Gauhati HC Allows Challenge to Customs Jewellery Seizure Due to Denial of Opportunity by Lower Court

Manik Chand And Sons (Jewellers) Pvt. Ltd. Vs Union of India And 5 Ors (Gauhati High Court)

The matter before the Gauhati High Court involved a writ appeal filed by a jewellery company challenging actions taken by the Customs Department in relation to seizure of jewellery. The incident arose in 2017 when an employee of the company was intercepted at Guwahati airport while carrying old gold and diamond-studded jewellery claimed to belong to customers and intended for repair, polishing, and cutting. Although the employee possessed delivery challans and related documents, the Customs authorities found discrepancies and proceeded to detain the employee and seize the jewellery under the Customs Act, 1962.

The appellant contended that the seizure was invalid as there was no evidence to suggest that the jewellery was imported or not of domestic origin, and further argued that the seizure occurred beyond the customs area. The seizure was initially challenged in a writ petition, where an interim order dated 22.09.2017 directed release of the jewellery upon furnishing security. Accordingly, the jewellery was released against security of Rs. 11,17,530/- based on a valuation of Rs. 44,70,121/-.

Subsequently, during pendency of proceedings, the Customs Department issued a show cause notice dated 16.08.2018 proposing confiscation of the seized goods. This notice was challenged by the appellant on grounds including limitation and jurisdiction; however, the challenge was dismissed on 18.03.2019, with the court holding that there was no jurisdictional or legal defect in the notice and directing the authorities to proceed with a personal hearing.