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TMI Blog2024 (7) TMI 872X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be the sole basis for rejecting the same. The phrase personal effect has to be construed in the context and cannot be interpreted dehors the facts of a particular case, more particularly when what is being considered is the value of the article. In the instant case, one cannot lose sight of the fact that Petitioner is engaged in the business of jewellery in U.S.A. for last 25 years and has been declaring income in the U.S.A. of USD-1,50,000/-. A person of such background could wear a chain with a pendant of high value. For a High Net Worth individual, an expensive watch of Rolex made would be his personal effect, but same may not be the case if a person is of a mere means. In the context of Petitioner s case merely by ascribing high value, the customs authorities were not justified in initiating the impugned proceedings and contend that same is not his used personal effects, moreso, because the diamonds were valued at (assuming) price prevailing on date of Petitioner s arrival whereas the diamonds were purchased in 1989, although already observed, as to how the exercise of valuation carried out by the Customs Authorities is vitiated. The Respondents are directed to refund t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hant Sangvi and one Sarju Shah who, as per the Customs Officer, were experts in diamonds trade from SEEPZ . What he meant by experts is not clear. Mr. Sangvi and Mr. Shah, as trade representatives, ascertained the value of diamonds embedded in the pendant at Rs. 1,20,35,000/-. These trade representatives have further opined that the finishing of prongs were not upto the mark and, therefore, the diamonds could be removed easily. The Customs Officer, thereafter, seized the chain alongwith diamonds on the basis that Petitioner has attempted to smuggle the said diamonds into India and, therefore, same was liable for confiscation. (vi) On 12th October 2007, a show cause notice was issued by the Commissioner of Customs proposing confiscation of 12 diamonds under Section 111(d), (l) and (m) of the Act and further to show cause as to why penalty should not be imposed upon Petitioner under Section 112 of the Act. The show cause notice also invoked Rule 6 of the Baggage Rules, 1998 which prescribes that a person residing abroad for over a year and returning to India is allowed to import free of duty jewellery upto an aggregate value of Rs. 10,000/- in case of a male passenger. (vii) On 15th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Rule 7, but there was no finding by the Commissioner of Customs. (x) The aforesaid order of the Tribunal was challenged by Petitioner in Writ Petition No. 390 of 2010 and Respondent in Customs Appeal No. 31 of 2010. On 13th April 2010, the Co-ordinate Bench of this Court disposed the Customs Appeal and the Writ Petition dismissing the appeal of Respondent challenging the directions given by the Tribunal for cross-examination. Insofar as Petitioner s Writ Petition is concerned, the Co-ordinate Bench held that the Tribunal could not have given a direction to the Adjudicating Authority to decide the matter afresh on the basis of Baggage Rules, 1994 which stood repealed, but the said finding to decide afresh was modified by replacing Baggage Rules, 1994 with the Baggage Rules, 1998 which was applicable at that point of time. (xi) Pursuant to above, orders passed by the Tribunal and the High Court, the Commissioner of Customs granted opportunity of cross-examination and also considered the matter afresh. The Commissioner of Customs rejected the contention of Petitioner with regard to invoice filed by Petitioner to prove the purchase of chain alongwith diamond pendant inter alia on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the chain alongwith pendant on payment of reduced fine of Rs. 20,00,000/- and personal penalty of Rs. 15,00,000/-. It is this order which is challenged by Petitioner before us. Respondents have not challenged the order of the Revisional Authority. (xv) On 30th March 2012, Petitioner has made a payment of Rs. 35,00,000/- (20,00,000 + 15,00,000) as per the order of the Revisional Authority and has re-exported the gold chain with diamonds. 3. Submissions of Petitioner:- Petitioner submits that the gold chain with pendant in which diamonds were embedded was purchased more than 25 years ago and at the time of disembarking from flight, he was wearing the same. Petitioner submits that he had provided invoice in support of proof that the same was purchased from US jeweller in the year 1989 and that Respondents were not justified in rejecting the said evidence merely on the solitary ground that invoice was not signed by the seller. Petitioner submits that the said gold chain with pendant is his personal effects and therefore, under Rule 7 of the Baggage Rules, 1998 read with Appendix-E, same was allowed to be brought into India free of duty. Petitioner further submits that in the show caus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have brought the said chain with pendant embedded with diamonds without declaring and paying the duty thereon. Respondents, therefore, supported the order of the Appellate and Revisional Authority and prayed for dismissal of the present petition. 5. Analysis and Conclusion:- Before we proceed, it will be useful, for ease of reference, to reproduce relevant Rules of Baggage Rules, 1998:- RULE 2. Definitions In these rules, unless the context otherwise requires- (i) (ii) resident means a person holding a valid passport issued under the Passports Act, 1967 (15 of 1967) and normally residing in India; (iii) tourist means a person not normally resident in India, who enters India for a stay of not more than six months in the course of any twelve months period for legitimate non-immigrant purposes, such as touring, recreation, sports, health, family reasons, study, religious pilgrimage or business; (iv) (v) RULE 3. Passengers returning from countries other than Nepal, Bhutan, Myanmar or China - An Indian resident or a foreigner residing in India, returning from any country other than Nepal, Bhutan, Myanmar or China, shall be allowed clearance free of duty articles in his bona fide baggag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and travel souvenirs, if (a) these goods are for personal use of the tourist, and (b) these goods, other than those consumed during the stay in India, are re-exported when the tourist leaves India for a foreign destination. (ii) articles as allowed to be cleared under rule 3 or rule 4. (i) used personal effects and travel souvenirs, if - (a) these goods are for personal use of the tourist, and (b) these goods, other than those consumed during the stay in India, are re-exported when the tourist leaves India for a foreign destination. (i) used personal effects and travel souvenirs, if - (a) these goods are for personal use of the tourist, and (b) these goods, other than those consumed during the stay in India, are ex-exported when the tourist leaves India for a foreign destination. (ii) articles upto a value of [Rs. 6,000] for making gifts. 6. The only issue which arises in the present petition is whether Petitioner can bring into India a gold chain with pendant in which diamonds were embedded in accordance with Baggage Rules 1998. In our view, for more than one reason, the orders passed by the Original, Appellate and Revisional Authority holding confiscation of goods and permittin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t landed at 9:40 then by the time the flight reaches the towing point and the gates are opened for the passengers to disembark the plane it atleast takes sometime and, therefore, the statement of Mr. Mahale, Preventive Officer that he noticed Petitioner at 10:00 p.m. cannot be believed. (iii) On 7th May 2007, Respondents called Prashant Sangvi and Sarju Shah, whom Respondents have termed as experts of diamond s trade and got the diamonds valued at Rs. 1,20,35,000/- on the basis of which further impugned proceedings have been initiated. The details of these two persons are not mentioned either in the show cause notice or in any of the subsequent orders. They are baldly described as experts in diamond trade. It is not the case of Respondent that these two gentlemen are Approved Government valuers to value the diamond. We fail to understand as to why a Government Approved Valuer was not called by Respondents to value the gold chain and diamonds. The fact that they are experts in diamond trade does not mean that they are experts in valuation of diamond. These two gentlemen were not produced for cross-examination inspite of clear directions by Tribunal confirmed by High Court. In our vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rded this fact that Rule 7 has not been invoked in the original show cause notice. (vi) The counsel for Respondents has sought to justify the orders of the lower authorities by relying upon Rule 3 and Rule 4 of the Baggage Rules 1998. In our view, both these rules would not apply to Petitioner. Rule 3 applies to an Indian resident or a foreigner residing in India. It is admitted position that Petitioner is neither an Indian resident nor a foreigner residing in India. Similarly, Rule 4 is not applicable because Petitioner is not returning from Nepal, Bhutan and China. In any case, there is no invocation of Rule 3 or Rule 4 in the show cause notice and, therefore, even on this count, Respondents cannot justify and support the orders of the lower authorities by placing reliance on Rules 3 and 4 of the Baggage Rules. (vii) The next contention raised by respondents that Appendix-E to Baggage Rules 1998, column 2-(ii) refers to articles allowed to be cleared under Rule 3 or Rule 4 and when one goes to Rule 3, it in turn refers to Appendix-A. Appendix-A(a)(ii) refers to articles allowed free of duty upto a value of Rs. 25,000/- other than those mentioned in Annex-I. It was their contentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve of the value since there is no cap under Appendix-E (a) (i) when compared with entries in other Appendix, where the legislature had put a cap on the value of the article to be brought into India free of duty, which is not the case in Appendix-E (a) (i). (ix) In the petition, Petitioner has annexed disembarkment card which is required to be filled when a passenger arrives in India. The disembarkment card filled by Petitioner does not require to disclose jewellery, but it only requires the value of dutiable goods being imported to be disclosed. On the contrary, the Notes to the disembarkment card specifies that tourist can import jewellery free of duty, if they are re-exported at the time of departure. In the instant case, the chain along with pendant which was worn by Petitioner was his personal effect and, therefore, same was not dutiable . Therefore, the allegation of Respondents that the chain along with pendant was not disclosed in the disembarkment card is not sustainable. It is also important to note in this connection, Circular No. 12 of 2000 dated 18th February 2000 issued by Ministry of Finance, Government of India, which states that no endorsement on the passport is req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the customs authorities were not justified in initiating the impugned proceedings and contend that same is not his used personal effects, moreso, because the diamonds were valued at (assuming) price prevailing on date of Petitioner s arrival whereas the diamonds were purchased in 1989, although we have already observed above as to how the exercise of valuation carried out by the Customs Authorities is vitiated. (xii) Petitioner is justified in placing reliance on the decision of the Supreme Court of India in Directorate of Revenue Intelligence Vs. Pushpa Lekhumal Tolani 2017 (353) E.L.T. 129 (S.C.), where on very similar facts, the Supreme Court quashed the proceedings initiated by the Customs Authorities for seizing the jewellery. Paragraph 9 of the said decision which squarely applies to the present case:- 9. Insofar as the question of violation of the provisions of the Act is concerned, we are of the opinion that the respondent herein did not violate the provisions of Section 77 of the Act since the necessary declaration was made by the respondent while passing through the Green Channel. Such declarations are deemed to be implicit and devised with a view to facilitate expeditio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an Vs. Union of India 2014 SCC OnLine Ker 28775 on the ground that decision primarily dealt with the fact that under the 1998 Baggage Rules, there was no provision which prohibited a passenger to wear the jewellery and enter India. We, however, do not agree this line of distinction because the Kerala High Court gave various reasoning and one of the reasoning was that a passenger wearing jewellery would not be covered by the Baggage Rules. We, however, have not given any opinion on this aspect of the reasoning by the Kerala High Court but have relied on the other reasons. In any case, Respondents themselves have admitted in the note that this reasoning of the Kerala High Court has been rectified in 2016, and they have admitted that prior to 2016, there was no such prohibition on a foreign tourist wearing a gold chain and entering India and since in the present petition we are concerned with pre 2016 Baggage Rules, distinction sought to be made does not survive. Insofar as the decision in the case of Jasvir Kaur Vs. Union of India 1991 SCC OnLine Del 625 is concerned, that decision was concerned with Baggage Rules, 1978, whereas we are concerned with the Baggage Rules 1998 and both t ..... 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