Bizman-customs officials in legal battle over import of 350 kg gold

Categories: GST Recent News, News
No Comments

Taking advantage of the free trade agreement (FTA) with Indonesia, a city-based businessman imported over 350 kg of gold in a span of two months this year. He even paid tax for his precious consignments. Later, customs sleuths realized their folly in allowing a private entity to import gold. They are now locked in an interesting legal battle with the businessman over the gold import. In the 2018-19 financial year, customs sleuths had managed to seize only 50 kg of gold from smugglers. Businessman Rajesh Kolawar, through his firms, had legally imported over 350 kg of gold worth over Rs120 crore in 60 days from Indonesia, which is among top 10 gold exporting countries. Rajesh’s gold tryst started in September 2017. Through his firm Sri Exports, he had imported a kilo of gold granules of 99.9% purity from Indonesia. At the Rajiv Gandhi International Airport (RGIA) in Shamshabad, customs authorities confiscated the gold consignment stating that as per RBI regulations, only nominated banks and agencies notified by the Directorate General of Foreign Trade (DGFT) could import the precious metal. They had directed him to pay Rs2.5 lakh penalty in November 2017.

On behalf of Sri Exports, Rajesh filed an appeal before the customs commissioner. In May 2018, the customs commissioner modified the order of the adjudicating authority by allowing Sri Exports to redeem the gold by paying Rs1 lakh fine and Rs50,000 penalty. Sri Exports then appealed against the order in the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT). In November 2018, CESTAT had set aside the order of the customs commissioner. Ideally, customs officials should have gone for an appeal immediately, but since the duty on a kilo gold was less than Rs20 lakh, they did not appeal and, citing the CESTAT order, the businessman started importing large consignments of gold into the city. “Citing the CESTAT order, Rajesh Kolawar, through his company, RK Digital Solutions, imported over 200 kg of gold in eight consignments in April 2019,” a customs official said. With a surge of gold imports by an individual, Hyderabad customs officials became alert. In May, they seized two consignments of gold weighing over 150 kg, imported by RK Digital Solutions. After the seizure of the consignment, RK Digital Solutions’ representatives filed a petition before the high court challenging the seizure in June. Meanwhile, customs officials too appealed against CESTAT order.

“The high court issued a stay on the CESTAT order in the last week of June, while the petition filed by the other party was linked to the appeal filed by the customs department,” Telangana assistant solicitor general K Laxman said. Talking to TOI, Rajesh said he had imported gold by following due procedure. “Adhering to the Foreign Trade Policy, Customs Act and RBI guidelines, I imported the gold trough my companies. Since customs officials did not allow for duty-free import, I even paid 10% duty and 3% Integrated GST and imported the yellow metal,” Rajesh said. “They had allowed eight consignments imported by me in April and seized two consignments in May 2019. We have appealed in the high court, challenging the seizure,” he said, claiming not just CESTAT in Hyderabad, even the CESTAT in Bengaluru gave an order in his favor to import gold.

Read More at: