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TMI Blog2025 (3) TMI 793X X X X Extracts X X X X X X X X Extracts X X X X ..... torate General of Foreign Trade DGFT to the appellant for import of gold bars in terms of Foreign Trade Policy 2015-2020 and to export gold jewellery after undertaking the process of manufacturing. In pursuance of the said Advance Authorization, the appellant imported 53kgs of duty free gold bars through two Bills of Entry, both dated 13.08.2020. One Bill of Entry No. 8461348 was for import of 31kgs of gold and the other Bill of Entry No. 8461516 was for import of 22kgs of gold. The export obligation period in respect of the gold bars imported under the aforesaid Advance Authorization was 120 days from the date of clearance of the import consignment by the customs authority. According to the appellant, in view of the COVID pandemic, extension in deadlines were given as a result of which the aforesaid period of 120 days stood extended till 31.12.2021 without composition fee. The export obligation period could, however, be extended further on payment of composition fee, as provided for under paragraph 4.42(d) of the Handbook of Procedure of Foreign Trade Policy. 3. It transpires from the records that the Officers of DRI conducted a search at the premises of the appellant on 13.08.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he premises on 13.08.2020 since a search was being conducted. The Delhi High Court also noticed that the gold bars were brought immediately to the premises after the search was over. The Delhi High Court, however, gave liberty to the appellant to move an application for provisional release of gold under section 110(A) of the Customs Act. The relevant portions of the judgment of the Delhi High Court are reproduced below: "33. There is prima facie some merit in the arguments advanced by the learned counsel for the petitioner that 53 kg gold bars, at the time of detention, were found in the declared premises and, thus, could not have been seized. The said gold was cleared from customs in late hours of 13.08.2020. The said gold was safely kept by the principal officers of the petitioner company. The gold could not be brought inside the declared premises because a search was being conducted during the relevant time on 13.08.2020/14.08.2020. However, it was brought inside immediately thereafter. At this stage, it is not relevant to consider whether the petitioner would ultimately succeed. The arguments raised require adjudication of facts. ***** ***** 51. The Gold, in relation to w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hall be taken by the competent authority within a period of four weeks, by directing the appropriate authority to decide the request for provisional release of the seized gold in accordance with law within a maximum period of four weeks. 11. An order dated 01.05.2024 was then passed by the Commissioner rejecting the application filed by the appellant for provisional release of gold. The Commissioner placed much emphasis on the fact that 53kgs of gold was not found during the search of the premises on 13.08.2020 and 14.08.2020 and concluded that this was done to save duty on import of gold. The Commissioner also placed emphasis on the fact that during the search of the premises fully mechanized facility for manufacture of jewellery was not found in the premises even though under the Advance Authorization Scheme, fully mechanized facility was necessary. The relevant portions of the order passed by the Commissioner are reproduced below: "2. I have gone through the facts of the case- (i) DRI, Noida Regional Unit (DRI-NRU) had carried out investigation into the illegal diversion of gold imports under Advance authorization Scheme by three firms including M/s. Shree Gold art Pvt. Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty on import of gold. (ix) From the copies of the documents regarding companies received from the office of Additional Director General of Foreign Trade, CLA, New Delhi, it was found out that these companies had applied for import of Gold under Advance Authorisation Scheme for manufacture of Gold Jewellery /articles by a fully mechanized process, gold medallions and coins. Whereas during the search of premises, DRI Noida did not find any fully mechanized facility for manufacture of jewellery/articles nor any facility for manufacture of gold medallion and coins which points to the fact that Advance Authorisations were obtained on the basis of false declarations. ***** 3. In view of the above facts, I hereby reject the request of the importer for provisional release of 53 kgs of gold seized by DRI, Noida Regional Unit vide seizure Memo dated 22.12.2020" ( emphasis supplied ) 12. It is this order dated 01.05.2024 passed by the Commissioner that has been assailed in this appeal. 13. Learned counsel for the appellant submitted that the Commissioner committed an error in rejecting the application filed by the appellant for provisional release of the gold. Learned counsel submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n considered. 16. The records indicate that the appellant was granted an Advance Authorization dated 19.02.2019 under which any jewellery/articles manufactured by a fully mechanized process and unstudded for 53102.940gms could be exported under the Advance Authorization. The appellant imported 53kgs of gold through two Bills of Entry, both dated 13.08.2020. The said 53kgs of gold imported by the appellant were cleared by the customs in the late hours of 13.08.2020. The export obligation period in respect of the gold bars imported by the appellant was 120 days from the date of clearance of the import consignment. 17. The Officers of DRI had conducted a search at the premises of the appellant on 13.08.2020 on the allegation of diversion of duty free gold imported by the appellant and the search continued till 14.08.2020. The panchanama dated 13/14.08.2020 does not record the presence of 53kgs of gold. According to the appellant, the said 53kgs of gold that were imported through the two Bills of Entry dated 13.08.2020 could not be brought to the premises because of the search that was going on and it is only after the search was over that the said gold bars were brought into the dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the date for fulfillment of the export obligation. In regard to the prayer made by the appellant for extension of the Advance Authorization License, the Delhi High Court observed that the appellant would be at liberty to apply for extension/re-validation after the adjudication of the show cause notice dated 11.08.2021. 21. The contention of the learned authorized representative appearing for the department that in the absence of the any extension/renewal of the Advance Authorization, the seized goods cannot be provisionally released, cannot be accepted. The appellant had filed a Writ Petition in the Delhi High Court not only for release of the seized gold but also for extension of the Advance Authorization and the Delhi High Court, in its judgment dated 22.12.2023, made it clear that the appellant would be at liberty to apply for extension/re-validation of the Advance Authorization License after the show cause notice dated 11.08.2021 was adjudicated. The Delhi High Court also made it clear that as and when such application is filed, the Directorate General of Foreign Trade shall consider the same in accordance with law keeping in mind the peculiar facts of the case as the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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