Delhi HC Orders Customs to Refund ₹19.22 Lakh with 6% Interest as Gold already Disposed Before OIO [Read Order]

The High Court of Delhi, directed Customs to refund ₹19.22 lakh with 6% interest to the petitioner after a 338-gram gold piece, seized at IGI Airport in March 2024, was disposed of before the passing of the Order-in-Original (OIO).

Imran,petitioner-assessee, filed a petition under Articles 226 and 227 of the Constitution of India seeking release of a 338-gram gold piece seized by the Customs Department on 24th March 2024.

He had arrived from Kuwait at the Indira Gandhi International Airport, New Delhi, on 23rd March 2024, where the gold was detained. His representative submitted a request on 20th May 2024 not to dispose of the seized item, but it was alleged that Customs disposed of it on 10th June 2024.

The Order-in-Original dated 30th December 2024 confiscated the 338-gram gold piece but allowed redemption on payment of ₹2,00,000, subject to re-export after legal and regulatory clearances.

The authority denied the “Free Allowance” claim, ordered confiscation under Section 111 of the Customs Act, and stated that the redemption option would lapse after 120 days from receipt of the order. A penalty of ₹1,90,000 was also imposed under Sections 112 and 114AA of the Act.

The petition challenged the disposal of the gold piece before the passing of the OIO and without any intimation to the petitioner. It was further submitted that the disposal was carried out despite the petitioner’s representation stating willingness to re-export the gold piece.

The Court noted the Department’s counter affidavit, which stated that intimation was sent to the petitioner before disposal of the gold and that the representation dated 20th May 2024 was forged. The affidavit also showed that the 338-gram gold piece was inventorised on 11th June 2024 and disposed of on 28th June 2024 through SPMCIL, fetching a net amount of ₹23,12,917.

Justice Prathiba M Singh and Justice Shail Jain observed that while the OIO allowed redemption and re-export, it did not mention that the gold had already been disposed of. Since the gold was sold, the Court directed that ₹2,00,000 as redemption fine and ₹1,90,000 as penalty be deducted, and the remaining ₹19,22,917 be paid to the petitioner within one month.

Interest at 6% from 28th June 2024, amounting to ₹1,67,045, was also ordered to be paid.

The bench left it open to the Department to act on the alleged forgery and directed the Customs Commissioner to set up easily accessible counters outside the secured airport area for passengers facing similar difficulties. The petition was disposed of on these terms.

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