1968 (10) TMI 47 - HC - Customs

Summary

Issues Involved:
1. Legality of the seizure of diamonds.
2. Interpretation of "baggage" under the Customs Act, 1962.
3. Applicability of Section 80 and Section 77 of the Customs Act, 1962.
4. Whether diamonds were imported for commercial purposes.
5. Discretion of the Customs Officer under Section 80.
6. Jurisdiction of the High Court under Article 226 of the Constitution.

Detailed Analysis:

1. Legality of the Seizure of Diamonds:
The appeal challenges the judgment that declared the seizure of the diamonds unwarranted and illegal. The respondent had declared the diamonds upon arrival and requested their detention under customs custody, which was initially allowed. However, the diamonds were later seized under Section 110 of the Customs Act, 1962, on the grounds that they were liable for confiscation under Section 111(d).

2. Interpretation of "Baggage" under the Customs Act, 1962:
The term "baggage" is not explicitly defined in the Customs Act but is included in the definition of "goods." The court concluded that "baggage" should be interpreted in its larger, ordinary sense, encompassing all personal belongings a traveler carries, whether accompanied or unaccompanied. This interpretation is crucial as it determines whether the diamonds can be considered part of the respondent's baggage.

3. Applicability of Section 80 and Section 77 of the Customs Act, 1962:
Section 77 requires the owner of any baggage to declare its contents, while Section 80 allows for the detention of dutiable or prohibited articles for return upon the passenger's departure from India. The court held that the respondent had made a valid declaration under Section 77 and requested detention under Section 80, thus expressing an intention not to import the diamonds permanently into India.

4. Whether Diamonds Were Imported for Commercial Purposes:
The court examined whether the diamonds, which were undoubtedly merchandise, were imported for commercial purposes. It was argued that merely landing in India does not constitute import unless the goods are intended for use, enjoyment, consumption, sale, or distribution within the country. The court found that since the diamonds were declared and detained under Section 80, there was no intention to import them for commercial purposes.

5. Discretion of the Customs Officer under Section 80:
The appellants contended that the Customs Officer had the discretion to accept or reject the detention request under Section 80 and could revoke this discretion. The court disagreed, stating that once the discretion to detain the articles was exercised, the officer was under a statutory obligation to return them upon the passenger's departure from India.

6. Jurisdiction of the High Court under Article 226 of the Constitution:
The appellants argued that the Customs Act provides for appeal and revision, and thus the High Court should not have entertained the writ petition under Article 226. The court upheld the learned Single Judge's discretion to entertain the petition, noting the specific circumstances of the case justified the exercise of jurisdiction under Article 226.

Conclusion:
The court dismissed the appeal with costs, affirming that the seizure of the diamonds was unwarranted and illegal, and the respondent was entitled to their return. The interpretation of "baggage" and the application of Sections 77 and 80 were central to this decision, as was the determination that the diamonds were not imported for commercial purposes. The court also upheld the jurisdiction of the High Court under Article 226 in this matter.