Custom
TRT-2025-
Cestat Mumbai
Date:-16-03-23
In:-
Issue Favourable to Tax Payer ?:-
Amrutlal Kaluram Purohit Vs. ADG (Adjudication), DRI, Mumbai
Order date: 16 March 2023
Facts:
- The Appellant, Amrutlal Kaluram Purohit, was alleged by Directorate of Revenue Intelligence, Mumbai (hereinafter referred to as ‘DRI’) that three consignments of Air conditions, imported in the name of M/s. Anmol Trading, M/s. Vinayak Enterprises & Royal Trading, were examined by the officers of DRI, Mumbai on 29th & 30th December, 2017 at JNPT and a total of 57 kgs. gold bars concealed in the air conditioner, valued at Rs.16.96 crores, were seized under the provisions of Customs Act.
- When the case was in investigation stage the appellant had filed an application u/s 137 for compounding of offence u/s 135. The department opposed such application on the ground that it was pre-mature as show cause notice has not been issued.
- It is also the case of the department that since the gold bars herein were imported by mis-declaration and concealment in violation of various provisions of Customs Act, The Foreign Trade (Development & Regulation) Act, 1992, Foreign Trade (Regulation) Rules, 1993 and also in violation of RBI guidelines therefore the same falls under the definition of ‘prohibited goods’ as per section 2(33) ibid.
Issue:
- Whether the learned Chief Commissioner is justified in rejecting the application for compounding of offence by resorting to the definition of ‘prohibited goods’ as prescribed under Section 2(33) ibid?
Order:
- The Court observed that for compounding of offences, certain exceptions has been provided by the proviso to section 137 and one of the exception therein is clause (c), which provides that if the goods involved is prohibited items for import & export in ITC (HS) classification of Export and Import items of Foreign Trade Policy then the same is not compoundable. This exception has been relied upon by the learned Chief Commissioner while rejecting the application filed by the appellant.
- The learned Chief Commissioner failed to appreciate that the expression used in the proviso to Section 137(3) is prohibited items whereas for rejecting the application he relied upon the definition of prohibited Goods as prescribed u/s. 2(33) ibid.
- since, Gold is freely importable it can’t come under the ambit of ‘prohibited goods’ on the ground that it was imported illegally.
- The impugned order was set aside and the application was restored.
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