Gold was freely importable by the Normal importer before 18/12/2019

Customs, Excise & Service Tax Appellate Tribunal (CESTAT) in one of its orders said that prior to the notification dated 18/12/2019, the gold was also freely importable by the Normal importer in terms of RBI Guidelines.

The appellant filed Bill of Entry No. 3682159 dated 20/10/2017 under Notification No. 46/2011, Sl. No. 966 (i) for import of 150 pieces of Gold Bars of purity 99.10% totally weighing 150 Kg falling under Customs Tariff Heading 7108 12 00 of Customs Tariff Act, 1975. The gold was detained and a query was raised to the appellant to clarify the end use of eligibility of import of gold in terms of DGFT Notification No. 34/2017 dated 18/10/2017. After the query was answered by the appellant, the goods were detained and a show-cause notice was issued to the appellant for confiscation of the imported gold and for the imposition of penalty under Section 112 of the Customs Act, 1962.

The appellant contested the show-cause notice but the adjudicating authority absolutely confiscated the imported gold and also imposed a penalty of Rs. 6,00,00,000/- (Rupees Six Crores only) under Section 112 of the Customs Act. The said order was challenged before the learned Commissioner, who set aside the adjudication order of confiscating the gold and imposing penalty but gave a direction to release the imported gold with the condition that the appellant will utilize the same for manufacture and export by themselves. Against the said order, the appellant has filed an appeal before CESTAT.

Mr. Kiran S. Jawali, Senior Advocate for the Appellant submits that the appellant placed the order for the purchase of the imported gold on 12/10/2017 which was invoiced by the seller on 15/10/2017, and the goods were delivered to the transporter on 17/10/2017 and the airway bill was also issued on the same day. The appellant filed a Bill of Entry on 20/10/2017 as a Normal importer. He further submits that the RBI Regulations were with regard to the import of Gold Bars under para-C.11 and C.11.2 of the Master Directions of RBI. Para C.11 stipulates that the Nominated Banks and Nominated Agencies were permitted to import gold on a consignment basis and para- C.11.2 stipules that import of Gold Bars under Letter of Credit was restricted to maximum credit period for 90 days. Therefore, it is clear that as of 20/10/2017, the import of Gold Bar was clearly permissible to import in India upon payment of Customs duty without any end-use condition.

On the other hand, Mr. P. Gopakumar, Additional Commissioner, the learned AR opposed the contention of the learned counsel and submits that although the Airway bill was issued on 17/10/2017 the goods left the exporting country after 18/10/2017. Therefore, it cannot be said that goods have been imported prior to the date of the Notification.

The Coram of Judiciary, Hon’ble Shri Ashok Jindal, Judicial Member, and Hon’ble Shri C.J. Mathew, Technical Member held that the appellant imported the gold as a normal importer; therefore, the restrictions contained in Notification 34/2017 dated 18/10/2017 are not applicable to the appellant and the import has been done prior to the introduction of the Notification dated 18/10/2017.