TaxTMI 
TaxTMI 
2025 (3) TMI 19
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.... India and the same was detained by the Department at the airport. It is further submitted that till date no show cause notice has been issued. 5. Ld. Counsel for the Petitioner relies on the decision of this High Court in WP(C). 6855/2023 titled 'Nathan Narayanswamy v. Commissioner of Customs' dated 15th September, 2023 in support of its case. 6. On 17th February, 2025, ld. Counsel for the respondent had sought time to take instructions in the matter. Today, further time is prayed for filing a status report. 7. The ld. SSC for the Department has also handed over a copy of the detention receipt dated 17th June, 2024 signed by the Petitioner and the undertaking/appraisement report dated 18th June, 2024. The said undertaking is in a standard format, wherein the Petitioner is stated to have waived the issuance of the show cause notice and personal hearing. It is also stated in the said undertaking that the Appellant would pay the custom duty along with fine and penalty. The said undertaking reads as under:- "On being asked I, Makhinder Chopra (D. O. B. 28.03.1982), state that I have appeared before Air Customs Superintendent on 17.06.2024 to tender my statement under....
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....lude jewellery. * * * * 3. Passenger arriving from countries other than Nepal, Bhutan or Myanmar:-An Indian resident or a foreigner residing in India or a tourist of Indian origin, not being an infant arriving from any country other than Nepal, Bhutan or Myanmar, shall be allowed clearance free of duty articles in his bona fide baggage, that is to say, - (a) used personal effects and travel souvenirs; and (b) articles other than those mentioned in Annexure-I, up to the value of fifty thousand rupees if these are carried on the person or in the accompanied baggage of the passenger: Provided that a tourist of foreign origin, not being an infant, shall be allowed clearance free of duty articles in his bona fide baggage, that is to say, (a) used personal effects and travel souvenirs; and (b) articles other than those mentioned in Annexure-I, up to the value of fifteen thousand rupees if these are carried on the person or in the accompanied baggage of the passenger: Provided further that where the passenger is an infant, only used personal effects shall be allowed duty free. Explanation.- The free allowance....
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.... would show that gold and gold jewellery is being treated as prohibited articles where the same is beyond the prescribed limits under Rule 5 of Baggage Rules, including gold bullion. 15. The Supreme Court in Pushpa Lekhumal Tolani (supra), has considered whether jewellery being carried by a tourist as part of her baggage would qualify as smuggling under the Act read with the Baggage Rules, 1998, that was in force during the relevant period. The Supreme Court clearly holds that it is not permissible to completely exclude jewellery from the ambit of 'personal effects'. Accordingly, the Court declared that the seized jewellery items therein were the bona fide jewellery of the tourist for her personal use and was intended to be taken out of India. The relevant extract from the judgment of the Supreme Court is also set out 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....
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....o 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 their original packing has to be understood in a pragmatic way. Conclusion: 16) We are of the considered opinion that in the absence of any facts on record about the nature and mode of concealment and also any finding of the lower authority that jewellery was kept in a way to evade detection on examination of the baggage, it has to be held that there was no concealment as such. It is seen that the respondent chose the Green Channel for clearance of her baggage. She committed no violation of law or infraction of any instruction for clearance of the baggage through the green channel as she being a tourist had no dutiable goods to declare under the Baggage Rules. The presumption that the jewellery found in her baggage cannot be considered as personal effects owing to its high monetary value is rebutted herewith and we hold tha....
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.... intended customs officers to bear in mind the distinction 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 ....
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....cles, which have not been mentioned in Annexure-1 and carried in the accompanied baggage of a passenger. In such case, the application of Baggage Rules, 2016, would not arise. Thus, the jewelery worn by the passenger will not fall within the provisions of the Baggage Rules, 2016. 53. On the other hand, if anyone worn any unreasonable amount of gold or jewelleries, they shall be brought under search, however, in the present case, it is not so. In India, as per our customs, it is normal to wear 10 nos. of bangles for a marriage function. In such case, it is for the Officers to apply their mind while detaining the gold. If 10 nos. of chains were worn by a person, then it would be suspectable and if anything is hide, then the provisions of Section 101 and 102 of the Customs Act, 1962, would apply since it clearly amounts to secreting the gold in their body under the pretext of worn in the body. 54. Considering the above aspect only, while enacting the provisions of the Customs Act, the Parliament has consciously excluded the jewels worn by the passengers. If there is any intention to put all the passengers into hassle, disrespecting their proprietorial rights, dignity....
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.... be conscious of the fact that personal effects including jewellery of tourists are protected by the law from detention and same cannot be detained in a mechanical manner. III.(B) Applicability of the Baggage Rules qua tourists of foreign origin 20. It is noted that the Petitioner is a Russian passport holder and thus, the extent of applicability of the Baggage Rules to a tourist of foreign origin has to be kept in mind. This issue has also been discussed by various decisions of the of this Court including in Nathan Narayansamy vs. Commissioner of Customs, W.P.(C) 6855/2023, wherein the Co-ordinate Bench of this Court was dealing with a similar situation wherein certain jewellery was recovered and seized from the baggage items of a tourist holding Malaysian passport. The Court considered the provisions of the Baggage Rules qua a tourist of foreign origin and held as under: "4. Undisputedly, and since the petitioner held a foreign passport, it would be the Proviso to Rule 3 alone which would apply. In terms of the said Proviso, a tourist of foreign origin is permitted clearance of duty free articles in his bona fide baggage, and the articles and the limits/restriction....
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....been issued to the Petitioner on the basis of the said undertaking. 24. The issuance of a show cause notice before confiscation of goods by the Customs officials is covered under Section 124 of the Act, which reads as under: "124. Issue of show cause notice before confiscation of goods, etc.- No order confiscating any goods or imposing any penalty on any person shall be made under this Chapter unless the owner of the goods or such person- (a) is given a notice in writing with the prior approval of the officer of Customs not below the rank of an Assistant Commissioner of Customs, informing him of the grounds on which it is proposed to confiscate the goods or to impose a penalty; (b) is given an opportunity of making a representation in writing within such reasonable time as may be specified in the notice against the grounds of confiscation or imposition of penalty mentioned therein; and (c) is given a reasonable opportunity of being heard in the matter: Provided that the notice referred to in clause (a) and the representation referred to in clause (b) may, at the request of the person concerned be oral. Provided further that n....
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....ed to, * waiver of personal hearing has been agreed to and * it has also been recorded that an oral SCN has been received. Such signing of the standard form would not be in compliance with the principles of natural justice, inasmuch as, the waiver under Section 124 of the Act would have to be a conscious wavier and an informed wavier. 15. A perusal of Section 124 of the Act would show that even after an oral show cause notice is given, the authority has the discretion to issue supplementary notice under circumstances which may be prescribed. For ready reference, Section 124 of the Act is set out below:- "124. Issue of show cause notice before confiscation of goods, etc.-No order confiscating any goods or imposing any penalty on any person shall be made under this Chapter unless the owner of the goods or such person- (a) is given a notice in [writing with the prior approval of the officer of Customs not below the rank of[an Assistant Commissioner of Customs], informing] him of the grounds on which it is proposed to confiscate the goods or to impose a penalty; (b) is given an opportunity of making a representation in writ....
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....as not issued within six months from the date of seizure, the consequence would be that the person from whom the gold was seized would become entitled to its return. Although the aspect of extension of period of detention for another six months vide the Proviso to Section 110 (2) of the Act was introduced w.e.f 29.03.20184 the ratio still holds sway to the effect that issuing of notice to the owner for detention of seized goods is mandatory and the Apex Court frowned upon the fact that no explanation was offered by the Respondents as to why they were constrained to dispose of the seized gold, when it was neither perishable nor hazardous, and there was no answer as to why the gold was disposed of without any notice being" 19. This Court is of the opinion that the printed waiver of SCN and the printed statement made in the request for release of goods cannot be considered or deemed to be an oral SCN, in compliance with Section 124. The SCN in the present case is accordingly deemed to have not been issued and thus the detention itself would be contrary to law. The order passed in original without issuance of SCN and without hearing the Petitioner, is not sustainable in law. T....