Home > Recent Judgements > Personal Jewelery Of Incoming Passengers Exempt From Custom Duty: Delhi High Court
DEC 09, 2024
BACKGROUND
In the case of Saba Simran vs. Union of India & Ors, The woman had been carrying the gold jewellery with her while returning to India from Dubai. Upon arrival, the Customs Department seized her jewellery, claiming that it integrated an import and thus, was subject to duty. The woman, however, argued that the jewellery was her personal property, worn and carried for personal use, which should be exempt from customs duty under the Baggage Rules.
The Customs Department, citing Rule 2(vi) of the Baggage Rules, 2016, argued that all jewellery, whether personal or not, is subject to the restrictions outlined in the Rules. The Rules define “personal effects” to Expressly exclude items of jewellery, this led to the woman’s belongings being taken.
Under Rule 2 (vi) Baggage Rules, 2016
Rule 2 (vi) of Baggage Rules 2016 state that, “personal effects” means things required for satisfying daily necessities but does not include jewellery.
KEY ISSUES
- Whether the gold jewellery worn by the petitioner, a foreign national, are subject to customs duty upon arrival in India applicability of Baggage Rules on Used Personal Jewellery?
- Whether the petitioner was required to declare the gold jewellery in the Declaration Form under the Customs Act and the Baggage Rules, 1998?
- Whether the petitioner was obligated to obtain an export certificate for the gold ornaments while leaving India and produce proof that the gold was previously purchased in India?
JUDGEMENT
The Delhi High Court has resolved the issue by clearly defining the terms ‘personal jewellery’ and ‘jewellery’ as one of the broader categories of articles in such cases. Rule 2(vi) of the Baggage Rules excludes jewellery from the definition of personal effects.
However, the Court made a critical difference, arguing on the “jewellery” in this sense referred to newly acquired articles and not those which had already been used and were taken on account of personal luggage at the point.
The Court Magnified that personal jewellery items that have been owned and worn by the passenger before the overseas trip should not be treated as imports. And these items should be considered personal effects, which are usually exempt from customs duty when entering India.
The bench noted that a previous circular issued by the Ministry of Finance in relation to the previous Baggage Rules of 1998 had clarified that “personal effects” included “personal jewellery.” Although this distinction was lost in the 2016 Baggage Rules, the Court ruled that this did not diminish the validity of the earlier interpretation. The Court recognized that Customs officers should still distinguish between personal jewellery, which is meant for personal use, and newly purchased jewellery, which could be subject to duty.
In its ruling, the Delhi High Court relied on precedents from the Supreme Court and the Kerala High Court. In Directorate of Revenue Intelligence v. Pushpa Lekhumal Tulani (2017), the Supreme Court ruled that the respondent’s jewellery was for personal use and not dutiable. Similarly, in Vigneswaran Sethuraman v. Union of India (2014), the Kerala High Court held that jewellery worn by a passenger did not need to be declared to Customs, as it was considered personal and not subject to duty.
OBSERVATION
The court cancelled the confiscation and fine ordered by Customs and told the Joint Commissioner to look again at the petitioner’s request for her jewellery to be returned. This decision is an important reminder that personal items, like jewellery, which are for the passenger’s own use and not newly bought, do not have to pay customs duties.
This case shows how important it is to understand the details of customs rules. It also makes sure that passengers are not unfairly fined for carrying their personal belongings. The Delhi High Court’s decision strengthens the idea that personal items, including jewellery, should not be taxed when returning to India, if they were not newly purchased during the trip.
The Court concluded that jewellery borne by a passenger on their person or in their baggage, intended for personal use, would not constitute an import. As such, it would be exempt from customs duty under the Baggage Rules.
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