Per A.C.C. Unni :

By Order-in-Original dt. 16.8.99, Commissioner of Customs (Air Cargo Unit), New Delhi ordered confiscation of 200 T.T. Gold Bars under Section 111 (d) of the Customs Act, 1962 with a redemption fine of Rs. 1 crore. A penalty of Rs. 5 lakhs was also imposed on the appellants under Section 112 (a) of the Act. A penalty of Rs. 25 lakhs was also imposed on M/s. Shri Ganesh Exports, A-33, Okhla Phase-I, New Delhi under Section 112 (a) of the Customs Act.

2. The present Appeal filed by M/s. Bin Sabt Jewellery challenges the said Order insofar as it relates to them.

3. We have heard Shri L.P. Asthana, ld. Advocate for the appellants and Shri R.D. Negi, ld. SDR for the Respondent Collector.

4. The appellants are dealers in bullion in Dubai and are said to be one of the major exporters of gold bullion to India. The appellants claim that on the receipt of a FAX message from M/s. Shri Ganesh Exports, A-33, Okhla Phase-I, New Delhi for supply of 200 T.T. gold bars, the appellants despatched a consignment of 200 T.T. gold bars under Air Way Bill No. NBR 09873101044 by Flight No. AI 726 dt. 23.7.98, which arrived at New Delhi Airport on 24.7.98. The deal was to be completed on the basis of relevant documents issued through the appellants' Bankers viz., Bank of Baroda, Dubai and the Punjab National Bank (PNB), Okhla Industrial Branch, New Delhi, the Bank indicated by M/s. Shri Ganesh Exports. On receipt of the documents by PNB on 28.7.98, PNB was unable to trace M/s. Shri Ganesh Exports at the address given. PNB thereupon informed Air India, Carriers of the goods, not to release the goods and also informed the Customs Air Cargo on 29.7.98. On the same day Manager, PNB informed Bank of Baroda, Dubai by FAX stating that they could not find anyone with the name of M/s. Ganesh Exports at the address given and the documents were lying at the risk and cost of the consignor and immediate action be taken. Bank of Baroda, Dubai in turn informed the appellants and whereupon, appellants contacted one of their regular importers of gold in India, namely, M/s. M.D. Overseas Ltd., who agreed to arrange clearance of the consignment on production of the required licence. Accordingly, the documents were transferred in favour of M/s. M.D. Overseas Ltd., on 30.7.98. M/s. M.D. Overseas Ltd., thereafter filed Bill of Entry No. 679828 dt. 31.7.98 for clearances of the gold consignment against Duty Free Replenishment Licence. However, on 4.8.98 M/s. M.D. Overseas Ltd., withdrew their Bill of Entry. On 7.8.98, appellants made a request to the Commissioner of Customs to allow re-export of the gold, since they continued to be the owners of the gold. Alternatively, they also requested for permission to sell the goods to some other buyer in India. Since the appellants could not obtain any favourable response from the Commissioner of Customs, they approached the Hon'ble Delhi High Court praying for a Writ of Mandamus to permit clearance of the goods or alternatively, for permission to re-export the same. While disposing of the Petition, the Hon'ble High Court by order dated 9.10.98 allowed re-export of the gold subject to appellants furnishing a Bank Guarantee equal to the value of the gold and on giving an undertaking to pay the amount in the event of the gold being held liable to confiscation. The Hon'ble High Court also made certain observations about the appellants' title to the goods as well as to the applicability of the provisions of Section 111 (d) and 111 (m) of the Customs Act.

5. By a further order dt. 9.11.98 the Bank Guarantee furnished by the appellants was directed not to be encashed for a period of four weeks from the date of passing of the order of adjudication. Accordingly, appellants furnished a Bank Guarantee for a sum of Rs. 94 lakhs on 2.12.98 and subsequently, the amount of bank guarantee was also increased to Rs. 1 crore.

6. Thereafter on 2.2.99 appellants were called upon by the Department to show cause why the 200 T.T. gold bars