The petitioner purchased seven gold chains weighing 350 grams from M/s. Arthesdam Jewellery, Singapore, and arrived at Chennai airport on 4-9-2010 carrying the gold chains. Upon arrival, he declared possession of the gold chains to the Airport Customs Officers, who did not accept the declaration, took his passport, and threatened arrest if he did not sign their statement. Subsequently, the petitioner was allowed to leave the airport but the gold jewellery and his passport were not released. Despite repeated requests, the Superintendent of Air Intelligence summoned the petitioner on 9-9-2010, where the gold jewellery remained unreleased under the Customs Act, 1962. Additionally, 650 US Dollars carried by the petitioner were seized as duty payment for the gold chains. The petitioner contended that he complied with Section 77 of the Customs Act, 1962, and the respondents arbitrarily refused to release the jewellery, prompting the filing of a writ petition under Article 226 of the Constitution of India.

Legal Issues Presented

Whether the petitioner is entitled to release of the gold jewellery on payment of customs duty and applicable penalty under the Customs Act, 1962.
Whether the respondents acted contrary to the provisions of the Customs Act, 1962, in refusing to release the gold jewellery.
Whether the petitioner, having declared the gold jewellery, is liable for confiscation and penalty under Sections 110, 111, 112, and 125 of the Customs Act, 1962.
Whether the petitioner is entitled to the option of paying a fine in lieu of confiscation under Section 125 of the Customs Act, 1962.

Arguments of the Parties

Petitioner’s Arguments

The petitioner declared possession of the gold chains on arrival and complied with Section 77 of the Customs Act, 1962.
The petitioner is entitled to bring up to 10 kilograms of gold, having resided abroad for more than six months, and gold is not a restricted item.
The respondents should release the gold jewellery upon payment of customs duty as per Notification No. 31/2003-Customs dated 1-3-2003, along with any applicable penalty under Section 125 of the Customs Act, 1962.
The seizure under Section 110 and confiscation under Section 111 require proper procedure, including offering an option to pay a fine in lieu of confiscation under Section 125.
Relied on precedents supporting the right to pay fine instead of confiscation and the entitlement to release of goods on payment of duty and penalty.

Respondents’ Arguments

The petitioner denied carrying gold or gold jewellery upon questioning and declared the value of goods as nil on the Customs Declaration card.
On suspicion, gold chains weighing 350 grams were seized under Section 110 of the Customs Act, 1962, read with the Foreign Trade (Development and Regulation) Act, 1992; the petitioner also carried 600 US Dollars which were retained.
The petitioner initially admitted not intending to declare the gold jewellery and claimed it did not belong to him, but later retracted stating coercion.
The petitioner contravened Section 77 of the Customs Act, 1962, by attempting to evade customs duty, making the gold jewellery liable for confiscation under Section 111 and penalty under Section 112.
The petitioner is not the owner of the gold jewellery and therefore not entitled to its return, as per the decision in G.V Ramesh v. Commissioner of Customs.
A show cause notice was issued and adjudication proceedings were pending, justifying refusal to release the gold jewellery.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Shaik Jamal Ba-sha v. Government of India, [1997 (91) E.L.T 277 (A.P)]	Option to pay fine in lieu of confiscation under Section 125(1) of the Customs Act, 1962 and Rule 9 of the Baggage Rules, 1978.	Supported the petitioner’s right to pay fine instead of confiscation of goods.
Commissioner of Customs (Preventive) v. Uma Shankar Verma, [2000 (120) E.L.T 322 (Cal.)]	Section 125 of the Customs Act, 1962 distinguishes between prohibited and non-prohibited goods regarding option to pay fine in lieu of confiscation.	Held that for non-prohibited goods, the assessee must be allowed to pay fine instead of confiscation.
Yakub Ibrahim Yusuf v. Commissioner of Customs, Mumbai, 2011 (263) E.L.T 685 (Tri.-Mumbai)	If owner of goods is unknown, redemption option must be given to the person from whose possession goods were recovered.	Reinforced petitioner’s entitlement to pay fine and redeem goods.
G.V Ramesh v. Commissioner of Customs, [2010 (252) E.L.T 212 (Tri. - Chennai)]	Non-ownership of seized goods disentitles petitioner from claiming return of goods.	Respondents relied on this to assert petitioner’s lack of ownership and denial of release.

Court's Reasoning and Analysis

The court examined the affidavits and records, noting that the gold jewellery was confiscated under Section 111 of the Customs Act, 1962, on the allegation of improper importation without declaration to evade customs duty. Although the respondents asserted non-declaration and evasion, the court found no proper grounds for refusal to release the jewellery upon payment of customs duty. It recognized the petitioner’s admitted entitlement to import up to 10 kilograms of gold after residing abroad for over six months and that gold is not a prohibited item. The court emphasized the statutory provision under Section 125 of the Customs Act, 1962, which provides an option to pay a fine in lieu of confiscation. It relied on precedents to affirm that the petitioner must be given the option to pay customs duty and redemption fine to obtain provisional release of the gold jewellery. The court clarified that the provisional release is subject to ongoing adjudication proceedings, and the petitioner must cooperate fully therein.

Holding and Implications

The writ petition is allowed. The respondents are directed to provisionally release the gold jewellery to the petitioner forthwith upon payment of the customs duty and redemption fine as prescribed by Notification No. 31/2003-Customs and Section 125 of the Customs Act, 1962.

The provisional release is contingent upon the outcome of adjudication proceedings, which the petitioner must cooperate with fully. No costs are awarded, and the connected miscellaneous petition is closed. This decision directly affects the parties by ordering provisional release but does not establish any new legal precedent beyond the application of existing statutory provisions and case law.

Show all summary ...

1. Heard the learned counsel appearing for the petitioner and the learned counsel appearing for the respondents.

2. It has been stated that the petitioner had purchased 7 gold chains (350 gms), vide Invoice No. 100047, dated 2-9-2010, from M/s. Arthesdam Jewellery, Singapore. The petitioner had arrived at the Chennai airport, on 4-9-2010, along with the gold chains. Immediately, on his arrival he had declared before the Airport Customs Officers about the possession of the gold chains. However, without accepting the declaration made by the petitioner they had taken his passport and they had threatened that he would be arrested it he did not sign the statement written by the customs officers. Thereafter, he was allowed to leave the airport. It has been further stated that, in spite of the repeated requests made by the petitioner, for the release of the gold jewels and to return his passport, the Superintendent of Air Intelligence unit had issued summons to the petitioner to appear before him, on 9-9-2010. The petitioner had appeared before the Superintendent of Air intelligence unit, as per the summons. However, the gold jewellery had not been released, as per the relevant provisions of the Customs Act, 1962.

3. It has also been stated that the Airport Customs Officers had also seized 650 US Dollars from the petitioner, on the date of his arrival. The US Dollars were meant for payment of duty for the gold chains he had brought from Singapore, having stayed there for more than six months. There is no mis-declaration or non-declaration of the the gold jewellery by the petitioner, as alleged by the respondents. The petitioner had complied with the provisions of Section 77 of the Customs Act, 1962. Even though the respondents are duty bound to release the gold jewellery, on payment of the proper customs duty, the respondents are refusing to release the same, arbitrarily, and contrary to the provisions of the Customs Act, 1962. In such circumstances, the petitioner has preferred the present writ petition before this Court, under Article 226 of the Constitution of India.

4. The learned counsel appearing on behalf of the petitioner had sub-mitted that the respondents should release the gold jewellery on the petitioner paying the customs duty, as per the Notification No. 31/2003-Customs, dated 1-3-2003, along with the applicable penalty, if any, as per Section 125 of the Customs Act, 1962. He had further submitted that it is an admitted fact that the petitioner had been residing at Singapore for more than six months and as such, he is eligible to bring upto 10 kilograms of gold. He had also submitted that gold is not a restricted item. The duty that is to be paid is at the rate of Rs. 250/- for every 10 gms of gold imported into India, as per Notification No. 31/2003-Customs, dated 1-3-2003, issued under Chapter 71 of the First Schedule to the Customs Tariff Act, 1975.

5. The learned counsel had also submitted that the seizure of the goods could be done, under Section 110 of the Customs Act, 1962, if the officer concerned has reason to believe that such goods are liable to be confiscated, as per the procedures prescribed thereunder. Provisional release of the goods seized under Section 110 may be released to the owner, pending the adjudication proceedings, on taking a bond from the person concerned, with such security and conditions, as the Commissioner of Customs may require. The confiscation of improperly imported goods could be made by invoking Section 111 of the said Act. Further, penalty could be levied, under Section 112 of the Customs Act, 1962, for improper importation of goods. Since, the petitioner is the importer of the gold jewellery, as per Clause (26) of Section 2 of the said Act, the respondents ought to have released the gold jewellery to the petitioner, on his paying the proper customs duty and the proper penalty, as per the provisions of the Customs Act, 1962. However, the respondents had refused to release the gold jewellery contrary to the provisions of the said Act and without having sufficient reasons to do so.

6. The learned counsel appearing on behalf of the petitioner had relied on the decision of the High court of Andhra Pradesh, reported in Shaik Jamal Ba-sha v. Government of India, [1997 (91) E.L.T 277 (A.P)], wherein it had been held that an option to pay the fine, in lieu of the confiscation of the goods, is to be given to the importer, in terms of the Second Part of Section 125(1) of the Customs Act, 1962, read with Rule 9 of the Baggage Rules, 1978, framed under Section 79(2) of the Customs Act, 1962.

7. He had also relied on the decision of the High Court of Calcutta, made in Commissioner of Customs (Preventive) v. Uma Shankar Verma, [2000 (120) E.L.T 322 (Cal.)], wherein it had been held that, as per the provisions of Section 125 of the Customs Act, 1962, if the goods are ‘prohibited’ the option to confiscate, without giving an option to the assessee to pay the fine in lieu thereof, is with the customs authorities. However, when the goods are not prohibited’ then the customs authorities have no option but to allow the assessee to pay the fine, in lieu of the confiscation.

8. The learned counsel had also relied on the decision of the Bombay Tribunal, made in Yakub Ibrahim Yusuf v. Commissioner of Customs, Mumbai, 2011 (263) E.L.T 685 (Tri.-Mumbai), wherein it had been held that if the owner of the goods is not known, the option of redemption has to be given to a person from whose possession the goods in question had been recovered.

9. In the counter affidavit filed on behalf of the respondents, it has been stated that the petitioner, who is a holder of an Indian passport, bearing No. 7473949, had arrived at the Chennai airport, from Singapore, on 4-9-2010. On being questioned as to whether he was carrying gold or gold jewellery he had replied in the negative. From the Customs Declaration card produced by the passenger it was seen that he had declared the value of the goods he had brought as nil’. However, when the baggage of the petitioner had been seized, on suspicion, it was found that he was carrying gold chains of 22 carat purity, weighing 350 grams, valued at Rs. 6,23,000/-. He was also found to be carrying with him 600 US Dollars. The gold jewellery had been seized under a mahazar, under Section 110 of the Customs Act, 1962, read with Foreign Trade (Development and Regulation) Act, 1992. The 650 US Dollars carried by the petitioner had also been retained.

10. It had also been stated that the petitioner had admitted, voluntarily, that he did not intend to declare the gold jewellery and that the jewellery did not belong to him. However, he had retracted the statement later stating that it had been obtained under coercion. It had been further stated that, since, the petitioner did not declare the gold jewellery brought by him and as he had attempted to evade the payment of customs duty, in respect of the said gold jewellery, he had contravened the provisions of Section 77 of the Customs Act, 1962. As such, the gold jewellery was liable for confiscation, under Section 111 of the said Act. The petitioner was also liable for penal action, under Section 112 of the said Act. As the petitioner is not the owner of the gold jewellery seized by the respondent he is not entitled for the return of the same, as per the decision of the Chennai Bench, made in G.V Ramesh v. Commissioner of Customs, [2010 (252) E.L.T 212 (Tri. - Chennai)].

11. It has also been stated that a show cause notice, dated 27-1-2011, had been issued to the petitioner, and based on which adjudication proceedings would be held and proper orders would be passed, as per law, after giving an opportunity of hearing to the petitioner, in such circumstances, the request of the petitioner, to release the gold jewellery in question, to the petitioner, as prayed for by him, in the present writ petition, is liable to be rejected.

12. In view of the averments made in the affidavit filed in support of the writ petition and in the counter affidavit filed on behalf of the respondents and on a perusal of the records available, it is seen that the gold jewellery in question, imported by the petitioner, had been confiscated, under Section 111 of the Customs Act, 1962, on the allegation that the petitioner had attempted to import the said jewel, improperly, without declaring the same, with the intention of evading the payment of customs duty. The respondents had also issued a show cause notice asking the petitioner as to why penalty should not be imposed on him, under Section 112 of the said Act. The present writ petition has been filed by the petitioner praying that the second respondent should be directed to release the gold jewellery, covered by F. No. O.S No. 942 of 2010/2010-AIU, on payment of the customs duty applicable for the import of the jewellery, as per the Notification No. 31/2003-Customs, dated 1-3-2003, issued under Chapter 71 of the First Schedule to the Customs Tariff Act, 1975. Even though the respondents had stated in the counter affidavit filed on behalf of the respondents that the petitioner had failed to declare the gold jewellery brought by him from Singapore, on 4-9-2010, with the intention of evading payment of customs duty, no proper grounds have been made out for their refusal to release the gold jewellery, on payment of the customs duty.

13. It is not in dispute that the petitioner is entitled to import upto 10 Kilograms of gold, as it is an admitted fact that he had been living abroad for more than six months. It is also noted that gold is not a prohibited item. Further, an option is available to a person, who is the owner of the 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 125 of the Customs Act, 1962. 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 the customs duty and the penalty liable to be paid by him, as per the Notification No. 31/2003-Customs, dated 1-3-2003, issued under Chapter 71 of the First Schedule to the Customs Tariff Act, 1975.

14. From the decisions cited supra, relied on by the learned counsel appearing for the petitioner, it is clear that an option has to be given to the petitioner to pay the applicable customs duty and the redemption fine and to get the goods released, as per Section 125 of the Customs Act, 1962. Accordingly, the respondents are directed to release the gold jewellery in question, provisionally, to the petitioner, forthwith, on his paying the customs duty and the redemption fine, as per the Notification No. 31/2003-Customs, dated 1-3-2003, and as per the provisions of Section 125 of the Customs Act, 1962. it is also made clear that the provisional release of the goods in question would be subject to the adjudication proceedings to be conducted by the authorities concerned, and the petitioner shall cooperate, fully in the said proceedings. The writ petition is ordered accordingly. No costs. Consequently, connected miscellaneous petition is closed.