The Delhi High Court has directed the release of goods detained without show cause notice (SCN) on the grounds that printed waiver of SCN cannot be considered to be an oral SCN but directed that the storage charges will be borne by traveller.
The bench of Justice Prathiba M. Singh and Justice Dharmesh Sharma have referred the matter to the Central Board of Indirect Taxes and Customs (CBIC) for undertaking a review of the various forms including Detention receipts, Requests for appraisal and connected documents. It must be duly changed in accordance with law and in compliance with the principles of Natural Justice.
In addition, the bench directed the CBIC to frame a procedure to be prescribed for issuance of show cause notices after detention of goods by customs.
The bench observed that the issues relating to the Baggage rules are already being considered by the Court in the Qamar Jahan Vs. Union of India, where the Court opined that the Baggage Rules of 2016 are required to be re-looked by the Central Board of Indirect Taxes and Customs, considering the price of gold which has increased over the years. The matter is listed on 27th March, 2025.
The Petitioner arrived from Dubai in Terminal-3, IGI Airport, New Delhi on 3rd March, 2024. He was traveling with his wife and was crossing through Green Channel, when he was intercepted.
The goods were detained by the Customs Official namely one gold chain, one three layered gold chain with black beads and gold pendant, four cut pieces of gold bar, Sony PS5 Play Station, one V ersace Ladies Cosmetic Set, Meta Quest-3 Gaming Device, Xerjoff-K Jabir Perfume and I PHONE 15 PRO 256 GB.
The detention was effected and a detention receipt was issued. The Petitioner had made a request for release of detained goods.
The appraisal of the gold was done, which included one gold chain, one three layered gold pendant chain with black beads and gold pendant and four cut pieces of gold bar along with a carton containing miscellaneous electronic items. Total of all the detained items was appraised at approximately Rs. 20 lacs.
The Petitioner sought the release of the detained goods under Section 110(2) of the Customs Act, 1962, on the ground that no Show Cause Notice was issued.
The petitioner sought the direction to the Commissioner of Customs to pay storage charges to Central Warehousing Cooperation, IGI Airport.
The Petitioner submitted that the Show Cause Notice has not been issued within the period of 6 months from the date of appraisement of the goods.
The department submitted that the SCN could be even oral as per the first proviso to Section 124 of the Act. In the application for release of detained goods, the Petitioner has signed an undertaking that he does not want a written SCN or even a personal hearing.
The court held that the printed waiver of SCN and the printed statement made in the request for release of goods cannot be considered or deemed to be an oral SCN, in compliance with Section 124.
The court noted that the SCN in the present case is accordingly deemed to have not been issued and thus the detention itself would be contrary to law. The order passed in original without issuance of SCN and without hearing the Petitioner, is not sustainable in law. The Order is accordingly set-aside.
Case Details
Case Title: Amit Kumar Versus The Commissioner Of Customs
Case No.: W.P.(C) 15973/2024
Date: 6/02/2025
Counsel For Petitioner: S. Vijay Kanth
Counsel For Respondent: Gibran Naushad
