2025 (3) TMI 754 - HC - Customs

Seizure of the gold chain from the Petitioner by the Customs authorities was justified under the Customs Act 1962 and the Baggage Rules 2016 - denial of free allowance - eligible passenger in terms of the Notification No. 50/2017-Customs dated 30th June 2017 (as amended) read with Baggage Rules 2016 (as amended) - confiscation - redemption fine - penalty - violation of principles of natural justice - HELD THAT - A photograph of the Petitioner wearing the said jewellery has been placed on record. The wedding card of the Petitioner showing the date of marriage as 21st April 2024 has also been placed on record. A perusal of the photograph along with the wedding card would itself show that the Petitioner is a bona fide passenger who was travelling to India to attend a wedding ceremony. It is not in dispute as has been recorded by the adjudicating authority that the Petitioner himself is a UAE resident with a proper resident ID. The gold chain has been valued at Rs. 1, 76, 488/- - The Petitioner being a non-resident is fully entitled to the benefit provided to an eligible passenger under the Baggage Rules 2016. The goods constitute personal effects of the Petitioner and could not have been seized in the manner the Custom authorities have. This Court has now pronounced several orders/judgments following various judgments of the Supreme Court and this Court wherein it has been held clearly that if the gold items seized are personal jewellery the same would not be liable to be confiscated. Moreover in the present case a show cause notice has not been issued to the Petitioner and no personal hearing has been afforded. Conclusion - i) The impugned order dated 7th November 2024 passed by the adjudicating authority is accordingly quashed. ii) No penalty or redemption fine shall be collected from the Petitioner. No warehousing charges shall also be liable to be collected from the Petitioner. The charges if any already deposited shall be refunded to the Petitioner. Petition disposed off.

Summary

ISSUES PRESENTED and CONSIDERED

The primary legal questions considered in this judgment include:

• Whether the seizure of the Petitioner's gold chains by the Customs authorities was lawful under the Customs Act, 1962 and the Baggage Rules, 2016.
• Whether the Petitioner, as a non-resident and an eligible passenger, is entitled to the benefits under the Baggage Rules, 2016.
• Whether the procedural requirements, such as the issuance of a show cause notice and the provision of a personal hearing, were duly followed by the adjudicating authority.
• Whether the waiver of the show cause notice and personal hearing by the Petitioner was legally valid.

ISSUE-WISE DETAILED ANALYSIS

Seizure of Gold Chains

The relevant legal framework includes the Customs Act, 1962, specifically sections 111(d), 111(j), and 111(m), which govern the confiscation of goods. The Baggage Rules, 2016, as amended, and Notification No. 50/2017-Customs, also play a crucial role in determining the rights of passengers regarding personal effects.

The Court noted that the Petitioner, a minor and a non-resident, was traveling to India for a family wedding, and the seized gold chains were personal effects worn since childhood. The adjudicating authority's order to seize the items was based on the failure to declare the goods at the Red Channel. However, the Court found that the items constituted personal effects and should not have been seized.

In applying the law to the facts, the Court emphasized the Petitioner's status as an eligible passenger under the Baggage Rules, 2016, which should have exempted her personal jewellery from confiscation.

Procedural Requirements

The Court examined whether the procedural requirements of issuing a show cause notice and providing a personal hearing were adhered to. The adjudicating authority acknowledged that no show cause notice was issued, and no personal hearing was conducted, as the Petitioner had requested a waiver of these rights.

The Court, referencing previous judgments, highlighted that such waivers are not in accordance with the law, citing cases like Amit Kumar v. The Commissioner of Customs and Mohamed Shamiuddeen v. Commissioner of Customs & Ors., which underscore the necessity of following due process.

SIGNIFICANT HOLDINGS

The Court quashed the impugned order dated 7th November, 2024, passed by the adjudicating authority, with significant legal reasoning as follows:

• "The Petitioner being a non-resident is fully entitled to the benefit provided to an eligible passenger under the Baggage Rules, 2016. The goods constitute personal effects of the Petitioner and could not have been seized in the manner the Custom authorities have."
• The Court ordered that no penalty or redemption fine shall be collected from the Petitioner, and any warehousing charges already deposited should be refunded.
• The gold items were ordered to be released to the Petitioner or an authorized representative within two weeks, after verifying their identity.

The core principles established include the reaffirmation of the rights of eligible passengers under the Baggage Rules, 2016, and the necessity of adhering to procedural requirements such as issuing show cause notices and providing personal hearings. The judgment reinforces the protection of personal effects from unlawful seizure, particularly when due process is not followed.