2025 (9) TMI 1227 - HC - Customs

Petition dismissed; petitioner told to pursue statutory appeal after Sec.108 statement on detained 198g gold chains before marriage

Chadchaporn Thankrathok Versus The Commissioner Of Customs

The HC dismissed the petition by permitting the petitioner to pursue statutory appellate remedies, noting the detention of two gold chains (198 g) in 2023 ... Smuggling - seeking release of her gold chains - service of order - principles of natuarl justice - HELD THAT:- The Court has perused the said Order-in-Original and considered the facts of the case. It appears that the order may not have been in the knowledge of the Petitioner. However, the detention of the Petitioner’s gold items took place in 2023, much prior to the marriage of the Petitioner and at that time, it is unclear as to under what circumstances the Petitioner had travelled to India. She was not married at that time. Considering the nature of the goods, i.e., two golds chains weighing 198 grams, clearly, it appears that the Petitioner was aware that she had to declare the same. It is also noted that since the Petitioner is a Thai national, the Petitioner has also given a statement under Section 108 of the Customs Act, 1962, wherein she has stated that the gold items don’t belong to her and the same were given to her by one Mr. Monu Saow, though it is not clear as to who is Mr. MonuSaow. The husband of the Petitioner, who is appearing virtually states they are unaware of any Mr. Monu Saow. There was a waiver of Show Cause Notice, considering the long time which has elapsed since the detention and the subsequent passing of the impugned Order-in-Original, the Court is inclined only to permit the Petitioner to avail of her appellate remedy in accordance with law. The Order-in-Original dated 24th November, 2023 which has been handed over today, shall be considered to have been served upon the Petitioner on date - Petition disposed off. ISSUES PRESENTED AND CONSIDERED 1. Whether the Order-in-Original impugned in the petition was effectively served on the detainee such that process requirements of natural justice were satisfied. 2. Whether absence of a Show Cause Notice to the detainee vitiates the Order-in-Original and requires setting aside of the order. 3. Whether the detainee's nationality, marital status at time of detention, and statements under Section 108 of the Customs Act bearing on ownership affect the presumption of knowledge and obligation to declare gold at the port of entry. 4. Whether, in circumstances where substantial time has elapsed since detention and adjudication, relief by way of direct release is appropriate or whether appellate remedy should be permitted. 5. Whether the appellate remedy is to be treated as timely when instituted from the date of deemed service by the Court, and whether limitation can be waived in that event. 6. What interim directions (personal hearing, preservation of goods, consideration of binding precedents, warehousing charges) should be issued pending appeal. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Service of Order-in-Original and satisfaction of process requirements Legal framework: Principles of service and notice under administrative and customs adjudication require that the affected person be made aware of the adjudicatory order so as to enable exercise of appellate remedies and to satisfy requirements of natural justice. Precedent Treatment: The Court observed that higher judicial decisions require meaningful opportunity to be heard and consideration of service; the Appellate Authority must consider such precedents (treated as binding on the authority). Interpretation and reasoning: The Court found the covering communication did not specify an address and the detainee may not have been aware of the Order-in-Original. On inquiry and interaction the detainee's identity was established and the Order was handed over in court; the Court therefore deemed the Order to be served on the detainee on that date. Ratio vs. Obiter: Ratio - where effective service is doubtful and the order may not have been in the knowledge of the affected person, a court may deem service at a later date and permit exercise of appellate remedy from that date. Obiter - observations about adequacy of contemporaneous postal/embassy communication. Conclusion: The Order-in-Original shall be treated as served on the detainee on the date it was handed over in court, enabling fresh limitation calculation from that date. Issue 2 - Absence of Show Cause Notice and impact on validity of Order-in-Original Legal framework: Principles of natural justice and statutory adjudication require issuance of Show Cause Notice and opportunity to contest grounds before passing an adverse order, unless valid statutory waiver exists. Precedent Treatment: The Court acknowledged reliance on binding decisions that underscore the necessity of following prescribed procedures and considering precedents in adjudication; no specific precedent was overruled. Interpretation and reasoning: The petitioner's counsel argued absence of Show Cause Notice; the Court noted possible waiver but did not find it appropriate to set aside the Order-in-Original outright given the facts - particularly the elapsed time since detention and the circumstances indicating the detainee knew or ought to have known of declaration obligations. Ratio vs. Obiter: Ratio - absence of Show Cause Notice does not automatically mandate setting aside where circumstances and statutory remedies (appeal) can provide adequate opportunity for redress; court may direct appellate process instead. Obiter - commentary that service and notice defects are material and must be addressed by the Appellate Authority. Conclusion: The Court declined to set aside the Order-in-Original exclusively on the ground of absence of Show Cause Notice and instead permitted the detainee to pursue the appellate remedy with a personal hearing. Issue 3 - Ownership, declaration obligations, and effect of Section 108 statement Legal framework: Customs law imposes declaration obligations on passengers entering the country; ownership and possession of dutiable goods (such as gold) are relevant to seizure and adjudication. Statements under statutory provisions (e.g., Section 108 of Customs Act) form part of the record and may indicate awareness or lack thereof about ownership. Precedent Treatment: The Court emphasized that binding precedents on similar factual/legal questions are to be considered by the Appellate Authority; none were distinguished or overruled by the Court in its order. Interpretation and reasoning: The Court noted the detainee, a foreign national, had given a Section 108 statement disclaiming ownership and attributing the items to another person; concomitantly, the nature and quantity of goods (two gold chains, 198 grams) made it apparent that declaration was required and that the detainee should have been aware of that duty. The petitioner's subsequent marital status did not alter the facts at the time of detention. Ratio vs. Obiter: Ratio - a declaratory statement denying ownership does not automatically invalidate detention where objective facts (quantity/nature of goods) suggest a duty to declare; such factual-mixed conclusions are properly examined on appeal. Obiter - suggestion that identity of the person named in the Section 108 statement ought to be investigated by the Appellate Authority. Conclusion: The Court treated the Section 108 statement and the objective circumstances as relevant factors supporting adjudication; these matters are to be fully considered by the Appellate Authority on merits. Issue 4 - Appropriateness of direct release versus permitting appellate remedy given delay Legal framework: Courts may grant relief where detention/adjudication is vitiated by procedural infirmity or where continued detention is unjustified, but ordinarily appellate and statutory remedies should be exhausted unless exceptional circumstances warrant interference. Precedent Treatment: The Court referenced binding authorities requiring consideration of appellate process and adherence to precedent by the Appellate Authority; it did not order direct release, distinguishing cases where immediate release was warranted. Interpretation and reasoning: Considering the long interval between detention (2023) and the present proceedings and the unclear circumstances surrounding travel and ownership at the time, the Court found it more appropriate to permit the appellate process rather than grant direct release. The Court sought to preserve the detainee's statutory right to appeal and ensured procedural protections (personal hearing, consideration of precedents). Ratio vs. Obiter: Ratio - where procedural defects exist but the record shows contested factual elements and substantial time has elapsed, the court may direct exercise of statutory appellate remedy with protections rather than order immediate release. Obiter - remarks on factors that might justify immediate release in other cases. Conclusion: Direct release was not granted; the detainee was permitted to file an appeal which shall be heard with a personal hearing and decided on merits. Issue 5 - Computation and waiver of limitation for filing appeal Legal framework: Limitation periods for filing statutory appeals run from service of the Order; courts may extend or refuse to dismiss appeals where service was defective or order was not in knowledge of the aggrieved party. Precedent Treatment: The Court relied on the general principle that where service is deemed effected by the Court, limitation can be computed from that date and dismissal on limitation grounds can be avoided. Interpretation and reasoning: Given doubts about prior service, the Court deemed the Order served on the date it was handed over in court and expressly directed that if the appeal is filed within limitation calculated from that date, it shall not be dismissed on limitation grounds. Ratio vs. Obiter: Ratio - where the court deems service at a later date due to defective prior service, appeals filed within limitation from that deemed date cannot be dismissed for delay. Obiter - procedural guidance on communication particulars to be used by authorities. Conclusion: Limitation shall be computed from the date of deemed service as directed; the Appellate Authority shall not dismiss on limitation if appeal is filed within that recalculated period. Issue 6 - Interim directions: personal hearing, preservation of goods, consideration of precedents, warehousing charges Legal framework: Appellate proceedings require an opportunity for personal hearing; seized goods are to be preserved pending appeal except where disposal is lawful and in accordance with law; appellate authorities must consider binding precedents; claims for waiver of storage/warehousing charges are cognizable before the competent authority. Precedent Treatment: The Court reiterated that binding decisions of higher courts must be mandatorily considered by the Appellate Authority; it did not adjudicate the merits of warehousing charge waiver but left it to the appellate forum. Interpretation and reasoning: To protect rights and ensure adjudicatory fairness, the Court directed that a personal hearing be afforded, that detained goods not be disposed of without intimation and, in any event, not for at least two months after the Appellate Order, and that appellate authority consider cited precedents. The request for waiver of warehousing charges was left for determination by the Appellate Authority. Ratio vs. Obiter: Ratio - appellate authorities must grant personal hearings, consider binding precedent, and preserve seized goods pending appeal absent lawful disposal after intimation; waiver of warehousing charges is an arguable relief to be considered on appeal. Obiter - time periods and communication details provided by the Court as aids to effective appellate process. Conclusion: Directions issued - personal hearing to be afforded; goods not to be disposed without intimation and, in any event, for at least two months after Appellate Order; Appellate Authority to consider all grounds and binding precedents; prayer for waiver of warehousing charges to be pressed before the Appellate Authority.