Full Text
HIGH COURT OF DELHI
Date of Decision: 21st May, 2025
MANAN KARAN SHARMA .....Petitioner
Through: Ms. Richa Kumari, Advocate.
Through: Ms. Anushree Narain, Advocate.
Prathiba M. Singh, J. (Oral)
JUDGMENT
1. This hearing has been done through hybrid mode.
2. The present writ petition has been filed under Articles 226 and 227 of the Constitution of India, inter alia, challenging the impugned Order-in- Original dated 11th March, 2024 and the impugned Order-in-Appeal dated 28th October, 2024 (hereinafter collectively “the impugned orders”). The Petitioner has also prayed for release and re-export of gold jewellery detained by the Customs Department vide Detention Receipt (old) dated 26th December, 2023.
3. The case of the Petitioner is that he is an Indian passport holder and a resident of the United Arab Emirates. It is stated that the Petitioner was travelling from Dubai to India on 26th December, 2023 and upon landing at the Indira Gandhi International Airport, New Delhi, he was intercepted by the Customs Department. The Petitioner is stated to have been wearing a gold chain of 80 grams and a gold kada of 150 grams (hereinafter “the detained goods”), which were seized by the Customs Department.
4. The Petitioner is aggrieved by the fact that no show cause notice had been issued and the impugned Order-in-Original was passed, which was challenged in appeal by the Petitioner. Vide the impugned Order-in-Appeal the Commissioner of Customs (Appeals) has allowed release of the detained goods, subject to payment of custom duty along with redemption fine and penalty in the following terms: “ ORDER
6.0 In light of discussions and findings as above, 1 allow the appeal partially against OIO No.1289/003390/26-12- 2023/WH/2023-24 dated 11-03-2024 passed by the Joint Commissioner of Customs, T-3, IGI Airport, New Delhi and order that the impugned goods “(I) One gold chain having purity 999, weight 80 grams, valued at Rs.4,77,794/- (II) One gold kada having purity 999, weight 150 grams, valued at Rs.8,95,863/- (Total value Rs. 13,73,657) be released after payment of redemption fine in total of Rs. 1,40,000/- (Rupees One Lakh Forty Thousand Only) under Section 125 of the Customs Act, 1962 along with applicable duty. The penalty under Section 112(a) and 112(b) of the Customs Act, 1962 is upheld to Rs. 1,30,000/- (Rupees One Lakh Thirty Thousand Only). The Appeal is disposed with such modifications and consequential relief as above.”
5. Heard the ld. Counsels for the parties. The Court has also perused the documents placed on record, including the photographs of the Petitioner wearing the detained goods. In the opinion of the Court, having considered the facts of the case and the documents placed on record, the detained goods clearly appear to be used personal gold items of the Petitioner.
6. In terms of Rule 2(vi) read with Rule 3 of the Baggage Rules, 2016 (hereinafter “the Rules”) the Petitioner would be permitted clearance of articles, free of duty in his bona fide baggage, including used personal effects. The relevant provisions of the Rules are extracted hereunder: “2(vi) “Personal effects” means things required for satisfying daily necessities but does not include jewellery. * * * *
3. Passenger arriving from countries other than Nepal, Bhutan or Myanmar:- An Indian resident or a foreigner residing in India or a tourist of Indian origin, not being an infant arriving from any country other than Nepal, Bhutan or Myanmar, shall be allowed clearance free of duty articles in his bona fide baggage, that is to say, - (a) used personal effects and travel souvenirs; and (b) articles other than those mentioned in Annexure-I, up to the value of fifty thousand rupees if these are carried on the person or in the accompanied baggage of the passenger: Provided that a tourist of foreign origin, not being an infant, shall be allowed clearance free of duty articles in his bona fide baggage, that is to say, (a) used personal effects and travel souvenirs; and (b) articles other than those mentioned in Annexure- I, up to the value of fifteen thousand rupees if these are carried on the person or in the accompanied baggage of the passenger: Provided further that where the passenger is an infant, only used personal effects shall be allowed duty free. Explanation.- The free allowance of a passenger under this rule shall not be allowed to pool with the free allowance of any other passenger. * * * *
5. Jewellery.- A passenger residing abroad for more than one year, or return to India, shall be allowed clearance free of duty in his bona fide baggage of jewellery upto a weight, of twenty grams with a value cap of fifty thousands rupees if brought by a gentleman passenger, or forty grams with a value cap of one lakh rupees if brought by a lady passenger. * * * * ANNEXURE–I (See Rules 3, 4 and 6)
1. Fire arms.
2. Cartridges of fire arms exceeding 50.
3. Cigarettes exceeding 100 sticks or cigars exceeding 25 or tobacco exceeding 125 gms.
4. Alcoholic liquor or wines in excess of two litres.
5. Gold or silver in any form other than ornaments.
6. Flat Panel (Liquid Crystal Display/Light-Emitting Diode/Plasma) television.”
7. The issue whether gold jewellery worn by a passenger would fall within the ambit of personal effects under the Rules, has now been settled by various decisions of the Supreme Court as also this Court. The Supreme Court in Directorate of Revenue Intelligence and Ors. v. Pushpa Lekhumal Tolani, (2017) 16 SCC 93, while considering the relevant provisions of the Customs Act, 1962 (hereinafter “the Act”) read with the Baggage Rules, 1998, that were in force during the relevant period, held that it is not permissible to completely exclude jewellery from the ambit of ‘personal effects’. The relevant paragraphs of the said order read as under:
was found to be in the possession of the respondent. Moreover, we cannot ignore the contention of the respondent that her parents at the relevant time were in Indonesia and she had plans of proceeding to Indonesia. Some of the jewellery items purchased by the respondent were for her personal use and some were intended to be left with her parents in Indonesia. The High Court has rightly held that when she brought jewellery of a huge amount into the country, the respondent did not seem to have the intention to smuggle the jewellery into India and to sell it off. Even on the examination of the jewellery for costing purposes, it has come out to be of Rs 25 lakhs and not Rs 1.27 crores as per DRI. The High Court was right in holding that it is not the intention of the Board to verify the newness of every product which a traveller brings with him as his personal effect. It is quite reasonable that a traveller may make purchases of his personal effects before embarking on a tour to India. It could be of any personal effect including jewellery. Therefore, its newness is of no consequence. The expression “new goods” in their original packing has to be understood in a pragmatic way.”
8. In Saba Simran v. Union of India & Ors., 2024:DHC:9155-DB, the Division Bench of this Court was seized with the issue of deciding the validity of the seizure of gold jewellery by the Customs Department from an Indian tourist. The relevant paragraphs of the said judgement are as under:
personal effect of the passenger would not be subject to the monetary prescriptions incorporated in Rules 3 and 4 of the 2016 Rules.
16. This clearly appeals to reason bearing in mind the understanding of the respondents themselves and which was explained and highlighted in the clarificatory Circular referred to above. That Circular had come to be issued at a time when the Appendices to the 1998 Rules had employed the phrase “used personal effects, excluding jewellery”. The clarification is thus liable to be appreciated in the aforesaid light and the statutory position as enunciated by the respondents themselves requiring the customs officers to bear a distinction between “personal jewellery” and the word “jewellery” when used on its own and as it appears in the Appendices. This position, in our considered opinion, would continue to endure and remain unimpacted by the provisions contained in the 2016 Rules.”
9. This Court in Mr Makhinder Chopra vs. Commissioner Of Customs New Delhi, 2025:DHC:1162-DB, had the occasion to consider the relevant provisions of the Rules, as also the decisions of the Supreme Court and this Court. After analysing the same, this Court held as under:
10. At this stage it would be relevant to consider the decision of the Madras High Court in Thanushika vs. The Principal Commissioner of Customs (Chennai), W.P. No. 5005/2024 (decided on 31st January, 2025) wherein the High Court was dealing with a case where the gold jewellery of a Sri Lankan tourist was seized by the Customs Department. The High Court after analysing various provisions of the Act and the Rules held that the said Rules would only apply to baggage and would not extend to any article “carried on the person” as mentioned in Rule 3 of the Rule. This Court in Makhinder Chopra (supra) having considered the above decision, observed as under:
11. Thus, it is now settled that the used jewellery worn by the passenger would fall within the ambit of personal effects in terms of the Rules, which would be exempt from detention by the Customs Department.
12. In the facts of this case, a perusal of the impugned orders would show that the Petitioner has not been given the benefit of the detained goods being personal effects, which is very clear, even from the photographs of the Petitioner, who is a young boy, which have been placed on record.
13. The detained goods being personal effects of the Petitioner, the detention of the same itself would be contrary to law, Accordingly, the detained goods would be liable to be released on this ground itself. However, there is another issue which is required to be considered i.e., non issuance of the show cause notice within the prescribed period under the Act.
14. Once the goods are detained, it is mandatory to issue a show cause notice and afford a personal hearing to the Petitioner. The time prescribed under Section 110 of Act, is a period of six months. However, subject to complying with the requirements therein, a further extension for a period of six months can be taken by the Customs Department for issuing the show cause notice. In this case, the one year period itself has elapsed, yet no show cause notice has been issued. Accordingly, the detention is impermissible.
15. In view of the above discussion, the impugned orders are set aside and the detained goods shall be released to the Petitioner within four weeks, subject to verification.
16. The Petitioner may collect the detained goods through an Authorised Representative, in which case, the detained goods shall be released after receiving a proper email from the Petitioner or some form of communication that the Petitioner has no objection to the same being released to the concerned Authorised Representative.
17. The storage or warehousing charges shall, however, be paid.
18. The present writ petition is disposed of in above terms. All pending applications, if any, are also disposed of.
PRATHIBA M. SINGH JUDGE RAJNEESH KUMAR GUPTA JUDGE MAY 21, 2025/MR/msh