Indian jewellers who import gold ornaments from Indonesia under a free trade agreement have a cause for cheer ahead of Diwali, with Delhi High Court directing customs authorities not to go by a recent government circular to clear their consignments but do so in accordance with the existing regulations.
While the regulations say 20 per cent of the applicable duty should be deposited for provisional assessment of the consignments, the circular issued last month directs customs authorities to seek a bank guarantee of 100 per cent before provisionally clearing the goods, said a plea by the jewellers before the court.A bench of justices Badar Durrez Ahmed and Sanjeev Sachdeva directed customs officials to “clear the consignments of gold from Indonesia, which are subject matter of the writ petition, provisionally in accordance with law and particularly as per the Customs (Provisional Duty Assessment) Regulations.”
Why can’t you provisionally assess them as per law? There can’t be a circular contrary to the regulations. How can you insist upon 100 per cent bank guarantee when your regulation says 20 per cent,” the court said while passing the interim order.The bench also issued notice to the government, the Directorate of Revenue Intelligence and the customs authority and sought their replies before December 14 on the plea of the Bullion and Jewellers Association contending that due to the circular, their business was affected.The association, represented by senior advocate P Chidambaram, told the court that the jewellers it represents were importing gold ornaments from a state-run Indonesian company.
As per the India-ASEAN Free Trade Agreement (FTA), if the Indonesian government provides a certificate of origin (COO) certifying the gold originated from there and was not of mixed origin, then the customs duty payable is zero per cent as against 15 per cent.The association, in its plea filed through advocate Tarun Gulati, claimed that the government had misinterpreted a letter by the Indonesian company from which the ornaments were bought, and concluded that the gold used by that state-run entity was of mixed origin.
It also alleged that the government was of the view that the company was importing gold dore (obtained after smelting gold ore) and issued the October 6 circular.It said the circular directed the customs officials to assess the gold ornaments from Indonesia under 15 per cent duty and not to grant the benefit of the FTA.The circular also directed the customs officials to issue show cause notices in respect of gold jewellery imported from Indonesia, that was already cleared and refer the matter to DRI, the association told the court.
( Source – PTI )