The Delhi High Court has said the value of gold permissible under the Baggage Rules for travellers coming from abroad to India will have to be relooked by the Central Board of Indirect Taxes and Customs (CBIC), saying it “appears to be completely not in tune with the current market value of gold”.
A Bench of Justices Prathiba. M. Singh and Dharmesh Sharma said they had seen a number of cases, where “even small quantities of jewellery are sometimes seized by the Customs department if the passenger is walking through the green channel — which is for passengers not having any dutiable or prohibited goods”.
“Moreover, the court is of the view that the Baggage Rules may also require a relook, considering the market rate of gold at present, where 40 grams of gold would be costing much more than the value cap of ₹1,00,000 prescribed under Rule 5 of Baggage Rules,” the Bench said in its January 13 order.
Imposed fine
The court was dealing with a petition by Qamar Jahan, who was returning from Dubai to India last year, when the Customs department confiscated two gold kadas and one gold chain. Ms. Jahan was directed to pay a redemption fine of ₹75,000 and a personal penalty of ₹1,10,000 in terms of the Customs Act.
After her appeal against the order was dismissed by the Commissioner of Customs, she moved the High Court.
Independent of the facts in her case, the court had on previous hearing queried the Customs officials as to what are the applicable rules and circulars in respect of confiscation or seizure by the Customs department of jewellery which are worn by travellers/tourists who may be coming from abroad to India.
The Customs officials said that as per the Baggage Rules, 2016, that came into force on April 1, 2016 and was passed under Section 79 of the Customs Act, 1962, the term “personal effects” would not include jewellery.
The rules also say that any jewellery of 20 grams with a value cap of ₹50,000 in case of a man and 40 grams with a value cap of ₹1,00,000 in case of a woman, only can be cleared free of duty upon return to India, subject to the condition that the concerned passenger is residing abroad for more than one year.
The Indian Customs Declaration Form issued by the CBIC as part of the Guide for Travellers says gold and gold jewellery are being treated as prohibited articles where the same is beyond the prescribed limits under Rule 5 of Baggage Rules, including gold bullion.
On a query from the court, the Customs department’s counsel stated that if any traveller is coming from abroad and is carrying jewellery which is more than the value as prescribed in Rule 5 of the Baggage Rules, the same would have to be declared by the said traveller.
The counsel further stated that, “where the declaration has been made the applicable duty would not have to be paid and an undertaking would have to be given, inter alia, stating that the said traveller intends to carry the declared jewellery back”.
The court, however, told the Custom department’s counsel that, “A perusal of the Baggage Rules or the Declaration Form does not show that this position, qua declaration of the jewellery, is duly clarified to travellers/tourists visiting India”.
While the Custom department’s counsel also points out that there are many cases, where travellers are undertaking frequent travel almost every week or two weeks, with the sole intention to smuggle gold into India.
“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 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,” it added.
The court said “the Baggage Rules are required to be relooked 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 travellers, whether Indian or foreigners into India; (ii) that illegal smuggling of gold is properly curbed”.
It will hear the case again in March.
