One Rolex Watch Is Not 'Commercial Quantity', Can Be For Personal Use: Delhi High Court Grants Extension For Redemption Under S.125 Customs Act - 2025-09-23

Single Rolex Watch Not 'Commercial Quantity,' Can Be for Personal Use: Delhi HC Cautions Customs Authority

New Delhi: The Delhi High Court, in a significant observation, has ruled that a single Rolex watch cannot be considered a 'commercial quantity' and can reasonably be for personal use. A bench comprising Justice Prathiba M. Singh and Justice Shail Jain made this remark while hearing a plea from a Dubai resident whose luxury watch was detained at Indira Gandhi International Airport for non-declaration.

The Court also cautioned the customs adjudicating authority to avoid such errors in future orders and granted the petitioner an extension to redeem his confiscated watch.

Background of the Case

The case involves Mr. Mahesh Malkani, a Dubai resident, who was travelling to India on March 7, 2024. Upon his arrival at Delhi's IGI Airport, the Rolex watch (Model No. 126610LV) he was wearing was detained by customs officials on grounds of non-declaration.

Subsequently, on January 30, 2025, the Commissioner of Customs passed an order confiscating the watch, valued at Rs. 13,48,500, under various provisions of the Customs Act, 1962. However, the order gave Mr. Malkani the option to redeem the watch for re-export within 120 days by paying a redemption fine of Rs. 1,80,000 and a separate penalty of Rs. 1,50,000. Mr. Malkani failed to meet this deadline, prompting him to file a writ petition in the High Court.

Petitioner's Arguments and Court's Observations

The petitioner's counsel highlighted a significant error in the reasoning provided by the customs authority in its order. The authority, in paragraph 8.4 of its order, had stated: "Goods are clearly in commercial quantity and cannot possibly be for personal use."

The High Court took strong exception to this finding. In its judgment, the bench unequivocally stated:

"Clearly, this Court is of the view that one Rolex watch cannot be held to be a commercial quantity and there is no reason as to why the same cannot be kept for personal use."

While noting the flawed reasoning, the Court focused on the fact that the option for redemption had already been granted. The primary issue before the court was the lapsed deadline for paying the redemption fine.

Final Decision and Implications

The Delhi High Court disposed of the petition by extending the period for redemption. The bench directed that Mr. Malkani must pay the redemption fine of Rs. 1,80,000 by October 31, 2025, to reclaim his watch in accordance with the original order. The Court also stipulated that the petitioner would be liable to pay any applicable warehousing charges calculated from the date of detention.

Issuing a stern warning to the department, the bench noted, "The adjudicating authority is cautioned to ensure that in future, such errors do not occur in the orders which are passed by the adjudicating authority."

This judgment serves as a crucial clarification on the interpretation of 'commercial quantity' versus 'personal use' in the context of passenger baggage rules, particularly concerning high-value personal items. It underscores the need for customs authorities to apply a reasonable and logical standard when making such determinations.