Gold import violation: 12,000 grams worth Rs. 3.56 crores concealed in UPS machines, release order overturned under Section 125

Delhi HC set aside an order releasing seized gold articles on payment of redemption fine. The court found that 12,000 grams of gold bars worth Rs. 3.56 crores were deliberately concealed in UPS machines and imported through courier, violating regulated import regime. Since gold import is strictly regulated and permitted only through identified agencies following restricted procedures per Customs and RBI circulars, the gold fell under prohibited category under Section 125 of the Act. The Adjudicating Authority erred in directing release, and the appeal was allowed.

---

---

Issues:
The appeal challenges the validity of the final order of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) which allowed the release of seized gold articles on payment of redemption fine u/s 125 of the Customs Act, 1962.

Details of the Judgment:

Issue 1: Interpretation of Section 125 of the Customs Act, 1962
The Court examined whether gold could be released on payment of redemption fine under Section 125 of the Act. Referring to the recent decision in Nidhi Kapoor vs. Principal Commissioner and Additional Secretary to the Government of India, the Court analyzed Section 2(33) of the Act to determine the scope of prohibited goods. It was concluded that goods imported in violation of conditions for import fall within the ambit of prohibited goods, allowing the Adjudicating Officer to exercise discretion in permitting release on payment of redemption fine.

Issue 2: Illegality in Release of Seized Gold
The Court found that the gold bars, concealed in UPS machines and packing material, were deliberately imported through a courier in violation of regulations. Import of gold is strictly regulated and permitted only through identified agencies in compliance with Circulars issued by Customs and the Reserve Bank of India. Considering the potential negative impact of illegal gold imports on the economy, the Court held that the Adjudicating Authority erred in directing the release of the seized articles on payment of redemption fine. The CESTAT's failure to interfere with the original order was deemed erroneous.

Decision:
The Court allowed the appeal, setting aside the impugned order and quashing the original order. The appellant was granted the opportunity to proceed further in accordance with the law. All pending applications were disposed of as a result of the judgment.

---