Non-Declaration Of Gold At Green Channel Not Always Smuggling: Delhi High Court

The Delhi High Court has recently held that in a case of non-declaration of gold at the Green Channel which does not amount to smuggling, absolute confiscation may be disproportionate and redemption on payment of fine may be permitted.

A Division Bench of Justices Nitin Wasudeo Sambre and Ajay Digpaul observed,

“The release is permitted only upon payment of redemption fine and penalty, along with applicable duty. The orders under challenge therefore do not condone the violation and instead calibrate the consequence.”

The Court thus dismissed a writ petition filed by the Customs Department challenging orders of the appellate and revisional authorities that had permitted redemption of confiscated gold on payment of fine and penalty, instead of ordering absolute confiscation.

The case arose from Respondent's interception and recovery of 300 grams of gold cut pieces, after she crossed the Green Channel.

While Customs treated the case as one warranting absolute confiscation and imposed penalties under the Customs Act, the appellate authority later found that the matter involved non-declaration rather than organised smuggling.

The Commissioner (Appeals) accepted the passenger's retraction of her initial statement and allowed redemption of the gold under Section 125 of the Customs Act. This view was affirmed by the Revisional Authority.

Upholding these findings, the High Court observed,

“Once the appellate authority accepted the retraction and the ownership claim based on the material placed before it, the consequential exercise of discretion under Section 125 to permit redemption, coupled with imposition of redemption fine and penalty and liability to pay duty, cannot be faulted as an exercise that undermines the statutory scheme. The discretion under Section 125 is intended to be exercised judiciously on the facts of each case. Order-in-Appeal reflects application of mind to the nature of the lapse and to the proportionality of absolute confiscation.”

As such, the Court ordered that Respondent shall be entitled to release of the detained goods and dismissed Customs' plea.

For Petitioner: Aditya Singla, SSC CBIC with Advocate Arya Suresh Nair

For Respondent: Advocates Dhan Mohan, Senior Panel Counsel for UOI along with Advocates Tanisha Bhatia and Anjali Choudhary