The Delhi High Court has directed the department to pay the entire value of detained gold as per market rate as the customs department disposes of detained gold without intimation to Russian National.
The bench of Justice Prathiba M. Singh and Justice Dharmesh Sharma has observed that the disposal of the detained gold without intimation to the Petitioner is also contrary to law. The entire process followed by the Customs Department for the disposal of the detained gold, collecting the redemption fine and penalty as also deducting customs duty before payment of the value of the detained gold to the Petitioner would, therefore, not be tenable.
The bench stated that the Petitioner is entitled to the entire value of the detained gold as on the market rate prevalent today, which would be liable to be paid by the Customs Department within a period of three weeks. If the amount is not paid within three weeks, costs of Rs.1,00,000 would be liable to be paid by the Customs Department to the Petitioner.
The bench clarified that no duty would be liable to be deducted from the payment of the value of the detained gold as the Petitioner has already deposited the redemption fine and penalty in terms of the Order-in-Appeal.
“The Customs Department shall ensure in future that the intimation of disposal of detained or confiscated property is given to the concerned party both via email as also the mobile number, so that the said party who has succeeded in Court or Tribunal against the detention of the property, are not deprived of their properties, as has happened in the present case,” the bench warned.
The petitioner was Russian National was intercepted after crossing the Green Channel at IGI Airport, New Delhi. On the date, the Petitioner’s baggage was searched and 1065.10 grams of gold was recovered from the Petitioner. The gold was detained and the case of the Petitioner was adjudicated.
The Order was challenged by the Petitioner in appeal before the Commissioner of Customs (Appeals). The said appeal was allowed and the detained goods were directed to be released to the Petitioner on payment of redemption fine of Rs. 4,60,000 as also penalty of Rs. 4,60,000.
The petitioner contended that despite payment of the said redemption fine and the penalty, the detained goods were not released by the Respondent.
Strangely however, instead of complying with the directions, vide the Refund Order the Assistant Commissioner (Refund) directed the refund of only Rs. 50,14,704/- to the Petitioner. To make things worse, the refund amount was modified and reduced to Rs. 29,46,139 on the ground that Customs Duty of Rs. 20,68,565 is also payable.
The department contended that there was an error by the Customs Department in this case as the Order-in-Appeal allowing release of the detained goods was not communicated to the Department concerned. The gold detained from the Petitioner, actually stood disposed of on 29th November, 2022 along with various other gold items which were detained/confiscated.
The court held that this course of action would be completely contrary to law inasmuch as the Order-in-Appeal had clearly directed the release and re-export of the detained gold, subject to payment of redemption fine and penalty. The said order could not have been ignored by the Customs Department. Even if there was a lack of communication, the fact of disposal of the detained gold ought to have been communicated to the Court.
Case Details
Case Title: Gor Sharian Versus The Commissioner Of Customs
Case No.: W.P.(C) 1807/2025, CM APPL. 8675/2025 & CM APPL. 8676/2025
Date: 14th February, 2025
Counsel For Petitioner: S. Vijay Kanth
Counsel For Respondent: Gibran Naushad
