Delhi High Court Orders Customs To Release Traveller’s Gold Worth ₹20 Lakh, Iphone, Playstation & More Over Failure To Issue SCN

The Delhi High Court recently ordered the Customs authorities to release a traveller’s gold worth over ₹14 lakh and other branded articles like iPhone, PlayStation, etc. over the authority’s failure to issue him a show cause notice.

Section 124 of the Customs Act, 1962 contemplates issuance of a show cause notice before confiscation of goods.

The Petitioner had landed at Delhi International airport with his family. He was intercepted carrying a gold chain, another three layered gold chain with gold pendant, four pieces of gold bar, a Sony PS5, a Versace cosmetic set, a Meta Quest-3 gaming device, a Xerjoff-K Jabir perfume and an Iphone 15 Pro. The seized articles were appraised at approximately Rs. 20 lacs.

Petitioner contended that no SCN was issued to him and no opportunity was accorded for even a hearing. He thus sought release of goods and the Customs to bear storage charges of the airport.

The Department on the other hand contended that an oral SCN was given to the Petitioner, who also signed an undertaking that he does not want a written SCN or even a personal hearing.

At the outset, the High Court observed that such signing of a standard form of waiver by the Petitioner would not be in compliance with the principles of natural justice, inasmuch as, the waiver under Section 124 has to be “conscious” and “informed”.

Court noted that the printed waiver form contained three stipulations: (i) waiver of SCN, (ii) waiver of personal hearing; and (iii) affirmation that an oral SCN has been received.

It opined that when a request for release of goods is being made by the person whose goods have been detained, the said person cannot be expected to read the printed form. It observed,

“The three-pronged waiver which the form contains is not even decipherable or comprehensible to the common man. Apart from agreeing as per the said form that the oral SCN has been served, the person affected has also waived a right for personal hearing. Such a form in fact shocks the conscience of the Court, that too in cases of the present nature where travellers/tourists are made to run from pillar to post for seeking release of detained goods.”

Court said that if an oral SCN waiver has to be agreed to by the person concerned, the same ought to be in the form of a proper declaration, consciously signed by the person concerned.

“Even then, an opportunity of hearing ought to be afforded, inasmuch as, the person concerned cannot be condemned unheard in these matters. Printed waivers of this nature would fundamentally violate rights of persons who are affected. Natural justice is not merely lip-service. It has to be given effect and complied with in letter and spirit,” it added.

The Court thus ordered release of Petitioner’s goods but clarified that storage charges will have to be borne by the Petitioner himself.

Further, in order to avoid such situations in future, the Court referred the matter to the Central Board of Indirect Taxes and Customs for undertaking a review of the various forms, including Detention receipts, Requests for appraisal and connected documents.

Appearance: Mr. S. Vijay Kanth, Adv. for Petitioner; Mr. Gibran Naushad, Sr. Standing Counsel for Customs

Case title: Amit Kumar v. The Commissioner Of Customs

Case no.: W.P.(C) 15973/2024

Click here to read order

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