Rahul Khotani v. Commissioner of Customs

Delhi HC7 Apr 2025W.P.(C)/4371/2025

Case brief

AI extract

What is this about?

Delhi HC writ (Article 226) for release of detained 100g gold chain, IGI Airport, Detention Receipt No. 4777 dt. 07.07.2024; Section 108 Customs Act 1962 ownership disclaimer discounted as possible confusion; mandatory show cause notice under Section 110 Customs Act 1962 (six months + six months extension) not issued; release subject to verification and storage charges, else Order-in-Original after hearing; petition disposed 07.04.2025.

What did the court decide?

Conditional release of the detained gold chain ordered: Petitioner to appear before the Customs Department; upon verification of credentials and confirmation that the chain is his personal effect, release subject to payment of storage charges; if Customs is not satisfied it is a personal effect, a proper Order-in-Original to be passed after hearing the Petitioner. ¶para 12

Rahul Khotani Vs Commissioner of Customs — Customs and Excise | Delhi HC (2025)

What the court decided

AI extract

Outcome

¶para 12

Issue for consideration

Whether the Petitioner is entitled to release of his gold chain (weighing 100 grams) detained by Customs, given that no show cause notice was issued within the period prescribed under Section 110 of the Customs Act, 1962. +1 more

¶para 4

Court's answer

Once goods are detained, it is mandatory for the Customs authorities to issue a show cause notice and afford a hearing to the petitioner.

¶para 8

Ratio / Principle

The time prescribed under Section 110 of the Customs Act, 1962 for issuing a show cause notice is six months, extendable by a further period of six months subject to complying with the formalities.

¶para 8

Key takeaways

In the present case, no show cause notice was issued within the first six-month period, and no extension had been obtained or intimated to the Petitioner as per the submissions made in Court.ratio¶para 8
The Section 108 statement appears to have been recorded in a situation where the Petitioner had just arrived at the Airport, and there may have been some confusion even in its recording.ratio¶para 7

Detailed headnote1 paragraphs

Customs - Detention of 100 grams gold chain of passenger arriving at IGI Airport, New Delhi on 07.07.2024 (Detention Receipt No. 4777 dated 07.07.2024; New Detention Receipt Nos. 43676 and 36206 dated 07.10.2024 and 07.11.2024) - Release sought under Article 226 of the Constitution of India - Petitioner claims chain is old gold owned by him for 8-10 years - Section 108 Customs Act, 1962 statement recorded 06.07.2024 disclaimed ownership, which the Court observed may reflect confusion as it was recorded immediately upon arrival - Court holds that once goods are detained, issuance of show cause notice and affording hearing is mandatory - Time prescribed under Section 110 Customs Act, 1962 is six months, extendable by further six months subject to formalities - No show cause notice issued within first six months and no extension obtained or intimated - Directions: Petitioner to appear before Customs Department; release of gold chain after verification of credentials and personal-effect status, subject to storage charges; if Customs not satisfied, proper Order-in-Original after hearing - Petition disposed of (Prathiba M. Singh and Rajneesh Kumar Gupta, JJ.; 07.04.2025).

¶1

$~59

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IN THE HIGH COURT OF DELHI AT NEW DELHI

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- W.P.(C) 4371/2025

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RAHUL KHOTANI .....Petitioner

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Through: Mr. Ravi Rathore, Ms. Richa Kumari, Mr. Maroof Khan, Mr. Yatin Bhutani & Mr. Pawan, Advs.

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versus

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COMMISSIONER OF CUSTOMS .....Respondent Through: Ms. Anushree Narain, SSC with Mr. Ankit Kumar, Adv.

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CORAM: JUSTICE PRATHIBA M. SINGH JUSTICE RAJNEESH KUMAR GUPTA

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O R D E R

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% 07.04.2025

¶11

This hearing has been done through hybrid mode.

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The present petition has been filed by the Petitioner- Rahul Khotani under Article 226 of the Constitution of India inter alia seeking release of the gold chain weighing 100 grams of the Petitioner seized by the RespondentCommissioner of Customs vide Detention Receipt No. 4777 dated 7th July 2024 (New Detention Receipt Nos. 43676 and 36206 dated 7th October 2024 and 7th November 2024 respectively) (hereinafter, ‘ detention receipt ’)

¶13

According to the Petitioner, he arrived at the IGI Airport, New Delhi on 7^th July, 2024 by flight no. SG-12 and one gold chain of the Petitioner was seized by the Customs Department after a detention receipt.

¶14

The case of the Petitioner is that the gold chain which was seized by the Customs Department is an old gold chain owned by him for the last 8 to 10 years. Further, no show cause notice has also been issued till date in this matter. Hence, the Petitioner prays for release of the gold chain.

¶15

Ld. Counsel for the Respondent submits that a statement under Section

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This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 15/04/2025 at 15:58:14

¶17

108 of the Customs Act, 1962 was given by the Petitioner at the time of detention of the gold chain. The Petitioner in the said statement stated that the said gold chain does not belong to him. Since there is a discrepancy, ld. Counsel submits that the Petitioner may appear before the Customs Department and the identity, etc., would be verified and subject to the said verification, the gold chain shall be released.

¶18

The statement under Section 108 reads as under:

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“On being asked, I, Mr. Rahul Khotani (DOB:10.10.1985) state that I have appeared before Air Customs Superintendent on 06.07.2024 to tender my voluntary statement under Section 108 of the Customs Act, 1962 in respect of above mentioned items recovered from my possession. On being asked, I state that I was intercepted by the Customs Officer after I had crossed the Green Channel and during the scanning of my baggage and DFMD, the above said item has been recovered from me. On being asked, I state that the above mentioned recovered item does not belong to me. I admit my omission and commission on my part; that I am well aware of the fact that there is Customs duty on import of above Goods; that I will be agreeing with the description, quantity and value to be assessed by the department, and I am ready to pay the Customs duty along with fine and penalty as applicable. I also do not need any Show Cause Notice or personal hearing in the matter. I have tendered my statement true and correct and understood the same. I have tendered the above statement without any duress, pressure or threat.”

¶20

The Court has perused the matter. The above statement appears to have been given in a situation where the Petitioner had just arrived at the Airport and there may have been some confusion even in recording of the same. 8. Once the goods are detained, it is mandatory to issue a show cause

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notice and afford a hearing to the Petitioner. The time prescribed under Section 110 of the Customs Act, 1962 is a period of six months and subject to complying with the formalities, a further period of six months extensions can be taken by the Customs Department for issuing the show cause notice. In the present case, it is noticed that there is no show cause notice within the first six months period. Further, no extension has been obtained or intimated to the Petitioner as per the submissions made today.

¶23

The Petitioner prays for release of the gold chain in his favour. 10. Let the Petitioner appear before the Customs Department. After verification of his credentials and the fact that the gold chain is a personal effect of the Petitioner, the Customs Department shall release the gold chain subject to payment of storage charges.

¶24

If the Customs Department is not satisfied that the gold chain is of a personal effect, then after hearing the Petitioner, a proper Order-in-Original shall be passed.

¶25

Petition is disposed of in these terms. All pending applications, if any, are also disposed of.

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PRATHIBA M. SINGH, J.

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RAJNEESH KUMAR GUPTA, J.

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APRIL 7, 2025 Rahul/Ck

¶29

This is a digitally signed order.

¶30

The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 15/04/2025 at 15:58:14

Rahul Khotani v. Commissioner of Customs

Case brief

What is this about?

What did the court decide?

Rahul Khotani v. Commissioner of Customs

Case brief

What is this about?

What did the court decide?

Why is it important?

What the court decided

Issues for consideration

Statutes considered

Procedural history

Parties & counsel

Coram

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