Customs Duty on Gold: Delhi HC Upholds Mandate u/s 110(2) of Customs Act, Directs Release of Seized Gold Due to Non-Issuance of SCN [Read Order]

The Delhi High Court has issued directions to the Customs Department for the release of a detained gold bar, subject to the payment of applicable customs duty, redemption fine and penalty.

Suhel Khan, in his petition, disclosed that one gold bar weighing 116.60 grams, brought by him on arrival from Saudi Arabia on May 19, 2024, had been detained at the Indira Gandhi International Airport. The petitioner submitted that no Show Cause Notice was ever issued to him despite the statutory mandate under Section 110 and Section 124 of the CustomsAct, 1962.

The petitioner relied upon the recent judgment of the Supreme Court in Union of India v. Jatin Ahuja, wherein the Court held that in the absence of a SCN within the prescribed six-month period, the seized goods must be returned unless the period is duly extended in writing by the competent authority. It was argued that since neither a notice nor an extension was issued, the continued detention of the gold bar was unlawful.

The Court was informed by the Customs Department that a personal hearing was granted to the petitioner’s authorised representative on May 15, 2025, during which he acknowledged carrying the gold bar and produced the invoice. It was recorded that the representative agreed to pay customs duty, redemption fine and penalty to secure release of the detained item.

The matter was heard by a Bench comprising Justice Prathiba M. Singh and Justice Shail Jain, which considered the Supreme Court ruling as well as the petitioner’s recorded undertaking before the Customs authorities. After noting the facts and the absence of a statutory show cause notice, the Court held that the petitioner may secure release of the gold bar upon fulfilling the financial requirements.

The Court directed the petitioner to appear before the competent Customs authority and a designated Nodal Officer was appointed to facilitate the same. It was further ordered that no warehousing charges shall be levied in the circumstances of the case.

The writ petition was accordingly disposed of, and the Customs Department was directed to release the gold bar upon payment of duty, redemption fine and penalty as recorded in the personal hearing.

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