2024 (12) TMI 179 - HC - Customs

Foreign national passenger wins case for release of seized gold chain and kara worn openly during travel from Bangkok

Luvleen Maingi Versus Union Of India & Ors.

Delhi HC allowed petition seeking release of seized gold chain and kara from foreign national passenger arriving from Bangkok. Customs authorities seized ... Seeking direction for release/return/re-export the gold to the Petitioner - Baggage Rules - Petitioner did not provide any documents regarding the possession of the gold chain and kara - seizure u/s 110 of the Customs Act, 1962 on the reasonable belief that the same were imported to India illegally and were attempted to be cleared without payment of customs duty - HELD THAT:- Import of gold in India is highly regulated and bulk importation of gold can only be effected by the nominated banks, agencies or business houses in the manner laid down by various DGFT Regulations as well as by RBI Circulars or by the “eligible passengers” in the manner provided by the relevant regulations. As per Section 7 of Foreign Trade (Development and Regulation) Act, 1992, no person is allowed to import gold into the country except under an Import-Export Code Number. However, Rule 3 (1) (h) of the Foreign Trade (exemption from application of rules in certain cases) Rules, 1993 provides exemption to the import of any goods by the person as passenger baggage to the extent permissible under the Baggage Rules. In the present case also, petitioner is a foreign national, who brought a chain and a kara by wearing them on his body while arriving from Bangkok. The same was not brought in a concealed manner. It is found that the present case stands squarely covered by the judgments of Pushpa Lekhumal Tulani [2017 (8) TMI 684 - SUPREME COURT] and Vigneswaran Sethuraman vs. Union of India [2014 (12) TMI 268 - KERALA HIGH COURT]. Thus, it becomes apparent that the Original Authority and Revisional Authority has clearly misconstrued the scheme as well as objectives of the Baggage Rules. Since the case of the petitioner has not been evaluated on the basis of the principles, the order impugned cannot be sustained. The order dated 13.08.2018, passed in revision, is hereby quashed and set aside - Petition allowed. Issues Involved:1. Legality of the seizure of gold chain and kara under Section 110 of the Customs Act, 1962.2. Interpretation and application of the Baggage Rules, 1998, particularly regarding personal jewellery.3. The jurisdiction and authority of the Customs officials in issuing a show-cause notice.4. The applicability of previous judicial precedents to the present case.5. The validity of the order passed by the Revisional Authority.Issue-wise Detailed Analysis:1. Legality of the Seizure:The petitioner, a foreign national, was found carrying a gold chain and kara upon arrival in India, which were not declared in the Customs Declaration Form. The Customs officials seized the items under Section 110 of the Customs Act, 1962, on the belief that they were imported illegally. The petitioner argued that the gold was purchased in India and was not intended for importation. The court found that the seizure was based on a misinterpretation of the law, as the petitioner had worn the items on his person and they were not concealed.2. Interpretation and Application of the Baggage Rules:The court examined the Baggage Rules, 1998, and relevant circulars to determine whether personal jewellery falls under the definition of 'personal effects' that can be carried duty-free. The court referred to previous judgments, noting that personal jewellery is distinct from general jewellery and should be considered part of personal effects. The court concluded that the Customs authorities misconstrued the Baggage Rules by not recognizing the distinction between personal jewellery and other items.3. Jurisdiction and Authority of Customs Officials:The court addressed the jurisdictional issue raised by the petitioner concerning the authority of Customs officials to issue a show-cause notice. It was argued that the jewellery was personal effects and did not require declaration. The court agreed, citing previous case law that personal jewellery worn by a passenger does not necessitate a declaration and thus falls outside the jurisdiction of a show-cause notice.4. Applicability of Previous Judicial Precedents:The court extensively referred to previous cases, such as Pushpa Lekhumal Tulani and Vigneswaran Sethuraman, which dealt with similar issues of personal jewellery being carried as part of baggage. These cases established that personal jewellery worn by a passenger is not considered smuggling and does not require declaration. The court found that these precedents directly applied to the present case, supporting the petitioner's position.5. Validity of the Revisional Authority's Order:The Revisional Authority had set aside the Order-in-Appeal that favored the petitioner, restoring the original confiscation order. The court found that the Revisional Authority failed to properly apply the principles established in previous judgments and misinterpreted the Baggage Rules. Consequently, the court quashed the Revisional Authority's order, holding that the confiscation, customs duty, and penalty imposed lacked legal foundation.Conclusion:The court allowed the writ petition, quashing the order dated 13.08.2018, and set aside the confiscation, customs duty, and penalty imposed on the petitioner. The court emphasized that the items in question were personal jewellery worn by the petitioner, which did not require declaration under the Baggage Rules, and thus the actions of the Customs authorities were without legal basis.