TaxTMI 
TaxTMI 
2024 (12) TMI 179
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....ying any goods which he needed to declare to the Customs, to which, he replied in negative. As per Indian Customs Declaration Form of the petitioner, there were no dutiable goods carried by him. Petitioner had not declared any gold/bullion in Column No. 10 (ii) & (iii) in the declaration form. On his personal search, a gold chain and a gold kara were recovered. After examining the same, the Jewellery Appraiser reported that the total weight of the gold was 501.00 grams, valued at Rs. 13,12,861/-. Since the petitioner did not provide any documents regarding the possession of the gold chain and kara, the same were seized under Section 110 of the Customs Act, 1962 ["Act"] on the reasonable belief that the same were imported to India illegally and were attempted to be cleared without payment of customs duty. 4. A Show Cause Notice dated 14.10.2024 was issued to the petitioner. Petitioner filed his response stating that gold jewellery was purchased by his wife for his daughter's wedding. 5. Order-in-Original dated 31.03.2015 was passed, thereby, confiscating the gold chain and kara. However, the petitioner was given an option to redeem the confiscated goods on payment of redemptio....
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....e nominated banks, agencies or business houses in the manner laid down by various DGFT Regulations as well as by RBI Circulars or by the "eligible passengers" in the manner provided by the relevant regulations. As per Section 7 of Foreign Trade (Development and Regulation) Act, 1992, no person is allowed to import gold into the country except under an Import-Export Code Number. However, Rule 3 (1) (h) of the Foreign Trade (exemption from application of rules in certain cases) Rules, 1993 provides exemption to the import of any goods by the person as passenger baggage to the extent permissible under the Baggage Rules. 11. The interpretation of the respondents to the Baggage Rules is that they are confined to personal effects exclusive of jewellery whether it be personal or otherwise. As per their contention, the monetary limit provided in the Baggage Rules would be determinative of the value of the jewellery that may be carried by an incoming passenger and allowed duty free. 12. In the case of Saba Simran vs. Union of India & Ors. W.P. (C) 3612/2024, we had an opportunity to refer to the legislative history of rules pertaining to baggage as framed in exercise of the powers con....
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...., new or used, which a tourist may personally and reasonably required taking into account of circumstances for his visit but excluding all merchandise imported for commercial purposes. The list contained in Notf. 92, though the Notn. has expired, continue to the guiding the customs formations at the Airport to give this benefit. 3. The Baggage Rules, 1998 issued vide Notn. No. 30/98-Cus(NT) dated 2/6/98 has provided for import of duty free goods by tourists in Regulation 7 as contained in Appendix 'E' of the said rules. There is no definition for personal effects in the present Baggage Rules. However, for the sake of uniformity it is considered necessary to reiterate that the personal effects would include the following goods: (i) Personal jewellery (ii) One camera with film rolls not exceeding twenty (iii) One video camera/ camcorder with accessories and with video cassettes not exceeding twelve (iv) One pair of binoculars (v) One portable colour television (not exceeding 15 cms in size) (vi) One music system including compact disc player (vii) One portable typewriter (viii) One perambulator ....
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....necessities of life. Articles other than those mentioned in Annex. I upto a value of Rs. 35,000 if these are carried on the person or in the accompanied baggage of the passenger. All passengers of and above 10 years of age and returning after stay abroad of three days or less. Used personal effects, excluding jewellery, required for satisfying daily necessities of life. Articles other than those mentioned in Annex. I upto a value of Rs. 15,000 if these are carried on the person or in the accompanied baggage of the passenger. All passengers upto 10 years of age and returning after stay abroad of more than three days. Used personal effects, excluding jewellery, required for satisfying daily necessities of life. Articles other than those mentioned in Annex. I upto a value of Rs. 12,000 if these are carried on the person or in the accompanied baggage of the passenger. All passengers upto 10 years of age and returning after stay abroad three days or less. Used personal effects, excluding jewellery, required for satisfying daily necessities of life. Articles other than those mentioned in Annex. I upto a value of Rs. 3,000 if these are carried on the person o....
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.... which must be recognised to exist when construing and identifying 'personal jewellery' as opposed to 'jewellery' per se. 15. The expression 'jewellery' as it appears in Rule 2 (vi) would thus have to be construed as inclusive of articles newly acquired as opposed to used personal articles of jewellery which may have been borne on the person while exiting the country or carried in its baggage. Thus, personal jewellery which is not found to have been acquired on an overseas trip and was always a used personal effect of the passenger would not be subject to the monetary prescriptions incorporated in Rules 3 and 4 of the 2016 Rules. 16. This clearly appeals to reason bearing in mind the understanding of the respondents themselves and which was explained and highlighted in the clarificatory Circular referred to above. That Circular had come to be issued at a time when the Appendices to the 1998 Rules had employed the phrase "used personal effects, excluding jewellery". The clarification is thus liable to be appreciated in the aforesaid light and the statutory position as enunciated by the respondents themselves requiring the customs officers to bear a distinction betw....
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....ion of the Petitioner to the effect that her parents are in Indonesia and she had plans of proceeding to Indonesia. She had stated that she had planned to purchase return air tickets from Delhi to Jakarta (Indonesia)/Singapore, as she had been doing so in the past, while in Delhi and she also produced evidence of her similar previous purchases before the Respondents. 21. Some of the jewellery items items purchased by the Petitioner were for her personal use and some were intended to be left with her parents in Indonesia. One of the items confiscated by the customs was a silver panther which was valued in U.K. Pound Sterling 9,460/- for which the Petitioner did not claim exemption from VAT because it was to be taken back to England by the Petitioner. To this extent, the conduct of the Petitioner appears to be consistent and bona fide. 22. The overall circumstances show that even though she brought jewellery of a huge amount into the country, the Petitioner did not seem to have the intention to smuggle the jewellery into India and to sell it off. If jewelleries were to be sold in India, its cost was only about Rs. 25 lakh. is not understood why a person should impor....
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....ourt are extracted below:- "13. Insofar as the question of violation of the provisions of the Act is concerned, we are of the opinion that the respondent herein did not violate the provisions of Section 77 of the Act since the necessary declaration was made by the respondent while passing through the green channel. Such declarations are deemed to be implicit and devised with a view to facilitate expeditious and smooth clearance of the passenger. Further, as per the International Convention on the Simplification and Harmonisation of Customs Procedures (Kyoto 18-5-1973), a passenger going through the green channel is itself a declaration that he has no dutiable or prohibited articles. Further, a harmonious reading of Rule 7 of the Baggage Rules, 1998 read with Appendix E (2) (quoted above), the respondent was not carrying any dutiable goods because the goods were the bona fide jewellery of the respondent for her personal use and was intended to be taken out of India. Also, with regard to the proximity of purchase of jewellery, all the jewellery was not purchased a few days before the departure of the respondent from UK, a large number of items had been in use for a long period. It....
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....lery was meant for import into India on the basis of return ticket which was found to be in the possession of the respondent. Moreover, we cannot ignore the contention of the respondent that her parents at the relevant time were in Indonesia and she had plans of proceeding to Indonesia. Some of the jewellery items purchased by the respondent were for her personal use and some were intended to be left with her parents in Indonesia. The High Court has rightly held that when she brought jewellery of a huge amount into the country, the respondent did not seem to have the intention to smuggle the jewellery into India and to sell it off. Even on the examination of the jewellery for costing purposes, it has come out to be of Rs 25 lakhs and not Rs 1.27 crores as per DRI. The High Court was right in holding that it is not the intention of the Board to verify the newness of every product which a traveller brings with him as his personal effect. It is quite reasonable that a traveller may make purchases of his personal effects before embarking on a tour to India. It could be of any personal effect including jewellery. Therefore, its newness is of no consequence. The expression "new goods" in....
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.... at the request of the passenger for the purpose of being returned to him on his leaving India. The term baggage thus connotes something which is distinct and different from the passenger who has brought the baggage. Section 81 of the Act empowers the Central Board to frame regulations regarding the declaration of the contents of any baggage, its custody, examination, assessment to duty and clearance of baggage and transit of baggage from One customs station to another or to a place outside India. Going by the stipulations in Sections 77, 80 and 81 of the Act, I am persuaded to take the view that the provisions therein can have no application to the instant case where the petitioner, a tourist coming from Sri Lanka had on his person a gold chain which he was wearing and was not kept concealed in his body. Such being the situation, clauses (1) and (m) of Section 111 of the Act can have no application. 16. That takes me to the question whether the petitioner had imported or attempted to import or brought to Indian Customs Waters for the purpose of being imported, gold ornaments, contrary to any prohibition imposed by the Act or any other law, so as to attract clause (d) of S....
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....3. Rule 7 of the Baggage Rules, 1998 stipulates that a tourist arriving in India shall be allowed clearance free of duty, articles in his bona fide baggage to the extent mentioned in column (2) of Appendix E. The petitioner is a tourist of foreign origin. This fact is not in dispute. Going by entry (b) in Appendix-E, tourists of foreign origin, other than those of Pakistani origin coming from Pakistan, coming to India by air can be allowed clearance free of duty (i) his or her used personal effects and (ii): articles other than those mentioned in Annexure-I, up to a value of Rs. 8000 for personal use of the tourist or as gifts and travel souvenirs if these are carried on the person or in the accompanied baggage of the passenger. Annexure I referred to in Appendix E is extracted below for easy reference:- 1. Firearms. 2. Cartridges of fire arms exceeding 50. 3. Cigarettes exceeding 200 or cigars exceeding 50 or tobacco exceeding 250 gms. 4. Alcoholic liquor or wines in excess of two litres. 5. Gold or silver, in any form, other than ornaments. 22. The effect of the aforesaid stipulations in Appendix-E and Annexure-I of the Baggag....
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.... cannot wear gold ornaments on his person. The Customs Act, 1962 and the Baggage Rules, 1998 do not provide sufficient warning to foreign tourists entering India that wearing a gold chain is prohibited. The Act and the Rules do not even remotely indicate that a foreign tourist entering India cannot wear a gold chain on his person, in other words, foreign tourists entering India are in a boundless sea of uncertainty as to whether it is prohibited or not. As the Customs Act, 1962 and the rules framed there under contemplate confiscation and levy of penalty as also prosecution, the State has a duty to specify with a degree of certainty as to what is prohibited and what is not, without leaving it to the foreign tourist to guess what is prohibited and what is not." 16. The Kerala High Court also commented on the lack of clarity in the rules in Para No. 30, reproduced below:- "30. The principle laid down in the aforesaid decisions is founded on a universal sense of fairness or reasonableness. The apprehension voiced by the Apex Court in Kartar Singh v. State of Punjab [(1994) 3 SCC 569] and by the Supreme Court of United States in jay Giaccio v. State of Pennsylvania, (1966) ....