2026 (3) TMI 516

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....antity of gold of 5268.60 gms. Statement of the appellant Shri Mohammed Ashraf revealed that the gold was procured by them under '20:80 Import of Gold Scheme' declared by Government of India vide Circular No.34/2013-Cus. Dated 04.09.2013 and he has admitted to the discrepancy in the declaration made in the shipping bill about the content of the gold found in the consignment of 244 numbers of gold bangles. Consequently, the said goods were seized under Mahazar dated 11.03.2014. Later, investigation was initiated including search of the residence premises of the appellant on 11.03.2014 resulting to recovery of 1607.820 gms of 22ct gold jewellery; since the same was believed to be made from the balance quantity of gold meant for export quantity of gold bangles, the same was also seized. On completion of the investigation and analysing the statements of various persons and documents recovered, show-cause notice was issued to the appellant on 14.11.2014 alleging contravention of the provisions of Customs Act, 1962 and proposed confiscation of 244 nos. of gold bangles valued at Rs.72,19,571/- under Section 113(i) of Customs Act, 1962 (CA, 1962, for short), 22ct gold ornaments weighing 16....

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....y M/s. MMTC Ltd., II Floor, Jos Trust Building, Ernakulam - 682 035 is ordered to be appropriated towards Customs duty and interest respectively, payable in respect of Bill of Entry No.4636653 dated 14.02.2014, as per the provisions of Para 4(xv) of Board's Circular No.34/2013-Cus dated 04.09.2013. Aggrieved by the said order, appellant filed the present appeal. 3.1. At the outset, the learned advocate for the appellant has submitted that the appellant has purchased 5kgs. of gold from M/s. MMTC Ltd. for making jewellery and export of the same as per '20:80 Import of Gold Scheme' vide Circular No.34/2013-Cus. Dated 04.09.2013. He has submitted that under the said Scheme, for every consignment of gold imported by the specified agencies at least 20% of the quantity shall be for supply as duty free gold to the exporters for making jewellery for export and remaining would be cleared on payment of duty in accordance with RBI Circular dated 14.08.2013. As per the said Scheme, they had registered with the jurisdictional Deputy / Assistant Commissioner who issued a certificate to their unit. He has submitted that the duty free gold received from MMTC is required to be converted into j....

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....ion of penalty on the appellant aggregating to Rs.143.00 lakhs under different provisions of Customs Act, 1962 is unsustainable in law when the provisions of the Scheme has been complied with by way of discharging the applicable duty on the 5 kgs. Of gold with interest. In support of his submission, he has referred to the following judgements. i. Keshavlal Khemchand and Sons Pvt. Ltd. Vs. CC, Cochin [2025(392) ELT 705 (ker.)] ii. Ciabro Alemao Vs. CC, Goa [2018(362) ELT 465 (Bom.)] iii. Navayuga Engineering Co. Ltd. Vs. UOI [2024(390) E|LT 3 (SC)] iv. CC, Bangalore Vs. Covergys India Services Pvt. Ltd. [2013(298) ELT 94 (Tri. Bang.)] 4. Per contra, learned AR for the Revenue has reiterated the findings of the learned Commissioner. She has submitted that from the statement recorded, it revealed that the appellant had made every attempt to export by misdeclaring the quantity of gold and tried to benefit himself while exporting 244 nos. of gold bangles declaring the gold content of the said bangles as 5268.600 gms of 916 purity. The declared FOB value of the gold was Rs.1,32,31,019.92. The said export was declared to be made against 5000 gms of g....

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....d that as per the procedure prescribed under the Scheme vide Circular No.34/2013-Cus, under Clause 4(iii), for every consignment of gold imported, at least 20% shall be for supply to the exporters only and remaining can be cleared on payment of duty in accordance with RBI circular dated 14.08.2013. Further, as per clause 4(xi) of the Scheme, the exporter is required to follow the procedure getting registered with the Customs Department and furnish an undertaking to the Deputy / Assistant Commissioner without bank guarantee to follow the conditions of the notification under which they receive duty free gold and export the jewellery made therefrom within the period prescribed under the Foreign Trade Policy. As per clause 4(xiv) of the said Scheme, the proof of export shall be furnished by the exporter in accordance with para 4A.8(a) of the Handbook of Policy V.1 to the nominated agency as a proof of having exported the jewellery made from the duty free gold released within the prescribed period. The nominated agency is required to furnish self-certified copy of the same to the Customs office where the gold was bonded. The consequence of non-export of the jewellery out of the duty fre....

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..... ... (i) any goods entered for exportation which do not correspond in respect of value or in any material particular with the entry made under this Act or in the case of baggage with the declaration made under section 77; 10. Therefore, the direction of confiscation of the 244 nos. of gold bangles under Section 113(i) of Customs Act, 1962 by the learned Commissioner, valued at Rs.72,19,571/- in the impugned order cannot be faulted with. However, the confiscation of 22ct gold ornaments weighing 1607.820 gms valued at Rs.42,46,735/- recovered from the premises of the appellant under Section 111(o) of the Customs Act, 1962 cannot be sustained inasmuch as Section 111(o) (extracted below) is not attracted in the present case. Also, the same is not applicable to liberalized import of gold and export of jewellery manufactured using the said gold procured under '20:80 Import of Gold Scheme' under Circular No.34/2013-Cus. dt. 04.09.2013. 111. Confiscation of improperly imported goods, etc.-The following goods brought from a place outside India shall be liable to confiscation:- ... ... ... ... (o) any goods exempted, subject to any condition, ....