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The Madras High Court has recently upheld a fine of Rs. 16,30,000 imposed as redemption fine under Section 125 of the Customs Act and as penalty under Sections 112 (a) & 114 AA of the Customs Act, 1962 on Srilankan nationals based in Colombo who attempted to walk through the green channel wearing 1594 kgs of gold jewelry valued at Rs.43,95,854 without making declaration before the Customs Officers.

Apart from the jewelry, the said persons had also purchased about 112 bottles of liquor valued at Rs.1,50,000.

A single judge bench of Justice C Saravana said,

"Since the value of the gold ornaments worn in person of the respective petitioners exceeded Rs.50,000/- (Rupees Fifty Thousand only), it was incumbent on the part of the petitioners to have made proper declaration under Customs Baggage Declaration Regulations, 2013 read with Baggage Rules 2016. These Rules apply to all passengers including tourist coming to India."

In this case, Sri Lankan nationals based in Colombo had arrived at the Chennai Airport in May 2017 wearing 1594 kgs of gold jewelry valued at Rs.43,95,854.

They had attempted to walk through the green channel along with two minor children wearing 1594 kgs of gold jewelry without making declaration before the Customs Officers. Apart from the jewelry, one of them had also purchased about 112 bottles of liquor valued at Rs.1,50,000.

Officers of the Air Customs Department had then intercepted them and found that there was an attempt to smuggle liquor beyond the permissible limit and therefore the jewelry and the liquor bottles were seized.

A show cause notice under Section 124 of the Customs Act, 1962 was issued and after conduction of proceedings, Joint Commissioner of Customs imposed redemption fine under Section 125 of the Customs Act and penalty under Sections 112 (a) & 114 AA of the Customs Act, 1962.

In the impugned order, the appellate authority reversed the order passed by the Commissioner of Customs (Appeals) and thus affirmed the order of the Joint Commissioner ordering confiscation of the gold & liquor and imposition of redemption fine and penalty under Section 125 and Section 112 (a) of the Customs Act, 1962. It was further held that there was no necessity to impose a separate penalty under Section 114 AA of the Customs Act, 1962.

High Court found that there was no material irregularity discernible in the decision-making process adopted by the authorities and the impugned order did not suffer from any vices of violation of the principle of natural justice.

Also, it was noted that jewelry items were not articles of personal effect as defined in Rule 2(vi) of the Baggage Rules, 2016, therefore, the petitioners being tourist within the meaning of Rule 2(1)(v) of the said Rules were governed by Sub Clause (b) of the Rule 3 of Baggage Rules, 2016 as per which gold or silver ornaments upto a value of Rs.50,000 worn in person or carried on person are only freely importable.

Thus while dismissing the writ petition, the High Court observed,

"The conduct of the petitioners attempting to walk through the green channel without proper declaration had raised serious doubts and thus proceedings initiated against the petitioners are in accordance with the provisions of the Customs Act, 1962. Therefore, I do not find any infirmity in the order..."

Case Title: Chandrasegaram Vijayasundaram and Ors vs. Principal Commissioner (Revision Application) and Ors