2022 (7) TMI 1196 - HC - Customs

Court Invalidates Detention Receipt for Gold Bangles, Petitioner Eligible for Concessional Duty

A. Palaniyappan Versus The Commissioner of Customs, The Joint / Additional Commissioner of Customs (Airport), The Superintendent of Customs

A. Palaniyappan Versus The Commissioner of Customs, The Joint / Additional Commissioner of Customs (Airport), The Superintendent of Customs - TMI Issues Involved:1. Validity of the Detention Receipt issued by customs authorities.2. Eligibility of the petitioner to claim concessional duty for the detained gold bangles.3. Compliance with customs declaration requirements.4. Applicability of Section 110-A and Section 125 of the Customs Act, 1962 for provisional release of seized goods.5. Legal precedents regarding the release of seized gold on payment of duty.Detailed Analysis:1. Validity of the Detention Receipt:The petitioner challenged the Detention Receipt issued by the customs authorities at Trichy International Airport, arguing that the gold bangles were purchased in Singapore with his hard-earned money and were declared upon arrival. The customs officers, however, detained the gold, suspecting the petitioner to be a carrier for someone else. The court noted that the petitioner had declared the gold bangles and had provided an invoice, but the customs officers detained the gold without providing a proper reason or issuing a show cause notice.2. Eligibility for Concessional Duty:The petitioner claimed eligibility for concessional duty as he had been residing abroad for more than six months. The court recognized that the petitioner had been working in Singapore for 3.5 years and had a valid work permit and bank account in Singapore. The court found no evidence of concealment or smuggling, as the gold bangles were openly declared.3. Compliance with Customs Declaration Requirements:The customs authorities argued that the petitioner did not provide a declaration slip and lacked foreign currency to pay the duty, suggesting he was a carrier. The court found no specific rebuttal to the petitioner's assertion that no declaration slip was obtained from him and noted that the gold was not concealed, indicating no intent to smuggle.4. Applicability of Section 110-A and Section 125 of the Customs Act, 1962:The petitioner sought the release of the gold under Section 110-A, which allows the provisional release of seized goods pending adjudication. The court held that the petitioner, being the owner of the gold, was entitled to its release on providing a bank guarantee for 50% of the duty. Section 125, which allows for the redemption of seized goods on payment of a fine, was also applicable, as the gold was not a prohibited item but a restricted one.5. Legal Precedents:The petitioner cited several judgments, including the Supreme Court ruling in Commissioner of Customs vs. Atul Automations Pvt. Ltd., which distinguished between prohibited and restricted items and allowed for the redemption of restricted goods on payment of the market value. The Delhi High Court in Vaibhav Sampat More vs. National Investigation Agency also held that the import of gold is restricted but not prohibited, subject to duty payment. The court referenced consistent rulings by the Madras High Court and other courts that supported the release of seized gold on payment of 50% of the duty.Conclusion:The court directed the petitioner to execute a bank guarantee for 50% of the customs duty, after which the gold bangles should be handed over to him within two weeks. The customs authorities were instructed to complete the adjudication proceedings within three months. The writ petition was disposed of with no costs, and connected miscellaneous petitions were closed.