The Delhi High Court has held that the values of gold that would be permissible under the Baggage Rules would also have to be re-looked by the Central Board of Indirect Taxes and Customs (CBIC) as the same appears to be completely not in tune with the current market value of gold.
The bench of Justice Prathiba M. Singh and Justice Dharmesh Sharma held that let this matter be referred to the Chairman, CBIC for reconsideration of the Baggage Rules 2016. Let the re-consideration be undertaken in coordination with any other Departments or Ministries as may be required and the report be filed before this Court regarding the reconsideration and the manner thereof. The report shall be filed by the next date of hearing.
The Bench noted that a number of writ petitions challenging the seizure of even small quantities of jewellery is sometimes seized by the Customs Department if the passenger is walking through the green channel – which is for passengers not having any dutiable or prohibited goods.
The Court has queried the Customs officials as to what are the applicable Rules and Circularsin respect of confiscation or seizure by the Customs Department of jewellery which are worn by travellers/tourists who may be coming from abroad to India.
The Court has been informed by the Customs Officials that as per the Baggage Rules, 2016, that came into force on 1st April, 2016 and was passed under Section 79 of the Customs Act, 1962, the term “personal effects” would not include jewellery.
As per the Baggage Rules any jewellery of 20 grams with a value cap of Rs. 50,000/- in case of a man and forty grams with a value cap of Rs. 1,00,000/- in case of a woman, only can be cleared free of duty upon return to India, subject to the condition that the concerned passenger is residing abroad for more than one year.
The Indian Customs Declaration Form (hereinafter “Declaration Form”) issued by the CBIC as part of the Guide for Travellers has also been perused by the Court, which would show that gold and gold jewellery is being treated as prohibited articles where the same is beyond the prescribed limits under Rule 5 of Baggage Rules, including gold bullion.
On a query from the Court, Mr. Shubham Tyagi,Counsel for the Customs Department, as also Mr. Harpreet Singh,Counsel, who regularly appears for the Customs informed the Court, that if any traveller is coming from abroad and is carrying jewellery which is more than the value as prescribed in Rule 5 of the Baggage Rules, the same would have to be declared by the traveller. Further, where the declaration has been made the applicable duty would not have to be paid and an undertaking would have to be given, inter alia, stating that the traveller intends to carry the declared jewellery back.
The petitioner has challenged the Orderpassed by the Joint Commissioner of Customs and the Commissioner of Customs (Appeals). The adjudicating authority, inter alia, ordered confiscation of two gold kadas and one gold chain of the Petitioner.
The Petitioner was also directed to pay a redemption fine of Rs. 75,000/- and a personal penalty of Rs. 1,10,000/- in terms of the Customs Act, 1962. The Petitioner appealed the Order-in-Original and the Commissioner of Customs (Appeals) dismissed the appeal filed by the Petitioner.
On the last date of hearing i.e., 9th January, 2025, after considering the facts of the case, the Court had directed a competent Customs official, who is familiar with the relevant circulars issued in respect of seizure of personal effects and jewellery by the Customs Department, be present in Court on the next date of hearing.
The Court noted that the Baggage Rules may also require a re-look, considering the market rate of gold at present, where forty grams of gold would be costing much more the value cap of Rs. 1,00,000/- prescribed under Rule 5 of Baggage Rules. With the maximum limit of Rs.1,00,000/-, the gold that could be purchased may only be around 15 grams.
The court issued the notice to CBIC and Customs Dept. and listed the matter on 27th March, 2025.
Case Details
Case Title: Qamar Jahan Versus Union Of India, Represented By Secretary, Ministry Of Finance & Ors.
Case No.: W.P.(C) 198/2025
Date: 13th January, 2025
Counsel For Petitioner: Adv. Ashish Panday
Counsel For Respondent: Jagdish Chandra
