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2025 (4) TMI 1549 - HC - CustomsSmuggling of gold - Detention of the one gold kada of the Petitioner - personal effect under the Baggage Rules 2016 or not - HELD THAT - Considering the fact that the gold kada seized is merely a personal effect of the Petitioner in the opinion of this Court the detention itself would be contrary to law - the detention of the gold kada is set aside. Petition disposed off.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered by the Court were:
2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Whether the gold kada seized was a personal effect under the Baggage Rules, 2016 The legal framework governing this issue includes the Baggage Rules, 2016, which define personal effects and the scope of jewellery that can be considered as part of personal baggage exempt from customs duty or detention. The Court relied heavily on precedents, notably the decisions in Mr. Makhinder Chopra vs. Commissioner of Customs and Amit Kumar v. The Commissioner of Customs, where it was clarified that jewellery bona fide worn by tourists as personal effects falls within the ambit of the Baggage Rules and cannot be arbitrarily detained. The Court examined the evidence, including photographs submitted by the Petitioner and his testimony that the gold kada was a 22-carat personal ornament worn as part of his religious practice as a Sikh. The Court observed that the single kada, weighing 60 grams, was consistent with personal use and not commercial import or smuggling. Applying the law to facts, the Court concluded that the gold kada was indeed a personal effect as defined under the Baggage Rules, 2016, and therefore was not liable to detention or confiscation by Customs. The Respondent did not contest the nature of the item as personal jewellery but focused on procedural compliance, which was addressed separately. Conclusion: The gold kada seized was a personal effect within the meaning of the Baggage Rules, 2016, and thus should not have been detained. Issue 2: Legality of detention without proper issuance of Show Cause Notice and personal hearing The relevant legal provisions include Section 124 of the Customs Act, which mandates issuance of a Show Cause Notice and an opportunity for personal hearing before confiscation or detention of goods. The Court noted that the Petitioner had submitted a preprinted waiver form declining the SCN and personal hearing, requesting that the matter be decided on merits. Precedents cited by the Court, particularly Amit Kumar v. The Commissioner of Customs, established that such waivers cannot substitute for the statutory requirement of issuing an SCN and providing a hearing. The Court emphasized that the Customs Department's practice of obtaining preprinted waivers is contrary to the principles of natural justice and statutory mandates. The Court considered the Respondent's submission that personal hearing dates were fixed and notices communicated only after the detention. However, the Court found this insufficient to cure the initial procedural lapse. The Court held that the absence of a valid SCN and personal hearing rendered the detention unlawful. The SCN issued months after the detention and without the Petitioner's consent did not meet statutory requirements. Conclusion: The detention of the gold kada without proper SCN and personal hearing was contrary to law and violated principles of natural justice under Section 124 of the Customs Act. Issue 3: Validity of preprinted waiver of SCN and personal hearing The Court analyzed the effect of the Petitioner's waiver of SCN and personal hearing, which was submitted in a preprinted form. Drawing from the precedent in Mr. Makhinder Chopra vs. Commissioner of Customs, the Court reiterated that such waivers are impermissible and cannot be treated as compliance with procedural safeguards. The Court reasoned that the statutory scheme envisages that the Customs Department must issue a proper SCN and provide an opportunity for hearing in each case, and that any attempt to bypass this through standard waiver forms undermines the rule of law and natural justice. Conclusion: The preprinted waiver of SCN and personal hearing is invalid and does not satisfy the requirements of Section 124 of the Customs Act. Issue 4: Entitlement to release of the detained gold kada and conditions thereof Given the findings that the gold kada was a personal effect and that the detention was unlawful, the Court proceeded to order release of the item. The Court directed that the gold kada be released within four weeks subject only to payment of warehouse charges, which is a standard condition to cover storage costs. The Court's order reflected the principle that personal effects lawfully carried by tourists should not be unduly detained and that procedural irregularities should not prejudice the rights of individuals. Conclusion: The Petitioner is entitled to release of the gold kada within four weeks on payment of warehouse charges. 3. SIGNIFICANT HOLDINGS The Court's crucial legal reasoning is encapsulated in the following verbatim excerpts from the judgment and cited precedents: "...jewellery that is bona fide in personal use by the tourist would not be excluded from the ambit of personal effects as defined under the Baggage Rules. Further, the Department is required to make a distinction between 'jewellery' and 'personal jewellery' while considering seizure of items for being in violation of the Baggage Rules." "Since, the Court has made clear that the practice of making tourists sign undertaking in a standard form waiving the show cause notice and personal hearing is contrary to the provisions of Section 124 of the Act, hereinafter, the Customs Department is directed to discontinue the said practice. The Customs Department is expected to follow the principles of natural justice in each case where goods are confiscated in terms of Section 124 of the Act." "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." Core principles established include:
Final determinations:
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