Gold jewelry worn by passenger cannot be seized under Baggage Rules 2016 as provision exceeds Customs Act scope

The HC ruled that gold jewelry worn by a passenger cannot be seized under Baggage Rules 2016, as the phrase "carried on the person" in the Rules exceeds the scope of Section 79 of the Customs Act 1962, which only covers baggage items. The court declared this provision ultra vires, stating rule-making bodies must function within statutory limits. The confiscation order was quashed due to procedural violations including lack of proper show cause notice, inadequate hearing opportunities for the foreign national petitioner, and contradictory statements by customs officials. The court ordered release of seized gold ornaments within seven days.

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1. ISSUES PRESENTED and CONSIDERED

The core legal issues considered in this judgment include:

• Whether the seizure and detention of gold jewelry from the petitioner and her family members by customs officials was lawful under the Customs Act, 1962 and the Baggage Rules, 2016.
• Whether the Baggage Rules, 2016, particularly the provision concerning articles "carried on the person," are ultra vires the Customs Act, 1962.
• Whether the customs officials violated principles of natural justice by not issuing a show cause notice or providing a proper opportunity for a hearing before passing the confiscation order.
• The appropriateness of the customs officials' conduct during the seizure, particularly in relation to cultural and religious sentiments.
• Whether the respondents' failure to specifically deny the petitioner's allegations in their counter-affidavit amounts to an admission of those allegations.

2. ISSUE-WISE DETAILED ANALYSIS

Seizure and Detention of Gold Jewelry

The relevant legal framework includes the Customs Act, 1962, and the Baggage Rules, 2016. The petitioner argued that the jewelry was personal property and not subject to the Baggage Rules, 2016, which they claimed were beyond the scope of Section 79 of the Customs Act. The Court noted that the respondents did not specifically deny the petitioner's allegations of mistreatment and forced signing of documents, which under Section 58 of the Evidence Act, 1872, could be deemed admitted.

The Court found that the customs officials' actions, particularly the removal of the petitioner's "thaalikodi" (mangalsutra), were culturally insensitive and unbecoming of their office. The Court emphasized the cultural significance of the "thaalikodi" and criticized the customs officials for not respecting this sentiment.

Application of Baggage Rules, 2016

The Court examined whether the Baggage Rules, 2016, were applicable to jewelry worn by the petitioner. The Court found that the Rules, specifically the provision concerning articles "carried on the person," were beyond the scope of the Customs Act, 1962. The Court held that the Rules could not override the Act, and thus, jewelry worn by the passenger should not fall under the Baggage Rules, 2016.

Violation of Principles of Natural Justice

The Court found that the customs officials did not issue a show cause notice or provide a proper opportunity for a hearing before passing the confiscation order. The Court ruled that this was a violation of the principles of natural justice, rendering the confiscation order invalid.

Conduct of Customs Officials

The Court criticized the conduct of the customs officials, particularly the second respondent, for their handling of the situation. The Court found that the officials acted in a manner that was disrespectful to the petitioner's cultural and religious sentiments and that the seizure was conducted with an ulterior motive.

Failure to Deny Allegations

The Court noted that the respondents' failure to specifically deny the petitioner's allegations in their counter-affidavit amounted to an admission of those allegations. The Court emphasized the importance of specific denials in legal proceedings and found that the respondents' general denials were insufficient.

3. SIGNIFICANT HOLDINGS

The Court held that the Baggage Rules, 2016, particularly the provision concerning articles "carried on the person," were ultra vires the Customs Act, 1962. The Court stated, "The Customs Act, 1962, enables the Central Government to make Rules to the extent of the articles carried in the baggage of a passenger and not for the articles, which were carried on the person."

The Court quashed the confiscation order dated 24.04.2024, citing the lack of a show cause notice, insufficient opportunity for a hearing, and the preparation of a Mahazar with false information. The Court directed the respondents to release the seized gold jewelry within seven days.

The Court ordered an inquiry against the customs officials involved in the seizure, particularly the second respondent, whose conduct was deemed unbecoming of an officer. The Court referred the matter to the Department of Personnel & Training (IRS-Customs) for appropriate action.

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