Don't seek bank guarantee to clear gold imports: HC to Customs

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.