Allegation of Duty-Free Gold Under Replenishment Scheme Unsustainable; Madras HC Bars Criminal Proceedings Against Jewellery Exporter

The Madras High Court barred criminal proceedings against a jewellery exporter accused of misusing the duty-free gold replenishment scheme. Authorities alleged irregularities in imports of gold under the scheme intended to incentivize exports. The Court found the allegations unsustainable, noting that the exporter had complied with statutory documentation and procedural requirements. It emphasized that prosecution cannot be initiated merely on suspicion without proper verification of facts. The judgment protects exporters operating within legal frameworks while ensuring government schemes are not misused. This ruling sets a precedent for due diligence before initiating criminal action in customs and excise matters and reinforces the principle of procedural fairness in investigating alleged violations under export incentive programs. It also provides guidance on balancing enforcement with business certainty and highlights judicial restraint against arbitrary prosecution.