Delhi High Court Holds No customs duty on personal jewellery: Upholds Passenger Rights Under Baggage Rules

Delhi High Court Holds No customs duty on personal jewellery: Upholds Passenger Rights Under Baggage Rules

In a significant judgment that strengthens the rights of international travelers, the Hon’ble Delhi High Court ruled that personal jewellery worn by passengers forms part of bona fide baggage and is exempt from customs duty under Rule 5 of the Baggage Rules, 2016. The case—Kartik Sahdev v. Commissioner of Customs, W.P.(C) 3193/2025—has far-reaching implications for how customs authorities handle personal adornments worn during international travel.

Case Background

The petitioner, Mr. Kartik Sahdev, along with his wife, was intercepted at Terminal 3 of the Indira Gandhi International Airport, New Delhi, upon their return from Bangkok on October 14, 2023. Customs officials detained two gold kadas and two gold chains worn by the couple under Detention Receipt No. DR/INDEL4/14.10.2023/002858. The goods were appraised at a value of ₹9,67,266.

Subsequently, an Order-in-Original (OIO) dated January 16, 2024, imposed a redemption fine of ₹1,20,000 and a penalty of ₹97,000. Mr. Sahdev contended that he had been denied a proper hearing and was made to waive his right to a Show Cause Notice (SCN) by signing a pre-printed standard form under duress.

Court’s Findings

A Division Bench comprising Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta found two major illegalitiesin the actions of the Customs Department:

1. Violation of Natural Justice:
   The Court emphasized that the alleged waiver of a Show Cause Notice by signing a pre-printed form was not a conscious or informed waiver. Relying on the precedent Amit Kumar v. The Commissioner of Customs [2025:DHC:751-DB], the Court held that such standard printed forms fail to meet the requirements of Section 124 of the Customs Act, 1962 and violate principles of natural justice.“Natural justice is not merely lip-service. It has to be given effect and complied with in letter and spirit,” the Court observed.
2. Jewellery as Bona Fide Baggage:
   The High Court reiterated that personal jewellery worn by passengers constitutes bona fide baggage and is exempt from customs duty. This view aligns with earlier decisions such as:
   • Nathan Narayanswamy v. Commissioner of Customs [W.P.(C) 6855/2023, Delhi HC, dated 15th September 2023], and
   • Rahul Vattamparambil Remesh v. Union of India & Ors. [2025:DHC:1444-DB].

No customs duty on personal jewellery

• In the present case, a demand of 44% Customs Duty was raised, but the High Court clarified that no customs duty is applicable on personal jewellery.

Legal Implications and Directives

The Court declared that since over one year had elapsed without a proper Show Cause Notice being issued, continued detention of the goods was impermissible. It ordered that:

• Mr. Sahdev may pay the fine and penalty as stipulated in the OIO.
• Upon payment, the detained jewellery must be released within four weeks.
• No storage charges shall be levied.

Moreover, the Court directed that the matter be referred to the Central Board of Indirect Taxes and Customs (CBIC)for a review of standard forms used during baggage detentions, ensuring compliance with the principles of natural justice.

Conclusion

This decision sets a clear precedent protecting passengers from arbitrary customs detentions of personal jewellery. It reinforces that jewellery worn by travelers—if for personal use—cannot be treated as dutiable goods. The case also highlights the importance of due process and affording a proper hearing, especially in quasi-judicial proceedings under the Customs Act.

For frequent international flyers, especially Non-Resident Indians (NRIs) and business travelers, this judgment offers significant relief and clarity regarding what constitutes “bona fide baggage.”

Cited Judgment Summary:

• Case Name: Kartik Sahdev v. Commissioner of Customs
• Court: Delhi High Court
• Bench: Justice Prathiba M. Singh and Justice Rajneesh Kumar Gupta
• Date of Judgment: March 27, 2025
• Citations Relied Upon:
  • Amit Kumar v. The Commissioner of Customs [2025:DHC:751-DB]
  • Nathan Narayanswamy v. Commissioner of Customs [W.P.(C) 6855/2023]
  • Rahul Vattamparambil Remesh v. Union Of India & Ors. [2025:DHC:1444-DB]

Counsel For Petitioner: Adv. Ashish Panday

Also Read: Delhi High Court Directs Release of Seized Gold Jewellery in Customs Dispute – Key Legal Takeaways