Delhi High Court - Orders
Commissioner Of Customs (Export) vs Shri Ashwini Kumar Alias Amanullah on 15 September, 2023
Author: Yashwant Varma
Bench: Yashwant Varma, Dharmesh Sharma
$~22
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CUSAA 37/2021 & CM APPL. 34847/2023
COMMISSIONER OF CUSTOMS (EXPORT) ..... Appellant
Through: Mr. Satish Kumar, Sr. Standing
Counsel with Ms. Vaishali
Goyal, Adv.
versus
SHRI ASHWINI KUMAR ALIAS AMANULLAH
..... Respondent
Through: Mr. V. S. Negi along with Ms.
Kavita Swaroop, Advs.
CORAM:
HON'BLE MR. JUSTICE YASHWANT VARMA
HON'BLE MR. JUSTICE DHARMESH SHARMA
ORDER
% 15.09.2023
1. The Commissioner of Customs is in appeal and assails the validity of the final order of Customs, Excise & Service Tax Appellate Tribunal, New Delhi [„CESTAT‟] dated 10 November 2020 which has in essence refused to interfere with the decision taken by the Adjudicating Authority which had in exercise of the discretion conferred by Section 125 of the Customs Act, 1962 proceeded to permit the release of the gold articles which had been seized on payment of redemption fine.
2. As would be evident from the Order-in-Original, the seizure related to gold bars weighing 12000 grams valued at Rs.3,56,64,000/-. The aforesaid gold bars were found concealed in 08 UPS mchines and packing material. We had by our order dated 28 July 2023 framed the following question of law in the present case:-
"a. Whether gold could be said to fall in the prohibited category This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 20/09/2023 at 20:54:19 as contemplated under Section 125 of the Act and thus not liable to be released on payment of redemption fine?"
3. Insofar as the said question is concerned, the same stands duly settled and answered by us in terms of the recent decision rendered in Nidhi Kapoor vs. Principal Commissioner and Additional Secretary to the Government of India & Ors. [2023:DHC:5933- DB]. Dealing with the interpretation to be accorded upon Section 2(33) of the Act, whether gold would fall within the ambit of prohibited goods and the discretion conferred on the competent authority in terms of Section 125, we had observed as under:-
"145. In summation, we note that Section 2(33) of the Act while defining prohibited goods firstly brings within its dragnet all goods in respect of which a prohibitory notification or order may have been issued. That order could be one promulgated either under Section 11 of the Act, Section 3(2) of the FTDR or any other law for the time being in force. However, a reading of the latter part of Section 2(33) clearly leads us to conclude that goods which have been imported in violation of a condition for import would also fall within its ambit. If Section 2(33) were envisaged to extend only to goods the import of which were explicitly proscribed alone, there would have been no occasion for the authors of the statute to have spoken of goods imported in compliance with import conditions falling outside the scope of "prohibited goods".
146. Our conclusion is further fortified when we move on to Section 11 and which while principally dealing with the power to prohibit again speaks of an absolute prohibition or import being subject to conditions that may be prescribed. It is thus manifest that a prohibition could be either in absolutist terms or subject to a regime of restriction or regulation. It is this theme which stands reiterated in Section 3(2) of the FTDR which again speaks of a power to prohibit, restrict or regulate. It becomes pertinent to bear in mind that in terms of the said provision, all orders whether prohibiting, restricting or regulating are deemed, by way of a legal fiction, to fall within the ambit of Section 11 of the Act. This in fact reaffirms our conclusion that Section 2(33) would not only cover situations where an import may be prohibited but also those where the import of goods is either restricted or regulated. A fortiori and in terms of the plain language and intent of Section 2(33), an import which is effected in violation of a restrictive or regulatory condition would also fall within the net of "prohibited goods".
147. We are further of the considered opinion that the absence of a This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 20/09/2023 at 20:54:19 notification issued under Section 11 of the Act or Section 3(2) of the FTDR would have no material bearing since a restriction on import of gold stands constructed in terms of the FTP and the specific prescriptions forming part of the ITC (HS). Those restrictions which are clearly referable to Section 5 of the FTDR and the relevant provisions of that enactment would clearly be a restriction imposed under a law for the time being in force. Once the concept of prohibited goods is understood to extend to a restrictive or regulatory measure of control, there would exist no justification to discern or discover an embargo erected either in terms of Section 11 of the Act or Section 3(2) of the FTDR. This more so since, for reasons aforenoted, we have already found that the power to prohibit as embodied in those two provisions itself envisages a notification or order which may stop short of a complete proscription and merely introduce a restriction or condition for import.
xxx xxx xxx
154. The submission addressed by the learned amicus does not commend acceptance when one bears in mind the admitted position that the stipulation with respect to the import of gold being subject to RBI regulatory control is a prescription which stands incorporated in and introduced by the FTP itself. It is the FTP formulated in terms of Section 5 of the FTDR which makes the import of gold subject to RBI regulation. This stipulation thus clearly evidences the intent of the Union Government to confer RBI with the authority to formulate regulatory provisions in relation to the import of gold. Since this power stands bestowed upon the RBI by the Union Government and forms an integral part of the FTP itself, one need not look for or undertake an expedition to discern a power independently vested in the RBI to issue appropriate directives and circulars regulating the import of gold.
xxx xxx xxx
156. The Court holds that an infraction of a condition for import of goods would also fall within the ambit of Section 2(33) of the Act and thus their redemption and release would become subject to the discretionary power of the Adjudging Officer. For reasons aforenoted, the Court finds no illegality in the individual orders passed by the Adjudging Officer and which were impugned in these writ petitions."
4. In the facts of the present case, we find that the gold bars had been deliberately concealed in 08 UPS machines and packing material and were sought to be imported through a courier. The gold bars weighed 12000 grams and had been valued at that time at This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 20/09/2023 at 20:54:19 approximately Rs.3.56 crores.
5. We find that the import of gold is strictly regulated and is permitted only through certain identified agencies, who too must import the same in accordance with a restricted and regulated regime which stands created in terms of the various Circulars issued by Customs as well as the Reserve Bank of India.
6. In the facts of the present case, we thus find that the Adjudicating Authority has clearly erred in directing the release of the seized articles on the payment of redemption fine. We had an occasion in Nidhi Kapoor to notice the deleterious effect that illegal import of gold could have on the economy of the country itself. We are thus of the considered opinion that the CESTAT has clearly erred in failing to interfere with the order in original and which had permitted the respondent to seek release on payment of redemption fine.
7. In view of the aforesaid, we find ourselves unable to sustain the order impugned. The appeal shall consequently stand allowed. The impugned order dated 10 November 2020 is hereby set aside. We consequently also quash the order dated 10 May 2019 and leave it open to the appellant to proceed further in accordance with law.
8. Consequently, all pending applications stand disposed of.
YASHWANT VARMA, J.
DHARMESH SHARMA, J.
SEPTEMBER 15, 2023/ss This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 20/09/2023 at 20:54:19