The Delhi High Court has ordered CBIC to re-look into the Baggage Rules to curb the illegal smuggling of gold and directed them to take policy decisions to ensure that genuine tourists and travellers into India are not harassed.

The Court issued notice in a Writ Petition filed under Articles 226 and 227 of the Constitution challenging the confiscation of gold jewellery by the Customs Department. The Bench directed the Central Board of Indirect Taxes and Customs (CBIC) to re-look the value of gold that could be permissible under the Baggage Rules, 2016 (Rules) passed under Section 79 of the Customs Act, 1962 (the Act).

A Division Bench of Justice Prathiba M Singh and Justice Dharmesh Sharma ordered, “Let this matter be referred to the Chairman, CBIC for reconsideration of the Baggage Rules 2016. Let the re-consideration be undertaken in coordination with any other Departments or Ministries as may be required and the report be filed before this Court regarding the reconsideration and the manner thereof. The report shall be filed by the next date of hearing.

Advocate Ashish Panday represented the Petitioner, while CGSC Jagdish Chandra appeared for the Respondents.

Brief Facts

The adjudicating authority had ordered confiscation of two gold kadas and one gold chain of the Petitioner. The Petitioner was directed to pay a redemption fine of Rs. 75,000 and a personal penalty of Rs. 1,10,000 in terms of the Act. The Petitioner appeal challenging the same was dismissed.

Customs officials informed the Court that under the Rules, “personal effects” did not include jewellery. As per Rule 5 of the Rules, a male passenger residing abroad for over a year can bring up to 20 grams of jewellery valued at Rs. 50,000 free of duty. Similarly, a female passenger is allowed up to 40 grams valued at Rs. 1,00,000. Jewellery exceeding these limits must be declared, and applicable duties must be paid.

Court’s Reasoning

The High Court noted that the Customs Department sometimes seized even small quantities of jewellery if a passenger was walking through the green channel (for passengers not having any dutiable or prohibited goods).

The Baggage Rules may also require a re-look, considering the market rate of gold at present, where forty grams of gold would be costing much more the value cap of Rs. 1,00,000/- prescribed under Rule 5 of Baggage Rules. With the maximum limit of Rs.1,00,000/-, the gold that could be purchased may only be around 15 grams,” it held.

While, there is no doubt that any illegal smuggling of gold deserves to be curbed, at the same time, bona-fidely and genuine tourists/travellers, including people from Indian Origin such as the OCI Cardholders, PIOs etc., could be travelling for social engagements in India or social events such as marriages etc., with gold, which could be of a much higher value than the permissible limits,” the Court remarked.

Such tourists and travellers, the Court observed, “ought not to be expected to file detailed declarations, which could make the entire process of entering India and exiting from airports extremely unfriendly or onerous.

Consequently, the Court held that “the Baggage Rules are required to be re-looked by the CBIC and a policy decision ought to be taken by the Government of India on both fronts:- (i) to ensure that there is no harassment of genuine tourists and travellers, whether Indian or foreigners into India; (ii) that illegal smuggling of gold is properly curbed…The values of gold that would be permissible under the Baggage Rules would also have to be re-looked by the CBIC as the same appears to be completely not in tune with the current market value of gold.

Accordingly, the High Court listed the matter for 27th March, 2025.

Cause Title: Qamar Jahan v. Union Of India (Neutral Citation: 2025-DHC-174-DB)

Appearance:

Petitioner: Advocate Ashish Panday

Respondents: CGSC Jagdish Chandra; Senior Standing Counsel Harpreet Singh; Advocates Shubham Kumar Mishra, Suhani Mathur and Shivang Chawla

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