Release of seized Gold jewellery on payment of custom duty & Redemption fine

PJ/Case Law/2011-12/1139

Case: T. Elavarsan v/s Commissioner of Customs (Airport), Chennai

Citation: 2011 (266) ELT 167 (Mad)

Issue: - Gold seized (non banned item) can be released on payment of custom duty and redemption fine.

Brief Facts: - Gold Jewellery of 350 grams was confiscated from the petitioner upon his arrival at the Chennai Airportfrom Singapore. The Customs officers had also seized US $ 650 from the petitioner. His passport was taken from him and after recording of statement, petitioner was released. Thereafter, he had made various requests for release of gold jewels as per provisions of Customs Act, 1962 but the same was not released. The petitioner also appeared before the Customs Authorities as summoned.

Therefore, the Petitioner has filed this writ petition for release of gold jewels on payment of customs duty and redemption fine as per provisions of Notification No. 31/2003-Customs dated 01.03.03.

Petitioner’s Contention: - Petitioner has stated that he had purchased the gold jewellery in Singapore and had declared the same to the Customs Authority on arrival in India. It was stated that the Customs officials had not accepted his declaration was had obtained his statement towards evasion on payment of customs duty under coercion. It was stated that the US currency seized from him was meant for payment of customs duty on the said jewellery and since the petitioner was staying in Singapore for more than 6 months, he was eligible to bring upto 10 kilograms of gold. It was submitted that gold is not a restricted item and should be released on payment of duty as per Notification No. 31/2003-Cus. It was submitted that the petitioner had complied with the provisions of Section 77. And there was no mis-declaration or non-declaration on his behalf.

It was submitted that Customs Authorities are duty bound to release the gold jewellery on payment of duty they was arbitrarily refusing to release the same which is contrary to provisions of Customs Act. Petitioner relied upon the judgments given in Shaik Jamal Basha v/s Government of India [1997 (91) ELT 277 (AP)], Commissioner of Customs (Preventive) v/s Uma Shankar Verma [2000 (120) ELT 322 (Cal)], Yakub Ibrahim Yusuf v/s Commissioner of Customs, Mumbai [2011 (263) ELT 685 (Tri-Mumbai)].

Respondent’s contention:- Revenue submitted that the petitioner had not declared the possession of gold jewellery on arrival in India from Singapore. The gold jewellery was found from the baggage of the petitioner which was seized on suspicion. The petitioner was also found carrying 600 US$. It was stated that the gold jewellery was seized under a mahazar under Section 110 of the Customs Act, 1992 read with Foreign Trade (Development and Regulation) Act, 1992.

It was contended that the Petitioner had made a voluntary statement admitting that he did not intend to declare the gold jewellery and the same did not belong to him. It was stated that he had later on retracted from his statement. It was submitted that the petitioner had not declared the jewellery with intent to evade payment of customs duty. He had contravened the provisions of Section 77. As such, the said jewellery was liable for confiscation under Section 111 and penal action under Section 112 was liable to be taken against him. It was submitted that as the petitioner is not the owner of the said jewellery he is not entitled for return of jewellery as per decision given in G. V. Ramesh v/s Commissioner of Customs [2010 (252) ELT 212 (Tri-Chennai)].

It was further submitted that show cause notice has been issued to the petitioner and adjudication proceedings are going on and therefore, the request of the petitioner was release of jewellery should be rejected.

Reasoning of Judgment: - The High Court noted that the gold jewellery was confiscated under Section 111 on allegation that the petitioner had attempted to import the said jewellery improperly without declaring the same with intent to evade payment of duty.

The High Court held that Revenue has not given any proper grounds for their refusal to release the gold jewellery, on the payment of customs duty. It was noted that there is no disputed on the fact that Petitioner is entitled to import upto 10 kilograms of gold as he was living abroad for more than 6 months. It was also noted that gold is not a prohibited item. It was noted that an option was available to a person, who is the owner of goods, or where such owner is not known, the person from whose possession or custody such goods had been seized, to pay fine in lieu of confiscation under Section 124.

It was held that in such circumstances, there is nothing shown on behalf of the respondents that the petitioner is not entitled to get the goods released on his payment of customs duty and penalty liable to be paid by him, as per the Notification No. 31/2003-Cus, dated 01.03.2003.

The High Court held that it is clear that an option has to be given to the petitioner to pay the applicable customs duty and redemption fine and to get the goods released, as per Section 125. Direction given to the Revenue to release provisionally the jewellery on payment of customs duty and redemption fine to petitioner, as per Notification No. 31/2003-Cus and as per Section 125. Release of goods to be subject to adjudication proceedings.

Decision:- Writ petition disposed of accordingly.

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PJ/Case Law/2011-12/1139

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