Karnataka High Court
The Principal Commissioner Of Customs vs Rajesh Exports Ltd on 2 September, 2025
Author: S.G.Pandit
Bench: S.G.Pandit
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NC: 2025:KHC:34482-DB
CSTA No. 1 of 2023
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 2ND DAY OF SEPTEMBER, 2025
PRESENT
THE HON'BLE MR. JUSTICE S.G.PANDIT
AND
THE HON'BLE MR. JUSTICE K. V. ARAVIND
CUSTOMS APPEAL No.1 OF 2023
BETWEEN:
1. THE PRINCIPAL COMMISSIONER OF
CUSTOMS, A P AND ACC COMMRTE,
INTERNATIONAL AIR PORT,
DEVANAHALLI, BENGALURU.
...APPELLANT
(BY SRI. JEEVAN J NEERALGI, SENIOR STANDING COUNSEL)
AND:
1. RAJESH EXPORTS LTD.,
Digitally signed No.4 BATAVIA CHAMBERS,
by VINUTHA B
S KUMARA PARK EAST,
Location: HIGH BENGALURU 560 001.
COURT OF
KARNATAKA ...RESPONDENT
(BY SRI KIRAN S JAVALI, SENIOR ADVOCATE FOR
SRI RAGHU HULIKAL, ADVOCATE)
THIS CSTA / CUSTOMS APPEAL UNDER SECTION 130 OF
THE CUSTOMS ACT 1962, PRAYING TO ALLOW THE APPEAL OF
THE APPELLANT AND DECIDE THE QUESTIONS OF LAW AS
FRAMED ABOVE SET ASIDE THE ORDER DATED 03.03.2022,
PASSED BY THE CESTAT, BENGALURU IN FINAL ORDER
No.20078/2022,
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NC: 2025:KHC:34482-DB
CSTA No. 1 of 2023
HC-KAR
THIS APPEAL COMING ON FOR ADMISSION THIS DAY,
JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE S.G.PANDIT
and
HON'BLE MR. JUSTICE K. V. ARAVIND
ORAL JUDGMENT
(PER: HON'BLE MR. JUSTICE K.V. ARAVIND) Heard Sri Jeevan J. Neeralgi, learned Senior Standing Counsel for the appellant-Revenue, and Sri Kiran S. Javali, learned Senior Counsel appearing for Sri Raghu Hulikal, learned counsel for the respondent-Assessee.
2. The Revenue has preferred this appeal under Section 130 of the Customs Act, 1962 (for short, 'the Act'), assailing the order passed by the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Bengaluru (for short, 'CESTAT'), in Final Order No. A/20078/2022 dated 03.03.2022.
3. The Revenue has raised the following substantial questions of law:
(i) WHETHER, under the facts and circumstances the CESTAT is correct in holding that prior to the Notification dt. 18.12.2019 bearing No.36/2015-20, the gold was -3- NC: 2025:KHC:34482-DB CSTA No. 1 of 2023 HC-KAR freely importable by the normal importer in terms of RBI Guidelines by ignoring the Notification No.34/2017?
(ii) WHETHER, under the facts and circumstances the provisions of Paragraph 2.17 and 9.11 of the Hand Book of Procedure is applicable to the impugned import?
(iii) WHETHER, the import of gold is regulated and subject to conditions laid down under Paragraph 4.41 of the Foreign Trade Police 2015-20?"
4. Facts in Brief, The respondent-Assessee is the holder of a valid 5 Star Export House License issued by the Regional Authority of the DGFT and is a nominated agency under the Foreign Trade Policy, 2015-20, for the purpose of import of precious metals. The respondent filed a Bill of Entry for import and clearance of 150 gold bars of 99.10% purity, weighing a total of 150 kgs., claiming the benefit of Notification No. 46/2011-Cus., dated 01.06.2011. The Revenue raised a query requiring the respondent to clarify the end use and eligibility for import of gold in terms of DGFT Notification No. 34/2015-20, dated 18.10.2017. The respondent contended that the said Notification was not applicable. The Adjudicating Authority, by -4- NC: 2025:KHC:34482-DB CSTA No. 1 of 2023 HC-KAR order dated 25.05.2019, confiscated the gold bars on the ground of violation of the Foreign Trade Policy. 4.1 The respondent preferred an appeal. The Commissioner of Customs (Appeals), by order dated 25.09.2020, upheld the order of the Adjudicating Authority holding that the Notification dated 18.10.2017 was applicable. However, the Commissioner directed release of the confiscated goods with a condition that the same be utilized for manufacture and export. Aggrieved, the respondent preferred a further appeal before the Tribunal, reiterating its contention.
4.2 The Tribunal, under impugned order, held that the Notification dated 18.10.2017 was not applicable to the respondent. The Tribunal, while considering the matter, formulated the following three issues:
"(a) What should be the date of the import of the gold in the facts and circumstances of the case?
(b) Whether the provisions of Notification No.34/2017 dated 18.10.2017 are applicable to the facts of the case or not?
(c) Whether prior to the Notification dated 18.12.2019, the gold was freely importable or not?-5-
NC: 2025:KHC:34482-DB CSTA No. 1 of 2023 HC-KAR Issues (a) and (b) relate to the interpretation of Notification No. 34/2015-20, dated 18.10.2017, whereas issue (c) pertains to a different aspect.
5. Sri Jeevan J. Neeralgi, learned Senior Standing Counsel appearing for the appellant-Revenue, submits that prior to Notification No. 34/2015-20, dated 18.10.2017, there was no condition requiring utilization of imported gold for the purpose of export. It is submitted that after 18.10.2017, such utilization condition became applicable. The learned Senior Standing Counsel further submits that the said Notification came into effect on 18.10.2017, whereas the goods in question reached India on 25.10.2017. He points out that the goods departed from the last airport of export, i.e., Indonesia, only on 19.10.2017, which is to be reckoned as the date of shipment where the mode of transport is by air. Accordingly, as the shipment took place after 18.10.2017, the conditions imposed under the Notification dated 18.10.2017 would govern the present import. It is contended that the Tribunal, without adverting to these aspects, proceeded on the basis that the Airway Bill was dated 17.10.2017, which was prior to the -6- NC: 2025:KHC:34482-DB CSTA No. 1 of 2023 HC-KAR Notification, and thereby held that the Notification dated 18.10.2017 was not applicable to the import in question. 5.1 Learned Senior Standing Counsel further submits that, in respect of goods imported prior to 18.12.2019, the applicable notification or exemption was not under challenge before the Tribunal. It is contended that the finding recorded by the Tribunal on issue (c) is unwarranted, as the same did not arise from the orders impugned before it.
6. On the other hand, Sri Kiran S. Javali, learned Senior Counsel appearing for Sri Raghu Hulikal, learned counsel for the respondent, submits that the Airway Bill for transportation of the goods was issued on 17.10.2017. There is no dispute that the goods were lifted from Indonesia only on 19.10.2017 and reached Bengaluru on 25.10.2017. However, it is submitted that, in terms of Notification No. 34/2015-20 dated 18.10.2017, the date of shipment for the purpose of import has to be reckoned from the date of the Airway Bill. Learned Senior Counsel, therefore, contends that since the Airway Bill is dated 17.10.2017, the Notification which came into effect on 18.10.2017 is not applicable to the goods in question. It is -7- NC: 2025:KHC:34482-DB CSTA No. 1 of 2023 HC-KAR urged that both the Adjudicating Authority and the Appellate Authority committed an error in reckoning the date of departure of the flight from Indonesia as the relevant date. The Tribunal has rightly corrected this error. Accordingly, learned Senior Counsel prays for dismissal of the appeal.
7. Having considered the submissions of the learned Senior Standing Counsel for the appellant-Revenue and the learned Senior Counsel for the respondent-Assessee, it is not in dispute that the Airway Bill is dated 17.10.2017, the goods were lifted by flight from Indonesia on 19.10.2017, and they landed in Bengaluru on 25.10.2017. The Notification imposing utilization conditions, being Notification No. 34/2015-20, came into effect on 18.10.2017. The controversy, therefore, centers around which of the aforesaid dates is to be reckoned as the "date of shipment" for the purpose of applying the Notification dated 18.10.2017.
8. Paragraph 9.11 prescribes the date of shipment/dispatch in respect of imports made through different modes of transportation. It reads as under:
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NC: 2025:KHC:34482-DB CSTA No. 1 of 2023 HC-KAR Sl. No. Mode of Date of Shipment / Transportation Dispatch
(i) By Sea The date affixed on the Bill of Lading
(ii) By Air Date of relevant Airway Bill provided this represents date on which goods left last airport in the country from which the import is effected.
(iii) From land-Locked Date of dispatch of goods by Countries rail, road or other recognised mode of transport to consignee in India through consignment basis.
(iv) By Post Parcel Date stamp of office of
dispatch on the packet or
dispatch note
(v) By Registered Date affixed on Courier
Courier Service Receipt / Waybill
(vi) Multimodal Date of handing over goods
Transport to first carrier in a combined
transport Bill of Lading.
9. In the present case, the mode of transportation is by air.
Where the transportation is by air, the relevant provision states that the date of the Airway Bill shall represent the date on which the goods left the last airport in the country from which the import is effected. Learned counsel for the Revenue reads this to mean that the date of shipment is the date on which the goods actually departed from the last airport in the country of -9- NC: 2025:KHC:34482-DB CSTA No. 1 of 2023 HC-KAR export, i.e., 19.10.2017. According to the respondent- Assessee, however, the date of the Airway Bill itself is to be reckoned as the date of shipment, irrespective of the date on which the goods physically left the country of export. A comparison with other modes of transportation supports this interpretation. For instance, in the case of import by post parcel, the date stamp of the office of dispatch on the packet or dispatch note is treated as the date of shipment. Similarly, in the case of import by registered courier service, the date affixed on the courier receipt/waybill is treated as the date of shipment. Further, in the case of multi-modal transport, the date of handing over the goods to the first carrier, as evidenced in the combined transport bill of lading, is considered the date of shipment. A combined reading of all modes of transport thus indicates that the relevant date of shipment/dispatch is tied to the documentary evidence issued, and not necessarily to the actual date of physical departure of the goods from the country of export.
10. The Tribunal, on analysing the matter, has rightly reckoned the date of shipment as the date of the Airway Bill.
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NC: 2025:KHC:34482-DB CSTA No. 1 of 2023 HC-KAR We are in complete agreement with the finding recorded by the Tribunal. The finding recorded by the Tribunal is based on a correct interpretation of the expression 'date of shipment' as provided in Notification No. 34/2015-20, dated 18.10.2017. We are, therefore, not inclined to interfere with the finding of the Tribunal on issues (a) and (b). Accordingly, we hold that no substantial question of law arises for consideration before this Court.
11. The submission of the learned Senior Standing Counsel for the appellant-Revenue insofar as it relates to the finding of the Tribunal on issue (c) merits consideration. It was never an issue before the Tribunal as to whether gold was freely importable prior to the Notification dated 18.10.2017. On a reading of the order-in-original passed by the Adjudicating Authority as well as the order of the Appellate Authority, it is evident that issue (c) did not arise from the orders impugned before the Tribunal. The finding recorded by the Tribunal on that issue is, therefore, unnecessary and avoidable. This aspect is also not seriously disputed by the learned Senior Counsel appearing for the respondent-Assessee. In that view of the
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NC: 2025:KHC:34482-DB CSTA No. 1 of 2023 HC-KAR matter, we hold that the finding of the Tribunal on issue (c) is unsustainable and the same is liable to be set aside.
12. Accordingly, the following;
Order
(i) The appeal is allowed in-part.
(ii) The order of the CESTAT dated 03.03.2022 in Final
Order No.A.20078/2022 insofar as issue (a) and (b) is hereby confirmed and finding on issue (c) is set aside.
(iii) As we have held that no substantial questions of law would arise for consideration, the questions of law framed in the appeal are not answered.
Sd/-
(S.G.PANDIT) JUDGE Sd/-
(K. V. ARAVIND) JUDGE MV List No.: 1 Sl No.: 2