ALO Law Office- IDT Tax I Arbitration I Litigation
Date: 06.08.2025
CESTAT Delhi Quashes Bond Enforcement Against Bank of Nova Scotia
In a significant ruling by the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), the Bank of Nova Scotia successfully challenged the enforcement of bonds executed for recovery of duty, interest, and penalty against two exporters, Nikkamal Jewellers and Krishan Chander Ramesh Chander (P) Ltd. The decision, pronounced on August 5, 2025, sets a precedent for cases involving the obligations of nominated agencies under customs notifications.
Background
The Bank of Nova Scotia, a multinational financial service provider, operates as a nominated agency for importing bullion under the “Export Against Supply by Nominated Agencies” scheme. This scheme, governed by Notification No. 57/2000-Cus dated May 8, 2000, allowed duty-free import of gold, provided it was exported as jewellery within 120 days. However, the second proviso of this notification, which mandated this obligation, was omitted by Notification No. 33/2015-Cus dated May 15, 2015.
The case arose when the Directorate of Revenue Intelligence (DRI) intercepted gold jewellery allegedly being smuggled by exporters linked to the Bank of Nova Scotia. A show cause notice was issued to various parties, including the exporters, but the Bank of Nova Scotia was not explicitly called upon to respond.
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 Delhi
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