The Madras High Court has held that a challenge to the confiscation of a domestically registered car and Indian currency, along with a penalty arising from an alleged gold-smuggling incident, must be pursued before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) when the disputed items were neither imported nor exported as baggage.
The bench of Justice C. Saravanan upheld the Central Government Revision Authority’s decision rejecting the revision application under Section 129DD of the Customs Act, 1962, as not maintainable and permitted the petitioner to approach CESTAT within 30 days from receipt of the judgment and directed the Tribunal to decide the appeal on merits, after hearing him, without further reference to limitation.
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The principal legal issue was whether the petitioner’s challenge to the confiscation of his vehicle and cash, the redemption fine and the penalty belonged before CESTAT under Section 129A or before the Central Government Revision Authority under Section 129DD.
The distinction mattered because the first proviso to Section 129A(1) excludes certain categories of disputes from CESTAT’s jurisdiction, including orders relating to goods imported or exported as baggage. Orders falling within those specified categories are subject to the revision mechanism under Section 129DD.
In the present case, the Court found that the disputed cash, mobile phones and car were neither imported nor exported. It consequently held that the statutory exclusion of CESTAT’s jurisdiction did not apply.
The proceedings originated in a Customs case involving two unfinished gold chains of 24-karat purity, weighing 999 grams and valued at ₹59,64,030. According to the adjudication order reproduced in the judgment, the gold was seized from P. Kumar, a motor driver employed with Customs at Trichy Airport.
By an order dated September 13, 2024, the Joint Commissioner of Customs ordered absolute confiscation of the gold under Section 111 of the Customs Act.
The authority also ordered absolute confiscation of ₹5,35,000 recovered from the assessee’s Maruti Suzuki Wagon R. The adjudicating authority proceeded on the finding that the money was meant to pay persons involved in the smuggling and invoked Section 121.
The car was confiscated under Section 115(2) on the finding that it was intended to carry the smuggled gold. The assessee was given an option to redeem the vehicle on payment of a ₹1 lakh fine within 120 days from the date of issue of the adjudication order.
The authority directed the release of the seized mobile phones without any fine or penalty and imposed a penalty of ₹5.96 lakh on assessee under Section 112(b).
On February 19, 2025, the Commissioner (Appeals) reduced assessee’s penalty from ₹5.96 lakh to ₹1.5 lakh while upholding the remaining portions of the adjudication order.
The assessee then filed a revision application before the Central Government under Section 129DD.
His challenge covered the confiscation of the car, the ₹1 lakh redemption fine, confiscation of ₹5.35 lakh in Indian currency, the reduced penalty of ₹1.5 lakh and recovery of ₹6,160 towards handling and warehousing charges for release of the mobile phones.
He also disputed the legal basis of the seizure and confiscation. Among other grounds, he contended that the vehicle had not been used as a conveyance within the meaning of Section 115(2) and that the cash did not constitute sale proceeds attracting Section 121.
The revision application did not challenge the confiscation of the gold chains.
The Revision Authority rejected the application on July 14, 2026, holding that the reliefs sought did not relate to goods imported or exported as baggage.
It noted that assessee was not a passenger, had not imported or exported goods as baggage and had not crossed the Customs barrier.
The authority further recorded that the vehicle was domestically registered and had been seized from the airport parking area outside the Customs area. The Indian currency had been recovered from its glove box.
On that basis, it concluded that the challenge did not fall within the categories excluded from CESTAT’s jurisdiction under the first proviso to Section 129A(1). The revision application was therefore held to be outside its jurisdiction under Section 129DD.
The assessee approached the High Court seeking to quash this rejection and restore the revision application for a decision on merits.
Examining the statutory framework, the High Court explained that Section 129A provides an appellate remedy before CESTAT against orders of the Commissioner (Appeals), subject to the specified exclusions.
Besides baggage disputes, the first proviso addresses certain cases involving imported goods not unloaded at their destination and disputes concerning drawback.
The Court held that the present challenge did not fall within those exclusions. It observed that the seized cash, mobile phones and car were neither exported nor imported. It also noted that the gold had not been loaded into the car when the vehicle was seized.
Accordingly, there was no statutory bar preventing CESTAT from entertaining an appeal against the first appellate authority’s order. By implication, the Central Government Revision Authority lacked jurisdiction under Section 129DD.
The Court therefore found no ground to interfere with the rejection of the revision application.
The High Court had directed provisional release against a ₹1 lakh security deposit, observing that keeping the vehicle idle would cause depreciation and that its continued retention would serve no useful investigative purpose when its details were already available with Customs.
A subsequent petition concerned the authorities’ refusal to release the vehicle. In July 2025, the Court directed provisional release after recording that the ₹1 lakh redemption fine had been paid, although beyond the stipulated period.
That petition was closed on August 18, 2025, after compliance with the release direction.
The High Court granted assessee liberty to file an appeal before CESTAT within 30 days from receipt of a copy of its order.
The Tribunal must hear the petitioner and dispose of the appeal on merits and in accordance with law, without further reference to limitation.
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