2025 (7) TMI 1559 - HC - Customs

Customs Ordered to Produce Detained Gold Jewellery for Verification Under Prior Directions

The HC directed the Customs Department to produce the detained goods on the next hearing date due to a factual dispute regarding the nature of the gold ... Requirement to reconsider the Baggage Rules, 2016 especially in respect of issues which have been highlighted by this Court - Detention of goods by the Customs Department belonging to passengers travelling to India, of both Indian and foreign origin - HELD THAT:- The Court has heard the parties and perused the records. Considering the nature of the matter, let the detained goods be produced on the next date of hearing as there is a factual dispute as to the nature of the gold jewellery. In the event the Court is satisfied on the next date that the detained goods are indeed the personal jewellery of the Petitioner, then the same shall be released in terms of the directions passed on 19th May, 2025. List on 8th September, 2025 at 2:30 p.m. ISSUES: Whether the existing procedure under the Baggage Rules, 2016 for detention and disposal of goods by Customs Department requires reconsideration and amendment.The scope and content of a Standard Operating Procedure (SOP) to be followed by Customs pending amendment of the Baggage Rules.Permissible weight and nature of used personal gold jewellery that can be carried or worn by Indian and foreign passengers under the Baggage Rules.Procedural requirements for recording statements under Section 108 of the Customs Act and for timely issuance and disposal of show cause notices.Whether storage charges imposed by Central Warehousing Corporation (CWC) can be waived in light of Court orders.Authority and procedure for release of detained goods, including release through authorized representatives.Whether detained goods claimed as personal jewellery should be released pending final determination of their nature. RULINGS / HOLDINGS: The Court directed that the Customs Department and CBIC reconsider the Baggage Rules, 2016, particularly in respect of issues highlighted by the Court, and mandated the formulation of a Standard Operating Procedure (SOP) to be followed until the Rules are amended.The SOP must cover all issues highlighted by the Court, including the manner of recording statements under Section 108 of the Customs Act, and the appraisal and disposal procedures for detained items, with the Court approving a draft SOP subject to modifications.The Court identified specific areas requiring further clarification, including the permissible weight of used gold jewellery for Indian and foreign passengers, and the procedure for issuance of show cause notices within prescribed timeframes under the Customs Act, 1962.The Court granted further time to the Customs Department and CBIC to finalize amendments to the Baggage Rules, acknowledging substantial progress and requiring the draft Rules to be placed on record before the next hearing.Storage charges imposed by the Central Warehousing Corporation were ordered to be waived where the Court had specifically directed such waiver, and the CWC was directed to comply strictly with Court orders, with assurance given by CWC officials.The detained goods may be released to an authorized representative upon receipt of proper communication from the owner, ensuring compliance with Court directions.In the event of factual dispute regarding the nature of detained goods as personal jewellery, the goods are to be produced before the Court, and if confirmed as personal jewellery, they shall be released in accordance with prior directions. RATIONALE: The Court relied on its supervisory jurisdiction to ensure that the Customs Department complies with statutory provisions under the Customs Act, 1962, and the Baggage Rules, 2016, emphasizing the need for clarity and uniformity in procedures affecting passengers' goods.The directions to formulate and implement an SOP reflect the Court's approach to provide interim regulatory certainty pending formal amendment of the Baggage Rules by the competent authority, i.e., the Central Board of Indirect Taxes & Customs (CBIC).The Court's insistence on addressing issues such as permissible limits for used gold jewellery and timely issuance of show cause notices aligns with principles of procedural fairness and administrative efficiency under customs law.In respect of storage charges and release of goods, the Court emphasized strict compliance with its orders to prevent undue hardship and delay, underscoring the binding nature of judicial directions on statutory authorities and their agents.The Court's approach to resolving factual disputes regarding the nature of detained goods by directing physical production before the Court demonstrates adherence to evidentiary principles and ensures just adjudication on the merits.The collaborative consultation between various Ministries and agencies, including MEA, Ministry of Tourism, DGFT, DRI, and Customs Authorities, indicates a multi-stakeholder approach to policy formulation consistent with administrative law principles.