Customs department seizes gold from foreigner, sells it off

Delhi High Court

New Delhi: The Customs Department has been directed by the Delhi High Court to pay Rs 94 lakh to a foreigner for hurriedly selling off nearly 4 kg gold seized from her even though the proceedings were pending in the court. When the high court was informed that the proceeds collected during the auction were equal to the value of the gold, Rs 93,34,783, it directed the Customs Department which comes under the Ministry of Finance, to refund the amount to the Kenyan national by June 30. On failure to refund the amount by the time fixed, the authorities will have to pay the money along with a simple interest at 6 per cent per annum on the sum for the period of delay, it said.

A bench of Justices S Muralidhar and I S Mehta set aside the adjudication order passed by the Commissioner of Customs (Airport and General) confiscating the seized gold and imposing Rs 18 lakh penalty on her. The court questioned the customs officials as to why they were constrained to dispose of the seized gold, when it was neither perishable nor hazardous. The officials had no explanation to offer for this action, it noted. "In the present case with the seized material not being perishable, being gold bars, there was no reason for the Respondents to have hurriedly disposed it off and that too without notice to the petitioner (woman)," it said.

The bench said the entire manner in which the respondents have proceeded to pass the adjudication order and also dispose of the gold without notice to the woman leaves no doubt that not only the disposal of the seized gold, but the adjudication order as well, are both "unsustainable in law". The court also noted that even the show cause notice was not served upon the woman, from whom 3,732.48 gms of gold bars were seized at the IGI Airport on January 5, 2015. The woman said she had arrived at IGI Airport here from Nairobi on January 5, 2015 and was carrying the gold which she wanted to be used for making jewellery in India and then take it back to Kenya to sell for profit. The authorities had claimed to have found 32 pieces of gold bars, each weighing 10 tolas, from the woman's pouches.

According to the woman, she had purchased the gold in Kenya after selling her car and taking loan from her friends and relatives. When she was exiting, she was stopped at the gate and was asked if she was carrying any gold. She claimed that when she replied in the affirmative, she was taken to the preventive room where she took out the gold from her bag and gave it to the Customs Department. When the gold was not returned to her and no show cause notice (SCN) was issued, she filed a petition in the high court in April 2018. As per the documents of Customs department, when she was asked at the airport whether she was carrying any dutiable goods/ gold items which she needed to declare, she had answered in the negative.

The bench said there was no answer why the gold had to be disposed of without notice being issued to the person from whom it was seized. The court noted that the authorities disclosed for the first time, its counter affidavit filed in February this year, that as per available records, the case property has been already disposed of but no details were given as to when the seized gold was disposed of. It referred to a previous judgement of the Supreme Court in which it was stated that if the SCN was not issued within six months from the date of seizure the consequence would be that the person from whom the gold was seized would become entitled to its return. "Even the adjudication order in the present case would be illegal as the Commissioner passed the same ex-parte without the SCN having been actually served upon the present petitioner at all in the present case," the high court said.

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