Delhi High Court
Luvleen Maingi vs 1. Union Of India & Ors. on 2 December, 2024
Author: Yashwant Varma
Bench: Yashwant Varma
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment reserved on: 02 September 2024
Judgment pronounced on: 02 December2024
+ W.P.(C) 11877/2018
LUVLEEN MAINGI ..... Petitioner
Through: Mr. D.S. Chadha and Ms. Riya
Sharma, Advs.
versus
UNION OF INDIA & ORS. ..... Respondents
Through: Mr. Anil Soni, CGSC along
with Mr. Devrat Yadav, Adv.
for UOI.
Mr. Harpreet Singh, SSC along
with Ms. Suhani Mathur and
Mr. Jatin Kumar Gaur, Advs.
CORAM:
HON'BLE MR. JUSTICE YASHWANT VARMA
HON'BLE MR. JUSTICE RAVINDER DUDEJA
JUDGMENT
RAVINDER DUDEJA, J.
1. The present Writ Petition has been filed, seeking following
relief:
“a) Issue a Writ Order or direction in the nature of Mandamus or
any other appropriate Writ, order or direction for release/return/re-
export the gold to the Petitioner.”
2. Shorn of all the unnecessary details, the brief facts are as
follows.
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3. Petitioner is a Foreign National of Indian origin and a resident
of Thailand. He arrived in India from Bangkok on 25.04.2014. Near
the exit gate after he had crossed the green channel, the Officers of
Customs enquired from the petitioner whether he was carrying any
goods which he needed to declare to the Customs, to which, he replied
in negative. As per Indian Customs Declaration Form of the petitioner,
there were no dutiable goods carried by him. Petitioner had not
declared any gold/bullion in Column No. 10 (ii) & (iii) in the
declaration form. On his personal search, a gold chain and a gold kara
were recovered. After examining the same, the Jewellery Appraiser
reported that the total weight of the gold was 501.00 grams, valued at
Rs. 13,12,861/-. Since the petitioner did not provide any documents
regarding the possession of the gold chain and kara, the same were
seized under Section 110 of the Customs Act, 1962 [“Act”] on the
reasonable belief that the same were imported to India illegally and
were attempted to be cleared without payment of customs duty.
4. A Show Cause Notice dated 14.10.2024 was issued to the
petitioner. Petitioner filed his response stating that gold jewellery was
purchased by his wife for his daughter’s wedding.
5. Order-in-Original dated 31.03.2015 was passed, thereby,
confiscating the gold chain and kara. However, the petitioner was
given an option to redeem the confiscated goods on payment of
redemption fine of Rs. 2,00,000/- and payment of applicable customs
duty at the rate of 36.05%. A penalty of Rs. 1,25,000/- was also
imposed upon the petitioner.
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6. Feeling aggrieved, the petitioner preferred an appeal before the
Commissioner of Customs. Order-in-Appeal passed by the
Commissioner of Customs (Appeals) went in favour of the petitioner
and directed the Department to return the gold jewellery to the
petitioner.
7. Order-in-Appeal was challenged in revision before the
Additional Secretary to the Government of India. The Revisional
Authority vide order dated 13.08.2018 allowed the revision
application and set aside the Order-in-Appeal and restored the Order-
in-Original. Said order is subject matter of challenge in the present
writ petition.
8. Learned counsel appearing for the writ petitioner has argued
that petitioner is the owner of the gold jewellery. It is submitted that
gold weighing 1742 grams was purchased by the wife of the petitioner
from M/s. Shagun Jewellers Pvt. Ltd, Paschim Vihar vide Invoice no.
4329 dated 21.04.2021 against payment made through NRI account
jointly held by the petitioner and his wife, maintained with Canara
Bank. It is submitted that the gold kara and chain in question were
made out of part of the said gold from M/s. Roop Jewellers, Arya
Samaj Mandir, Rani Bagh for a consideration of Rs. 5570/-. It is
submitted that the ornaments were seized ignoring the invoices
produced.
9. The learned Standing Counsel appearing for the Department has
argued that petitioner had not made any declaration of gold kara and
chain in the Declaration Form. It is submitted that as per the report of
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the Appraiser, the gold chain and gold kara were made up of 24 carat
gold and that petitioner tried to clear the same clandestinely and thus
violated the provisions of Section 77 of the Customs Act. It is further
submitted that gold is not allowed to be imported freely in the
baggage. With regard to the claim of the petitioner that the impugned
gold was purchased from India and taken to Bangkok, it is submitted
that the petitioner had not obtained export certificate in respect of the
said gold while leaving India for Bangkok and there is nothing on
record to suggest that the impugned gold was the same gold which
was purchased from India.
10. Import of gold in India is highly regulated and bulk importation
of gold can only be effected by the nominated banks, agencies or
business houses in the manner laid down by various DGFT
Regulations as well as by RBI Circulars or by the “eligible
passengers” in the manner provided by the relevant regulations. As
per Section 7 of Foreign Trade (Development and Regulation) Act,
1992, no person is allowed to import gold into the country except
under an Import-Export Code Number. However, Rule 3(1)(h) of the
Foreign Trade (exemption from application of rules in certain cases)
Rules, 1993 provides exemption to the import of any goods by the
person as passenger baggage to the extent permissible under the
Baggage Rules.
11. The interpretation of the respondents to the Baggage Rules is
that they are confined to personal effects exclusive of jewellery
whether it be personal or otherwise. As per their contention, the
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monetary limit provided in the Baggage Rules would be determinative
of the value of the jewellery that may be carried by an incoming
passenger and allowed duty free.
12. In the case of Saba Simran vs. Union of India & Ors. W.P.
(C) 3612/2024, we had an opportunity to refer to the legislative
history of rules pertaining to baggage as framed in exercise of the
powers conferred by Section 79 of the Act. The relevant paras are
extracted below:-
“9. If we were to travel back in time to the Baggage Rules,
1998, it becomes apparent that those rules did not incorporate a
definition of “personal effects” in explicit terms. Appendices A
and B thereof, however, while declaring articles which would be
allowed free of duty had provided that ‘used personal effects,
excluding jewellery’ would fall under the aforesaid duty-free
prescription. That prescription was to apply to all passengers of
ages 12 and above and who were returning to India after an
overseas trip of more than three days or three days or less.
10. In order to deal with certain perceived gaps in those Rules,
and bearing in mind the absence of a definition of “personal
effects”, the Ministry of Finance issued a clarificatory Circular
No. 72/98- Customs dated 24 September 1998 and which reads
as follows:
“Circular No. 72/98- Customs
dated 24/9/1998
F.No.520/136/92- CUS- VI
Government of India
Ministry of Finance
Department of Revenue, New DelhiSubject : Eighth Report of Estimates Committee (11th Lok Sabha)
on disposal of passenger baggage detained at International Air
ports; action taken by the Govt. on the recommendations contained
in the forty-ninth report of Estimates Committee (10th Lok sabha
on the Ministry of Finance (Department of Revenue) Customs
clearance at International Airport – Reg.
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In the Estimates Committee (1994-95) of the 10th Lok
Sabha, the Government had undertaken to review the Baggage
Rules permitting the travellers to bring in Note Book Computers
and other essential items so that harassment to the general
passengers could be eliminated. The Committee has desired an
expeditious review of the matter. The matter has been examined,
under Tourist Baggage Rules, 1987, Notification No. 45/ 92-Cus
(NT) dated 19/6/92 was issued listing the personal effects which
could be imported temporarily free of duty. This list included 14
items of day to day use of the tourist.
2. The Tourist Baggage Rules was replaced by the Baggage
Rules, 1994 which contained a chapter on concession for tourists.
In Rule 11, the personal effects imported by the tourists
temporarily have been allowed duty free entry and the explanation
of Rule 11 defined the wording ‘personal effect’ such as clothings
and other articles, new or used, which a tourist may personally and
reasonably required taking into account of circumstances for his
visit but excluding all merchandise imported for commercial
purposes. The list contained in Notf. 92, though the Notn. has
expired, continue to the guiding the customs formations at the
Airport to give this benefit.
3. The Baggage Rules, 1998 issued vide Notn. No. 30/ 98-
Cus(NT) dated 2/6/98 has provided for import of duty free goods
by tourists in Regulation 7 as contained in Appendix ‘E’ of the said
rules. There is no definition for personal effects in the present
Baggage Rules. However, for the sake of uniformity it is
considered necessary to reiterate that the personal effects would
include the following goods:
(i) Personal jewellery
(ii) One camera with film rolls not exceeding twenty
(iii) One video camera/ camcorder with accessories and with
video cassettes not exceeding twelve
(iv) One pair of binoculars
(v) One portable colour television (not exceeding 15 cms in
size)
(vi) One music system including compact disc player
(vii) One portable typewriter
(viii) One perambulator
(ix) One tent and other camping equipment
(x) One computer (laptop/ note book)
(xi) One electronic diary
(xii) One portable wireless receiving set (transister radio)
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(xiii) Professional equipments, instruments and Apparatus of
appliances including professional audio/ video equipments
(xiv) Sports equipments such as one fishing outfit, one sporting
fire arm with fifty cartridges, one non-powdered bicycles,
one canoe or ranges less than 51 metres long, one pair of
skids, two tennis rackets, one golf set (14 pcs. With a dozen
of golf balls).
(xv) One cell phone.
4. It may kindly be noted that while Notn. No. 45/92 defined
personal effects as articles both new or used and Rule 11 of
Baggage Rules 1994 allowed personal effects of tourists for duty
free import, the Baggage Rules 1998 allows only used personal
effects of the tourists. It is not the intention of the Board to verify
the newness of every product which a traveller brings so long as it
is not prima facie new goods in their original packagings which
can be disposed of off hand.
Sd/-
(Vijay Kumar)
Under Secretary to the Govt. of India”
11. As is evident from a reading of paragraph 3 of the
aforenoted Circular, the competent authority clarified that the
phrase “personal effects” would include “personal jewellery”. The
respondents thus consciously sought to introduce a distinction
between “personal jewellery” and the word ‘jewellery’ per se as it
appears in the Appendices. The clear intent of that Circular appears
to have been to include personal items of jewellery or ornaments
within the meaning of the expression “personal effects”.
12. When the aforesaid 1998 Rules came to be amended in
2006, by virtue of the Baggage (Amendment) Rules, 2006, the
stipulation with respect to articles allowed entry free of duty
remained the same except for the increased monetary limits of INR
35,000/-, 15,000/- and 3,000/- which came to be incorporated.
Appendices A and B, as they stood in the 1998 Rules and post the
2006 Amendment, read as follows:
“Appendix A
(See rule 3)
(1) Articles allowed free of
duty
(2)
All passengers of and Used personal effects,
above 10 years of age excluding jewellery,
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and returning after stay required for satisfying
abroad of more than daily necessities of life.
three days. Articles other than those
mentioned in Annex. I
upto a value of Rs.
35,000 if these are
carried on the person or
in the accompanied
baggage of the
passenger.
All passengers of and Used personal effects,
above 10 years of age excluding jewellery,
and returning after stay required for satisfying
abroad of three days or daily necessities of life.
less. Articles other than those
mentioned in Annex. I
upto a value of Rs.
15,000 if these are
carried on the person or
in the accompanied
baggage of the
passenger.
All passengers upto 10 years of age and Used personal effects, excluding
returning after stay abroad of more jewellery, required for satisfying daily
than three days. necessities of life.
Articles other than those mentioned in
Annex. I upto a value of Rs. 12,000 if
these are carried on the person or in the
accompanied baggage of the passenger.
All passengers upto 10 years of age and Used personal effects, excluding
returning after stay abroad three days jewellery, required for satisfying daily
or less. necessities of life.
Articles other than those mentioned in
Annex. I upto a value of Rs. 3,000 if
these are carried on the person or in the
accompanied baggage of the passenger.
Explanation. – The free allowance under this rule shall not be
allowed to be pooled with the free allowance of any other
passenger.
APPENDIX B
(See rule 4)
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(1) (2)
Passengers of and above Used personal effects,
10 years of age and excluding jewellery,
returning after stay required for satisfying
abroad of more than daily necessities of life.
three years Articles other than those
mentioned in Annex. I
upto a value of Rs. 6,000
if these are carried on
the person or in the
accompanied baggage of
the passenger.
Passengers upto 10 years of age and Used personal effects,
returning after stay abroad of more than excluding jewellery,
three days. required for satisfying
daily necessities of life.
Articles other than those
mentioned in Annex. I
upto a value of Rs. 1500
if these are carried on
the person or in the
accompanied baggage of
the passenger.
Explanation. – The free allowance under this rule shall not be
allowed to be pooled with the free allowance of any other
passenger.”
However, even up to this stage of the amendment process,
“personal effects” were not defined in the Rules.
13. When the 2016 Rules ultimately came to be promulgated,
Rule 2(vi) specifically introduced a definition with respect to
“personal effects”. As noticed in the preceding parts of this
judgment, Rule 2(vi) while defining “personal effects” explicitly
excludes items of jewellery. The word ‘jewellery’ as it now
appears in that definition clause must necessarily be read in
conjunction with the previous versions of the Baggage Rules which
operated from time to time as well as the clarificatory Circular
referred to above. However, both Rules 3(a) as well as 4(b) employ
the phrase “used personal effects” and which expression existed
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even in the prior versions of the rules and have been noticed
hereinabove.
14. Rule 2(vi) of the 2016 Rules essentially adopts the same
concept of ‘used personal effects’ as was intended under the 1998
Rules, and by way of abundant caution, a definition now stands
placed in the 2016 Rules and which purports to define the
expression “personal effects” with sufficient clarity. However, the
same would not detract from the distinction which the respondents
themselves acknowledged in the Circular and intended customs
officers to bear in mind the distinction which must be recognised to
exist when construing and identifying ‘personal jewellery’ as
opposed to ‘jewellery’ per se.
15. The expression ‘jewellery’ as it appears in Rule 2(vi) would
thus have to be construed as inclusive of articles newly acquired as
opposed to used personal articles of jewellery which may have
been borne on the person while exiting the country or carried in its
baggage. Thus, personal jewellery which is not found to have been
acquired on an overseas trip and was always a used personal effect
of the passenger would not be subject to the monetary prescriptions
incorporated in Rules 3 and 4 of the 2016 Rules.
16. This clearly appeals to reason bearing in mind the
understanding of the respondents themselves and which was
explained and highlighted in the clarificatory Circular referred to
above. That Circular had come to be issued at a time when the
Appendices to the 1998 Rules had employed the phrase “used
personal effects, excluding jewellery”. The clarification is thus
liable to be appreciated in the aforesaid light and the statutory
position as enunciated by the respondents themselves requiring the
customs officers to bear a distinction between “personal jewellery”
and the word “jewellery” when used on its own and as it appears in
the Appendices. This position, in our considered opinion, would
continue to endure and remain unimpacted by the provisions
contained in the 2016 Rules.”
13. This Court in the case of Pushpa Lakhumal Tulani vs. Add.
Commissioner, Customs, 2006 SCC OnLine Del 1069, considered
the issue of ornaments and jewellery being carried as part of baggage
and whether the same would qualify as “smuggling” as defined under
the Act, albeit in the context of the rules which applied then. The issue
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of gold ornaments and the application of relevant baggage rules came
to be answered as follows:-
“19. We are of the view that there is no substance in any of the
contentions raised on behalf of the Respondent. Insofar as the issue
of jurisdiction is concerned, we are of the view that after three
years of the matter remaining pending in this Court with more than
25-30 hearing before different Benches, it would not be equitable
to relegate the Petitioner to the statutory remedy. Moreover,
learned Counsel for the Petitioner has raised a jurisdictional issue,
namely, whether the Respondent Authorities in fact had the
jurisdiction in law to issue a show-cause notice in the facts of this
case. It is his contention that there was no reason for the Petitioner
to declare the personal jewellery brought in by her since they were
her personal effects. If this contention is found to be correct, it
would follow that the Respondents did not exercise their
jurisdiction in accordance with law and in fact had no jurisdiction
to issue a show-cause notice. This jurisdictional issue can, of
course, be gone into by us in exercise of powers under Article 226
of the Constitution and we do not think it appropriate to relegate
the Petitioner to the statutory remedy.
20. Insofar as the question of the intention of the Petitioner to take
back the jewellery to England is concerned, we do not think the air
ticket sought to be relied upon by learned Counsel for the
Respondent is of much consequence. The ticket, we find, was
purchased by the Petitioner in April, 2002, that is, seven months
before the date of departure. There could be a change in date by
few days here and there particularly because it is a first class ticket
and therefore that is of no consequence. Moreover, we cannot
ignore the contention of the Petitioner to the effect that her parents
are in Indonesia and she had plans of proceeding to Indonesia. She
had stated that she had planned to purchase return air tickets from
Delhi to Jakarta (Indonesia)/Singapore, as she had been doing so in
the past, while in Delhi and she also produced evidence of her
similar previous purchases before the Respondents.
21. Some of the jewellery items items purchased by the Petitioner
were for her personal use and some were intended to be left with
her parents in Indonesia. One of the items confiscated by the
customs was a silver panther which was valued in U.K. Pound
Sterling 9,460/- for which the Petitioner did not claim exemption
from VAT because it was to be taken back to England by theSignature Not Verified
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Petitioner. To this extent, the conduct of the Petitioner appears to
be consistent and bona fide.
22. The overall circumstances show that even though she brought
jewellery of a huge amount into the country, the Petitioner did not
seem to have the intention to smuggle the jewellery into India and
to sell it off. If jewelleries were to be sold in India, its cost was
only about Rs. 25 lakh. is not understood why a person should
import jewellery of Rs. 1.27 crores and try to smuggle it in, only to
sell it for Rs. 25 lakh. The benefit of doubt must, therefore, go to
the Petitioner.
23. We also find from the record that out of the 28 packages that
were brought into the country by the Petitioner, as many as 11
items were used jewellery. In fact photographs have been filed on
record and which were apparently placed before the adjudicating
authority indicating that 11 items have been used by the Petitioner
over the years.
24. Insofar as the question of the original packing of the goods is
concerned, we do not think that much reliance can be placed by
them Respondent. There is no doubt that the jewellery was very
expensive. It is common knowledge that jewellery is a delicate
item and is put in especially designed boxes so that it may not get
damaged while in transit. If these expensive items are put in other
boxes, it may cause loss due to breakage to the owner of the
jewellery. Learned Counsel for the Petitioner gave us an example
of a laptop computer which is packed in the original bag and
continues to be retained in that bag all along. Since a laptop
computer continues to be retained in the original bag, it does not
mean that the tourist owner is going to sell that item in the black
market or in the gray market in India. There can be some
exceptions to this Rule. One has to look at the matter in a
pragmatic way and one should appreciate that jewellery cannot be
treated as other personal effects such as clothing, etc. We have also
considered another possible situation. What if the Petitioner had
worn the jewellery that she was carrying with her in her hand
baggage. Could the Respondents still have confiscated it? Could
they have claimed that it was not her “personal effects” and that
she had imported it to sell it in India? To our mind the answer has
to be in the negative. This is because it could not be said that the
jewellery was new goods packed “in their original packaging”,
much less to say that it could “be disposed of off-hand”. The
expression “new” connotes that which is not at all used. It does not
include “like new”.”
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14. The decision of this Court in Pushpa Lekhumal Tulani (supra)
was confirmed by the Supreme Court in Directorate of Revenue
Intelligence and others vs. Pushpa Lekhumal Tulani, (2017) 16
SCC 93. The relevant paras of the decision of the Supreme Court are
extracted below:-
“13. 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 expeditious and
smooth clearance of the passenger. Further, as per the International
Convention on the Simplification and Harmonisation of Customs
Procedures (Kyoto 18-5-1973), a passenger going through the
green channel is itself a declaration that he has no dutiable or
prohibited articles. Further, a harmonious reading of Rule 7 of the
Baggage Rules, 1998 read with Appendix E (2) (quoted above), the
respondent was not carrying any dutiable goods because the goods
were the bona fide jewellery of the respondent for her personal use
and was intended to be taken out of India. Also, with regard to the
proximity of purchase of jewellery, all the jewellery was not
purchased a few days before the departure of the respondent from
UK, a large number of items had been in use for a long period. It
did not make any difference whether the jewellery is new or used.
There is also no relevance of the argument that since all the
jewellery is to be taken out of India, it was, therefore, deliberately
brought to India for taking it to Singapore. Foreign tourists are
allowed to bring into India jewellery even of substantial value
provided it is meant to be taken out of India with them and it is a
prerequisite at the time of making endorsements on the passport.
Therefore, bringing jewellery into India for taking it out with the
passenger is permissible and is not liable to any import duty.
14. The learned Senior Counsel brought to our notice that even as
per EXIM Code Numbers 7113 19 20 and 7113 19 30 of ITC (HS)
Classification of Export and Import items as on 1-4-2002, the
import of gold jewellery studded with diamonds or with other
precious stones, is freely allowed. Similarly, the learned Senior
Counsel rightly submitted that the invocation of Section 80 of the
Act is of no use as this section applies only to dutiable andSignature Not Verified
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prohibited goods. The accusation of not declaring the goods to the
Customs Authority and evading duty alleged to be due thereupon
has no legal basis.
15. With regard to the intention of the respondent to take back the
jewellery to England is concerned, we do not think that the air
ticket sought to be relied upon by DRI is of much consequence. In
the reply-affidavit dated 20-10-2014 filed before this Court by the
respondent herein, it has been submitted that the so-called enquiry
conducted by the appellant DRI subsequent to the passing of the
judgment by the High Court was admittedly done after the expiry
of more than 1185 days. The respondent herein left for London on
1-3-2007 on Jet Airways Flight No. 9W-0122 and returned to Delhi
on 6-3-2007 on Jet Airways Flight No. 9W-0121. It has been
further mentioned in the reply-affidavit that the fact of return of the
respondent herein to India has been deliberately concealed by the
appellant DRI. In fact, the respondent had travelled to London to
attend a doctor’s appointment with her daughter who was unwell at
the relevant time. Further, there is no restriction in UK law which
prohibits a person claiming VAT in London from re-importing the
items on which VAT has been claimed at a later date. Also, from
the present facts and circumstances of the case, it cannot be
inferred that the jewellery was meant for import into India on the
basis of return ticket which was found to be in the possession of the
respondent. Moreover, we cannot ignore the contention of the
respondent that her parents at the relevant time were in Indonesia
and she had plans of proceeding to Indonesia. Some of the
jewellery items purchased by the respondent were for her personal
use and some were intended to be left with her parents in
Indonesia. The High Court has rightly held that when she brought
jewellery of a huge amount into the country, the respondent did not
seem to have the intention to smuggle the jewellery into India and
to sell it off. Even on the examination of the jewellery for costing
purposes, it has come out to be of Rs 25 lakhs and not Rs 1.27
crores as per DRI. The High Court was right in holding that it is
not the intention of the Board to verify the newness of every
product which a traveller brings with him as his personal effect. It
is quite reasonable that a traveller may make purchases of his
personal effects before embarking on a tour to India. It could be of
any personal effect including jewellery. Therefore, its newness is
of no consequence. The expression “new goods” in their original
packing has to be understood in a pragmatic way.
16. We are of the considered opinion that in the absence of any
facts on record about the nature and mode of concealment and alsoSignature Not Verified
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any finding of the lower authority that jewellery was kept in a way
to evade detection on examination of the baggage, it has to be held
that there was no concealment as such. It is seen that the
respondent chose the green channel for clearance of her baggage.
She committed no violation of law or infraction of any instruction
for clearance of the baggage through the green channel as she
being a tourist had no dutiable goods to declare under the Baggage
Rules. The presumption that the jewellery found in her baggage
cannot be considered as personal effects owing to its high
monetary value is rebutted herewith and we hold that the
respondent was entitled to import personal jewellery duty free.”
15. The Kerala High Court also had an opportunity to deal with the
question of applicability of the Baggage Rule, 1998, in respect of
jewellery borne by a passenger on his person, while arriving in India
in the case of Vigneswaran Sethuraman vs. Union of India, 2014
SCC Online Ker. 28775. The High Court ruled as follows:-
“15. Section 77 of the Act stipulates that the Owner of any baggage
shall for the purpose of clearing it make a declaration of its
contents to the proper officer. The term “baggage” is defined in
Section 2(3) of the Act to include unaccompanied baggage. Motor
vehicles are excluded from the purview of the said definition. The
declaration under’ Section 77 is to be made by the owner of the
baggage. The term baggage ordinarily connotes suitcases or bag;s
or containers in which a traveller carries his/her goods or
belongings. Section 2(22) of the Act defines the term goods to
include baggage. Having regard to the stipulations in Section 77
and the definition of the term “baggage” occurring in Section 2(3)
of the Act, the body of a passenger cannot be said to be baggage. In
the instant case, the gold chain was worn by the petitioner and was
not carried in his baggage. It was therefore not necessary for the
petitioner to declare the gold chain worn by him. Section 80 of the
Act clarifies the position. Section 80 stipulates that the baggage of
a passenger, which contains any article which is dutiable or the
import of which is prohibited, may be detained at the request of the
passenger for the purpose of being returned to him on his leaving
India. The term baggage thus connotes something which is distinct
and different from the passenger who has brought the baggage.
Section 81 of the Act empowers the Central Board to frame
regulations regarding the declaration of the contents of any
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baggage, its custody, examination, assessment to duty and
clearance of baggage and transit of baggage from One customs
station to another or to a place outside India. Going by the
stipulations in Sections 77, 80 and 81 of the Act, I am persuaded to
take the view that the provisions therein can have no application to
the instant case where the petitioner, a tourist coming from Sri
Lanka had on his person a gold chain which he was wearing and
was not kept concealed in his body. Such being the situation,
clauses (1) and (m) of Section 111 of the Act can have no
application.
16. That takes me to the question whether the petitioner had
imported or attempted to import or brought to Indian Customs
Waters for the purpose of being imported, gold ornaments, contrary
to any prohibition imposed by the Act or any other law, so as to
attract clause (d) of Section 111 of the Act. Necessarily therefore
the question whether the Act or any other law prohibits a tourist
coming to India from wearing gold ornaments arises for
consideration. The second respondent has in the impugned order
held that a foreigner cannot import even a single gram of gold free
of duty or on payment of duty. He does not however refer to the
law which imposes the prohibition. The learned counsel appearing
for the respondents was also not able to bring to my notice any
provision in the Act or the Baggage Rules, 1998 to that effect. No
provision in any other law to that, effect was also brought to my
notice, in the absence of any prohibition imposed by the Act Or
any other law to the effect that a foreign tourist arriving in India
cannot wear gold ornaments On his person or wear gold ornaments
of 24 carat purity, clause (d) of Section 111 could hot have been
invoked to confiscate the gold chain worn by the petitioner. The
gold chain was not concealed in any package and therefore it could
not have been confiscated invoking clause (i) of Section 111. Even
if it was dutiable, as it was not concealed in any manner in any
package either before or after it was unloaded, it could not have
been confiscated invoking clause (i) of Section 111 of the Act. At
best, only the duty payable could have been levied. There is also
yet another reason why the impugned action cannot be sustained.
Even assuming for the sake of arguments that a foreign tourist
arriving in India cannot wear gold ornaments on his/her person in
view of an express provision of law in that regard (such a statutory
provision was not brought to my notice and it is not referred to in
Ext. P3 order), the respondents should have informed the petitioner
that he cannot wear it for the reason that the import of it is
prohibited and given him the option of having the goods detainedSignature Not Verified
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for the purpose of being returned to him on his leaving India as
contemplated in Section 80 of the Act. The respondents have not
stated in Ext. P3 that such an option was extended to him and
therefore for that reason also, the impugned order is liable to be set
aside.
xxxx xxxx xxxx
21. I shall now consider whether the Baggage Rules, 1998 prohibit
a tourist Of foreign origin from bringing even a single gram of gold
free of duty or on payment of duty to India as stated by the second
respondent in Ext. P3. Rule 7 of the Baggage Rules, 1998 stipulates
that a tourist arriving in India shall be allowed clearance free of
duty, articles in his bona fide baggage to the extent mentioned in
column (2) of Appendix E. The petitioner is a tourist of foreign
origin. This fact is not in dispute. Going by entry (b) in Appendix-
E, tourists of foreign origin, other than those of Pakistani origin
coming from Pakistan, coming to India by air can be allowed
clearance free of duty (i) his or her used personal effects and (ii) :
articles other than those mentioned in Annexure-I, up to a value of
Rs. 8000 for personal use of the tourist or as gifts and travel
souvenirs if these are carried on the person or in the accompanied
baggage of the passenger. Annexure I referred to in Appendix E is
extracted below for easy reference:–
1. Firearms.
2. Cartridges of fire arms exceeding 50.
3. Cigarettes exceeding 200 or cigars exceeding 50 or tobacco exceeding
250 gms.
4. Alcoholic liquor or wines in excess of two litres.
5. Gold or silver, in any form, other than ornaments.
22. The effect of the aforesaid stipulations in Appendix-E and
Annexure-I of the Baggage Rules, 1998 is that a tourist of foreign
origin coming to India by air is not entitled to duty free clearance
of firearms, cartridges of fire arms exceeding 50 numbers,
cigarettes exceeding 200 or cigars exceeding 50 or tobacco
exceeding 250 gms, alcoholic liquor or wines in excess of two
litres and gold or silver in any form other than ornaments. It is
evident from the Baggage Rules, 1998 that the restriction or
prohibition is on the duty free clearance of gold or silver in any
form other than as ornaments and not on the import as such. It is
not stipulated in the Baggage Rules, 1998 that a foreign tourist who
is coming to India by air cannot wear a gold chain or even his/her
wedding ring. In the absence of an express provision in the
Baggage Rules, 1998 prohibiting a foreign tourist entering IndiaSignature Not Verified
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from wearing a gold chain or other gold jewellery, I am of the
considered opinion that the impugned order was passed without
any legal foundation.
xxxx xxxx xxxx
26. It is evident from a reading of the aforesaid notifications that
they are notifications issued in exercise of the powers conferred on
the Central Government Under sub-section (1) of Section 25 of the
Customs Act, 1962 exempting gold and silver in any form but
excluding ornaments studded with stones or pearls; from customs
duty/as specified in the First Schedule to the Customs Tariff Act,
1975 to the extent mentioned in the notifications. A foreigner
cannot claim the benefit of the said notification. It applies only to
Indian citizens. The notifications do not prohibit import of gold or.
gold ornaments, but only exempt duty to the extent mentioned
therein. The reliance placed on Notification No. 117/1992- Cus., is
therefore, misconceived : The term “smuggling” is defined in
Section 2(39) of the Act. As per the said definition smuggling in
relation to any goods means any act or omission which will render
such goods liable to confiscation under Section 111 or Section 113
of the Act., As I have held that the order of confiscation was passed
without any legal foundation, the finding in Ext. P3 that the
petitioner attempted to smuggle the gold chain cannot be sustained,
consequently, I hold that the order of confiscation and the levy of
penalty are liable to be set aside.
27. The Customs Act, 1962, or the Baggage Rules, 1998 do not
stipulate that a foreign tourist entering India cannot wear gold
ornaments on his person. The Customs Act, 1962 and the Baggage
Rules, 1998 do not provide sufficient warning to foreign tourists
entering India that wearing a gold chain is prohibited. The Act and
the Rules do not even remotely indicate that a foreign tourist
entering India cannot wear a gold chain on his person, in other
words, foreign tourists entering India are in a boundless sea of
uncertainty as to whether it is prohibited or not. As the Customs
Act, 1962 and the rules framed there under contemplate
confiscation and levy of penalty as also prosecution, the State has a
duty to specify with a degree of certainty as to what is prohibited
and what is not, without leaving it to the foreign tourist to guess
what is prohibited and what is not.”
16. The Kerala High Court also commented on the lack of clarity in the rules
in Para No. 30, reproduced below:-
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“30. The principle laid down in the aforesaid decisions is founded
on a universal sense of fairness or reasonableness. The
apprehension voiced by the Apex Court in Kartar Singh v. State of
Punjab [(1994) 3 SCC 569] and by the Supreme Court of United
States in jay Giaccio v. State of Pennsylvania, (1966) 382 US 399;
‘has’ proved to be true in the instant case where, without the
backing of a law which expressly prohibits a foreign tourist
entering India from wearing a gold chain’ the respondents have,
relying on a notification which has no application, confiscated the
gold chain worn by the petitioner holding that he is not entitled to
import. free of duty or on payment of duty even a single gram of
gold. If that were the law, what fate will befall foreign tourists with
gold capped teeth who arrive in India. Though the learned counsel
appearing for the respondents submitted that the gold chain worn
by the petitioner was of 24 carat purity, which is prohibited, no
statutory stipulation to that effect was brought to my notice. In the
absence of a statutory prescription in express terms to the effect
that a foreign tourist “entering India should not wear 24 carat gold
jewellery much less gold jewellery, I am of the opinion that the
impugned order cannot be sustained. The Apex Court has
in Whirlpool Corporation v. Registrar of Trade Marks;
Mumbai ((1998) 8 SCC 1: AIR 1999 S.C. 22) reiterated the
proposition that the jurisdiction of the High Court to entertain a
writ petition under Article 226 of the Constitution of India is not
affected in spite of alternative statutory remedies in cases where the
authority against whom the writ is filed is shown to have had no
jurisdiction or had purported to usurp jurisdiction without any legal
foundation. In the view that I have taken it has to be necessarily
held that the order of confiscation passed in the instant case is one
without a legal foundation. I therefore overrule the contention of
the learned counsel appearing for the respondents that the
petitioner should be relegated to the alternative statutory remedies
available to him.”
17. In the present case also, petitioner is a foreign national, who
brought a chain and a kara by wearing them on his body while
arriving from Bangkok. The same was not brought in a concealed
manner. We find that the present case stands squarely covered by the
judgments of Pushpa Lekhumal Tulani and Vigneswaran Sethuraman
vs. Union of India (supra).
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18. Hence, when tested on the aforesaid principles, it becomes
apparent that the Original Authority and Revisional Authority has
clearly misconstrued the scheme as well as objectives of the Baggage
Rules. Since the case of the petitioner has not been evaluated on the
basis of the principles enunciated hereinabove, we find ourselves
unable to sustain the order impugned.
19. Accordingly, the order dated 13.08.2018, passed in revision, is
hereby quashed and set aside. We accordingly hold that the order of
confiscation, customs duty and the penalty imposed is without any
legal foundation.
20. Writ Petition accordingly stands allowed with all consequential
reliefs.
RAVINDER DUDEJA, J.
YASHWANT VARMA, J.
02 December, 2024/RM
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