Court rules in favor of Malaysian citizen in illegal gold jewelry seizure case. Petitioner granted provisional release under Customs Act.

The court ruled in favor of the petitioner, a Malaysian citizen, in a case involving the seizure of gold jewelry by Customs officials at Trichy Airport. The court held that the seizure was illegal as the jewelry was not concealed, and the petitioner was not smuggling. The petitioner was granted provisional release of the seized goods under Section 110-A of the Customs Act, upon executing a bank guarantee for 50% of the customs duty. The court directed the officials to hand over the seized gold articles to the petitioner and ordered completion of adjudication proceedings within three months.

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Issues Involved:
1. Legality of the seizure of gold jewelry by Customs officials.
2. Petitioner's claim of coercion and illegal detention.
3. Petitioner's right to provisional release of seized goods under Section 110-A of the Customs Act.
4. Applicability of Section 125 of the Customs Act regarding the option to pay a fine in lieu of confiscation.
5. Distinction between prohibited and restricted items under the Customs Act.

Issue-wise Detailed Analysis:

1. Legality of the seizure of gold jewelry by Customs officials:
The petitioner, a Malaysian citizen, was detained at Trichy Airport and his gold jewelry was seized by Customs officials. He argued that the jewelry was his personal property, worn on his body, and not concealed. The respondent officials conducted a surprise check and seized gold articles from multiple passengers, including the petitioner, who was found wearing gold chains, bracelets, and a ring. The petitioner contended that the seizure was illegal as the jewelry was not concealed and he was not smuggling.

2. Petitioner's claim of coercion and illegal detention:
The petitioner alleged that he was coerced into signing a typed statement under threat and was detained illegally from 05.11.2019 to 07.11.2019. He retracted this statement later, claiming it was signed under duress. The petitioner held an Overseas Citizen of India Card and had come to India for a family wedding. He argued that there was no need for him to sign a statement prepared by the officials if he was not coerced.

3. Petitioner's right to provisional release of seized goods under Section 110-A of the Customs Act:
The petitioner cited Section 110-A of the Customs Act, which allows for provisional release of seized goods pending adjudication. He argued that the respondents should have exercised this power and released the gold jewelry to him. He was willing to pay the necessary duty for the release of his goods. The court noted that as per Section 110-A, goods seized can be released to the owner on taking a bond with security and conditions as required by the adjudicating authority.

4. Applicability of Section 125 of the Customs Act regarding the option to pay a fine in lieu of confiscation:
The petitioner argued that under Section 125 of the Customs Act, he should be given the option to pay a fine in lieu of confiscation of the seized gold. He relied on various judgments, including those from the Apex Court and Delhi High Court, which held that gold is a restricted item, not a prohibited one, and can be redeemed on payment of duty and fine. The court acknowledged that Section 125 allows for redemption of confiscated goods on payment of a fine and directed the petitioner to provide a bank guarantee for 50% of the duty involved.

5. Distinction between prohibited and restricted items under the Customs Act:
The court referred to the judgment in Commissioner of Customs vs. Atul Automations Pvt. Ltd., which distinguished between prohibited and restricted items. The judgment clarified that restricted goods can be redeemed on payment of the market value and fine under Section 112(a) of the Customs Act. The court also cited the Delhi High Court ruling in Vaibhav Sampat More vs. National Investigation Agency, which held that the import of gold is restricted, not prohibited, and subject to prescribed quantity on payment of duty.

Conclusion:
The court concluded that the petitioner is entitled to the provisional release of the seized gold jewelry under Section 110-A of the Customs Act. The petitioner was directed to execute a bank guarantee for 50% of the customs duty, and upon doing so, the respondents were ordered to hand over the seized gold articles to the petitioner. The adjudication proceedings were to be completed within three months to ensure the revenue of the nation is protected. The writ petition was allowed, and no costs were imposed.

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