2006 (9) TMI 161 - HC - Customs

Jewellery found in bags in their original packing - personal effects of a tourist are allowed to be imported temporarily so there is no violation of Baggage Rules even if the new personal effects are in the original packing confiscation on basis of presumption that personal effects have been brought in with a view to dispose them of in India, is not justified no smuggling petitioner can t be relegated to statutory remedy when matter is pending before HC for 3 years- petition allowed

Issues Involved:
1. Jurisdiction of the Directorate of Revenue Intelligence to issue the show cause notice.
2. Whether the jewellery carried by the Petitioner constituted "personal effects" under the Baggage Rules, 1998.
3. Intention of the Petitioner to smuggle the jewellery into India.
4. Validity of the confiscation and penalty imposed by the customs authorities.

Detailed Analysis:

Jurisdiction of the Directorate of Revenue Intelligence:
The Petitioner challenged the jurisdiction of the Directorate of Revenue Intelligence (DRI) to issue the show cause notice dated 12th December, 2002. The Petitioner argued that Respondent No.3 had no jurisdiction to issue the notice under the facts and circumstances of the case and the Baggage Rules, 1998. The Court held that after three years of the matter pending with numerous hearings, it would not be equitable to relegate the Petitioner to the statutory remedy. The Court also noted that the jurisdictional issue could be examined under Article 226 of the Constitution, and thus, the writ petition was maintainable.

Whether the Jewellery Constituted "Personal Effects":
The Petitioner contended that the jewellery was her personal effects and thus did not require declaration under the Baggage Rules, 1998. Rule 7 of the Baggage Rules, 1998, and the relevant circular No.72/98-Cus dated 24.09.1998 were examined. The Court noted that "personal effects" include personal jewellery and other items reasonably required by a tourist. The Court found that the jewellery was indeed personal effects as defined under the rules and the circular. The jewellery was not in a state that could be considered new and intended for sale, thereby rebutting any presumption of smuggling.

Intention to Smuggle:
The Respondent argued that the Petitioner intended to smuggle the jewellery into India, pointing to the VAT refund form and the air ticket indicating a short stay. However, the Court found that the air ticket purchased seven months prior was not conclusive evidence of intent to smuggle. The Petitioner's consistent conduct, including plans to visit Indonesia and the fact that some jewellery was to be taken back to England, supported the lack of intent to smuggle. The Court also noted that the jewellery's value in India was significantly lower than its purchase value, making smuggling for sale implausible.

Validity of Confiscation and Penalty:
The Court held that the jewellery did not violate any provisions of the Baggage Rules, 1998, and thus, there was no basis for confiscation under Section 111(d) or Section 111(l) of the Customs Act. The show cause notice and the subsequent order of confiscation and penalty were quashed. The Court found that the Respondents had overstepped their jurisdiction and acted over-enthusiastically in trying to penalize the Petitioner.

Conclusion:
The Court quashed the show cause notice dated 12th December, 2002, and the Order-in-original dated 14th August, 2003, passed by Respondent No.3. The Petitioner was awarded costs of Rs.5,000/-. The confiscated goods were to be released to the Petitioner if not required in any other proceedings.

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