2025 (12) TMI 256 - HC - Customs

Customs told to allow re-export of seized gold jewellery for spouse's treatment, apply warehousing charges as on detention date

NAZARMAMMET NURYYYALEV Versus COMMISSIONER OF CUSTOMS

HC held that the adjudicating authority's Order-in-Original permitting re-export of the seized gold jewellery, subject to redemption fine and penalty, ... Seeking implementation of the Order-in-Original where Adjudicating Authority has permitted re-export of the Petitioner's gold jewellery consisting of two gold chains and two gold bracelets, subject to payment of redemption fine and penalty - HELD THAT:- Considering the fact that the Petitioner had visited India for medical treatment of his wife and the gold jewellery was for payment of the same, as also the fact that the Petitioner is not a habitual offender, the Court is of the view that in the interest of justice the Order-in-Original ought to be given effect to. It is directed that the Customs Department shall release the seized gold chain to the Petitioner for re-export. The warehousing charges shall be collected based on the charges applicable on the date of detention. Petition disposed off. 1. ISSUES PRESENTED AND CONSIDERED 1.1 Whether the Petitioner's right to redeem and re-export confiscated gold jewellery under the Order-in-Original stood extinguished on account of expiry of the time limit for payment of redemption fine under Section 125(3) of the Customs Act, 1962. 1.2 Whether, in view of the Supreme Court's suo motu orders extending limitation during the COVID-19 pandemic and the special facts of the case, the Court ought to direct implementation of the Order-in-Original permitting re-export, subject to conditions. 1.3 Ancillary to the above, on what terms (including costs, warehousing charges, and procedural safeguards) the implementation of the Order-in-Original for re-export of the gold jewellery should be allowed. 2. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Effect of expiry of time limit under Section 125(3) of the Customs Act, 1962 on the Petitioner's right to redeem and re-export (a) Legal framework (as discussed) 2.1 The Adjudicating Authority ordered confiscation of the gold jewellery under the Customs Act and simultaneously allowed re-export on payment of redemption fine under Section 125, along with penalty under Section 112. 2.2 The Customs Department rejected the Petitioner's request for payment of redemption fine and release for re-export by letter dated 25 August 2023, citing expiry of the time period prescribed in Section 125(3) of the Customs Act, 1962. 2.3 The Court took note of the Supreme Court's order in 'In Re: Cognizance for Extension of Limitation', Suo Motu Writ Petition (C) No. 3 of 2020, dated 10 January 2022, whereby the period between 15 March 2020 and 28 February 2022 stood excluded for the purpose of limitation, and where limitation expiring in that window would be reckoned afresh from 1 March 2022. (b) Interpretation and reasoning 2.4 The Order-in-Original permitting re-export on payment of redemption fine and penalty was passed on 27 January 2020, around the onset of the COVID-19 pandemic. 2.5 The Court noted that, applying the Supreme Court's order, any limitation period expiring between 15 March 2020 and 28 February 2022 would stand extended, with the limitation running from 1 March 2022. 2.6 The Petitioner approached the Customs Department in August 2023 to pay the redemption fine and seek release of the jewellery. Even after giving the benefit of the Supreme Court's exclusion period, the Court recorded that the delay would still be over one year. 2.7 The Department's stand was that, in light of Section 125(3), the time period for payment of redemption fine was over; however, it was also admitted that the gold jewellery had not yet been disposed of. (c) Conclusions 2.8 The Court accepted that, on a strict computation, the period prescribed under Section 125(3), even after applying the Supreme Court's suo motu extension, had elapsed by the time the Petitioner sought to pay the redemption fine. 2.9 Nonetheless, the Court did not treat the expiry of the Section 125(3) period as an absolute bar in the peculiar facts, particularly as the goods had not been disposed of and an unchallenged Order-in-Original permitted redemption and re-export. Issue 2 - Direction to implement the Order-in-Original permitting re-export despite delay, in view of COVID-19 and special circumstances (a) Interpretation and reasoning 2.10 The Adjudicating Authority, in the Order-in-Original, had specifically recorded that: * The Petitioner (passenger) came to India for medical treatment of his wife and brought the gold to meet medical expenses. * The Petitioner did not appear to be a habitual offender. * Confiscation was ordered with an option of redemption on payment of a specified redemption fine under Section 125, subject to procedural and regulatory compliance, and penalty under Section 112 was imposed. 2.11 The Court took into account that the Order-in-Original itself was passed in January 2020, close to the period impacted by the COVID-19 pandemic, which the Petitioner invoked as the reason for delay in paying redemption fine. 2.12 The Court placed weight on the findings in the Order-in-Original that the Petitioner was not a habitual offender, that the gold jewellery was brought for medical expenses, and that the authority had consciously decided to offer redemption and re-export, subject to fine and penalty. 2.13 The Court also noted that the jewellery had not been disposed of by the Department, thereby making implementation of the original order still practically possible. 2.14 Balancing the delayed approach of the Petitioner, the extended limitation benefit granted by the Supreme Court, and the humanitarian and non-habitual nature of the offence as recorded by the Adjudicating Authority, the Court invoked considerations 'in the interest of justice' and 'special circumstances' to justify giving effect to the Order-in-Original notwithstanding the delay. (b) Conclusions 2.15 The Court held that, in the special facts of the case, including the Petitioner's purpose of visit (medical treatment of his wife), the use of the jewellery for medical expenses, and the absence of habitual offending, the Order-in-Original permitting re-export should be implemented. 2.16 The Court, therefore, directed that the Petitioner be allowed to pay the redemption fine and that the gold jewellery be released for re-export in terms of the Order-in-Original, subject to additional conditions imposed by the Court (particularly costs and warehousing charges). Issue 3 - Terms, conditions, and directions for implementation of the Order-in-Original (a) Interpretation and reasoning 2.17 While permitting implementation of the Order-in-Original despite delay, the Court deemed it appropriate to balance equities by imposing costs on the Petitioner and regulating ancillary financial and procedural conditions. 2.18 The Court ordered the Petitioner to pay costs of Rs. 20,000/- to the Delhi High Court Bar Association within three weeks, specifying the detailed bank account particulars for remittance. 2.19 As to warehousing charges, the Court directed that such charges be collected 'based on the charges applicable on the date of detention,' thereby protecting the Petitioner from any escalated or subsequently enhanced rates. 2.20 For practical implementation and verification, the Court directed the Petitioner to appear before the Customs Department on a specified date, either personally or through an Authorised Representative, with the Petitioner joining virtually where the representative appears, supported by an email or other communication verifying such authorisation. 2.21 A specific Nodal Officer (Superintendent, Legal, Office of Commissioner, Customs, IGI Airport, Terminal 3, New Delhi) was designated to facilitate the Petitioner's appearance and compliance with the Court's order. (b) Conclusions 2.22 The Court directed the Customs Department to release the seized gold jewellery to the Petitioner for re-export, in accordance with the Order-in-Original, subject to: * Payment of the redemption fine and penalty as per the Order-in-Original. * Payment of Rs. 20,000/- as costs to the Delhi High Court Bar Association within three weeks. * Payment of warehousing charges computed on the basis of the charges applicable on the date of detention. * Compliance with procedural requirements, including appearance/authorisation before the Customs authorities, facilitated by the designated Nodal Officer.