Case: Directorate Of Revenue Intelligence Vs. Ms. Pushpa Lekhumal Tolani

a) On 19.11.2002, on the basis of specific intelligence tip off to the effect that one lady named Ms. Pushpa Lekhumalrespondent herein, who was scheduled to arrive at IGI Airport from London, would be carrying gold and diamond jewellery and other valuable goods concealed in her bags and would pass through the Green Channel without the payment of the customs duty, the officers of the Directorate of Revenue Intelligence (DRI), Hqrs. Office, New Delhi, kept a watch on her and as soon as she was about to cross the exit gate after passing through the Green Channel, she was intercepted and was asked whether she has any dutiable item to declare to which she replied in negative. A search was conducted under Section 102 of the Customs Act, 1962 (hereinafter referred to as `the Act) and 28 packages containing 44 items of jewellery worth Rs. 1.27 crores were recovered from two hand bags. On the very same day, the respondent was produced before the Additional Chief Judicial Magistrate and was remanded to judicial custody and she remained there till 26.11.2002.(b) On 12.12.2002, anotice was issued to the respondent by the then Assistant Director, Directorate of Revenue Intelligence, asking her toas to why the seized goods should not be confiscated under the Act. On 14.08.2003, the competent authority, passed a detailed order confiscating absolutely the new articles valued at Rs.confiscation of seized jewellery worth Rs. 40,47,235/with redemption clause on payment of fine of Rs. 3,00,000/and penalty to the tune of Rs.Vide order dated 27.09.2004, Additional Chief Metropolitan Magistrate, New Delhi, found the respondent guilty under Sections 132 and 135(1)(a) of the Act and sentenced to undergo imprisonment for the period already undergone and imposed a fine of Rs. 6 lakhs.(c) Being aggrieved by thenotice dated 12.12.2002 and order dated 14.08.2003, the respondent herein filed Writ Petition (C) No. 6633 of 2003 before the High Court of Delhi. The Division Bench of the High Court, vide order dated 13.09.2006 allowed the writ petition and quashed thenotice and order dated 14.08.2003 and directed for release of the goods. In view of the aforesaid judgment, the appeal filed by the respondent herein against the conviction passed by the Additional Chief Metropolitan Magistrate was allowed by the Additional Sessions Judge vide order dated 11.04.2007.(d) Aggrieved by the decision of the High Court, the appellant filed a review petition being No. 335 of 2009. The Division Bench of the High Court, vide order dated 04.09.2009, dismissed the said review petition.(e) Aggrieved by the orders dated 13.09.2006 and 04.09.2009, the appellant has preferred this appeal by way of special leave.

Court's reasoning:
9. Insofar as the question of violation of the provisions of the Act is concerned, we are of the opinion that the respondent herein did not violate the provisions of Section 77 of the Act since the necessary declaration was made by the respondent while passing through the Green Channel. Such declarations are deemed to be implicit and devised with a view to facilitate expeditious and smooth clearance of the passenger. Further, as per the International Convention on the Simplification and Harmonization of Customs Procedures (Kyoto 18.05.1973), a passenger going through the green channel is itself a declaration that he has no dutiable or prohibited articles. Further, a harmonious reading of Rule 7 of the Baggage Rules, 1998 read with Appendix E (2) (quoted above), the respondent was not carrying any dutiable goods because the goods were the bona fide jewellery of the respondent for her personal use and was intended to be taken out of India. Also, with regard to the proximity of purchase of jewellery, all the jewellery was not purchased a few days before the departure of the respondent from UK, a large number of items had been in use for a long period. It did not make any difference whether the jewellery is new or used. There is also no relevance of the argument that since all the jewellery is to be taken out of India, it was, therefore, deliberately brought to India for taking it to Singapore. Foreign tourists are allowed to bring into India jewellery even of substantial value provided it is meant to be taken out of India with them and it is aat the time of making endorsements on the passport. Therefore, bringing jewellery into India for taking it out with the passenger is permissible and is not liable to any import duty. Learned senior counsel brought to our notice that even as per EXIM Code Numbers 7113 19 20 and 7113 19 30 of ITC (HS) Classification of Export and Import items as on 01.04.2002, the import of gold jewellery studded with diamonds or with other precious stones, is freely allowed. Similarly, learned senior counsel rightly submitted that the invocation of Section 80 of the Act is of no use as this Section applies only to dutiable and prohibited goods. The accusation of not declaring the goods to the customs authority and evading duty alleged to be due thereupon has no legal basis.10. With regard to the intention of the respondent to take back the jewellery to England is concerned, we do not think that the air ticket sought to be relied upon by the DRI is of much consequence. In the reply affidavit dated 20.10.2014 filed before this Court by the respondent herein, it has been submitted that the so called enquiry conducted by thesubsequent to the passing of the judgment by the High Court was admittedly done after the expiry of more than 1,185 days. The respondent herein left for London on 01.03.2007 on Jet Airways flight No.and returned to Delhi on 06.03.2007 on Jet Airways flight No.It has been further mentioned in the reply affidavit that the fact of return of the respondent herein to India has been deliberately concealed by theIn fact, the respondent had travelled to London to attend a doctors appointment with her daughter who was unwell at the relevant time. Further, there is no restriction in UK law which prohibits a person claiming VAT in London fromthe items on which VAT has been claimed at a later date. Also, from the present facts and circumstances of the case, it cannot be inferred that the jewellery was meant for import into India on the basis of return ticket which was found to be in the possession of the respondent. Moreover, we cannot ignore the contention of the respondent that her parents at the relevant time were in Indonesia and she had plans of proceeding to Indonesia. Some of the jewellery items purchased by the respondent were for her personal use and some were intended to be left with her parents in Indonesia. The High Court has rightly held that when she brought jewellery of a huge amount into the country, the respondent did not seem to have the intention to smuggle the jewellery into India and to sell it off. Even on the examination of the jewellery for costing purposes, it has come out to be of Rs. 25 lakhs and not Rs. 1.27 crores as per the DRI. The High Court was right in holding that it is not the intention of the Board to verify the newness of every product which a traveler brings with him as his personal effect. It is quite reasonable that a traveler may make purchases of his personal effects before embarking on a tour to India. It could be of any personal effect including jewellery. Therefore, its newness is of no consequence. The expression "new goods" in their original packing has to be understood in a pragmatic way.We are of the considered opinion that in the absence of any facts on record about the nature and mode of concealment and also any finding of the lower authority that jewellery was kept in a way to evade detection on examination of the baggage, it has to be held that there was no concealment as such. It is seen that the respondent chose the Green Channel for clearance of her baggage. She committed no violation of law or infraction of any instruction for clearance of the baggage through the green channel as she being a tourist had no dutiable goods to declare under the Baggage Rules. The presumption that the jewellery found in her baggage cannot be considered as personal effects owing to its high monetary value is rebutted herewith and we hold that the respondent was entitled to import personal jewellery duty free.12. In the facts and circumstances of this case, it will be just and proper to expunge the remarks against the appellant from the judgment passed by the High Court. Therefore, the strictures passed against the appellant are expunged.