By TIOL News Service

MUMBAI, OCT 26, 2016: THE appellant has challenged the o-in-o by which the Principal Commissioner of Customs extended the period of six months for issuance of show cause notice in respect of seized goods in terms of proviso to Section 110(2) of Customs Act, 1962.

Inasmuch as there is no challenge to the extension of period for issuance for SCN but they have prayed for modifying the impugned order to the extent it rejects the request of the appellant for provisional release of seized goods.

Facts:

Thirteen kilograms of gold was concealed in nine different parcels sent by courier company. The gold was concealed under the goods viz. school bags, pens, stationery items, gifts etc. The adjudicating authority held that the gold attempted to be smuggled by concealing with some other consignment amounts to smuggling and which is not permissible, therefore, the gold is prohibited. Accordingly, the prohibited goods is liable for absolute confiscation, hence the seized goods cannot be released provisionally, it was held.

Before the CESTAT, it is submitted by the appellant that the import of gold as such is not prohibited and, therefore, the option for provisional release should be given to the appellant on taking a bond with security.

The AR submitted that in view of the judgments viz. Sheik Md Rafiqu Ahmed vs. CCE, Airport, Chennai – 2015-TIOL-2917-HC-MAD-CUS, CC, Chennai vs. Sh Savier Poonolly – 2014-TIOL-1662-HC-MAD-CUS, gold seized by the adjudicating authority is liable for absolute confiscation and, therefore, the same cannot be released provisionally.

The Bench observed –

"6. We find that the adjudicating authority while passing order only for extension of period for issuance of show cause notice, made a reference and observed that the gold seized is liable for absolute confiscation. However, without any show cause notice proposing specifically absolute confiscation of gold, giving finding that the seized gold is liable for absolute confiscation, is incorrect on the part of the adjudicating authority. Moreover, unless the principles of natural justice are complied with, the adjudicating authority is not supposed to decide the confiscability of the seized goods. Further, we find that the appellant as well as the Revenue have relied upon various judgments. We are of the view that before taking final decision on confiscability, the adjudicating authority must consider all those judgments. We are, therefore, of the view that as regards the issue of provisional release of the seized goods, the matter needs to be reconsidered by the adjudicating authority. We, therefore, remand the matter to the adjudicating authority for passing a fresh order after compliance with the principles of natural justice only on the issue of provisional release of seized goods. As regards the order for extension of period for issuance of show cause notice in respect of seized gold, the same stands intact."

The appeal was disposed of by way of remand to the adjudicating authority.

(See 2016-TIOL-2779-CESTAT-MUM)