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2025 (2) TMI 321 - HC - CustomsSeeking release of gold ornaments inappropriately seized by the respondents - Smuggling of Gold - seizure and detention of gold jewelry from the petitioner and her family members - Baggage Rules - Confiscation order passed without issuance of SCN - No proper opportunity of personal hearing was provided to the petitioner - scope of Section 79 of the Customs Act 1962 - no specific denial of averments or allegations raised against any party - HELD THAT - The Customs Act 1962 enables the Central Government to make Rules to the extent of the articles carried in the baggage of a passenger and not for the articles which were carried on the person and hence the inclusion of the word carried on the person is beyond the scope of the provisions of Section 79 of the Customs Act. When the provision of the Rule is beyond the scope of the provisions of the Act only the provision of the Act will prevail over the Rules. Thus the word carried on the person up to Rs. 50, 000/- is clearly beyond the scope of the Act and it cannot be given any effect since it is contrary to the provisions of the Statute. Thus it has to be construed only for the articles 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. 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 forgoing the customs against the fundamental rights let the Parliament take a decision and amend the provisions of the Act. Till then the Officers have to apply their minds with regard to detaining the passenger and the gold worn by them as the same would not fall within the purview of the Baggage Rules 2016. The Doctrine of ultra vires states that the Rule making body must function within the purview of the Rule making authority conferred on it by the parent Act. As the body of making rules or regulations there is no inherent power of its own to make rules but such power arise only from the Statute and hence it must necessarily function within the purview of the Statute - In the present case the Rule making body had made the Baggage Rules as if they are having inherent power of its own to make rules beyond the scope of the Statutes and they have incorporated the word carried on the person . In the present case admittedly the Rule making Authorities made the Rules by traveling beyond the scope of the Act which would amount to ultra vires. In such case the Statute would prevails over the Rules. When such being the case the Statute referred only with regard to the baggage and therefore the Rule has to be confined and read only with regard to the baggage and not with regard to the articles carried on the person . Since this Court has held that the provision as carried on the person of the Baggage Rules 2016 is ultra vires the detention of gold under the Baggage Rules 2016 in the present case would not apply unless and otherwise if it is secreted in person for which the proceedings shall be initiated under Section 101 of the Customs Act 1962 however that is not the present case except to the extent of false charges framed by the 2nd respondent against the petitioner - Further in this case no show cause notice was issued prior to the passing of confiscation order however it was mentioned in the order that receipt of show cause notice was waived. Though 3 opportunities of personal hearing were provided to the petitioner on 04.04.2024 08.04.2024 and 12.04.2024 no one has appeared before the respondents and under these circumstances the confiscation order came to be passed on 24.04.2024. However this Court is of the view that since the petitioner is a SriLankan citizen the shorter time provided by the respondent is not sufficient. In such case it is clear that the confiscation order was passed purely in violation of principles of natural justice and hence the same is liable to be quashed. Conclusion - i) The confiscation order was passed without issuing the show cause notice; ii) No proper opportunity of personal hearing was provided to the petitioner prior to the passing of confiscation order; iii) Since the Mahazar was prepared with false information to foist a false case against the petitioner the confiscation order was also passed as an ex parte order based on the false information available in the said Mahazar. iv) The manner in which the jewellery was brought by the petitioner as stated in the Mahazar is that it was brought under the sleeve however in the affidavit and counter it was clearly stated that the petitioner worn the jewellery at the time of arrival. Due to the said contradiction of the respondents it is clear that there was a change in the stand of the respondents with regard to the manner in which the gold was carried by the petitioner from proceedings to proceedings. v) As per the counter in this case the seizure was made due to the violation of Baggage Rules 2016. However this Court found that the question of violation of the Baggage Rules 2016 would not arise since the Baggage Rule contains a provision as carried on the person which this Court declared that the said provision in the Baggage Rule is ultra vires the provisions of Section 79 of the Customs Act 1962. The respondents are directed to release the goods of the petitioner within a period of 7 days from the date of receipt of copy of this order - petition allowed.
1. ISSUES PRESENTED and CONSIDERED
The core legal issues considered in this judgment include:
2. ISSUE-WISE DETAILED ANALYSIS Seizure and Detention of Gold Jewelry The relevant legal framework includes the Customs Act, 1962, and the Baggage Rules, 2016. The petitioner argued that the jewelry was personal property and not subject to the Baggage Rules, 2016, which they claimed were beyond the scope of Section 79 of the Customs Act. The Court noted that the respondents did not specifically deny the petitioner's allegations of mistreatment and forced signing of documents, which under Section 58 of the Evidence Act, 1872, could be deemed admitted. The Court found that the customs officials' actions, particularly the removal of the petitioner's "thaalikodi" (mangalsutra), were culturally insensitive and unbecoming of their office. The Court emphasized the cultural significance of the "thaalikodi" and criticized the customs officials for not respecting this sentiment. Application of Baggage Rules, 2016 The Court examined whether the Baggage Rules, 2016, were applicable to jewelry worn by the petitioner. The Court found that the Rules, specifically the provision concerning articles "carried on the person," were beyond the scope of the Customs Act, 1962. The Court held that the Rules could not override the Act, and thus, jewelry worn by the passenger should not fall under the Baggage Rules, 2016. Violation of Principles of Natural Justice The Court found that the customs officials did not issue a show cause notice or provide a proper opportunity for a hearing before passing the confiscation order. The Court ruled that this was a violation of the principles of natural justice, rendering the confiscation order invalid. Conduct of Customs Officials The Court criticized the conduct of the customs officials, particularly the second respondent, for their handling of the situation. The Court found that the officials acted in a manner that was disrespectful to the petitioner's cultural and religious sentiments and that the seizure was conducted with an ulterior motive. Failure to Deny Allegations The Court noted that the respondents' failure to specifically deny the petitioner's allegations in their counter-affidavit amounted to an admission of those allegations. The Court emphasized the importance of specific denials in legal proceedings and found that the respondents' general denials were insufficient. 3. SIGNIFICANT HOLDINGS The Court held that the Baggage Rules, 2016, particularly the provision concerning articles "carried on the person," were ultra vires the Customs Act, 1962. The Court stated, "The Customs Act, 1962, enables the Central Government to make Rules to the extent of the articles carried in the baggage of a passenger and not for the articles, which were carried on the person." The Court quashed the confiscation order dated 24.04.2024, citing the lack of a show cause notice, insufficient opportunity for a hearing, and the preparation of a Mahazar with false information. The Court directed the respondents to release the seized gold jewelry within seven days. The Court ordered an inquiry against the customs officials involved in the seizure, particularly the second respondent, whose conduct was deemed unbecoming of an officer. The Court referred the matter to the Department of Personnel & Training (IRS-Customs) for appropriate action.
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