The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has dismissed 11 appeals arising from customs proceedings against the appellant company, its directors and its customs broker over imports of gold doré bars and held that the importer could not claim exemption benefits after failing to meet the documentary, weight and purity conditions governing the imports under its Directorate General of Foreign Trade (DGFT) licences.

The bench of Dr Rachna Gupta (Officiating President) and Hemambika R. Priya (Technical Member) upheld the adjudication order confirming customs duty, confiscation and penalties. The appeals arose from three show-cause notices concerning a live consignment and earlier imports, including imports from Rwanda and Tanzania.

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The appellant/assessee which manufactures gold bars, held DGFT authorisations to import gold doré bars. The dispute centred on its claim to a concessional rate under Customs Notification No. 50/2017 and a nil basic customs duty benefit under Notification No. 96/2008 for imports from least developed countries. The department alleged that the company had claimed those benefits without satisfying the applicable import and exemption conditions.

For gold doré bars, Condition 40 of Notification No. 50/2017 requires, among other things, that each bar weigh at least five kilograms, that the goods be imported in accordance with a packing list issued by the mining company, and that the importer produce an assay certificate issued by the mining company or its attached laboratory. The notification describes gold doré bars covered by the entry as having gold content not exceeding 95%.

According to the order, the asseessee supplied packing lists and assay certificates from its supplier, Equinox Mining, rather than the mining company documents specified in the notification. Testing by the Central Revenues Control Laboratory also found that the imported bars exceeded 95% purity. The company argued that only one bar in a consignment of 27 fell below the five-kilogram threshold and that the excess purity was within a laboratory margin of error. It further contended that documents from Equinox, or from the relevant mining authority in Tanzania, should satisfy the documentary requirement.

The tribunal rejected those arguments. It held that the notification expressly required a mining company packing list and assay certificate, leaving no scope to substitute documents issued by a supplier or trader. It also declined to overlook the weight and purity discrepancies on the grounds advanced by the importer.

“The conditions of all the notifications have to be strictly [complied with] to avail the simultaneous benefit,” the tribunal said while addressing the company’s claim under both customs notifications. Citing Supreme Court decisions on the interpretation of tax exemptions, the bench held that an importer seeking an exemption must establish compliance with its conditions.

The importer relied on an earlier tribunal ruling to argue that its DGFT licence did not prevent it from claiming the benefit of Notification No. 96/2008. CESTAT’s decision turned on a different point: even where benefits under more than one notification are claimed, the importer must satisfy the conditions attached to each. The bench found that the country-of-origin certificates relied on for the least-developed-country benefit were based on exporter declarations and did not resolve the deficiencies identified in the import documents.

The assessee also challenged the department’s use of one laboratory report in relation to numerous past bills of entry and argued that the adjudicating authority had not made individual findings for each import. It pointed out that bills of entry covered by the third show-cause notice overlapped with those in the first two notices. Despite those objections, the tribunal found no ground to disturb the adjudication order.

The bench relied in part on statements recorded under Section 108 of the Customs Act in which company representatives indicated that mining company packing lists and assay certificates could not be supplied. It observed that the absence of those documents from the record supported the finding of non-compliance.

CESTAT concluded that the company had wrongly availed the exemption benefits and that failure to comply with the import conditions rendered the goods liable to be treated as prohibited goods under Section 2(33) of the Customs Act. It upheld confiscation and the penalties imposed on the importer, its directors and the customs broker. All 11 appeals were dismissed.

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