Undeclared Confiscated Gold Cannot Be Re-Exported U/S 125 Customs Act: Delhi High Court
The Bench upheld the seizure of 2.4 kg gold from Turkmenistan national, holding that allowing re-export for undeclared items under Section 125 would render Section 80 safeguards completely otiose.
Justice Anil Kshetarpal, Justice Shail Jain, Delhi High Court
The Delhi High Court held that Section 125 of the Customs Act, 1962 confers only a general discretionary power over confiscated goods, whereas Section 80 constitutes a special statutory code specifically governing the return or re-export of passenger baggage. The Court clarified that this special procedure is available exclusively when a passenger makes a true and proper declaration under Section 77 of the Act.
A Division Bench held that permitting re-export under Section 125 despite non-compliance with Section 80 would render the conditions incorporated in that provision redundant, since any passenger who failed to declare goods could then bypass Section 80's safeguards simply by invoking Section 125 after confiscation, an interpretation the Court declined to accept as it would render a statutory provision wholly otiose.
The petition was heard by a Division Bench of Justice Anil Kshetarpal and Justice Shail Jain observed, “Equally significant is what Section 125 does not provide. Although the provision authorises redemption of confiscated goods upon payment of fine, it nowhere provides that such redemption necessarily carries with it an entitlement to re-export the goods. Nor does it contain any non obstante clause overriding the special provisions governing passenger baggage. Had the Legislature intended Section 125 to independently authorise re-export of baggage irrespective of compliance with Section 80, it could easily have employed appropriate language to that effect. The conspicuous absence of such language assumes considerable significance”.
“…this Court is of the considered opinion that the Revisional Authority committed no error in holding that the direction permitting re-export of the confiscated gold under Section 125 of the Customs Act was contrary to the statutory scheme governing passenger baggage”, it further noted.
Advocate Dr. Ashutosh for the petitioner and Devvrat Yadav, SPC appeared for the respondent.
The Petitioner, a national of Turkmenistan, arrived at IGI Airport on May 1, 2019, and after crossing the Green Channel was intercepted by Customs authorities, who recovered six gold bars and various gold ornaments totalling 2,425 grams, valued at ₹48,52,474, from her hand baggage. She contended she had purchased the gold in Turkmenistan and intended to sell it in India to fund her medical treatment, and that her statement under Section 108 of the Customs Act had been improperly recorded through an unofficial interpreter.
The Joint Commissioner of Customs, by Order-in-Original dated December 31, 2020, held the gold liable to confiscation but, exercising discretion under Section 125, permitted the Petitioner to redeem it by re-export on payment of a fine of ₹8,00,000. The Commissioner of Customs (Appeals), by order dated September 29, 2021, dismissed cross-appeals by both the Petitioner and the Department, affirming the Order-in-Original in its entirety.
Thereafter, both the parties invoked the revisional jurisdiction of the Central Government under Section 129DD of the Customs Act. By order dated July 27, 2022, the Revisional Authority partly allowed both revisions, setting aside the demand of customs duty relating to the Petitioner's alleged prior imports, but also holding that re-export of passenger baggage is specifically governed by Section 80 of the Customs Act, and that in the absence of compliance with Sections 77 and 80, the Adjudicating Authority could not have permitted re-export by invoking Section 125. The Petitioner challenged this latter finding by way of a writ petition under Article 226 of the Constitution of India.
It rejected the Petitioner's reliance on her medical treatment needs, noting that the only supporting document was a hospital letter concerning a gynaecological consultation, unconnected to the neurological treatment later asserted before the Court, and held that financial necessity, however genuine, cannot override the mandatory declaration requirements of the Customs Act. The Bench also distinguished its earlier ruling in Nidhi Kapoor v. Principal Commissioner, holding that judgment concerned only the discretionary nature of redemption for prohibited goods and did not examine the interplay between Sections 80 and 125.
“The legislative scheme, therefore, indicates that while Section 125 confers a general discretionary power regarding confiscated goods, Section 80 constitutes a special statutory code governing return or re-export of goods forming part of passenger baggage, provided a true declaration has been made under Section 77 of the Customs Act”, the Bench said.
“Applying these principles, this Court is unable to accept the Petitioner’s submission that Section 125 can be invoked to direct reexport of passenger baggage notwithstanding non-compliance with Section 80. Such an interpretation would virtually render the conditions incorporated in Section 80 redundant. If every passenger who failed to make a declaration under Section 77 could nevertheless seek re-export by invoking Section 125 after confiscation, the statutory safeguards consciously incorporated by Parliament in Section 80 would become wholly otiose. Courts must avoid an interpretation which renders any statutory provision nugatory or ineffective…”, the Bench further said.
Cause Title: Oguljeren Derchiyeva v. Union of India (Neutral Citation: 2026:DHC:6296-DB)
Appearances:
Petitioner: Dr. Ashutosh, S.S. Arora, Abhijeet Sagar and Fatima, Advocates.
Respondent: Devvrat Yadav, SPC, Kartik Sharma, GP, Anushree Narain, Maman Chola, Apurv Yadav, Advocates.