner, too, acknowledges that the jewellery was imported as baggage. In these circumstances, we are of the considered opinion that the review petitioner is justified in its prayer that the 25299.68 grams gold jewellery be extended the same treatment as has been extended to the remaining gold. The judgment under review worked out the quantum of the bank guarantee to be furnished at ₹ 10 crores, as 30% of the total value of the gold seized, including the unreleased 25299.68 grams gold jewellery forming subject matter of the present review proceedings. That amount was enhanced by the Supreme Court to ₹ 15 crores - It is not possible, therefore, to direct furnishing of any further bank guarantee, as a condition, for release of 25299.68 grams gold. Review petition allowed.

Summary

Issues Involved:
1. Legitimacy of the seizure of gold by the Directorate of Revenue Intelligence (DRI).
2. Provisional release of the seized gold under Section 110A of the Customs Act, 1962.
3. Review of the High Court's decision to set aside the Tribunal's order permitting provisional release of 25299.68 grams of gold jewellery.

Summary of Judgment:

Issue 1: Legitimacy of the Seizure of Gold by DRI
- Gold imported by the respondent was seized by DRI from the respondent's workshop/factory and the Airport after crossing the Customs barrier. The respondent contended the gold was reimported within a year of export and entitled to duty exemption under Notification 45/2017-Cus, supported by CBIC Circulars. A Show Cause Notice was issued on 26th September 2019, pending adjudication.

Issue 2: Provisional Release of the Seized Gold under Section 110A of the Customs Act, 1962
- The respondent's request for provisional release of the seized gold was rejected by the ADG, DRI. The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) directed provisional release on terms. The High Court upheld the Tribunal's decision for gold seized from the factory/warehouse and 25400.06 grams gold jewellery, enhancing the conditions to a bond covering the entire value and a Rs. 10 crores Bank Guarantee (B/G). However, the release of 25299.68 grams gold jewellery seized at the Airport was set aside due to an unsigned Bill of Entry (B/E).

Issue 3: Review of the High Court's Decision to Set Aside the Tribunal's Order Permitting Provisional Release of 25299.68 grams of Gold Jewellery
- The respondent filed a Review Petition arguing that the 25299.68 grams gold jewellery was imported as baggage, exempt from B/E filing under Section 46(1) of the Customs Act due to Section 44, defining baggage as including unaccompanied baggage.
- The Supreme Court, in SLP (C) 10472/2020, upheld the High Court's judgment with an enhancement of the B/G to Rs. 15 crores.
- The High Court acknowledged that the jewellery was imported as baggage, supported by the Show Cause Notice and Standard Operating Procedure (SOP) dated 29th March 2016. The Tribunal's findings on the identity of the jewellery were not perverse and could not be re-examined under Section 130 of the Customs Act.
- The High Court concluded that the 25299.68 grams gold jewellery should be treated similarly to the other released gold, without requiring a further B/G, as the Supreme Court had already enhanced it to Rs. 15 crores.

Conclusion:
- The Review Petition was allowed, extending the same provisional release terms to the 25299.68 grams gold jewellery as applied to the other seized gold.