Union of India v. Vigneshwaran Sethuraman

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HON'BLE THE CHIEF JUSTICE DR. MANJULA CHELLUR & THE HONOURABLE SMT. JUSTICE P.V.ASHA MONDAY, THE 30TH DAY OF JUNE 2014/9TH ASHADHA, 1936 WA.No.694 of 2014 IN WP(C).6281/2014 --------------------------------------------------------------JUDGMENT IN WP(C) 6281/2014 ................ APPELLANTS/RESPONDENTS: 1. UNION OF INDIA REPRESENTED BY THE SECRETARY, DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, GOVERNMENT OF INDIA, NORTH BLOCK, NEW DELHI - 110 001. 2. THE DEPUTY COMMISSIONER OF CUSTOMS, AIR CUSTOMS, COCHIN INTERNATIONAL AIRPORT, NEDUMBSSERY, ERNAKULAM - 683 111. BY ADV. SRI.JOHN VARGHESE,SC,CEN.BOARD OF EXCISE RESPONDENT/PETITIONER: VIGNESWARAN SETHURAMAN, AGED 32 YEARS, S/O. SETHURAMAN, NO. 42, COLOMBO ROAD GALLE, SRI LANKA. BY SRI.ASWIN GOPAKUMAR THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 22-05-2014, THE COURT ON 30-06-2014 DELIVERED THE FOLLOWING: Manjula Chellur, C.J. & P.V.Asha, J. ------------------------------------------------------ W.A.No.694 of 2014 -----------------------------------------------------Dated this the 30[th] day of June, 2014 ## **JUDGMENT** ## **Manjula Chellur, C.J.** This appeal is directed against the judgment of learned single Judge dated 12.03.2014 allowing the writ petition. In brief, the facts that led to filing of the present appeal are as under: Respondent writ petitioner, a Sri Lankan national having registration of overseas citizen of India, arrived at Cochin International Airport, Nedumbassery on 22.02.2014 by Sri Lankan Airlines flight UL-165 from Colombo. After completion of emigration, customs and other formalities, he walked through the green channel. At the exit gate, he was stopped by an officer of Customs Department and asked whether a personal search is to be conducted before a judicial magistrate or before a gazetted officer of customs. Respondent writ petitioner opted for search before a WA 694/14 2 Gazetted Officer of customs. Accordingly, a gold chain weighing about 84 grams was seized and later confiscated as per Exhibit P3 on the allegation that gold chain ought to have been declared and duty ought to have been paid in terms of Notification No.117/92-Cus dated 01.03.1992. When respondent took up a contention that many other passengers were also wearing such jewellery who were not questioned by the customs, he was singled out and targeted. In spite of pleading before the authorities that it was presented to him on his 32[nd] birthday and submitting that if duty is payable, he is prepared to pay duty, officer refused the request. Contending that none of the circumstances existed warranting confiscation of gold chain under Section 111(d), (i), (l) and (m) and imposition of penalty under Section 112(a) and (b) of Customs Act, respondent writ petitioner sought for the following reliefs: (i) issue a writ of certiorari or any other appropriate writ, direction or order and quash Ext.P3 order; and WA 694/14 3 (ii) declare that confiscation of the gold chain weighing 84 grams (10.5 sovereigns) seized by the respondents from the petitioner on 22.02.2014 at the Cochin International Airport, Nedumbassery under sections 111 (d), (i), (l) and (m) and imposition of penalty under section 112(a) and (b) of Customs Act is arbitrary, illegal and unsustainable; and (iii) issue a writ of certiorari or any other appropriate writ, direction or order commanding the respondents to return the gold chain weighing 84 grams (10.5 sovereigns) seized by them from the petitioner on 22.02.2014 at the Cochin International Airport, Nedumbassery; and (iv) issue a writ of certiorari or any other appropriate writ, direction or order commanding the respondents to return the amount covered by Ext.P3 receipt realised from the petitioner as penalty under sections 112(a) and (b) of the Customs Act, 1962; or (v) issue a writ of certiorari or any other appropriate writ, direction or order commanding the respondents to permit the petitioner to re-export the gold chain or collect it on his way back to Sri Lanka; and (vi) pass such other orders and grant such other reliefs as this Hon'ble Court may deem fit in the interest of justice, equity, good conscience and fair play. 2. The main contention of the respondent was, notification dated 01.03.1992 was no longer in force as it WA 694/14 4 was superseded by Notification No.171/94 dated 30.09.1994 and Notification No.3/2012 dated 16.01.2012 and even otherwise those notifications relate to import of gold into India by a passenger of Indian origin or holding a valid passport issued under the Passports Act, 1967 in a baggage and not to gold ornaments worn by passengers visiting India. Therefore, under any circumstances the said reason cannot lead to confiscation of gold chain worn by him, hence illegal. 3. Respondent writ petitioner contended before learned single Judge that gold chain was neither found in his baggage or concealed on his person, but it was worn by him. Therefore, question of any declaration does not arise. Baggage rules do not prohibit a foreigner travelling to India wearing gold ornaments on his person. Baggage rules is applicable only to gold or silver in any form whatsoever carried in a baggage, therefore, the chain worn by him necessarily has to be excluded and confiscation was illegal. WA 694/14 5 The stand of Customs Department was, only personal belongings excluding jewellery for satisfying the daily necessities of life can be carried by a passenger travelling to India as required under Section 77 of the Act. Further, he was wearing 84 grams gold chain which was looking very crude. It was further contended, even assuming that a passenger visiting India could wear gold ornaments, he/she cannot wear gold ornaments of 24 carat purity but can wear only 22 carat gold ornaments. According to him, when alternate statutory remedies are available, the court should not entertain a writ petition invoking the extra ordinary jurisdiction under Article 226 of Constitution of India, therefore, writ petition was not maintainable and on merits also, it has to be dismissed. 4. Learned standing counsel placed reliance on the following decisions in support of his contentions: **Young v. Cook** (1877 Exchequer Division 101 T 105), **Commr. Of C.Ex., New Delhi v. Connaught Plaza Restaurant (P)** WA 694/14 6 **Ltd.** (2012 (286) E.L.T. 321 (S.C.)), **Om Prakash Bhatia v. Commissioner of Customs, Delhi** (2003 (155 E.L.T. 423 (S.C.)), **Indian Aluminium Cables Ltd. v. Union of India and others** ((1985) 3 SCC 284) and **Delhi Cloth and General Mills Co. Ltd. v. State of Rajasthan and others** ((1980) 4 SCC 71). 5. Exhibit P2 is the statement of respondent writ petitioner dated 22.02.2014 before Superintendent of Customs, Air Intelligence Unit, Cochin International Airport. We have gone through the said statement. As observed by learned single Judge, the statement certainly do not indicate that petitioner was carrying the gold chain in one piece of his hand baggage. Admittedly, there was no checking of baggage. The statement does not reveal that it was concealed on the person of petitioner but was recovered only when he was searched. It is also not the case of department that it was concealed either on the person of the passenger or in the baggage. This clearly indicates, it WA 694/14 7 was on the person of the passenger travelling to India. As per Exhibit P3, Deputy Commissioner of Customs, Cochin International Airport ordered confiscation apart from levying penalty of ` 5,000/-. From Exhibit P3, it is evident that reason for confiscation of gold chain was, a foreigner cannot import even a single gram of gold free of duty or on payment of duty. According to department, the passenger attempted to smuggle 24 carat gold in violation of the above mentioned sections. 6. Sections 111(d), (i), (l) and (m) read as under: ## **111. Confiscation of improperly imported** **goods, etc.** The following goods brought from a place outside India shall be liable to confiscation:- xxxxxx - (d) any goods which are imported or attempted to be imported or are brought within the Indian customs waters for the purpose of being imported, contrary to any prohibition imposed by or under this Act or any other law for the time being in force; - (i) any dutiable or prohibited goods found concealed in any manner in any package WA 694/14 8 either before or after the unloading thereof; - (l) any dutiable or prohibited goods which are not included or are in excess of those included in the entry made under this Act, or in the case of baggage in the declaration made under section 77. - (m) any goods which do not correspond in respect of value or in any other particular with the entry made under this Act or in the case of baggage with the declaration made under section 77 in respect thereof or in the case of goods under transhipment, with the declaration for transshipment referred to in the proviso to sub-section (1) of section 54.” 7. Section 112 of the Act reads as under: ## “ **112. Penalty for improper importation of goods, etc** .- Any person, - - (a) who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 111, or abets the doing or omission of such an act, or - (b) who acquires possession of or is in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing, or in any other manner dealing with any goods which he knows of has reason to believe are liable to confiscation under section 111., shall be liable, - WA 694/14 9 - (i) in the case of goods in respect of which any prohibition is in force under this Act or any other law for the time being in force, to a penalty not exceeding the value of the goods or five thousand rupees, whichever is the greater; - (ii) in the case of dutiable goods, other than prohibited goods, to a penalty not exceeding the duty sought to be evaded on such goods or five thousand rupees, whichever is the grater; - (iii) in the case of goods in respect of which the value stated in the entry made under this Act or in the case of baggage, in the declaration made under Section 77 (in either case hereafter in this section referred to as the declared value) is higher than the value thereof, to a penalty not exceeding the difference between the declared value and the value thereof or five thousand rupees, whichever is the greater; - (iv) in the case of goods falling both under clauses (i) and (iii), to a penalty not exceeding the value of the goods or the difference between the declared value and the value thereof or five thousand rupees, whichever is the highest; - (v) in the case of goods falling both under clauses (ii) and (iii) to a penalty not exceeding the duty sought to be evaded on such goods or the difference between the declared value and the value thereof or five thousand rupees, whichever is the highest.” WA 694/14 10 8. Apart from the above sections, one has to understand what exactly the term baggage would mean as defined under Section 2(3) of the Act, which reads as under: “baggage” includes unaccompanied baggage but does not include motor vehicles.” Section 2(22) of the Act defines the term goods which include baggage, reads as under: “goods” includes - (a) vessels, aircrafts and vehicles; (b) stores; (c) baggage; (d) currency and negotiable instruments; and (e) any other kind of movable property.” Apart from these two sections so far as present case, Sections 77, 80 and 81 of the Act are also relevant to understand the controversy, which read as under: “ **77. Declaration by owner of baggage** .- The owner of any baggage shall, for the purpose of clearing it, make a declaration of its contents to the proper officer. ## **80. Temporary detention of baggage** .- WA 694/14 11 Where the baggage of a passenger contains any article which is dutiable or the import of which is prohibited and in respect of which a true declaration has been made under section 77, the proper officer may, at the request of the passenger, detain such article for the purpose of being returned to him through any other passenger authorised by him and leaving India or as cargo consigned in his name. ## **81. Regulations in respect of baggage** .- The Board may make regulations, - - (a) providing for the manner of declaring the contents of any baggage; - (b) providing for the custody, examination, assessment to duty and clearance of baggage; - (c) providing for the transit or transhipment of baggage from one customs station to another or to a place outside India.” 9. Section 77 of the Act clearly indicates that owner of a baggage has the duty to make a declaration of its contents to the concerned authority for the purpose of clearing his/her baggage. Section 111 of the Act basically indicates under what circumstances confiscation of goods occur. Clause (d) of Section 111 connotes if any goods are WA 694/14 12 brought or imported or attempted to be imported or brought within Indian customs waters violating any prohibition in force or under the Act or any other law for the time being in force are liable for confiscation. 10. Clause (i) of Section 111 stipulates if any goods which are dutiable or prohibited are imported concealed in any manner in any package either before or after the unloading thereof is also liable for confiscation. Clause (l) of Section 111 also refers to confiscation of goods if any dutiable or prohibited goods which are not included or are in excess of those included in the entry made under the Act or in the case of baggage in the declaration made under Section 77. Clause (m) of Section 111 of the Act stipulates that any goods which do not correspond in respect of value or in any other particular mode with the entry made or in case of baggage with the declaration made under Section 77 are also liable for confiscation. WA 694/14 13 11. Section 112 refers to imposition of penalty only if goods are liable for confiscation under Section 111 of the Act under various circumstances explained above. With reference to above sections, one has to understand the circumstances in which the gold chain belonging to respondent writ petitioner was legally confiscated or not. Section 77 mandates declaration to be given by the owner of the baggage. Reading of Section 77 clearly indicates, body of a person cannot be understood as baggage. In other words, body of the passenger cannot be termed as baggage. Admittedly, as claimed by writ petitioner and as indicated in the order under challenge, passenger was not carrying the gold chain in his baggage but he was wearing it. Ultimately, it leads to a conclusion with reference to above provisions. Respondent writ petitioner was not compelled to give a declaration for the gold chain worn by him. Reading of Section 80 clearly indicates, detention of any article imported, which is dutiable or prohibited. WA 694/14 14 However, this has to be returned to the passenger at the time of leaving India. Section 81 of the Act empowers Central Government to make regulations regarding declaration of the contents of any baggage, its custody, examination, assessment to duty and clearance of baggage apart from transit or transhipment of baggage from one customs station to another or to a place outside India. 12. Reading of these provisions clearly indicate, a tourist passenger coming from Sri Lanka having a gold chain on his person which was not concealed either in his baggage or on his body cannot be saddled with the liability of its confiscation. Then, one has to see whether there was any intention on the part of the respondent writ petitioner to import gold chain contrary to the prohibition under the Act or any other law so as to attract clause (d) of Section 111 of the Act. One has to see whether there is prohibition for wearing gold ornaments by a tourist who visits India. As per Exhibit P3 order, a foreigner cannot import even a WA 694/14 15 single gram of gold ornament free of duty or on payment of duty. In the absence of any statute wherein prohibition is imposed by the Act or any other law in force to the effect that a foreigner arriving in India cannot wear gold ornaments on his person or wear gold ornaments having 24 carat purity, there is no justification for invoking clause (d) of Section 111 to confiscate the gold chain owned by the passenger. As already stated above, in the absence of concealment of gold chain either in the baggage or on the person of the passenger, we fail to understand how any clauses of Section 111 are attracted to the case on hand. As a matter of fact, Section 80 indicates, foreign tourist can declare and request for detention of any article, which is dutiable or prohibited, to be taken back by him at the time of leaving India. From the contents of Exhibit P3 and also from the averments in the writ petition, it is not clear whether such option was offered by the authorities or brought to the notice of respondent writ petitioner. WA 694/14 16 13. After referring to the provisions in the statute concerned, one has to see Baggage Rules of 1998 and also the notifications issued from time to time in this regard. Rule 7 of the Rules as amended in 1998 stipulates that a tourist arriving in India shall be allowed clearance free of duty articles in his bona fide baggage to the extent mentioned in column (2) of Appendix E. Necessarily, we have to refer to Appendix E of the Rules, which reads as under: ## **APPENDIX E** ||**APPENDIX E**| |---|---| |1|Articles allowed free of duty<br>2| |(a) Tourists of Indian origin<br>coming to India other than<br>tourists of Indian origin<br>coming by land routes as<br>specified in Annexure IV;|(i) Used personal effects and travel souvenirs, if -<br>(a) these goods are for personal use of the tourist,<br>and<br>(b) these goods, other than those consumed during<br>the stay in India, are re-exported when the tourist<br>leaves India for a foreign destination.<br>(ii) articles as allowed to be cleared under rule 3 or<br>rule 4.| |(b) Tourists of foreign<br>origin, other than those of<br>Pakistani origin coming<br>from Pakistan, coming to<br>India by air|(i) used personal effects<br>(ii) articles other than those mentioned in Annexure<br>I upto a value of Rs.8000 for personal use of the<br>tourist or as gifts and travel souvenirs if these are<br>carried on the person or in the accompanied<br>baggage of the passenger.| WA 694/14 17 |1|Articles allowed free of duty<br>2| |---|---| |(c) Tourists-(i) of Pakistani<br>origin<br>coming<br>from<br>Pakistan other than by land<br>routes;<br>(ii) of Pakistani origin or<br>foreign tourists coming by<br>land routes as specified in<br>Annexure IV;<br>(iii) of Indian origin coming<br>by land routes as specified<br>in Annexure IV.|(i) used personal effects<br>(ii) articles other than those mentioned in Annexure<br>I upto a value of Rs.6000 for personal use of the<br>tourist or as gifts and travel souvenirs if these are<br>carried on the person or in the accompanied<br>baggage of the passenger.| There are two columns (column nos.1 and 2) in Appendix E. Articles allowed free of duty are mentioned in column no.2. So far as present situation, respondent writ petitioner is a tourist of Indian origin having foreign citizenship (Sri Lankan), clause (a) of column no.1 is applicable and the gold chain other than those consumed during the stay in India are re-exported when the tourist leaves India for a foreign destination. As already stated above, Section 80 of the Act stipulates such a provision, however, nothing is on record to show that such option was given to the passenger in question. WA 694/14 18 14. If we take clause (b) of column no.1, it refers to tourists of Indian origin other than Pakistani coming to India by air. As against this, column no.2 contains two circumstances, (i) is used personal effects can be allowed clearance free of duty and (ii) is articles other than those mentioned in Annexure I up to a value of Rs.8,000/- for personal use of the tourist or as gifts and travel souvenirs if these are carried on the person or in the accompanied baggage of the passenger. Annexure I in appendix E refers to several articles, which reads as under: 1. Firearms. 2. Cartridges of fire arms exceeding 50. 3. Cigarettes exceeding 200 or cigars exceeding 50 or tobacco exceeding 250 gms. 4. Alcoholic liquor or wines in excess of two litres. 5. Gold or silver, in any form, other than ornaments. 15. After going through Annexure I of Appendix E, it is clear that a tourist of foreign origin coming to India by air is not entitled to duty free clearance of firearms, etc. and WA 694/14 19 also gold or silver, in any form, other than ornaments. Therefore, if we apply clause (a) of column no.1, Section 80 of the Act comes into play and if we apply clause (b), the goods in question is gold ornament worn by the passenger. Baggage Rules do not prohibit a tourist coming to India by air wearing a gold chain. In the absence of express provisions prohibiting wearing of gold ornaments by a foreign tourist while entering India would mean he/she cannot even wear the wedding ring, Mangala suthra by a woman passenger, etc. 16. As per Exhibit P3 order, violation of legal provision is Section 77 of the Act. Violation is non declaration as provided under Section 111(d), (i), (l) and (m) of the Act. Therefore, even from the angle of Baggage Rules, one cannot find fault with the passenger for wearing gold chain. 17. Then coming to notifications, the relevant notification is notification dated 16.01.2012 as earlier WA 694/14 20 notifications dated 01.03.1992, 30.09.1994 and 01.03.2003 were superseded. Notification No.3/2012-Customs dated 16.01.2012 reads as under: ## **NOTIFICATION** New Delhi, the 16th January, 2012 NO.3/2012-CUSTOMS G.S.R. 24(E) - In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue) No.172/1994-Customs, dated the 30th September, 1994, published in the Gazette of India, Extraordinary vide G.S.R.No.734(E), dated the 30th September, 1994 and notification No.31/2003 Customs, dated the 1[st] March, 2003, published in the Gazette of India, Extraordinary vide G.S.R.No.166(E), dated the 1st March, 2003, except as respects things done or omitted to be done before such supersession, the Central Government on being satisfied that it is necessary in the public interest so to do, hereby exempts goods of the description specified in column (2) of the Table below and falling under Chapter 71 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975), when imported into India by an eligible passenger, from so much of the duty of customs leviable thereon which is specified in the said First Schedule, as is in excess of the amount calculated at the rate as specified in the corresponding entry in column (3) of WA 694/14 21 the said Table and from the whole of the additional duty leviable thereon under section 3 of the said Customs Tariff Act. ## **TABLE** ||**TABLE**|| |---|---|---| |**S.No.**|**Description ofgoods**|**Rate**| |1|2|3| |1|Gold bars, other than tola bars, bearing manufacturer's or<br>refiner's engraved serial number and weight expressed in<br>metric units, and gold coins having gold content not below<br>99.5%|2.00%| |2|Gold in any form other than at S.No.1 above, including tola<br>bars and ornaments, but excluding ornaments studded with<br>stones or pearls|5.00%| |3|Silver, in any form including ornaments, but excluding<br>ornaments studded with stones or pearls.|6.00%| (2). The exemption is subject to the following conditions, namely: (i) the duty shall be paid in convertible foreign currency, (ii) the quantity of import shall not exceed ten kilograms of gold and one hundred kilograms of silver per eligible passenger, and (iii) the gold or silver is either carried by the eligible passenger at the time of his arrival in India or is imported by him within fifteen days of his arrival in India. Notwithstanding anything contained above, the exemption under this notification shall also apply to gold or silver taken delivery of by an eligible passenger from a customs bonded warehouse of the State Bank of India or the Minerals and Metals Trading Corporation Ltd., subject to the conditions (i) WA 694/14 22 and (ii) of para 2 above, and subject to further condition that such eligible passenger files a declaration in the prescribed form before the proper officer of customs at the time of his arrival in India declaring his intention to take delivery of the gold or silver from such a customs bonded warehouse and pays the duty leviable thereon before his clearance from customs. **Explanation:** - For the purposes of this notification, “eligible passenger” means a passenger of Indian origin or a passenger holding a valid passport, issued under the Passports Act, 1967 (15 of 1967), who is coming to India after a period of not less than six months of stay abroad, and short visits, if any, made by the eligible passenger during the aforesaid period of six months shall be ignored if the total duration of stay on such visits does not exceed thirty days and such passenger has not availed of the exemption under this notification or under the notification being superseded at any time of such short visits. 3. This notification shall come into force on the 17[th] day of January, 2012. [F.No.354/4/2012-TRU] RAJ KUMAR DIGVIJAY, Under Secy. These notifications are apparently issued as per sub-section (1) of Section 25 of the Act. Reading of the above provisions clearly indicate it applies only to Indian citizens. The WA 694/14 23 notification does not prohibit import of articles other than those mentioned therein. Authorities place reliance on notification dated 01.03.1992 which is totally misconceived. According to authorities, respondent writ petitioner attempted to smuggle gold chain, therefore, liable for confiscation. In the light of above observations, learned single Judge was justified in saying that goods in question was not liable to be confiscated, therefore, Exhibit P3 order confiscating gold chain and levying penalty was set aside. 18. Entire statute and the rules do not indicate that a foreign tourist coming to India cannot even wear a gold chain on his person. No such provision is expressly provided either under the statute or under the Baggage Rules or under the notifications. Learned single Judge was justified in referring to the judgment in **Kartar Singh v. State of Punjab** ((1994) 3 SCC 569) as State has the duty to specify with certainty what goods are prohibited and what are not. One cannot expect a tourist to guess and take his/her own WA 694/14 24 decision in the matter. So far as jurisdiction of the High Court to entertain a petition under Article 226 of the Constitution, learned single Judge was justified in placing reliance on **Whirlpool corporation v. Registrar of Trade Marks, Mumbai and others** (AIR 1999 SC 22). 19. Then coming to the citations referred to by learned standing counsel, none of the principles laid down in those decisions are applicable to the facts of the present case. With the above observations, we find no ground to entertain this appeal. Accordingly, the appeal is dismissed. **Manjula Chellur, Chief Justice** **P.V.Asha, Judge** tkv