Thursday, June 16, 2022

Foreigners Wearing Gold/ Silver jewellery Worth Over ₹50,000 Must Declare To Customs: Madras High Court

Foreigners Wearing Gold/ Silver Jewellery Worth Over ₹50,000 Must Declare To Customs/Upholds Penalty On Srilankan Family.

The Madras High Court recently upheld the order of the Principal Commissioner (Revision Application) and held that gold/silver ornaments that are worn in person and exceed Rs. 50,000 in value has to be declared before the Customs Authority.

Justice C Saravanan opined that the law was unambiguous in this regard. Though exemptions were provided under the Baggage Rules, 2016 was limited to the extent permitted. The court also opined that the import of jewellery is worth more than Rs. 50,000 could not be considered as bonafide baggage and could not be exempted from paying customs duty.

Case Detail

The petitioners are members of the same family and are Sri Lankan nationals based in Colombo. They arrived at the Chennai Airport on 06.05.2017 along with two minor children. All the petitioners were wearing 1,594 kgs of gold jewellery valued at Rs.43,95,854/-. They attempted to walk through the green channel along with two minor children wearing 1594 kgs of gold jewellery without making a declaration before the Customs Officers. Apart from the jewellery, the first petitioner had also purchased about 112 bottles of liquor valued at Rs.1,50,000/-.

The officers of the Air Customs Department intercepted them and found that there was an attempt to smuggle liquor beyond the permissible limit. Subsequently, a show-cause notice under Section 124 of the Customs Act, 1962 was issued to them which was duly replied to.

The Joint Commissioner of Customs, 3rd respondent imposed a redemption fine under Section 125 of the Customs Act and a penalty under Sections 112 (a) & 114 AA of the Customs Act, 1962. Aggrieved, the petitioners herein filed an appeal before the Appellate Commissioner. By a common Order, the appeals were allowed.

The petitioners had thus filed writ petitions for a refund of the amount paid by them towards redemption and penalty which was disposed of by the High Court directing the first respondent to pass appropriate orders on merits in the revision application filed before the first respondent within a period of 12 weeks.

The first respondent reversed the Order in Appeals passed by the Commissioner of Customs (Appeals) and thus affirmed the order of the third respondent ordering the confiscation of the gold & liquor and imposition of redemption fine and penalty under Section 125 and Section 112 (a) of the Customs Act, 1962. The first respondent further held that there was no necessity to impose a separate penalty under Section 114 AA of the Customs Act, 1962.

Court observation:

The court observed that Jewelry items are not articles of personal effect. Therefore, the petitioners being tourists within the meaning of Rule 2(1)(v) of the Rules were governed by Sub Clause (b) of Rule 3 of Baggage Rules, 2016. The said Rule read with Annexure I makes it clear that gold or silver ornaments up to a value of Rs.50,000/- (Rupees Fifty Thousand only) worn in person or carried on the person are only freely importable.

Since the value of the gold ornaments worn in the person of the respective petitioners exceeded Rs.50,000/- (Rupees Fifty Thousand only), it was incumbent on the part of the petitioners to have made a proper declaration under Customs Baggage Declaration Regulations, 2013 read with Baggage Rules 2016. These Rules apply to all passengers including tourists coming to India.

Therefore, there was no scope for any ambiguity and confusion. If the value of gold and silver ornaments exceeded the value under the Rules, the petitioners were required to make the appropriate declaration.

Import of gold or silver ornaments exceeding Rs.50,000/- (Rupees Fifty Thousand only) cannot be considered as part of the bonafide baggage of tourists traveling to India. The court also raised suspicion about the conduct of the petitioners.

"Further, one fails to understand, petitioners who claim to be pilgrims visiting an alien country would wear costly jewellery even if it be their customs. The fact that the petitioners also purchased 112 bottles liquor beyond the permissible limits and attempted to walk through the green channel without making declaration also shows that the visit to India by the petitioners were not purely as pilgrimage alone."
The court was therefore of the opinion that the proceedings against the petitioners were in accordance with the provisions of the Customs Act 1962 and that there was no infirmity in the order.

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