TaxTMI 
TaxTMI 
2024 (7) TMI 75
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.... be allowed for prohibited goods as defined under section 2(33) of Customs Act, 1962?" 2. The necessary facts leading to the filing of this appeal would run thus: 2.1. On the basis of specific intelligence, the DRT, Chennai Zonal Unit, initiated investigation into diversion of duty free imported gold procured from nominated agencies and subsequently, exporting fake gold jewellery in order to fulfil the obligation as mandated under Notification No.57/2000-Cus read with Circular No.27/2016-Customs of the Central Board of Excise & Customs, Government of India. The investigation revealed that fake jewelleries were exported by certain jewellers under the guise of 22 Carat plain gold jewellery. Such jewelleries were examined under mahazars and it was found that there is wider conspiracy to defraud the exchequer by unscrupulous exporters in connivance with local jewellers and bullion traders, such as, the respondent, based in Chennai with an intent to divert the duty free gold and to export fake jewellery under the guise of 22 Carat plain gold jewellery to fulfil the export obligation. The further follow-up searches made at the manufacturing places of fake jewellery at Rajkot and Kolkat....
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....l release of imported goods, which are seized under Section 110 of the Customs Act, 1962. As per Section 110A, provisional release will not be allowed for prohibited goods. In the present case, the seized gold are prohibited goods which could be evident from the statements recorded from the individuals. The statements also reveal the fraudulent activities of the respondent for evasion of tax. It was the further contention of the Revenue that the conditions in the above Circular were only followed in breach. Thus, the seized gold is aptly covered under clause (ii) of para 2 of the Circular due to the reason that the goods had not fulfilled the statutory obligations / compliance requirements. It was also submitted that the respondent had miserably failed to satisfy the burden that the seized gold was not a smuggled one in terms of Section 123 of the Customs Act, 1962. Further, the CESTAT has failed to note that even though Section 110A provides provisional release of seized goods, the Rules, Circular and Instructions issued by the Department from time to time provide the categories of goods that can be released provisionally. As far as the present case is concerned, the respondent ha....
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....erinvoicing for some other purpose, that is to say, not mentioning the true sale consideration of the goods, then it would amount to violation of the conditions for import/export of the goods, then it would amount to violation of the conditions for import/export of the goods. The purpose may be money laundering or some other purpose, but it would certainly amount to illegal/unauthorised money transaction. In any case, overinvoicing of the export goods would result in illegal/irregular transactions in foreign currency." "24. Considering the aforesaid facts and also the fact that this was the second case belonging to the same exporter, the authorities arrived at the conclusion that it was an organized racket to claim fraudulent drawback or an act of deliberate overinvoicing of the readymade garments. Hence, the authority imposed redemption fine as well as levied penalty. In our view, this finding arrived at by the authorities below cannot be said to be, in any way, unreasonable which would call for interference by this Court in this appeal." 3.2. That apart, reference was made to the decision of the Honourable Supreme Court in the case of Union of India and others vs. Raj Grow Imp....
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....on it in accordance with the guidelines issued from time to time and not mechanically in all cases. Stating so, the learned counsel appearing for the Revenue sought to allow this appeal by setting aside the order passed by the CESTAT. 4. Per contra, the learned counsel appearing for the respondent at the outset, submitted that the Tribunal after analysing the facts and circumstances of the case and also in the light of the legal position, passed the order impugned herein, which does not require any interference at the hands of this court. 4.1. That apart, the learned counsel for the respondent placed reliance on the decision of the Delhi High Court in the case of Additional Director General (Adjudication) vs. Its my name pvt Ltd., reported in 2021 (375) E.L.T. 545 (Delhi) wherein it was held as under: "83. Adverting, now, to the terms of provisional release, the impugned Final order does not set out any precise reasoning for having permitted provisional release on furnishing of a bond with bank guarantee for Rs. 1.25 crores. A Division Bench of this Court had, in Navshakti Industries Ltd., vs. Commissioner of Customs, ICD (2011) (267) E.L.T. 483 (Del.) permitted provisional rel....
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....he interests of the Revenue." 4.2. The learned counsel for the respondent further submitted that as against the aforesaid order passed by the Delhi High Court, the Additional Director General (Adjudication) filed a Special Leave Petition before the Honourable Supreme Court. By an order dated 01.10.2020, the Honourable Supreme Court modified the order passed by the Division Bench of the Delhi High Court as follows: "1. These proceedings have arisen from an order of a Division Bench of the Delhi High Court dated 28 February 2020 in an appeal from an order of the Customs, Excise and Service Tax Appellate Tribunal. The Tribunal set aside the direction of the competent authority declining to provisionally release the goods under Section 110A of the Customs Act, 1962 and while doing so, imposed certain conditions. 2. In appeal, the High Court by its order dated 28 February 2020 noted that the total value of the goods was Rs. 28.23 Crores. The High Court has directed provisional release subject to the respondent furnishing a bank guarantee quantified at Rs. 10 crores, besides other incidental conditions. 3. During the course of the hearing, we have heard Mr. S.V. Raju, Additional S....
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....igh Court in the case of Additional Director General (Adjudication) vs. Its my name pvt Ltd. mentioned supra held that the power and jurisdiction of the Tribunal is coequal with the powers exercised by the adjudicating authority and accordingly directed provisional release of the goods subject to certain conditions. While so, it was held that the gold seized from the respondent's premises, were part of investigation. As regards the allegation that the crude gold found in the premises of the respondent was not satisfactorily accounted for in the books of accounts, it was held that it could be considered only during investigation. 8. No doubt, the Tribunal has got powers to interfere with the order passed by the appellant. At the same time, given the nature of violation committed by the respondent in importing gold for manufacturing jewellery for export but diverting it into domestic market, we are of the view that this is not a fit case where the Tribunal is justified in exercising the discretion conferred upon Section 110-A of the Customs Act to provisionally release the goods. The Tribunal also ignored clause (i) of part 2 of Circular No.35/2017-Customs dated 16.08.2017 where....