Delhi High Court backs Customs in seizure of undeclared gold at IGI Airport

Introduction

This write-up summarises the decision of the Delhi High Court in Abdul Samad Vs Commissioner of Customs & Anr. (Delhi High Court), where the assessee challenged concurrent orders of the Customs authorities and the Central Government confirming confiscation of gold jewellery and gold biscuits allegedly imported into India without the mandatory declaration.

The Court examined whether it should exercise writ jurisdiction under Article 226 of the Constitution to disturb factual findings that the assessee had crossed the Green Channel at the airport with undeclared gold, attracting action under the Customs Act, 1962.

Background and procedural history

  • The dispute originated from an incident dated 11.10.2013 at Indira Gandhi International Airport, New Delhi, when the assessee, an Indian national resident in Mumbai, arrived from Dubai.
  • Customs officers claimed that after the assessee crossed the Green Channel, his baggage was searched and:
    • 477 gold chains weighing 2,516.5 grams,
    • two gold biscuits of 100 grams each (total gold: 2,716.5 grams),
    • Indian currency of Rs. 19,090 and 785 UAE Dirhams
      were recovered.
  • The Customs Declaration Form submitted by the assessee purportedly showed “Nil”, indicating no declaration of dutiable goods.

Subsequent proceedings unfolded as follows:

  1. 12.10.2013 – A detailed statement of the assessee was recorded under Section 108 of the Customs Act, 1962.
  2. The assessee was arrested, produced before the criminal court and granted bail on 14.10.2013.
  3. On 15.10.2013, after being released, he retracted his Section 108 statement, alleging that it was not voluntary.
  4. On 24.10.2013, an application was filed before the learned Chief Metropolitan Magistrate seeking preservation of CCTV footage of the relevant area at the airport.
  5. On 04.04.2014, the learned CMM ordered preservation of the CCTV footage. By that time, as informed by the CISF vide communication dated 09.04.2014, the footage of 11.10.2013 had already been overwritten/erased upon expiry of the standard retention period.

On the adjudicatory side:

  • The Additional Commissioner of Customs passed an Order-in-Original dated 28.03.2018, ordering confiscation of the gold jewellery and biscuits and imposing a penalty of Rs.13,23,225 on the assessee.
  • The assessee’s appeal to the Commissioner of Customs (Appeals) was dismissed on 06.12.2021.
  • A Revision Application under Section 129DD of the Customs Act was then filed before the Central Government. The Additional Secretary, Ministry of Finance, Department of Revenue rejected this revision vide Order No. 295/22-Cus dated 20.09.2022.

Aggrieved, the assessee approached the Delhi High Court under Article 226, seeking to:

  • quash the revisional order dated 20.09.2022,
  • set aside the adjudication and appellate orders, and
  • direct refund of the sale proceeds of the confiscated gold without deduction towards redemption fine, customs duty, penalty and interest.

The High Court framed the central question as:

Whether, in exercise of writ jurisdiction, it should interfere with the concurrent factual findings of the Adjudicating Authority, the Commissioner of Customs (Appeals) and the Revisional Authority that the assessee attempted to import substantial quantities of gold jewellery and gold biscuits into India without making the mandatory declaration, thereby rendering the goods liable to confiscation under the Customs Act, 1962.

Assessee’s arguments

The assessee, through counsel, raised the following principal contentions:

1. Intention to declare via Red Channel

  • The assessee claimed that he never intended to evade customs duty.
  • According to him, he was on his way to the Red Channel to declare the gold when he was intercepted at the aerobridge, prior to reaching the customs clearance area.
  • On this basis, it was argued that the allegation of having crossed the Green Channel with undeclared gold was factually incorrect and that there was no deliberate attempt at smuggling or evasion.

2. Prejudice from non-availability of CCTV footage