2025 (1) TMI 22 - HC - Customs

Seeking issuance of a writ of mandamus directing the Respondent- Commissioner of Customs to re-export gold seized from the Petitioner s mother - Petitioner, as the legal heir of the deceased passenger, is entitled to redeem the confiscated goods, or not - applicability of limitation period for redeeming the goods under Section 125 of the Customs Act when the order was not duly communicated to the deceased passenger. Petitioner, as the legal heir of the deceased passenger, is entitled to redeem the confiscated goods under the Customs Act, 1962 or not - HELD THAT - The passenger was a senior citizen of more than 70 years of age. The death certificate has been placed on record, which shows that she passed away on 11th December, 2023 in Uzbekistan itself. The Petitioner/daughter - Ms. Umida Karimova has placed a copy of her passport on record. The identity of the Petitioner and her relationship with late Ms. Sharipova is not being doubted by the Respondent. Considering that the goods in question are of substantial value and the passenger having expired, her heir/s i.e., her daughter cannot be deprived of the goods so long as the Order in Original dated 26th July, 2023 is complied with by the Petitioner. A pplicability of limitation period for redeeming the goods under Section 125 of the Customs Act - HELD THAT - The limitation period under Section 125 would apply only when the option to redeem, given to the passenger, is duly communicated to the passenger. In the present case, admittedly, there is no evidence on record to show that the said order was duly communicated. Under such circumstances, the limitation period is not triggered and thus would not bar release of the goods in terms of the said order. Admittedly, the Customs Department did not verify the address that was available in the detention receipt or in the copy of the passport. In this regard, the Court is of the opinion that whenever such detentions of goods are made or seizures are effected, the department ought to consider taking the proper contact details including the postal address, email address and mobile number of the passenger concerned and add the same on the detention receipt. This would facilitate communication with the passenger in respect of further proceedings and the order passed, if any. Also, in view of the fact that the passenger has expired and there is no proof of service of the order passed by the Customs department, the demurrage charges shall stand waived. The present order shall not act as a precedent. Conclusion - The Petitioner is entitled to redeem the goods upon compliance with the original order. The limitation period under Section 125 did not commence due to lack of communication. Petition disposed off.

1. ISSUES PRESENTED and CONSIDERED

The core legal questions addressed in this judgment are:

Whether the Petitioner, as the legal heir of the deceased passenger, is entitled to redeem the confiscated goods under the Customs Act, 1962.
Whether the limitation period for redeeming the goods under Section 125 of the Customs Act applies when the order was not duly communicated to the deceased passenger.
What are the implications of the Customs Department's failure to communicate the order effectively due to incomplete contact details?
Whether the demurrage charges should be waived given the unique circumstances of the case.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Entitlement to Redeem Confiscated Goods

Relevant Legal Framework and Precedents: The Customs Act, 1962, particularly Sections 111, 112, and 125, governs the confiscation and redemption of goods. Section 125 provides the option to redeem confiscated goods upon payment of a fine.
Court's Interpretation and Reasoning: The Court recognized the Petitioner's right as the sole legal heir to redeem the goods, provided she complies with the conditions set in the original order.
Key Evidence and Findings: The Petitioner presented a death certificate and her passport, establishing her identity and relationship with the deceased.
Application of Law to Facts: The Court applied Section 125, allowing redemption since the Petitioner is the legal heir and the goods are of substantial value.
Treatment of Competing Arguments: The Respondent did not dispute the Petitioner's identity or relationship with the deceased, focusing instead on procedural compliance.
Conclusions: The Petitioner is permitted to redeem the goods, subject to payment of the fine and penalty, and personal collection.

Issue 2: Limitation Period for Redemption

Relevant Legal Framework and Precedents: Section 125 of the Customs Act, 1962, outlines the limitation period for redeeming confiscated goods.
Court's Interpretation and Reasoning: The Court held that the limitation period is triggered only upon proper communication of the redemption option to the passenger.
Key Evidence and Findings: There was no evidence of the order being communicated to the deceased passenger.
Application of Law to Facts: The absence of communication meant the limitation period had not commenced.
Treatment of Competing Arguments: The Respondent argued that the order was published on a notice board, which the Court found insufficient for triggering the limitation period.
Conclusions: The limitation period does not bar the release of goods due to lack of communication.

Issue 3: Communication of the Order

Relevant Legal Framework and Precedents: Effective communication is essential for procedural fairness.
Court's Interpretation and Reasoning: The Court criticized the Customs Department for not ensuring proper contact details were obtained and used.
Key Evidence and Findings: The detention receipt lacked complete contact details, and the order was not communicated effectively.
Application of Law to Facts: The failure to communicate properly led to the non-application of the limitation period.
Treatment of Competing Arguments: The Court acknowledged the procedural lapse by the Customs Department.
Conclusions: The Customs Department should improve its procedures for obtaining and using contact information.

Issue 4: Waiver of Demurrage Charges

Relevant Legal Framework and Precedents: Demurrage charges are typically not waived unless exceptional circumstances exist.
Court's Interpretation and Reasoning: The Court found the circumstances unique due to the passenger's death and lack of communication.
Key Evidence and Findings: The passenger's death and procedural issues were significant factors.
Application of Law to Facts: Given the unique circumstances, the Court waived the demurrage charges.
Treatment of Competing Arguments: The waiver was granted as a discretionary relief, not setting a precedent.
Conclusions: Demurrage charges were waived due to the unique facts of the case.

3. SIGNIFICANT HOLDINGS

Verbatim Quotes of Crucial Legal Reasoning: "The limitation period under Section 125 would apply only when the option to redeem, given to the passenger, is duly communicated to the passenger."
Core Principles Established: Proper communication is essential for triggering statutory limitation periods; legal heirs can redeem goods if procedural conditions are met.
Final Determinations on Each Issue:
- The Petitioner is entitled to redeem the goods upon compliance with the original order.
- The limitation period under Section 125 did not commence due to lack of communication.
- The Customs Department must improve its procedures for obtaining and using contact information.
- Demurrage charges are waived due to the unique circumstances.