2025 (2) TMI 486 - HC - Customs

Gold bangles worn by passenger not baggage under Customs Act, detention ruled unlawful and improper

The Madras HC ruled that gold bangles worn by a passenger do not constitute 'baggage' under the Customs Act, 1962. The court held that the Baggage Rules, ... Doctrine of ultra vires - gold bangles worn by the petitioner upon returning to India fall under the definition of 'baggage' as per the Customs Act, 1962, and the Baggage Rules, 2016 or not - interpretation of the provision “as carried on the person” of the Baggage Rules, 2016 - HELD THAT:- While enacting the provisions of the Customs Act, the Parliament has consciously excluded the jewels worn by the passengers. If there is any intention to put all the passengers into hassle, disrespecting their proprietorial rights, dignity, forgoing the customs, against the fundamental rights, let the Parliament take a decision and amend the provisions of the Act. Till then, the Officers have to apply their minds with regard to detaining the passenger and the gold worn by them as the same would not fall within the purview of the Baggage Rules, 2016. The Doctrine of ultra vires states that the Rule making body must function within the purview of the Rule making authority conferred on it by the parent Act. As the body of making rules or regulations, there is no inherent power of its own to make rules, but such power arise only from the Statute and hence, it must necessarily function within the purview of the Statute - In the present case, the Rule making body had made the Baggage Rules as if they are having inherent power of its own to make rules beyond the scope of the Statutes, and they have incorporated the word “carried on the person”. In the present case, admittedly, the Rule making Authorities made the Rules by traveling beyond the scope of the Act, which would amount to ultra vires. In such case, the Statute would prevails over the Rules. When such being the case, the Statute referred only with regard to the baggage and therefore, the Rule has to be confined and read only with regard to the baggage and not with regard to the articles “carried on the person”. In the judgment of the Hon'ble Apex Court rendered in Naresh Chandra Agarwal vs. Institute of Chartered Accountants of India and others [2024 (2) TMI 493 - SUPREME COURT], it has been held that '(a) The doctrine of ultra vires envisages that a Rule making body must function within the purview of the Rule making authority, conferred on it by the parent Act. As the body making Rules or Regulations has no inherent power of its own to make rules, but derives such power only from the statute, it must necessarily function within the purview of the statute. Delegated legislation should not travel beyond the purview of the parent Act. (b) Ultra vires may arise in several ways; there may be simple excess of power over what is conferred by the parent Act; delegated legislation may be inconsistent with the provisions of the parent Act; there may be noncompliance with the procedural requirement as laid down in the parent Act. It is the function of the courts to keep all authorities within the confines of the law by supplying the doctrine of ultra vires.' In the above cases, the Court had held that a Rule Making Authority has to make the Rules within the scope of the parent Act and no Rules shall exceed beyond the scope of the parent Act since it would amount to ultra vires. Thus, in the present case, the Baggage Rule, 2016 will apply only to the baggage and the Rule made to the extent that the article “carried on the person” will not include baggage, which was in excess of powers conferred by the Rule making Authority and would amount to ultra vires. Therefore, the jewellery worn in person will not come under the purview of baggage - In the case on hand, the 10 nos. of bangles were admittedly worn by the petitioner and on the request of respondents it was handed over to them. Normally, in our country any person will worn this quantity of gold for a marriage and hence, in such case, it appears to be just and reasonable. All these aspects have to be taken into consideration by the respondents. However, since the Baggage Rule, 2016, includes the articles carried on the person, the Officials had treated the same as baggage and hence, this Court does find any fault on the Officials also. Conclusion - Since this Court has held that the provision “as carried on the person” of the Baggage Rules, 2016 is ultra vires, the detention of gold under the Baggage Rules, 2016, in the present case would not apply, unless and otherwise if it is secreted in person, for which, the proceedings shall be initiated under Section 101 of the Customs Act, 1962, however, that is not the case of the respondent. The petitioner worn the 10 nos. of bangles in her hands and thus, there is no secrecy or concealment. Thus, the detention of petitioner's 10 nos. of bangles is neither proper nor in accordance with law. The respondents are directed to dispose of the petitioner's representation dated 08.02.2024 and release the goods within a period of 7 days from the date of receipt of copy of this order - petition allowed. ISSUES PRESENTED and CONSIDEREDThe core legal questions considered in this judgment are:Whether the gold bangles worn by the petitioner upon returning to India fall under the definition of 'baggage' as per the Customs Act, 1962, and the Baggage Rules, 2016.Whether the Baggage Rules, 2016, which include articles 'carried on the person' within the definition of baggage, are ultra vires the Customs Act, 1962.Whether the detention of the gold bangles by the customs officials was lawful and in accordance with the relevant legal framework.ISSUE-WISE DETAILED ANALYSISDefinition and Scope of 'Baggage'Legal Framework and Precedents: The Customs Act, 1962, defines 'baggage' under Section 2(3) as including unaccompanied baggage but excluding motor vehicles. Rule 3 of the Baggage Rules, 2016, expands this definition to include articles carried on the person or in accompanied baggage.Court's Interpretation and Reasoning: The Court noted that the definition of 'baggage' under the Baggage Rules, 2016, is broader than that under the Customs Act, 1962. The Court referred to a prior judgment where it was held that the Baggage Rules, 2016, appear to have a wider scope than the statutory definition.Key Evidence and Findings: The petitioner wore the bangles openly on her person and did not conceal them. The Court found that wearing such jewelry is customary for attending social functions in India.Application of Law to Facts: The Court determined that the inclusion of articles 'carried on the person' within the Baggage Rules, 2016, exceeds the scope of the Customs Act, 1962, and thus cannot be applied to the petitioner's case.Treatment of Competing Arguments: The respondents argued that the petitioner should have obtained an Export Certificate to re-import the jewelry duty-free. The petitioner countered that the jewelry was worn, not carried in baggage, and thus should not be subject to the Baggage Rules.Conclusions: The Court concluded that the Baggage Rules, 2016, are ultra vires to the extent they include articles 'carried on the person' and that the detention of the bangles was not justified.Ultra Vires Nature of the Baggage Rules, 2016Legal Framework and Precedents: The doctrine of ultra vires requires that delegated legislation must remain within the scope of authority granted by the parent statute. The Court cited several precedents affirming this principle.Court's Interpretation and Reasoning: The Court emphasized that the rule-making authority cannot extend beyond the powers conferred by the parent Act. The inclusion of 'carried on the person' in the Baggage Rules, 2016, was deemed beyond the statutory scope.Key Evidence and Findings: The Court found no evidence of concealment or secrecy by the petitioner, which would have justified the application of Sections 101 and 102 of the Customs Act, 1962.Application of Law to Facts: The Court applied the doctrine of ultra vires to invalidate the portion of the Baggage Rules, 2016, that extended beyond the statutory definition of baggage.Treatment of Competing Arguments: The respondents' reliance on the broader definition in the Baggage Rules was rejected as inconsistent with the statutory framework.Conclusions: The Court held that the Baggage Rules, 2016, to the extent they include articles 'carried on the person,' are ultra vires and cannot be applied to the petitioner's case.Lawfulness of the DetentionLegal Framework and Precedents: The Customs Act, 1962, and the Baggage Rules, 2016, regulate the importation of goods and personal effects, with specific provisions for duty-free allowances.Court's Interpretation and Reasoning: The Court found that the detention of the bangles was not in accordance with the law, as the Baggage Rules, 2016, were improperly applied.Key Evidence and Findings: The petitioner provided evidence of the jewelry's use for attending a marriage function, aligning with customary practices.Application of Law to Facts: The Court applied the statutory provisions and determined that the detention was unjustified under the circumstances.Treatment of Competing Arguments: The respondents' arguments regarding the necessity of an Export Certificate were dismissed as irrelevant to the facts of the case.Conclusions: The Court concluded that the detention of the bangles was improper and ordered their release.SIGNIFICANT HOLDINGSCore Principles Established: The Court established that the Baggage Rules, 2016, cannot extend beyond the statutory definition of baggage under the Customs Act, 1962. Articles 'carried on the person' do not fall within the scope of baggage as per the Act.Final Determinations on Each Issue: The Court determined that the Baggage Rules, 2016, to the extent they include articles 'carried on the person,' are ultra vires. The detention of the petitioner's bangles was not lawful, and the respondents were directed to release the goods.Verbatim Quotes of Crucial Legal Reasoning: '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 and hence, the inclusion of the word 'carried on the person' is beyond the scope of the provisions of Section 79 of the Customs Act.'