CESTAT Delhi on Gold Dore Imports: Strict Compliance with Exemption Notifications Is Mandatory

Overview of the Decision

The Customs, Excise & Service Tax Appellate Tribunal, New Delhi (CESTAT Delhi) dealt with a batch of eleven connected appeals filed by M/s Tasha Gold Pvt Ltd, its directors and its Customs Broker in relation to imports of Gold Dore Bars. All appeals arose from a common Order-in-Original No. 35-37/2024-25 dated 31.03.2023, as modified by corrigendum dated 25.04.2025.

Three show cause notices covered:

• One live consignment of 27 Gold Dore Bars (BOE dated 06.12.2022)
• 102 past Bills of Entry relating to imports primarily from Rwanda and Tanzania
• 59 Bills of Entry overlapping with the earlier notices

The core controversy was whether the assessee had correctly claimed exemption from Basic Customs Duty under:

• Notification No. 50/2017-Cus dated 30.06.2017 (which superseded Notification No. 12/2012-Cus dated 17.03.2012), and
• Notification No. 96/2008-Cus dated 13.08.2008 (nil BCD for imports from specified Least Developed Countries).

The Tribunal ultimately confirmed the customs duty demands, upheld confiscation of the goods as “prohibited goods” under Section 2(33) of the Customs Act, 1962 and sustained penalties on the importing company, its directors and its Customs Broker, dismissing all eleven appeals.

Parties and Appeals Involved

Appellants

• M/s Tasha Gold Pvt Ltd (TGPL) – the importing company engaged in manufacture of gold bars
• Directors of TGPL – against whom personal penalties were imposed
• M/s Committed Cargo Care Ltd – the Customs House Agent (Customs Broker), also visited with penalty

Nature of the Appeals

• Six appeals challenged personal penalties on the directors of TGPL.
• Two appeals challenged penalties imposed on the Customs Broker.
• Three appeals questioned confiscation of gold dore bars and the associated demand of customs duty and penalties on TGPL.

All these were disposed of by a single common order of the Tribunal.

Background Facts and Departmental Investigation

Import Activity and Intelligence

TGPL was importing Gold Dore Bars (GDBs) under import licences issued by the Directorate General of Foreign Trade (DGFT), purporting to avail concessional treatment under:

• Notification No. 50/2017-Cus (read with its predecessor Notification No. 12/2012-Cus), and
• Notification No. 96/2008-Cus (for specified Least Developed Countries).

The Directorate of Revenue Intelligence (DRI), Noida Regional Unit, received intelligence that TGPL was misusing these exemption notifications in respect of GDB imports.

Search, Seizure and Statements

• A search under Section 105 of the Customs Act was conducted at TGPL’s factory on 16.12.2022.
• Statements were recorded under Section 108 of the Customs Act from:
  • Shri Athar Abbas Naqvi (authorised representative) on 15.12.2022
  • Shri Asif Abbas (Director) on 19.12.2022
  • Shri Saiyyad-Un-Ali (Factory Manager) on 16.12.2022

These statements, read with subsequent inquiry, revealed:

• TGPL had been importing GDBs since 2015, primarily from Rwanda.
• From 2021, it sourced from M/s Equinox Mining, described as the trading arm of M/s Ngali Mining, a government-owned entity.
• Ngali Mining aggregated gold pieces from mines, re-melted them into dore bars and sold them to Equinox for export.
• TGPL also imported consignments from Tanzania through several suppliers, including Sub Gold Ltd, Harmony Trading Ltd, Sakasia & Company Ltd, Kilosa Kwetu Trading Ltd, MMG Gold Ltd and Benzul Ltd.

Crucially, the department found that no packing lists or assay certificates issued by the actual mining companies (or miners) were produced for these consignments.

Legal and Policy Framework Governing Gold Dore Imports

DGFT Policy and Licence Conditions

By Notification No. 49/2015-20 dated 05.01.2020, DGFT tightened the import regime for gold (other than monetary gold) and silver under Chapter 71 of the Customs Tariff. In particular:

• Import of items falling under CTH 71081200, except Gold Dore Bars, was restricted to nominated agencies specified by RBI, DGFT and IFSCA.
• Import of Gold Dore Bars was allowed only against an import licence with actual user condition, and only from refineries.

TGPL held three DGFT authorisations for import of Gold Dore Bars under CTH 71081200:

Each licence incorporated a specific condition:

Imports must comply with Notification No. 12/2012-Cus dated 17.03.2012 (as superseded by Notification No. 50/2017-Cus dated 30.06.2017) and applicable RBI notifications.

Key Provisions of Notification No. 50/2017-Cus

The relevant entry is Serial No. 354 of Notification No. 50/2017-Cus, which provides a concessional BCD rate (9.35%) for “Gold Dore bar, having gold content not exceeding 95%” under Chapter 71, subject to Condition Nos. 9 and 40.

Condition No. 9:

• The importer must follow the procedure under the Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017.

Condition No. 40:
The benefits apply only if:

1. Goods are directly shipped from the producing country and each bar weighs 5 kg or more;
2. Goods are imported in accordance with the packing list issued by the mining company;
3. The importer produces an assay certificate issued by the mining company or its attached laboratory, detailing the precious metal content in the dore bars;
4. Gold Dore Bars are imported by an actual user for refining into standard gold bars of 99.5% purity or above; and
5. Silver Dore Bars are imported by an actual user for refining into silver bars of purity 99.9% or above.

Nil Duty Benefit under Notification No. 96/2008-Cus

Notification No. 96/2008-Cus grants nil BCD for specified products imported from certain Least Developed Countries (LDCs), including Tanzania and Rwanda. However, its application depends on: