Cannot Challenge Customs Duty Condition For Gold Release After Failing To Challenge Adjudication Order: Delhi High Court

The Delhi High Court has held that a person cannot belatedly challenge the condition requiring payment of customs duty for release of confiscated gold after having failed to challenge the original adjudication order imposing that condition.

The Division Bench of Justices Avneesh Jhingan and Shail Jain made the observation while dismissing a writ petition seeking to quash customs duty of ₹2,71,193 and detention charges of ₹2,02,842 imposed upon Petitioner in respect of a 98-gram gold kada detained at the Delhi airport.

For context, upon his return from Bangkok, Petitioner was intercepted by Customs officials and the gold kada valued at ₹6,16,346 was detained.

The Assistant Commissioner of Customs, through an order dated May 27, 2024, ordered confiscation of the gold kada but gave Petitioner an option to redeem it upon payment of a redemption fine of ₹60,000 along with applicable customs duty at the tariff valuation as on the date of detention. A penalty of ₹50,000 was also imposed under Sections 112(a) and 112(b) of the Customs Act, 1962.

The Customs Department challenged the adjudication order, but its appeal was dismissed. The revision filed by the Department was also pending.

In earlier proceedings initiated by Petitioner, the High Court had directed the Customs Department to give effect to the adjudication order and release the gold kada upon payment of the redemption fine and penalty.

The Court had also observed that the Customs Department ought not to file revision petitions against each and every adjudication or appellate order, noting that this resulted in unnecessary burden and delay.

Following the order, the gold kada was released to Petitioner after he paid the redemption fine, penalty, customs duty and detention charges.

Petitioner thereafter approached the High Court challenging the levy of customs duty and detention charges.

He argued that the Court, in its earlier proceedings, had recorded that the gold kada was old jewellery and was exempt under the Baggage Rules, 2016 and, consequently, no customs duty or detention charges could have been levied.

The Customs Department opposed the plea, contending that Petitioner had never challenged the adjudication order and that the earlier writ petition was confined to the detention of the gold kada.

The High Court noted that the adjudication order had specifically permitted release of the gold kada subject to payment of ₹60,000 as redemption fine, applicable customs duty at the tariff valuation on the date of detention and ₹50,000 as penalty.

It further noted that Petitioner had not challenged the adjudication order and that the gold kada had subsequently been released in compliance with the order.

The Court held that its earlier order had not examined the validity of the adjudication order. The challenge in those proceedings was confined to the detention of the gold kada, and Petitioner had not succeeded in establishing that the detention was illegal.

The operative directions in the earlier order were only for release of the detained goods in accordance with the adjudication order, the Court noted.

Even in this writ petition, the Court observed, there is no challenge to the OIO and the grievance is against the customs duty charged.

As such it held, “The petitioner at this belated stage cannot be permitted to indirectly challenge the condition imposed in the OIO after having failed to avail remedies to challenge the conditions imposed. No case is made out that the detention charges recovered were contrary to the statutory provisions. No ground is made out to exercise the extraordinary writ jurisdiction. The petition is dismissed.”

For Petitioner: Advocates Kaustubh Sinha and Surbhi Mehta

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