Transit passenger customs liability fails where no entry into India or import is proved; confiscation and penalty cannot stand.

A passenger remaining in the international transit lounge without entering India was held not amenable to customs liability for gold jewellery worn on his person, because no import into India or customs violation was established. On the facts accepted, he was not required to complete immigration or customs formalities applicable to an entrant, and there was no attempt at smuggling or false explanation of the jewellery's source. As the basis for confiscation failed, the consequential penalty also could not stand. The confiscation and penalty were set aside and the seized jewellery was directed to be returned.

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Issues: (i) Whether a passenger in transit, waiting in the international transit lounge without entering India, was amenable to customs liability for the gold jewellery worn on his person. (ii) Whether the confiscation of the gold jewellery and the consequential penalty under the Customs Act were sustainable.

Issue (i): Whether a passenger in transit, waiting in the international transit lounge without entering India, was amenable to customs liability for the gold jewellery worn on his person.

Analysis: The passenger was travelling from Bangkok to Kathmandu and was found in the transit lounge at IGI Airport. The finding recorded was that he had not entered India and was not required to comply with immigration or customs formalities applicable to a person entering the country. It was also accepted that he was not intermixing with other persons or attempting delivery of any goods for smuggling. On those facts, the customs law provisions invoked against import into India were held inapplicable.

Conclusion: The issue was decided in favour of the appellant, and the passenger in transit was held not to be liable to customs action on these facts.

Issue (ii): Whether the confiscation of the gold jewellery and the consequential penalty under the Customs Act were sustainable.

Analysis: The source of the jewellery was accepted as having been explained, and that explanation was not found false. Since the case was held not to involve an import into India or a violation of customs or foreign trade provisions, the foundation for confiscation under the cited confiscatory provisions failed. The penalty, being consequential to the confiscation, also could not survive.

Conclusion: The confiscation and penalty were held unsustainable and were set aside in favour of the appellant.

Final Conclusion: The appeal succeeded, the impugned order was set aside, and the seized gold jewellery was directed to be returned to the appellant.

Ratio Decidendi: A passenger remaining in the international transit area without entering India does not incur customs liability for goods worn on his person in the absence of an import into India, and confiscation or penalty cannot be sustained without proof of a customs violation.

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