Customs authorities must release seized gold chains after failing to issue show cause notice within six months under Section 110(2)

Delhi HC directed customs authorities to release seized gold chains from petitioners. The court held that detention receipts issued by customs constituted seizure under Customs Act 1962, not mere detention. Since no show cause notice was issued under Section 124(a) within the mandatory six-month period following seizure on 20.12.2022, the goods were required to be returned under Section 110(2). The court emphasized that customs authorities cannot circumvent statutory requirements by labeling seizure as detention, following precedent in Mohd Salman Khan case. Petition was allowed.

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Issues involved:
The petitioners seek quashing of detention receipts and release of Gold Chains seized by Custom Authorities upon returning from Dubai to India.

Details of the Judgment:

Issue 1: Detention of Gold Chains
The petitioners were intercepted at the airport, and Gold Chains were found in their possession without declaration. Custom Authorities detained the Gold Chains without issuing a show cause notice for seizure. The petitioners sought release of the Gold Chains seized under the detention receipt.

Issue 2: Legal Provisions
Reference was made to Section 124 of the Customs Act, stating that no confiscation or penalty order can be made without prior notice to the owner of the goods. Section 110 allows seizure of goods believed to be liable for confiscation, with a mandate to return the goods if no notice is issued within six months.

Issue 3: Precedent and Legal Interpretation
A co-ordinate bench judgment highlighted that detention cannot substitute seizure under the Act. Failure to issue a show cause notice within the statutory period mandates the return of seized goods to the owner. The Customs Department cannot detain goods to avoid the consequences of seizure.

Issue 4: Judgment and Directions
In line with legal provisions and precedents, the court directed the Customs Authorities to release the Gold Chains seized from the petitioners. The petitioners were required to be present for the appraisal of the Gold Chains' weight and purity. Any custom duty payable was to be informed and deposited for the release of the Gold Chains. The release did not prevent further legal actions by Customs Authorities regarding the alleged wrongful import.

Conclusion:
The petitions were allowed, and the Gold Chains were directed to be released in accordance with Section 110(2) of the Act. The petitioners' presence was required for appraisal, and any custom duty payable had to be deposited for the release. Customs Authorities were allowed to take legal action for the alleged wrongful import despite the release.

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