The Delhi High Court has directed Customs authorities to quantify applicable duty on 12 gold bars seized from a passenger and facilitate their release after payment of the prescribed duty, redemption fine, penalty and interest.
A Division Bench of Justice Anil Khetarpal and Justice Vimal Kumar Yadav held that the petitioner could not be faulted for failing to exercise the statutory option of redemption within the stipulated period when the Customs authorities themselves had failed to quantify the duty required to be paid to release the confiscated gold.
The Court was dealing with a writ petition filed by Prikshith Jhaver, who had challenged an August 8, 2024 communication and sought a direction to the Customs Department to determine the duty payable on the seized gold so that he could exercise his right of redemption. Advocate Upender Thakur appeared for Jhaver.
The petitioner had been intercepted while travelling from Delhi to Chennai at the Indira Gandhi International Airport. Customs authorities had detained 12 gold bars weighing approximately 1,200 grams.
Subsequently, on November 18, 2022, the Joint Commissioner of Customs, Terminal-3, passed an Order-in-Original directing confiscation of the gold bars. At the same time, the order granted the petitioner an opportunity to redeem the confiscated goods upon payment of the applicable customs duty, besides a redemption fine and penalty of Rs 50,000 each.
Following the adjudication order, Jhaver approached the authorities on December 28, 2022, seeking quantification of the duty payable so that he could avail himself of the redemption option.
The Customs Department, however, challenged the original adjudication order before the appellate authority. That appeal was dismissed on August 3, 2023, following which the order attained finality.
The petitioner subsequently sought a refund on the assumption that the confiscated gold had already been disposed of. That request was rejected on April 30, 2024, on the ground that it was premature.
During the proceedings before the High Court, the Customs authorities acknowledged that all 12 gold bars continued to remain in their possession.
The Department relied upon the Delhi High Court’s earlier decision in Gillette India Ltd. v. Commissioner of Customs & Ors., which examined the legal consequences flowing from confiscation under Sections 125 and 126 of the Customs Act, 1962.
The earlier judgment had held that where an importer fails to exercise the option of redemption within the prescribed period, confiscation becomes absolute and the goods vest in the Central Government under Section 126. The Court had also emphasized that Sections 125 and 126 constitute a continuous statutory scheme.
The Division Bench, however, distinguished the present case from the factual circumstances considered in Gillette India.
The Court noted that Jhaver had 120 days from the November 18, 2022 adjudication order to exercise the redemption option. Importantly, he had approached the Customs authorities on December 28, 2022—well within the prescribed period—with a specific request for quantification of the duty payable.
Although the application had admittedly been received by the authorities, no response was furnished. The Bench pointed out that while the redemption fine and penalty had been quantified in the Order-in-Original, the actual customs duty payable had never been determined by the Department.
The petitioner had not sought an extension of the redemption period. Instead, he had taken the necessary step within time by approaching the authorities for the very figure required to comply with the redemption order.
The Court held that the failure to complete the redemption process within the stipulated period could not, in the circumstances, be attributed exclusively to the petitioner. It observed that Customs authorities had also failed to inform Jhaver that the duty could be quantified and paid subsequently while the redemption fine and penalty could be deposited separately. Consequently, the Court found that the principle laid down in Gillette India did not foreclose relief sought by the petitioner.
Disposing of the writ petition, the High Court directed the Customs authorities to communicate the applicable duty payable on the confiscated gold bars to the petitioner within 15 days.
Once the duty is communicated, the petitioner is required to deposit the applicable duty along with the redemption fine and penalty, with 8% interest, as stipulated in the original adjudication order.
In the judgment pronounced on September 10, 2026, the Division Bench directed Customs release all 12 gold bars to the petitioner upon receipt of the prescribed amount.
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