Provisional release of four seized gold bars granted after finding correlation with bank purchases

CESTAT Kolkata granted provisional release of four gold bars seized from appellant company's employees. The tribunal found prima facie correlation between the seized gold and bars purchased by appellant from HDFC Bank Ltd. Provisional release was ordered subject to appellant providing bond for full value of seized gold supported by 25% bank guarantee. The tribunal refrained from expressing opinion on merits, reserving final adjudication for appropriate authority. Appeal disposed of with conditional release granted.

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Issues Involved:
1. Provisional release of seized gold bars.
2. Correlation of seized gold bars with purchase documents.
3. Compliance with procedural requirements u/s 110 of the Customs Act, 1962.
4. Validity of the appellant's claim of ownership and lawful purchase.

Summary:

1. Provisional Release of Seized Gold Bars:
The proceedings are related to the provisional release of four gold bars, each weighing one kilogramme, valued at Rs.1,95,18,867/-, seized from the appellant on 11.10.2023 by Kolkata Customs. The Tribunal had earlier allowed provisional release of the goods on execution of a bond for the full value of the seized gold supported by a Bank Guarantee to the extent of 25% of the value of the seized goods. The Department appealed against this order.

2. Correlation of Seized Gold Bars with Purchase Documents:
The appellant claimed that the gold bars were purchased from M/s. HDFC Bank Limited and provided invoices and a packing list from M/s. Brinks India Pvt. Ltd. showing the serial numbers. However, the Department contended that the seized gold bars did not have serial numbers for correlation with the invoices. The Tribunal observed that the appellant had provided challans for job work to M/s. Kalyan Jewellers and established a correlation between the marks and numbers on the gold bars and the purchase documents.

3. Compliance with Procedural Requirements u/s 110 of the Customs Act, 1962:
The appellant argued that the officers did not follow the procedure laid down u/s 110(1B) and 110(1D) of the Customs Act, 1962, for preparing an inventory of the goods. The Tribunal noted that the Proper Officer must record reasons for forming an opinion that the goods are smuggled and liable for confiscation, which was not done in this case.

4. Validity of the Appellant's Claim of Ownership and Lawful Purchase:
The appellant's employees were arrested and later granted bail based on a report from M/s. HDFC Bank Ltd. affirming the authenticity of the invoices. The appellant's representation for the release of the gold bars was initially rejected by the Department on the ground of lack of serial numbers. However, the Tribunal found that the appellant had prima facie established the correlation between the gold bars purchased from M/s. HDFC Bank Ltd. and the seized gold.

Conclusion:
The Tribunal ordered the provisional release of the four seized gold bars on the condition that the appellant provides a bond for the full value of the seized gold supported by a Bank Guarantee to the extent of 25% of the value of the seized goods. The Department was directed to release the gold on a provisional basis, subject to the fulfilment of these conditions. The appeal was disposed of on these terms.

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