Customs Department's Baggage Rules Have 'Limited Application' On Foreign Tourists: Delhi HC Orders Release Of Russian National's Gold Chain

The Delhi High Court has held that the Baggage Rules 2016 which are framed under the Customs Act 1962 to ensure that every passenger entering India passes through a Customs check has limited application on foreign tourists coming to India.While holding so, a division bench of Justices Prathiba M. Singh and Dharmesh Sharma ordered the release of a Russian national's gold chain, valued at about Rs. 7 lakhs, which was confiscated by the Customs Department when he arrived in India.It observed, “It is an undisputed fact that the Petitioner is a Russian passport holder…on the ground of limited applicability of the Baggage Rules to the tourist of foreign origin and as jewellery is part of personal effects, the detention of Petitioner's gold chain would have to be set aside.”The Petitioner had contended that till date no show cause notice was issued to him.The Department on the other hand relied on a detention receipt signed by the Petitioner, undertaking to waive the SCN and personal hearing.At the outset, the Court remarked that it is coming across a number of cases where the goods of tourists of both Indian and foreign origin are being “routinely detained” by the Customs Department.It identified three issues to be addressed in the matter:(i) detention of jewellery or personal effects of a tourist, especially those of foreign origin, under the Baggage Rules, 2016;Court noted Indian Customs Declaration Form issued by the CBIC as part of the Guide for Travellers 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 this aspect, it cited the Directorate of Revenue Intelligence & Ors. v. Pushpa Lekhumal Tolani (2017) where the Supreme Court had considered whether jewellery being carried by a tourist as part of her baggage would qualify as smuggling under the Customs Act or the Baggage Rules. It had held that it is not permissible to completely exclude jewellery from the ambit of 'personal effects'.Also significant to take note of the Delhi High Court's recent judgment In Saba Simran vs. Union of India & Ors. (2024) which held that 'personal jewellery' of a person coming to India cannot be subject to Custom duty.In Thanushika vs. The Principal Commissioner of Customs (Chennai) the Madras High Court ruled that Baggage Rule apply only to the baggage carried by an international traveller and the Rules cannot be extended to articles like jewellery, “carried on the person” of a traveller.It is in this backdrop that the High Court observed,“Customs Officials are required to consider the facts of each case and apply their mind before detaining the goods of a tourist, either of Indian or foreign origin. The Customs Officials have to be conscious of the fact that personal effects including jewellery of tourists are protected by the law from detention and same cannot be detained in a mechanical manner.”(ii) applicability of the Baggage Rules qua tourists of foreign originThe High Court cited Nathan Narayansamy v. Commissioner of Customs (2024) where it was held that Rule 5 of the Baggage Rules apply to an Indian national upon his return to the country after having lived abroad for the period prescribed and not to a foreign national.Following this decision, in Farida Aliyeva v. Commissioner of Customs the Court had ordered release of jewellery seized from a tourist who was travelling from Azerbaijan to India. Similarly, in Anjali Pandey vs. Commissioner of Customs the Court directed release of the jewellery seized from a tourist of foreign origin.As such, the High Court held, “the Petitioner is a Russian passport holder and thus, the extent of applicability of the Baggage Rules to a tourist of foreign origin has to be kept in mind.”(ii) undertaking in a standard format for wavier of show cause notice and personal hearing signed by the concerned tourist.The High Court cited Section 124 of the Customs Act which contemplates issuance of a show cause notice before confiscation of goods by the Customs officials. The Section provides a three-fold requirement: i) a notice in writing informing the grounds of confiscation; ii) An opportunity of making a representation in writing against the said grounds of confiscation; iii) A reasonable opportunity of personal hearing.In terms of proviso to the said Section, the Customs Authority may issue an oral show cause notice to the tourist in lieu of a written show cause notice at the request of the said tourist.Court said the undertaking in a standard form as relied upon by the Customs Department waiving the issuance of show cause notice and personal hearing would not satisfy the requirements of Section 124 of the Act. It emphasized that principles of natural justice have to be followed by the Customs Department before detention of the goods.In this regard, the Court cited Amit Kumar v. The Commissioner of Customs where it was held that signing of a standard form of...

Customs Department's Baggage Rules Have 'Limited Application' On Foreign Tourists: Delhi HC Orders Release Of Russian National's Gold Chain

Kapil Dhyani

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