Customs: Delhi High Court Directs Release of Confiscated Gold on Payment of Redemption Fine and Penalty

An individual named Rakesh Kumar Jat, a citizen of India, lives and works in Kuwait, holds a valid ‘State of Kuwait Civil ID Card,’ and was travelling from Kuwait to New Delhi on April 26, 2024, on flight JE-409. When he arrived at the Indira Gandhi International Airport, New Delhi, a gold item he was carrying, a 64-gram unevenly shaped gold cut piece, was detained by the Customs Department.

Then, he files a writ petition in the Delhi High Court under Articles 226 and 227 of the Indian Constitution to challenge an Order-in-Original dated May 27, 2025, passed by the Commissioner of Customs. He also asked the court to order the release of the seized gold.

In the high court, he argued that no show-cause notice (SCN) was issued to him by the authorities before releasing the final order, which is unfair as per the law, as he was not given a fair chance to explain his side before the final decision was made. He also mentioned that he had appointed an authorised representative to speak on his behalf to Customs, but the department did not even allow that representative to act or release the gold based on his authority.

In this context, the Customs Department argued that they were ready to implement the original order dated May 27, 2025. So they were willing to allow the release of the gold if the conditions of that order were followed. The Order-in-Original passed by the Customs Commissioner consisted of four parts:

1. Rakesh Kumar Jat was denied the usual allowance because he did not declare the gold either at the Red Channel (for declarations) or the Green Channel (for no declarations). He was found to be carrying the item without informing officials, which is illegal as per the law.
2. The gold piece, 64 grams of 999 purity valued at Rs. 4,49,544, was confiscated under multiple sections of the Customs Act, 1962 (Sections 111(d), 111(i), 111(j), and 111(m)) for improper import.

However, the Customs Department gave him a chance to get the gold back by paying a fine of Rs. 25,000 under Section 125 of the Customs Act. However, there were a few conditions: he must re-export the gold and not challenge the identity or value of the gold. The redemption offer was valid only for 120 days from the date he received the order. The commissioner levied a separate penalty of Rs. 30,000 on him under Sections 112(a) and 112(b) of the Customs Act for bringing in goods without declaration.

The Delhi High Court analysed the case and noted that Rakesh Kumar Jat agreed to follow the Customs order and had no objection to the gold being released, as long as he could redeem and re-export it. Hence, the court orders Customs to implement its own order within two weeks from the date of the court order. Rakesh Kumar Jat is allowed to either personally collect the gold item or send an Authorised Representative to collect it only after sending an email or written confirmation that he allows this person to collect the item on his behalf. 50% of the warehousing charges (for storing the gold until now) must also be paid by Rakesh. Once these conditions are met, payment of the fine (Rs. 25,000), penalty (Rs. 30,000), and half of the storage fees, the gold must be returned and re-exported as allowed.