Provisional release of seized crude gold bullion allowed on bond and bank guarantee pending adjudication

CESTAT Chennai allowed provisional release of seized crude gold bullion from appellant's premises. Gold was allegedly procured from importers who diverted imported gold contrary to import conditions. Despite appellant's claims of licit origin and proper documentation, adjudication remained pending for over 18 months. Following Delhi HC precedent, tribunal ordered release upon furnishing bond for full value plus bank guarantee with auto-renewal clause for 30% of goods' value. Appellant must maintain premises open for revenue inspection and account for all gold utilization/sales. Impugned order set aside and appeal disposed.

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Issues Involved:
1. Seizure of crude gold bullion by DRI officers during search and seizure operations at the appellant's premises.
2. Request for release of the seized crude gold bullion.
3. Rejection of the request for release of seized gold by the Principal Commissioner of Customs.
4. Appeal against the rejection order filed by the appellant.

Seizure of Crude Gold Bullion:
The appellant, engaged in the local trade of gold and silver bullion and jewellery, had their premises searched by DRI officers who seized 3516 grams of crude gold bullion. The appellant claimed that the seized stock was duly accounted for and submitted supporting documents on the date of search and seizure.

Request for Release of Seized Gold:
The appellant sought the release of the seized crude gold bullion, which was not granted by the authorities initially. Subsequently, the appellant approached the High Court through Writ Petitions, leading to directions for the lower authority to reconsider the release request.

Rejection of Release Request:
The Principal Commissioner of Customs rejected the request for provisional release of the seized gold, citing that the gold was allegedly procured from importers who diverted imported gold to the local market, making it 'prohibited goods' under the Customs Act 1962. The Commissioner feared that provisional release could defeat the purpose of absolute confiscation.

Appeal Against Rejection Order:
The appellant appealed the rejection order, arguing that the gold was duly recorded in their books of account and should be provisionally released. The appellant highlighted a judgment from the High Court of New Delhi to support their claim.

The Tribunal considered the arguments presented by both sides and noted that the gold seized was in crude form without foreign markings, indicating it may not be of foreign origin. The Tribunal refrained from making a definitive judgment pending adjudication but emphasized the need to balance the interests of the Department and the appellant.

The Tribunal referenced a judgment from the High Court of New Delhi regarding the release of seized goods, suggesting the provision of a Bank Guarantee and Bond as safeguards. Following this guidance, the Tribunal ordered the provisional release of the seized goods upon the appellant furnishing a bond for the full value of the goods and a Bank Guarantee for 30% of the value, with specified conditions for inspection and reporting to the Revenue.

In conclusion, the Tribunal set aside the impugned order and disposed of the appeal by directing the release of the seized goods under the outlined terms and conditions to safeguard the interests of both the Revenue and the appellant.

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