ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 15.05.2025
CESTAT Hyderabad Quashes Rs. 63 Crore Demand on Diamond India Ltd for Gold Replenishment under FTP
The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) delivered a landmark ruling in a batch of appeals involving Diamond India Ltd (DIL), Bullionline LLP, Jurassic Refiners & Jewels Pvt Ltd, and their officials. The dispute revolved around the replenishment of duty-free gold under the Foreign Trade Policy (FTP) 2015β20, alleging violations of Notification No. 57/2000-Cus.
Background of the Dispute
The exporters Bullionline LLP and Jurassic Refiners exported gold jewellery (kadas) and received duty-free gold from DIL, a DGFT-nominated agency, under the FTPβs replenishment scheme. DRI alleged:
- The jewellery was not manufactured through the fully mechanized process as claimed (which would require only 2% value addition), but rather semi-mechanized, requiring 3.5% value addition.
- The exporters used notional values and misdeclared making charges to falsely show compliance.
- DIL failed to conduct due diligence before releasing replenishment gold, leading to duty evasion of βΉ63.74 crore.
This Article has been written by Shri Ravi Shekhar Jha, Advocate Delhi High Court based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.
Source: CESTAT Hyderabad
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