Supreme Court affirms High Court ruling on gold seizure, extends provisional release terms under Customs Act

The Supreme Court upheld the High Court's decision regarding the legitimacy of the gold seizure by the Directorate of Revenue Intelligence (DRI) and the provisional release of the seized gold under Section 110A of the Customs Act, 1962. The court allowed the Review Petition, extending the same provisional release terms to the 25299.68 grams of gold jewelry as applied to the other seized gold, with the Bank Guarantee enhanced to Rs. 15 crores.

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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.

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