Detention of 54-gram gold chain illegal for lack of SCN and waiver under Sections 124, 110 Customs Act

HC held the continued detention of petitioner's 54-gram gold chain by Customs to be illegal due to non-issuance of a Show Cause Notice (SCN) and absence of a valid written waiver under Section 124 of the Customs Act, 1962. Relying on prior HC precedents, the court ruled that an oral waiver of SCN and personal hearing cannot be recognized in law. As the statutory six-month period under Section 110 had expired without any extension being sought, further seizure was impermissible. HC directed release of the gold chain to the petitioner for re-export, subject to payment of warehousing charges, and disposed of the petition.

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Issues: Whether continued detention of petitioner's gold chain is permissible where no show cause notice under Section 124 of the Customs Act, 1962 was issued and an alleged oral waiver of SCN and personal hearing was relied upon by the Customs Department; and whether the goods must be released when the statutory period under Section 110(2) has lapsed without extension.

Analysis: The determination focusses on the statutory requirement to issue a show cause notice under Section 124 and to afford a personal hearing, and the effect of an alleged oral waiver. Section 108 recording and reliance on an oral waiver cannot replace the formal issuance of SCN and the opportunity of hearing required by law. Precedent establishes that printed or oral waivers do not satisfy Section 124 and that natural justice requires a proper opportunity to be afforded. Separately, Section 110(2) prescribes a six-month period for issuing notice relating to detained goods; absence of issuance within this period and lack of a valid extension renders continued detention impermissible. The Supreme Court authority cited confirms that non-issuance of required notice within statutory time results in return or release of the goods.

Conclusion: The detention of the gold chain is unlawful. The petitioner is entitled to release of the gold chain for re-export subject to payment of warehousing charges; the petition is allowed and disposed of in those terms.

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