2025 (3) TMI 753 - 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.

ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment include:

Whether the seizure of the gold chain from the Petitioner by the Customs authorities was justified under the Customs Act, 1962 and the Baggage Rules, 2016.
Whether the Petitioner was entitled to the benefits of an eligible passenger under the Baggage Rules, 2016.
Whether the lack of a show cause notice and personal hearing violated the Petitioner's rights under the law.

ISSUE-WISE DETAILED ANALYSIS

Seizure of Gold Chain

Relevant Legal Framework and Precedents: The adjudicating authority based the seizure on sections 111(d), 111(j), and 111(m) of the Customs Act, 1962, which pertain to the improper importation of goods. The Baggage Rules, 2016, as amended, were also relevant for determining the eligibility of personal effects.
Court's Interpretation and Reasoning: The Court noted that the Petitioner was a non-resident and an eligible passenger under the Baggage Rules, 2016. The gold chain was considered personal jewellery, which should not be liable to confiscation.
Key Evidence and Findings: Evidence included the Petitioner's statement, the photograph showing the Petitioner wearing the jewellery, and the wedding card indicating the purpose of travel. The adjudicating authority's order was reviewed, which had denied the free allowance due to non-declaration at the customs channel.
Application of Law to Facts: The Court applied the Baggage Rules, 2016, and relevant precedents to conclude that the gold chain was a personal effect and should not have been seized. The Petitioner was deemed eligible for the benefits under the rules.
Treatment of Competing Arguments: The Court considered the adjudicating authority's position on the lack of declaration but found it insufficient to justify confiscation given the nature of the item as personal jewellery.
Conclusions: The seizure was unjustified, and the Petitioner was entitled to the return of the gold chain without penalties or charges.

Lack of Show Cause Notice and Personal Hearing

Relevant Legal Framework and Precedents: The Customs Act, 1962, and general principles of natural justice require a show cause notice and a personal hearing before adverse action is taken. Recent judgments have reinforced this requirement.
Court's Interpretation and Reasoning: The Court found that the waiver of the show cause notice and personal hearing was not in accordance with law, referencing recent judgments that emphasize the necessity of these procedural safeguards.
Key Evidence and Findings: The adjudicating authority's order acknowledged the Petitioner's waiver request but did not comply with legal requirements for such waivers.
Application of Law to Facts: The Court applied principles from recent judgments to determine that the lack of procedural safeguards rendered the adjudication process flawed.
Treatment of Competing Arguments: The adjudicating authority's acceptance of the waiver was deemed inadequate, given the legal precedents requiring strict adherence to procedural norms.
Conclusions: The lack of a show cause notice and personal hearing invalidated the adjudication process, warranting the quashing of the impugned order.

SIGNIFICANT HOLDINGS

Preserve Verbatim Quotes of Crucial Legal Reasoning: "The impugned order dated 7th November, 2024, passed by the adjudicating authority is accordingly quashed. No penalty or redemption fine shall be collected from the Petitioner."
Core Principles Established: The judgment reinforces the principle that personal jewellery of eligible passengers should not be confiscated and highlights the necessity of procedural safeguards such as show cause notices and personal hearings.
Final Determinations on Each Issue: The Court quashed the adjudicating authority's order, directed the return of the gold chain without penalties or charges, and emphasized adherence to procedural norms in customs adjudication.