Delhi High Court Orders Release of Detained Gold Jewellery on Payment of Duty and Fine | After Court’s Directive, Customs Finalises Baggage Rules Amendments and Seeks Time for IT Upgrade
Safiya Malik
The High Court of Delhi Division Bench of Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta directed the release of two gold kadas and one gold chain detained by Customs, subject to payment of duty and a redemption fine of ₹60,000, while waiving penalty and storage charges. The Court held that the detained items could not be treated as personal jewellery under existing regulations but ordered their release in view of the case’s circumstances.
During the hearing, the Customs Department informed the Court that the Draft Baggage Rules, amending the 2016 Rules, have been finalized but their issuance is pending due to the need for upgraded IT infrastructure to ensure effective implementation. The Department, in an affidavit filed by the Additional Commissioner of Customs, cautioned that issuing the amended rules without adequate infrastructure and proper regulations could lead to fresh disputes and sought two months’ time for refinement and proper implementation
The dispute arose when two gold kadas and one gold chain were detained by Customs at the Indira Gandhi International Airport, New Delhi, after being brought into India by a passenger. Customs authorities treated the articles as dutiable goods under the Customs Act, 1962 and not as personal jewellery permissible under the Baggage Rules, 2016. The items were seized and subjected to adjudication proceedings, resulting in an order imposing duty, a redemption fine, penalty, and storage charges.
The petitioner challenged the order before the High Court, seeking release of the detained jewellery and waiver of penalties and charges, contending that the articles were personal jewellery brought in for personal use and not intended for commercial purposes.
The Customs Department argued that the jewellery did not qualify as bona fide baggage under the Baggage Rules, 2016 and that the seizure and adjudication were lawful. The Department relied on statutory provisions under the Customs Act, 1962 and the Baggage Rules to justify detention, duty assessment, and imposition of redemption fine and penalties.
Having physically examined the seized jewellery in Court, the Division Bench recorded: “After having seen the same, this Court is of the opinion that prima facie that the detained jewellery is not the personal used jewellery of the Petitioner.” The Bench therefore found it appropriate to allow release subject to duty and fine rather than treating the items as exempt personal effects.
On the larger issue, the Court noted submissions from the Additional Solicitor General on the progress of amendments to the Baggage Rules, including integration of an IT portal named “ATITHI.” The affidavit placed on record by the Customs Department dated 8 September 2025 stated: “That the draft baggage rules have been finalized and are ready to be issued.” It also stated that effective implementation required accompanying regulations, circulars, and IT infrastructure to avoid future litigation.
The affidavit further recorded: “It is ensured and expected that post issuance of the amended Rules, Regulation, relevant Circular and development of proper IT system, as directed by Hon'ble Court vide order dated 13.01.2025, there would be no harassment to Genuine tourists and travelers, whether Indian or foreigners travelling into India; and also illegal smuggling of gold would be properly and more effectively curbed.”
The Court, upon reviewing the proposed amendments, recorded concerns with respect to the definition of ‘jewellery’ under proposed Rule 2(viii) and the monetary cap retained under proposed Rule 5. However, it found that the expanded definition of ‘personal effect’ under proposed Rule 2(vii) aligned with judicial precedents of the Supreme Court and High Courts.
The Bench stated: “After perusing the file, the Court is satisfied that the progress is substantial in nature and that there would be a need to amend the Baggage Rules on all these aspects.” It also recorded that Customs officials had confirmed changes to detention receipts to include passenger contact details and steps taken to streamline disposal of seized gold jewellery.
The Division Bench directed release of the detained jewellery subject to the payment of applicable customs duty and a redemption fine of Rs. 60,000. The penalty imposed earlier was waived, and the waiver of warehouse charges granted by the Court on 19 May 2025 remained in effect. The Court specified: “Let the release be effected within the next ten days.”
The petitioner was directed to appear before the Customs Authority on 15 September 2025 at 11:00 a.m., with facilitation by the designated nodal officer. The Bench made clear: “It is made clear that this order shall not act as a precedent.”
Regarding the broader issues, the Court directed that the amended Rules, Regulations, and Circulars, along with guidelines and practice directions, be placed before it in final draft form on the next date of hearing. The Customs Department was also ordered to file affidavits in related matters concerning procedures for disposal of seized gold jewellery and the method of intimating passengers prior to disposal. The matter was listed for further hearing on 19 November 2025.
Advocates Representing the Parties
For the Petitioner: Mr. Ashish Panday, Mr. Priyanshu Upadhyay, Mr. Ajay Singh, Mr. Akshat Raghuvanshi, Advocates
For the Respondents: Mr. N. Venkataraman, Additional Solicitor General with Mr. Shubham Tyagi (SSB, CBIC), Ms. Navruti Ojha, Mr. Rishabh Chauhan, Mr. Harish Saini, Advocates along with Mr. Dharam Veer, AC, IGI & Munesh Kumar Meena, AC, Board; Mr. Harpreet Singh, SSC with Mr. Jai Ahuja, Mr. Sanidhya Sharma, Mr. Akshay Saxena & Ms. Shivali Saxena, Advocates; Mr. Jagdish Chandra, CGSC, UOI, Mr. Shubham Kumar Mishra, Mr. Sujeet, Advocates.
Case Title: Qamar Jahan v. Union of India & Ors.
Case Number: W.P.(C) 198/2025
Bench: Justice Prathiba M. Singh, Justice Rajneesh Kumar Gupta
