Customs Cannot Detain Gold Without Issuing SCN: Delhi HC Orders Release of 3 Gold Bars Detained from Saudi Resident in 2021 Subject to Duty Payment [Read Order]

In a recent ruling, the Delhi High Court has held that Customs Authorities cannot detain goods without issuing a Show Cause Notice ( SCN ), and ordered the release of three gold bars seized from a passenger subject to duty payment, avoiding penalty and redemption fine. The court limited the warehouse charges to 50%.

The petitioner, a resident of Saudi Arabia, had returned to India on 26th December 2021 carrying three gold bars allegedly intended for making jewellery for his sister’s wedding.

Though the Customs Department issued a detention receipt on the same day, no further action or SCN followed. Despite repeated visits, including one in May 2022, the petitioner received no formal order indicating duty liability or proceedings under the Customs Act.

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The Division Bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta, relying on its previous decisions in Amit Kumar v. Commissioner of Customs and Makhinder Chopra v. Commissioner of Customs, reiterated that detention of gold without issuing an SCN is unsustainable in law and is liable to be quashed.

The Court, therefore, directed the Customs Authority to assess and inform the petitioner of the applicable duty amount, with no redemption fine or penalty payable.

Further, due to the prolonged delay and procedural lapse by Customs, the Court limited warehouse charges to 50% of the applicable amount as on the date of detention. The petitioner was directed to appear before the concerned Customs Authority on 30th July 2025 to facilitate the release process

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