COMMISSIONER OF CUSTOMS AIRPORT AND AIR CARGO COMPLEX KEMPEGOWDA INTERNATIONAL AIRPORT Vs. SRI. EXPORTS

JUDGEMENT

(1.) These appeals have been filed by the revenue under Section 130 of the Customs Act, 1962 (hereinafter referred to as 'the Act' for short) being aggrieved by the orders dated 30.04.2019 passed by the Customs, Excise and Service Tax Appellate Tribunal, Bangalore (hereinafter referred to as 'the tribunal' for short).

(2.) Facts leading to filing of these appeals briefly stated are that the respondent in CSTA No.13/2019 had filed bill of entry No.2296535 dated 03.07.2017 for import of 100 No. of gold medallions of 99.99% purity weighing 5 Kgs. worth Rs.1,35,66,558/-, whereas, the respondent in CSTA No.14/2019 filed bill of entry No.3333264 dated 21.09.2017 for import of goods declared as gold granules of 99.99% purity weighing 1 Kg, which was valued at Rs.29,95,524/-. The aforesaid goods were imported from Korea. Admittedly, the respondent is neither nominated bank nor a nominated agency or a holder of star or premium trading house. The Additional Commissioner issued show cause notices dated 17.10.2017 and 10.11.2017 to the respondent on the ground that respondent is neither a nominated bank nor a nominated agency as specified by Directorate General of Foreign Trade (DGFT) or in possession of status of star and premium trading houses and therefore, is not permitted to import the gold and the gold in question has been imported in contravention of the import policy envisaged by DGFT based on regulations promulgated by Reserve Bank of India. Therefore, the respondent was asked to show cause as to why an action to confiscate the goods in question be not taken under Section 111 of the Act and penalty under Section 112 of the Act be not imposed on it. The respondent in its replies submitted that it is an ordinary importer and as per the prevalent foreign trade policy, all the goods were freely importable without any prohibition. The Additional Commissioner of Customs by orders dated 28.03.2018 and 27.04.2018 inter alia held that respondent is neither a nominated agency, nominated bank nor a holder of star or premium trading house and is not covered under any of the categories of specified agencies permitted to import the gold medallions and gold granules and therefore, the goods are imported in violation of para 4.41 of Foreign Trade Policy 2015-2020 and are therefore liable for confiscation under Section 111(d) of the Act. However, an option was extended to redeem the goods on payment of redemption fine of Rs.15,00,000/- and Rs.3,00,000/- respectively and in addition, penalty of Rs.15,00,000/- and Rs.3,00,000/- was imposed under Section 112 of the Act respectively.

(3.) Thereupon, the respondent filed an appeal before the Commissioner of Income Tax (Appeals) who by an orders dated 12.10.2018 inter alia held that the respondent is not a bank nominated by the Reserve Bank of India and is also not a nominated public sector undertaking. It is also not nominated for star export house from gold and jewelry sector and nominated five star export house from any sector and any other entity is not permitted to import the gold. It was further held that the name of the respondent does not trigger in the list of nominated agencies in para 4.41 of Foreign Trade Policy 2015-2020 and therefore, the respondent is not permitted to import the goods. In the result, the order passed by the Additional Commissioner of customs was upheld. The respondent thereupon filed an appeal before the tribunal. The tribunal by orders dated 30.04.2019 inter alia held that the goods imported by the respondent viz., the gold medallions and gold granules which has been imported by the respondent from Korea were freely importable and there was no restriction. It was further held that master direction issued by Reserve Bank of India applies only to nominated banks and nominated agencies as notified by DGFT and since, the respondent has imported gold on consignment basis, therefore, conditions laid down by Reserve Bank of India are not applicable to the respondent. In the result, the orders passed by the Commissioner (Appeals) dated 12.10.2018 were quashed and the custom authorities were directed to clear the goods free of duty. In the result, the appeals preferred by the respondent were allowed. In the aforesaid factual background, the revenue is in appeal before us.