𝐒 𝐉 𝐄𝐗𝐈𝐌 𝐒𝐞𝐫𝐯𝐢𝐜𝐞𝐬

 “Indirect Tax I Indirect Tax Litigation I Customs & FTP I Central Licensing I Arbitration I Advisory”

Dated: 05.03.2025

Delhi High Court-Seizure of goods without issuing a Show Cause Notice (SCN) is illegal under the Customs Act

The Delhi High Court, in its judgment dated February 6, 2025, ruled in favor of Amit Kumar, holding that seizure of goods without issuing a Show Cause Notice (SCN) is illegal under the Customs Act, 1962. The Court declared that a standard waiver form cannot substitute statutory obligations and directed the release of the detained goods.

Key Findings of the Court:

1. Illegal Seizure of Goods Without SCN:

• The petitioner arrived at IGI Airport, Delhi on March 3, 2024, carrying gold, electronics, and luxury items.
• Customs authorities detained the goods but failed to issue an SCN within the statutory six-month period under Section 124 of the Customs Act.
• The detained goods were valued at approximately ₹20 lakhs.

2. Waiver Form Cannot Override Legal Rights:

• Customs argued that the petitioner had signed a standard waiver form, opting out of receiving a written SCN or a personal hearing.
• The Court rejected this argument, stating that:
  • Signing a standard waiver form is not an informed and conscious decision.
  • SCN must be properly issued in writing, and a personal hearing must be granted.
• Natural justice principles cannot be bypassed using pre-printed waiver forms.

3. Customs Cannot Use Oral SCNs for Seizure:

• The Court held that an oral SCN, as claimed by Customs, is not a valid substitute unless the petitioner consciously and explicitly waives their rights in writing.
• The Court emphasized that Natural Justice must be upheld and such waivers should not be forced upon travelers.

4. Direction for Goods Release & CBIC Review:

• The detained goods must be released to the petitioner, except for storage charges, which he must bear.
• CBIC was ordered to review and modify standard customs waiver forms to ensure compliance with natural justice principles.
• The judgment was also linked to the ongoing case Qamar Jahan v. Union of India, which is addressing amendments to the 2016 Baggage Rules.

Final Verdict:

• The Court set aside the Customs Order-in-Original dated November 29, 2024.
• The detained goods were ordered to be released to the petitioner.
• CBIC must revise waiver forms and clarify the procedure for issuing SCNs post-detention.

Impact of the Judgment:

• Ensures that travelers’ rights are protected against arbitrary customs actions.
• Reinforces the necessity of issuing an SCN before any seizure.
• Calls for reform in customs procedures to prevent misuse of waiver forms.

This judgment strengthens legal safeguards for individuals dealing with customs seizures and ensures greater accountability from customs authorities.

Section 124 of the Customs Act, 1962 Mandates that no goods can be confiscated or penalty imposed without issuing a Show Cause Notice (SCN) and providing the concerned party an opportunity to be heard. It allows for an oral SCN upon request, but emphasizes due process and natural justice in all customs proceedings.

In case you face any issues related to Indirect Tax-Customs, GST, Foreign Trade Policy (FTP), Arbitration matters and Central Licensing and related advisory matters in India then please feel free to get in touch with SJ EXIM Services.

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Source: Delhi High Court

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