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2016 (6) TMI 627 - MADRAS HIGH COURT

2016 (6) TMI 627 - MADRAS HIGH COURT - TMI - Seeking release of gold bars - whether the seized gold is a smuggled goods or not - show cause notice was issued - Though the respondent seemed to have produced an authorisation letter, dated 13.10.2013, to carry gold from Kolkatta to Chennai, it is the contention of the department that the said authorisation letter is a fabricated document to bring smuggled gold bars to Chennai. - Held that:- if the subject gold is ultimately sold by the dealer, it w .....

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. Chandrasekaran For the Respondent : Mr.V.T.Gopalan, Senior Counsel, for M/s.M.C.Gan Law Firm ORDER ( Order of the Court was made by S. Manikumar, J. ) W.A.No.954 of 2014 is filed by the Additional Director General and Senior Intelligence Officer, Directorate General of Revenue Intelligence, Chennai, against the order made in M.P.No.3 of 2014 in W.P.No.5663 of 2014, dated 04.07.2014. 2. W.A.No.1056 of 2014 is filed by the Joint Additional Commissioner of Customs (Airport), Chennai, against the .....

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4. Material on record discloses that earlier, while admitting W.P.No.5663 of 2014, this Court, by order, dated 25.02.2014, issued directions to provisionally release the gold, subject to certain conditions. Being aggrieved by the same, the appellants have preferred W.A.No.412 of 2014. After going through the materials on record, a Hon'ble Division Bench of this Court, vide order, dated 03.04.2014, at Paragraph 5, ordered as hereunder: 5. Aggrieved by the order passed by the High Court, Khaza .....

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t of Khazan Singh as Lambardar is not cancelled, it is not permissible to invite fresh applications..... 5. Before the Writ Court, the respondent has contended that he was engaged in the business of buying and selling Gold and Silver Bullion Bars from banks and local dealers. All the purchases and sales of gold and silver bullion bars are covered by proper and valid documents. He also contended that he was also registered with commercial tax department and an assessee on its file. According to h .....

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dent to a decision of the Hon'ble Apex Court in Commissioner vs. Navasakthi Industries Private Limited) reported in 2011 (269) ELT A 146 (SC), wherein, the Hon'ble Supreme Court has issued directions to release the gold articles, subject to certain conditions. Reliance has also been made to an order passed by a Division Bench of this Court in W.A.No.582 of 2011, wherein, this Court has directed the appellants to release the gold jewellery, on depositing 50% of the entire customs duty. 7. .....

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a show cause notice has been issued to the respondent, which is subject matter of challenge in another writ petition. Therefore, the appellants have contended that in the event of goods being released to the custody of the respondent, it would be prejudicial to the interests of the Department. 8. Having regard to the above rival submissions and by observing that whether the seized gold is a smuggled goods or not, as contended by the appellants, it can be gone into only during the adjudication pr .....

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custody of the petitioner, shall take necessary photograph and/or videograph in such a manner that the foreign marking, if any or other markings in the gold bars are visible so that it shall be used during the adjudication proceedings. (ii) The petitioner shall pay 100% duty towards the value of the goods as may be assessed by the officials of the respondents which was prevailing as on the date of seizure within a period of five days from the date of receipt of a copy of this order and the respo .....

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(vi) On compliance of condition Nos. (ii) and (iii) mentioned above, the respondents are directed to release the 15.160 kg of Gold Bars to the petitioner forthwith. 9. Being aggrieved by the same, the appellants have filed the present Writ Appeals. 10. Though several grounds have been raised, assailing the correctness of the interim direction in M.P.No.3 of 2014 in W.P.No.5663 of 2014, dated 04.07.2014, perusal of the same shows that one of the grounds raised is that, whether the Writ Court was .....

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the gold bars into India, and subsequently transport the same in domestic sector to avoid the checks by Customs in domestic airports, with an intention to completely evade Customs, the Writ Court ought not to have provisionally released the seized gold, which is against the principles laid down by the Hon'ble Supreme Court in Sheikh Mohd Omer v. Collector of Customs, Calcutta reported in 1983 (13) ELT 1439. 12. Added further, learned counsel appearing for the appellants submitted that in th .....

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selling Gold and Silver Bullion Bars. He also submitted that the amount of gold carried is entered in the books of accounts of the dealer. 14. Inviting the attention of this Court that already sufficient safeguards are provided in the interim order, dated 04.07.2014, learned Senior Counsel for the respondent submitted that besides payment of 100% duty on the quantity of gold, Writ Court has further directed to the respondents to execute a personal bond covering the entire value of the goods in q .....

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s Only). It also his contention that the conditions, if any, to be imposed by this Court, should not be onerous. According to him, the conditions ordered by the Writ Court, are just and reasonable. Heard the learned counsel appearing for the parties and perused the materials available on record. 16. Case of the appellants is that the Directorate of Revenue Intelligence, Chennai Zonal Unit (CZU-DRI in short) received specific intelligence that the respondent arriving at Chennai Domestic Airport f .....

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gold bars have been made to appear crude. Most of these bars had traces of markings such as, 10 TOLA , 999.0 , DUBAI-UAE and G on their surface. Weight of these 296 rectangular cut pieces of gold bars was 15.160 Kgs. The Government of India approved assayer, on examination, certified that the said 296 rectangular cut pieces of gold bars to be of 24 carat purity (999 purity) and valued the same as ₹ 4,53,89,040/-. 17. Further case of the appellants is that the respondent did not have docume .....

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/-, under Sections 111(d) and 111(I) of the Customs Act, 1962 and imposition of penalty, on the respondent and others. Though the respondent seemed to have produced an authorisation letter, dated 13.10.2013, to carry gold from Kolkatta to Chennai, it is the contention of the department that the said authorisation letter is a fabricated document to bring smuggled gold bars to Chennai. 19. Though it is the contention of the appellants that the subject gold, weighing 15.16 Kgs., is smuggled and lia .....

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other markings in the gold bars are visible. 20. Though there is a direction by the Writ Court to the effect that the respondent shall co-operate with the appellants in commencing and completing the adjudication proceedings initiated by them, indisputably adjudication proceedings already initiated are over, is subject matter of another writ petition. It is the contention of the appellants that the abovesaid quantity of gold is smuggled. 21. Section 110A of the Customs Act, deals with provisional .....

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er: The following goods brought from a place outside India shall be liable to confiscation: - (a) any goods imported by sea or air which are unloaded or attempted to be unloaded at any place other than a customs port or customs airport appointed under clause (a) of section 7 for the unloading of such goods; (b) any goods imported by land or inland water through any route other than a route specified in a notification issued under clause (c) of section 7 for the import of such goods; (c) any duti .....

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hibited goods required to be mentioned under the regulations in an import manifest or import report which are not so mentioned; (g) any dutiable or prohibited goods which are unloaded from a conveyance in contravention of the provisions of section 32, other than goods inadvertently unloaded but included in the record kept under sub-section (2) of section 45; (h) any dutiable or prohibited goods unloaded or attempted to be unloaded in contravention of the provisions of section 33 or section 34; ( .....

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or which do not correspond in any material particular with the specification contained therein; (l) any dutiable or prohibited goods which are not included or are in excess of those included in the entry made under this Act, or in the case of baggage in the declaration made under section 77; (m) any goods which do not correspond in respect of value or in any other particular with the entry made under this Act or in the case of baggage with the declaration made under section 77 in respect thereof .....

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e condition is not observed unless the non-observance of the condition was sanctioned by the proper officer; (p) any notified goods in relation to which any provisions of Chapter IVA or of any rule made under this Act for carrying out the purposes of that Chapter have been contravened. 23. Contention of the appellants is that the respondent did not furnish documents to show that there is legal import of the said 15.16 Kgs., of cut pieces of foreign origin gold bars. On the contra, the respondent .....

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Mahazar dated 14th October 2013, subject to the following conditions:- i) The respondent is directed to offer Bank Guarantee to 50% value of the gold, at the time of seizure, in the name of the the Joint Additional Commissioner of Customs (Airport), New Customs House, Meenambakkam, Chennai-27 and for the remaining value of gold, the respondent is directed to offer immovable property security, by production of documents, within a period of four weeks, from the date of receipt of a copy of this o .....

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