Gold Treated as Prohibited Goods: Delhi High Court Rejects Appeal in Rahul Goyal Case
Introduction
The Delhi High Court, in Rahul Goyal Vs Commissioner of Customs (Preventive), reaffirmed that gold can be treated as “prohibited goods” for the purposes of customs law, following its earlier ruling in Nidhi Kapoor vs. Principal Commissioner and Additional Secretary to the Government of India & Ors. [2023 SCC OnLine Del 5099]. By relying on this binding precedent, the Court declined to interfere with the order of the Customs Excise and Service Tax Appellate Tribunal (CESTAT) dated 22 December 2023, which had upheld the confiscation of gold.
The appeal, registered as CUSAA 65/2024, was dismissed by a Division Bench comprising Justice Yashwant Varma and Justice Ravinder Dudeja on 16/07/2024.
This decision is significant for assessees involved in gold-related imports or seizures, as it reinforces the judicial stance that gold may fall within the category of “prohibited goods” depending on the statutory context and the manner of import.
Background of the Dispute
Parties and Forum
- Appellant: Rahul Goyal
- Respondent: Commissioner of Customs (Preventive)
- Forum: Delhi High Court, appellate jurisdiction against a CESTAT order
- Impugned Order: CESTAT order dated 22 December 2023
The assessee approached the Delhi High Court under its appellate jurisdiction, challenging the legality and correctness of the CESTAT’s decision concerning confiscation of gold seized by the customs authorities.
Core Issue Before CESTAT and High Court
The central question placed before both CESTAT and subsequently the High Court was narrow but crucial:
Whether gold, in the facts and legal framework involved, falls within the category of “prohibited goods”.
The assessee contended that gold should not be classified as “prohibited goods”, and consequently, the confiscation ordered by the customs authorities and endorsed by CESTAT was alleged to be unsustainable in law.
Reasoning Adopted by the Delhi High Court
Reliance on Precedent: Nidhi Kapoor Judgment
While examining the appeal, the Bench scrutinised the CESTAT order and noted that the primary legal contention was squarely on the classification of gold as “prohibited goods”. The Court observed that this precise issue had already been examined and finally decided in:
Nidhi Kapoor vs. Principal Commissioner and Additional Secretary to the Government of India & Ors. [2023 SCC OnLine Del 5099]
In Nidhi Kapoor, the Delhi High Court had conclusively ruled against the assessee on the interpretation of “prohibited goods” in relation to gold. That decision, being a coordinate Bench ruling of the same High Court, operated as binding precedent for subsequent Benches, including the one hearing the present appeal by Rahul Goyal.
Accordingly, the Division Bench treated the question as no longer res integra (i.e., not open to re-argument), having been already settled in Nidhi Kapoor.
Application of the Principle of Binding Precedent
The Court adhered to the judicial discipline that a coordinate Bench is bound by an earlier decision on the same legal point unless the matter is referred to a larger Bench.