2022 (8) TMI 340 - HC - Customs

Court orders bank guarantee for customs duty on gold bangles, highlights redemption option upon payment.

The court ordered the petitioner to provide a bank guarantee for 50% of the customs duty and directed the release of the gold bangles within two weeks ... Seeking release/return the detained Gold Bangles - prohibited goods or not - Baggage Rules (no concealment in the body or luggage) - oral declaration by customs authorities - valid invoices of gold bought, was produced - HELD THAT:- It is not in dispute that the petitioner is working in Singapore for the past 5 ½ years and he is having a valid Work Permit Card issued by the Republic of Singapore and is also having a Bank Account in Singapore. As could be seen from the Detention/Seizure of Passengers Baggage Receipt issued by the third respondent, the petitioner had left India on 05.12.2016 to Singapore and returned to India again after 5 ½ years i.e., on 01.05.2022, which shows that for the past 5 ½ years, the petitioner was working in Singapore and he is also having a valid Work Permit Card issued by the Republic of Singapore. The petitioner came to India to attend the marriage in his family and for that purpose, he was carrying three gold bangles in his bag and not concealed the same in his baggage or on his body. Further, there is no declaration slip obtained from the petitioner and there is no specific rebuttal on the petitioner's assertion that no declaration slip is obtained from him. In fact, he was orally declared by the Customs Officers that he is carrying three gold bangles, totally weighing 150 grams for the marriage in his family, is not specifically denied. The petitioner had consistently taken a stand that he has been working in Singapore and got work permit and is also having a Bank Account for crediting his salary. With his earnings, he had purchased three gold bangles. He had also produced the invoice of the gold bangles to the authorities. Further, there is no concealment of gold in a baggage or body, which prima facie, shows that there is no smuggling and at the most, it is seized for non-declaration. Added to it, adjudication proceedings is yet to be completed. Section 125 of the Customs Act, 1962, gives rights to the owner or from whom the goods have been seized to redeem such goods on payment of fine. Further, this Court consistently held that goods can be handed over on executing 50% of the Bank guarantee on the duty amount. In view of the same, this Court directs the petitioner to execute 50% of the Bank guarantee in lieu of customs duty and on execution of the Bank guarantee, the respondents are directed to hand over the gold bangles to the petitioner within two weeks from thereon. It is for the respondents to proceed with the adjudication proceedings to save the revenue to the Nation - petition disposed off. Issues Involved:1. Legitimacy of the detention of gold bangles.2. Right to redeem seized goods.3. Compliance with Customs Act provisions.4. Allegations of smuggling and concealment.5. Adjudication proceedings and procedural fairness.Detailed Analysis:1. Legitimacy of the Detention of Gold Bangles:The petitioner, who has been working in Singapore for over five years, brought three gold bangles weighing 150 grams to India. Upon arrival at Trichy Airport, he declared the gold bangles to the Customs Officers. However, the Customs Officers detained the bangles and issued a Detention Receipt (D.R.No.342/2022). The petitioner argued that he purchased the bangles for a family marriage using his hard-earned money and provided an invoice as proof. The Customs Officers suspected the petitioner of acting as a carrier for a smuggling syndicate and detained the bangles without accepting the declaration.2. Right to Redeem Seized Goods:The petitioner contended that gold is not a prohibited item but a restricted one, and he should be allowed to redeem the gold bangles on payment of the applicable duty. He cited several judgments, including the Supreme Court's decision in *Commissioner of Customs vs. Atul Automations Pvt. Ltd.*, which allows redemption of restricted goods upon payment of market value and fine under Section 112(a) of the Customs Act, 1962. The Delhi High Court in *Vaibhav Sampat More vs. National Investigation Agency* also held that the import of gold is restricted, not prohibited, and subject to duty payment.3. Compliance with Customs Act Provisions:The petitioner argued that under Section 110-A of the Customs Act, 1962, seized goods could be released to the owner pending adjudication proceedings upon providing a bond or security. The petitioner was willing to provide a bank guarantee for 50% of the duty involved. The court noted that the petitioner had consistently maintained his ownership of the gold bangles and had not concealed them, indicating no smuggling intent.4. Allegations of Smuggling and Concealment:The respondents argued that the petitioner was part of an international smuggling syndicate smuggling gold in smaller quantities without declaring it to evade customs duty. They detained the gold bangles based on suspicious movements and lack of a declaration slip. The respondents also noted that the petitioner's retraction statements were identical to those of other passengers, suggesting coordinated action.5. Adjudication Proceedings and Procedural Fairness:The court observed that the petitioner had declared the gold bangles and provided an invoice. The court also noted that the petitioner had been working in Singapore for over five years and had a valid work permit and bank account. 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. The court emphasized the need for adjudication proceedings to be completed within three months to ensure procedural fairness and protect national revenue.Conclusion:The court directed the petitioner to provide a bank guarantee for 50% of the customs duty and ordered the respondents to release the gold bangles within two weeks of receiving the guarantee. The adjudication proceedings were to be completed within three months. The court reiterated that gold is a restricted item, not prohibited, and can be redeemed upon payment of duty. The petition was disposed of with no costs, and connected miscellaneous petitions were closed.