2025 (4) TMI 837 - HC - Customs

Detention of gold jewellery - absence of SCN and the lack of an opportunity for a personal hearing - violation of principles of natural justice - HELD THAT - In the opinion of this Court since no Show Cause Notice was issued to the Petitioner in the present matter and no opportunity for personal hearing was granted the same is not in accordance with law and would be contrary to the previous decisions of this Court including Amit Kumar v. The Commissioner of Customs 2025 (2) TMI 385 - DELHI HIGH COURT and Mr. Makhinder Chopra v. Commissioner of Customs New Delhi 2025 (3) TMI 19 - DELHI HIGH COURT . This Court has also 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. In fact even in the connected petitions of the family members of the Petitioner this Court has directed for release of the confiscated articles of the Petitioner on the same grounds of non-issuance of show cause notice and absence of personal hearing to the Petitioner - the detention of Petitioner s gold jewellery is illegal and the Order-in-Original passed in pursuance to such detention is not sustainable. Conclusion - The detention of the Petitioner s gold jewellery is illegal and that the Order-in-Original is unsustainable due to the lack of procedural fairness. Petition disposed off.

Summary

ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment are:

• Whether the detention of the Petitioner's gold jewellery by the Customs authorities at Indira Gandhi International Airport, New Delhi, was lawful.
• Whether the absence of a Show Cause Notice and the lack of an opportunity for a personal hearing rendered the Order-in-Original invalid.
• Whether the confiscated gold jewellery, being personal jewellery, should be exempt from confiscation under the applicable legal framework.

ISSUE-WISE DETAILED ANALYSIS

Detention of Gold Jewellery

The relevant legal framework involves the Customs Act, 1962, particularly Sections 111 and 112, which deal with the confiscation of goods and penalties for improper importation. The Petitioner was intercepted after crossing the Green Channel at the airport, and her jewellery was detained for not being declared, which the Customs authorities deemed a violation of customs regulations.

The Court noted that the Order-in-Original indicated that the Petitioner had admitted to the act of omission and commission and expressed willingness to pay the applicable customs duty, fine, and penalty. However, the Court found that the lack of a Show Cause Notice and the absence of a personal hearing opportunity were significant procedural lapses.

Absence of Show Cause Notice and Personal Hearing

The Court emphasized the importance of procedural fairness, referencing previous decisions where similar procedural deficiencies led to the setting aside of orders. The Court cited precedents such as Amit Kumar v. The Commissioner of Customs and Mr. Makhinder Chopra v. Commissioner of Customs, New Delhi, which underscore the necessity of issuing a Show Cause Notice and providing an opportunity for a personal hearing before confiscation.

The Court reasoned that the failure to provide these procedural safeguards rendered the Order-in-Original contrary to established legal principles and previous court decisions.

Confiscation of Personal Jewellery

The Court considered whether personal jewellery should be exempt from confiscation. It referred to prior judgments, including Nathan Narayanswamy v. Commissioner of Customs and Farida Aliyeva v. Commissioner of Customs, where it was held that personal jewellery is not liable to confiscation. The Court found that the Petitioner's jewellery, being personal and customary, should not have been detained.

The Court also noted that in related cases involving the Petitioner's family members, the confiscated articles were ordered to be released due to similar procedural deficiencies.

SIGNIFICANT HOLDINGS

The Court held that the detention of the Petitioner's gold jewellery was illegal and that the Order-in-Original was unsustainable due to the lack of procedural fairness. The Court set aside the detention and the Order-in-Original, ordering the release of the jewellery within four weeks.

Verbatim Quote: "In the opinion of this Court, since no Show Cause Notice was issued to the Petitioner in the present matter and no opportunity for personal hearing was granted, the same is not in accordance with law and would be contrary to the previous decisions of this Court."

The core principles established include the necessity of procedural fairness in customs proceedings and the protection of personal jewellery from confiscation when proper procedures are not followed.

The final determination was that the Petitioner's jewellery should be released, and any storage charges waived, emphasizing the importance of procedural compliance in customs enforcement actions.