Failure of Customs to Specify Applicable Duty Within Stipulated Period Leads to Court-Mandated Redemption Opportunity for Petitioner
In a significant ruling delivered on September 10, 2026, the Delhi High Court (Division Bench comprising Justices Anil Kshetarpal and Vimal Kumar Yadav) ordered the Commissioner of Customs, Terminal 3, Indira Gandhi International Airport, to quantify the applicable customs duty on twelve gold bars confiscated from the petitioner, Mr. Prikshith Jhaver, and release the bars upon payment of duty, redemption fine, penalty, and interest.
The case arose after the petitioner was intercepted at Delhi airport carrying 12 gold bars weighing 1200 grams in November 2022. The Customs Department issued an Order-in-Original on November 18, 2022, confiscating the gold bars but granted the petitioner an option to redeem the goods by paying the applicable duty along with a redemption fine and penalty of Rs. 50,000 each.
Mr. Jhaver promptly applied on December 28, 2022, for the quantification of the applicable customs duty to exercise his redemption option. However, the Customs Department failed to respond or quantify the duty during the prescribed 120-day redemption period. Subsequently, the Department filed an appeal against the original order, which was dismissed on August 3, 2023, making the confiscation order final.
Assuming the goods had been disposed of, the petitioner applied for a refund, which was rejected by the Customs Department in April 2024 on the ground that the refund application was premature.
The petitioner then approached the Delhi High Court, challenging the Customs Department's failure to quantify the duty and seeking a writ directing them to do so. The Court observed that under Sections 125 and 126 of the Customs Act, 1962, while redemption of confiscated goods must be exercised within the stipulated time, the failure of the Customs Department to quantify the duty prevented the petitioner from exercising this option.
Relying on the authoritative judgment in Gillette India Ltd. v. Commissioner of Customs (2019), the Court acknowledged the principle that once the redemption option is granted, it must be exercised within the period set by the adjudicating authority or else the confiscation becomes absolute. However, the Court held that where the default lies with the Customs Department in failing to quantify the duty, the petitioner cannot be held solely responsible for not redeeming the goods in time.
The Court therefore directed the Customs Department to communicate the amount of duty payable within 15 days. Upon such communication, the petitioner shall deposit the duty along with the redemption fine, penalty, and interest at 8% as per the original order. The Customs Department is then obligated to release the confiscated gold bars.
This judgment underscores the responsibility of Customs authorities to act promptly in quantifying duties to enable redemption and prevents arbitrary loss to individuals due to procedural lapses by authorities.
Bottom Line:
Customs Act, 1962 - Redemption of confiscated goods - Failure to quantify applicable duty within stipulated time by Respondents - Petitioner not solely responsible for inability to exercise redemption option - Respondents directed to quantify duty and release confiscated goods upon payment of duty, redemption fine, penalty, and interest.
Statutory provision(s):
Customs Act, 1962 Sections 125, 126
Prikshith Jhaver v. Commissioner of Customs Terminal 3, (Delhi)(DB) : Law Finder Doc Id # 2979298
