2025 (7) TMI 1654 - HC - Customs

Detained Gold Jewelry Held Personal Effects Under Baggage Rules; Show Cause Notice Required Before Detention

The HC held that the detained gold ornaments, weighing around 200 grams, qualified as personal effects under the Baggage Rules, having been gifted and ... Challenge to detention order - smuggling - Gold ornaments weighing around 200 grams - personal effects or not - no SCN issued and no opportunity of hearing granted - violation of principles of natural justice - HELD THAT:- A perusal of the Order-in-Appeal would also show that the Appellate Authority itself came to the conclusion that there was no mala fide intention of the Petitioner in non-declaration of jewellery which was for personal use. The Department of Revenue has now filed the revision against the said order - In this matter, no Show Cause Notice has been issued to the Petitioner and no personal hearing was also granted before passing of the Order-in-Original. The jewellery carried by the Petitioner squarely falls within the ambit of ‘personal effects’ as provided under the Baggage Rules. The jewellery was admittedly received as a gift from her mother-in-law and was being personally worn and carried by the Petitioner at the time of her arrival in India. Further, once the goods are detained, it is mandatory to issue a show cause notice and afford a personal hearing to the Petitioner. The time prescribed under Section 110 of Act, is a period of six months. However, subject to complying with the requirements therein, a further extension for a period of six months can be taken by the Customs Department for issuing the show cause notice. In this case, the one year period itself has elapsed, yet no show cause notice has been issued - It is also established that a waiver of the Show Cause Notice cannot be done on the basis of a pre filled form and the same being used as a basis for not issuing a Show Cause Notice or not affording a personal hearing, is not permissible. Under such circumstances, the detention itself would be doubtful. However, considering the fact that the Petitioner herself had filed the appeal and the Order-in-Appeal has been passed releasing the goods upon certain payment of some fine, it is deemed appropriate that the Order-in-Appeal be given effect to - The Petitioner may collect the detained jewellery through an Authorised Representative, in which case, the detained goods shall be released after receiving a proper email from the Petitioner or some form of communication that the Petitioner has no objection to the same being released to the concerned Authorised Representative. Petition disposed off. ISSUES: Whether the jewellery carried by the individual qualifies as 'personal effects' under the Baggage Rules and is thus exempt from detention by the Customs Department.Whether the Customs Department was obligated to issue a Show Cause Notice and afford a personal hearing before detaining and confiscating the jewellery.Whether a pre-filled waiver form signed by the individual can validly waive the right to a Show Cause Notice and personal hearing.Whether the detention and confiscation orders and subsequent penalty imposition comply with the procedural and substantive requirements under the Customs Act, 1962.The validity and effect of the Order-in-Appeal permitting release of the jewellery upon payment of redemption fine and penalty, in light of the revision application filed by the Customs Department. RULINGS / HOLDINGS: The jewellery qualifies as 'personal effects' under the Baggage Rules as it was 'personally worn and carried' and 'received as a gift,' and thus is exempt from detention by the Customs Department.The Customs Department failed to issue a Show Cause Notice and did not afford a personal hearing before passing the Order-in-Original, which is mandatory once goods are detained.A 'waiver of the Show Cause Notice cannot be done on the basis of a pre filled form' and such a form cannot be used as a basis for denying the right to a Show Cause Notice or personal hearing.The detention order and penalty imposition under the Customs Act, 1962 are procedurally flawed due to absence of Show Cause Notice and personal hearing, rendering the detention 'doubtful.'The Order-in-Appeal allowing release of the jewellery on payment of redemption fine and penalty is to be given effect to, despite the revision application filed by the Customs Department. RATIONALE: The Court applied the Baggage Rules and relevant provisions of the Customs Act, 1962, including Sections 77, 108, 110, 111(d), 111(j), 111(m), 112, and 129 DD.Established legal position, supported by precedent including a recent decision of the Court, holds that jewellery of personal use falls within 'personal effects' exempt from detention.Statutory procedural safeguards under the Customs Act require issuance of Show Cause Notice and opportunity for personal hearing before confiscation and penalty, with prescribed timelines and possible extensions.Precedents, including Amit Kumar v. Commissioner of Customs, confirm that a pre-filled waiver form cannot substitute for mandatory procedural requirements.The Court recognized the absence of mala fide intention in non-declaration and the Petitioner's willingness to comply with penalty and redemption fine, influencing the decision to uphold the Order-in-Appeal.No doctrinal shift or dissent noted; the judgment reinforces established procedural and substantive safeguards in customs detention and confiscation matters.