Gold Was Freely Importable By Normal Importer prior to DGFT Notification Dated 18 December, 2019: CESTAT
The Banglore Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has ruled that gold was freely importable by the normal importer prior to the restrictions imposed by the Directorate General of Foreign Trade (DGFT) vide Notification dated 18 December 2019.The two-member bench of Ashok Jindal (Judicial Member) and C. J. Mathew (Technical Member) has ruled that the...
The Banglore Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has ruled that gold was freely importable by the normal importer prior to the restrictions imposed by the Directorate General of Foreign Trade (DGFT) vide Notification dated 18 December 2019.
The two-member bench of Ashok Jindal (Judicial Member) and C. J. Mathew (Technical Member) has ruled that the appellant imported the goods as a normal importer. Therefore, the restrictions contained in Notification No. 34/2017 dated October 18, 2017, are not applicable to the appellant and the import has been done prior to introduction of the Notification dated October 18, 2017.
The appellant/assessee placed the order for purchase of the imported gold on October 12, 2017, which was invoiced by the seller on October 15, 2017, and the goods were delivered to the transporter on October 17, 2017, and the airway bill was also issued on the same day. The appellant filed a Bill of Entry on October 20, 2017, as a normal importer.
Post 2017, free import of gold was restricted by two notifications.
Notification No. 34/2017 dated October 18, 2017, was issued by DGFT which stipulated end use condition of manufacture and export for Gold Bar imported as Nominated Agencies which primarily meant that Gold Bars imported under consignment basis were required to be manufactured and exported which also mean that Gold Bars which are not imported as Nominated Agency or on consignment basis were importable without any end use condition.
On December 18, 2019, another notification was issued by the Ministry of Commerce which completely restricted the import of gold bars by normal importers and only nominated agencies were permitted to import the Gold Bar which means that before December 18, 2019, gold bars were also importable by normal importers.
Counsel for the appellant submitted that the gold must have been cleared in normal course but instead of clearing the gold, Customs detained the gold holding that in terms of Notification No. 34/2017 dated October 18, 2017, the Gold Bars would not have been imported. For stipulating the condition of manufacture and export, the Notification dated October 18, 2017, was not applicable at all because the Notification was not applicable for import by Normal importer. Just because the appellant was a Nominated Agency, it does not mean that Notification dated October 18, 2017, was automatically applicable to the appellant.
On the other hand, the assessee urged that although the Airway bill was issued on October 17, 2017, but the goods left the exporting country after October 18, 2017. Therefore, it cannot be said that goods have been imported prior to the date of the Notification. He further submitted that appellant being a Nominated Agency, they have imported the gold and they are bound by end use conditions in terms of Notification No. 34/2017 dated October 18, 2017.
The tribunal noted that the date of import of the impugned gold was October 17, 2017.
The CESTAT has observed that the appellant has imported goods as a normal importer and filed Bill of Entry as a Normal importer in terms of RBI Guidelines, therefore the provisions of Notification No. 34/2017 dated October 18, 2017 are not applicable to a Normal importer of gold and the notification is came to be issued after the date of import.
Case Title: Rajesh Exports Ltd. Versus Commissioner of Customs, Bangalore
Citation: Customs Appeal No. 20459 of 2020
Counsel For Appellant: Senior Advocate Kiran S. Jawali
Counsel For Respondent: Additional Commissioner P. Gopakumar