Mandatory issuance of a show cause notice before confiscation under Customs law is essential for adherence to natural justice principles.

ORDER :

Abdul Quddhose, J.

This writ petition has been filed, challenging the impugned order in original dated 03.06.2024 passed by the second respondent, confiscating the subject gold jewellery, morefully described in the prayer to this writ petition and also imposing penalty of Rs.3,00,000/- on the petitioner under Section 112 of the Customs Act, 1962.

2.The case of the petitioner is that he is working in Malaysia and he had brought the subject gold jewellery during one of his visits to India. According to the petitioner, since he was lacking requisite foreign currency for the payment of the Customs duty for the subject gold jewellery, the respondents had detained the gold jewellery, by issuing a detention receipt dated 28.04.2024. He would also submit that the detention receipt was issued only to enable the petitioner to pay the assessed Customs duty payable for the subject gold jewellery.

3.The petitioner claims that he had also paid the Customs duty as assessed by the respondents on 02.05.2024. However, according to the petitioner, despite paying the Customs duty, which is payable for the subject gold jewellery, as assessed by the Customs Department, the respondents did not release the subject gold jewellery to the petitioner. According to the petitioner, arbitrarily, the impugned order in original came to be passed by the respondents, confiscating the subject gold jewellery and imposing penalty on the petitioner under Section 112 of the Customs Act.

4.In the impugned order in original, the respondents have also appropriated the duty paid by the petitioner, amounting to Rs.3,42,341/- for adjustment, subject to additional duty and penalty being imposed on the petitioner.

5.The learned counsel for the petitioner drew the attention of this Court to the detention receipt dated 28.04.2024 and would submit that as seen from the detention receipt, the subject gold jewellery was detained by the Customs Department only on account of non-payment of the Customs duty by the petitioner and not on account of non-declaration of the same by the petitioner before the Customs Department.

6.The learned counsel for the petitioner also drew the attention of this Court to the duty paid challan dated 02.05.2024 for a sum of Rs.3,42,341/- and would submit that as seen from the same, the petitioner had paid the assessed Customs duty for the detained gold jewellery to the Customs Department.

7.The learned counsel for the petitioner also drew the attention of this Court to the representation given by the petitioner to the respondents on 02.05.2024, requesting the second respondent to release the subject gold jewellery to the petitioner, since the petitioner has already paid the duty. According to the learned counsel for the petitioner, despite paying the Customs duty, arbitrarily, the second respondent has passed the impugned order in original dated 03.06.2024, confiscating the gold jewellery and imposing a penalty of Rs.3,00,000/- on the petitioner.

8.The learned counsel for the petitioner would also submit that the petitioner has never issued any letter to the customs department waiving the necessity of the customs department to issue show cause notice to the petitioner for confiscating the subject gold jewellery. Learned counsel for the petitioner also submits that without passing a seizure order under Section 110 of the Customs Act, the respondents had passed the confiscation order under the impugned order in original, which is arbitrary and illegal.

9.On the other hand, the learned Standing Counsel appearing for the respondents would reiterate the contents of the counter affidavit filed by the respondents before this Court and would submit that since the petitioner had waived the issuance of show cause notice though a letter dated 29