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1998 Supreme(Del) 813
High Court Of Delhi
BIN SABT JEWELLERY LLC DUBAI (UAE) - Appellant
Versus
C.I.T. - Respondent
Decided On : 10/09/1998
The import of gold into India is not completely prohibited, and the license to import gold is freely transferable. The title to the gold remains with the exporter until the consignee takes delivery of the documents relating to the consignment.
Headnote:
CUSTOMS ACT - SECTION 111(M) - IMPORT OF GOLD - RE-EXPORT OF GOLD - BANK GUARANTEE - The petitioner, a bullion dealer in Dubai, exported gold to India pursuant to an order received from a fictitious importer. The Customs Authorities seized the gold under Section 111(m) of the Customs Act, 1962, believing it to be liable to confiscation. The petitioner filed a petition seeking a writ of mandamus to permit clearance of the goods or re-export to Dubai.
Fact of the Case:
The petitioner, a bullion dealer in Dubai, received an order for the supply of gold from a fictitious importer in India. The petitioner dispatched the consignment of gold to India, but the Customs Authorities seized it on suspicion that the importer was fictitious. The petitioner filed a petition seeking a writ of mandamus to permit clearance of the goods or re-export to Dubai.
Finding of the Court:
The court held that the petitioner had not violated any law by exporting the gold to India, as the import of gold was not completely prohibited and the license to import gold was freely transferable. The court also held that the title to the gold remained with the petitioner since the consignee had not taken delivery of the documents relating to the consignment. The court further held that the gold could be re-exported to Dubai if the petitioner furnished a bank guarantee in an amount equivalent to the value of the gold.
Issues: 1. Whether the petitioner had violated any law by exporting the gold to India. 2. Whether the title to the gold remained with the petitioner. 3. Whether the gold could be re-exported to Dubai.
Ratio Decidendi: 1. The court held that the petitioner had not violated any law by exporting the gold to India, as the import of gold was not completely prohibited and the license to import gold was freely transferable. 2. The court held that the title to the gold remained with the petitioner since the consignee had not taken delivery of the documents relating to the consignment. 3. The court held that the gold could be re-exported to Dubai if the petitioner furnished a bank guarantee in an amount equivalent to the value of the gold.
Final Decision: The petition was partly allowed. The court directed the petitioner to furnish a bank guarantee in an amount equivalent to the value of the gold in favor of the respondent. On such bank guarantee being furnished, the gold in question was allowed to be re-exported to Dubai by the petitioner.
( 1 ) THE petitioner is a bullion dealer in Dubai and a major exporter of bullion to India. In July, 1998 the petitioner received an order for supply of gold from Shri Ganesh Exports, New Delhi. Pursuant to the order so received, the petitioner despatched a consignment consisting of 200 TT bars of gold. The documents were forwarded to the Panjab National Bank, Okhla Indl. Estate, New Delhi instructing the bankers to retire the documents against cash. The consignment having reached New Delhi Air Cargo Complex by Air India flight on 24. 7. 98, the Customs Authorities got suspicious because the telephone numbers of the Bank as well as those of the notified consignee as entered on the Airway Bill were of 6 digits. Enquiries from the Mahanagar Telephone Nigam Ltd. confirmed that the said telephone numbers were not in existence in any location of Delhi. The notified consignee was not found at the given address. The bankers were also not in a position to identify or provide the whereabouts of the consignee.
( 2 ) THE Dubai exporter apprehended as having been duped by someone in sending the consignment. It instructed M/s. M. D. Overseas Ltd. of Connaught Circus, New Delhi to have the goods cleared to itself. Instructions were issued by the exporter to the bankers to retire the documents on cash against delivery in favour of M/s. M. D. Overseas who were also requested to file the bill of entry and lift the consignment. The Customs Authorities summoned Shri Satish Bansal of M/s. M. D. Overseas under Section 108 of the Customs Act. Shri Satish Bansal stated that he was claiming consignment by way filing the bill of entry at the request of the supplier with whom he had regular and long standing business relations and who had sent him an amended invoice pertaining to the said consignment alongwith a request for amendment of the airway bill and a letter stating that the original consignee was not taking delivery of the gold.
( 3 ) THE Custom Authorities have seized the gold forming a reason to believe that the gold having been imported in the name of a fictitious importer was liable to be confiscated under Section 111 (m) of the Customs Act, 1962.
( 4 ) M/s. M. D. Overseas Ltd. made a request on 4. 8. 98 followed by a request from the petitioner on 7. 8. 98 to the Customs Authorities that the goods lying uncleared may either be released to M/s. M. D. Overseas Ltd. or be re-exported back to Dubai. As none of the two prayers has been acceded to by the Customs Authorities, the present petition has been filed on 17. 8. 98 seeking a writ of mandamus to the respondents to permit clearance of the goods covered by Airway Bill No. 098- 7310-1044 and re-export the same to the country of origin i. e. Dubai or to permit resale of the goods to some consignee.
( 5 ) MR. Pradeep Jain, the learned Counsel for the petitioner has placed implicit and forceful reliance on the law laid down by the Supreme Court in Union of India v. Sampat Raj Dugar (1992) 58 ELT 163 (SC ).
( 6 ) MR. Jayant Bhushan, the learned Counsel for the respondents has opposed the petition supporting the counter filed on behalf of the respondents. He has referred to the definition of terms import and importer as defined in Clauses (23) and (26) of Section 2 of the Customs Act. Import is brining into India from a place outside India. Importer in relation to any goods at any time between their importation and the time when they are cleared for home consumption includes any owner or any person holding himself out to be the importer. Under Clause (d) of Section III any goods imported or attempted to be imported contrary to any prohibition and under Clause (m) any goods which do not correspondence in respect of value or any other particular with the entry made under the Customs Act are liable to confiscation.
( 7 ) MR. Jayant Bhushan also referred to Export and Import Policy 1 st April, 1997 to 31st March, 2002 whereunder gold can be imported subject to special import li
