Identical Gold Chains Not Personal Effects: Delhi HC says Travellers Liable to Declare and Pay Duty [Read Order]

The Delhi High Court has held that gold chains carried by passengers returning from Dubai cannot be treated as “personal effects” to be exempt from declaration under customs law. Thus, the travellers were liable to pay the duty.

The petitions were filed by five individuals, Ms Aarti Mangla Aggarwal, Mr Manish Aggarwal, Ms Shilpi Gupta, Mr Abhishek Gupta, and Mr Rishi Goel, seeking the release of seven gold chains collectively weighing 455 grams.

The gold chains had been seized by Customs officials upon the Petitioners’ arrival at the Indira Gandhi International Airport, New Delhi, on 15th June 2024, following their return from Dubai.

According to the Petitioners, the ornaments were part of their personal effects and were being worn at the time of travel.

They contended that the seizure was illegal and that the subsequent Show Cause Notices (SCNs) were issued beyond the permissible one-year period under Section 110 of the Customs Act. The Petitioners further submitted that the initial panchnama was wrongly drawn in the names of only two passengers, despite the gold being recovered from all five, and alleged that the seized items might have been disposed of without due process.

The Customs Department, represented by its Counsel, opposed the petitions and produced photographs of the seized gold chains along with the relevant entries from the dispatch register.

It was submitted that the SCNs were dispatched on 10th June 2024, well within the limitation period, and that the gold chains could not be treated as “personal effects” exempt from declaration. The Department further argued that identical gold chains purchased by the Petitioners in Dubai constituted dutiable goods, requiring declaration at the red channel upon arrival in India.

The Court examined the dispatch register and accepted that the SCNs had been issued within the statutory period under Section 110 of the Customs Act.

The Bench observed that the Customs Act prescribes a clear procedure for seizure and issuance of SCNs, allowing an initial period of six months extendable by another six months, provided due intimation is given to the party concerned. Since the Department’s records established compliance, the plea of limitation was rejected.

On the question of classification of the goods, the Court noted that the seized items were seven identical gold chains of similar design, purchased from Dubai, and therefore could not be regarded as personal effects carried for daily or personal use.

The Bench held that the Petitioners, being Indian nationals returning from abroad, had a legal obligation to declare the gold at the red channel and pay the applicable customs duty. Their passage through the green channel without declaration constituted a contravention under customs law.

During the hearing, counsel for the Petitioners submitted that they were willing to pay the applicable duty and had already filed replies to the SCNs. Taking note of this submission, the Court directed the Customs Department to grant a hearing to the Petitioners and to consider their offer to pay the duty before passing a final order in accordance with law.

The Division bench of Justice Prathiba M. Singh and Justice Shail Jain thus upheld the seizure and the validity of the SCNs while reiterating that identical gold chains purchased abroad do not qualify as personal effects exempt from declaration. The petitions were disposed of with directions for the Department to complete the adjudication process after hearing the Petitioners and ensuring compliance with customs formalities.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates