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Union of India and ors. Vs. Khalil Kacherim - Court Judgment

LegalCrystal Citation
SubjectCustoms
CourtDelhi High Court
Decided On
Case NumberLetter Patent Appeal No. 59 of 1968
Judge
Reported in1970CriLJ417; 1983(13)ELT941(Del); ILR1968Delhi505
ActsSea Customs Act, 1878 - Sections 79 and 80
AppellantUnion of India and ors.
RespondentKhalil Kacherim
Advocates: K.L. Arora and; Ravnder Narain, Advs
Cases ReferredA. Shaukataly v. The Collector of Customs
Excerpt:
(i) customs act (1962) - section 79--term 'baggage'--nto confined merely to bona fide baggage--goods entrusted under section 80--held no import.; that the term 'baggage' within the meaning of section 79 of the customs act, 1962 is nto confined merely to bona fide baggage within the meaning of section 79 of the act or to personal effects as defined by clause 3 of the tourist baggage rules, 1958 and includes any article contained in the baggage even though it be in commercial quantities.; (ii) sea customs act (1962) - section 80--goods nto carried beyond customs barrier--held no import.; there is no import within the meaning of the customs act, 1962 in a case where the goods are entrusted under section 80 and are nto carried by the passenger beyond the custom barrier.; that it may be..........two sections appear in chapter xi of this act which contains special provisions regarding baggage, goods imported or exported by post, and stores and are in these terms:- section 77. - 'the owner of any baggage shall, for the purpose of clearing it, make a declaration of its contents to the proper officer.' section 80. - 'where the baggage of a passenger contains any article which is dutiable or the import of which is prohibited and in respect of which a true declaration has been made under section 77, the proper officer may, at the request of the passenger, detain such article for the purpose of being returned to him on his leaving india.' (4) two toher provisions of this act which have a material bearing on this case are section 110 and section 111(d). section 110 gives power to the.....
Judgment:

S.N. Andley, J.

(1) This appeal has been filed against the judgment and order dated 26

(2) The following facts led up to the filingf the writ petition. On 14/8/1967 the respondent arrived from overseas by an Air France flight at Palam Airport, New Delhi. Upon arrival at the airport, he requested the Customs Officer on duty to keep in customs custody a packet which was declared by him to contain four smaller packets containing diamonds of the value of approximately $ 34,000. Thereupon the Customs Officer on duty issued a detention receipt staling that one packet containing four smaller packets said to contain diamonds of the value of $ 34,000 sealed with the passenger's own seal and the customs seal over his signature had been received. It was further stated on the face of this receipt by the Customs Officer 'declared re-export allowed' and 'declared-pending re-export out of India.' title respondent thereafter left for Bombay from where he returned on 24/8/1967 on which date he was to fly by an Air France flight leaving New Delhi at night. Before his departure, the respondent requested for return of the diamonds as he was leaving India but they were nto delivered back or released. The respondent thereforee, did nto leave by the Air France flight and approached the appellants again on the following day for delivery of the diamonds. The diamonds were nto returned but in the evening the respondent's statement was recorded. On 26/8/1967 a Panchanama was prepared wherein it was stated, inter alia, 'since the diamonds which were detained for re-export on 14/8/1967 vide D. R. No. 1372/88 are liable for confiscation under the Customs Act, 1962 (No. 52 of 1962), the diamonds are accordingly seized under section 110 of the same Act.' A demand for return of the diamonds was made on 30/8/1967 and since it was nto complied With, the respondent filed Civil Writ No. 1300 of 1967 in this Court.

(3) It is nto disputed that the detention receipt aforesaid was issued to the respondent under section 80 of 'the Customs Act, 1962 after the respondent had made the declaration contemplated by section 77 of the said Act. These two sections appear in Chapter Xi of this Act which contains special provisions regarding baggage, goods imported or exported by post, and stores and are in these terms:-

Section 77. - 'The owner of any baggage shall, for the purpose of clearing it, make a declaration of its contents to the proper officer.'

Section 80. - 'Where the baggage of a passenger contains any article which is dutiable or the import of which is prohibited and in respect of which a true declaration has been made under Section 77, the proper officer may, at the request of the passenger, detain such article for the purpose of being returned to him on his leaving India.'

(4) Two toher provisions of this Act which have a material bearing on this case are Section 110 and Section 111(d). Section 110 gives power to the proper officer to seize any goods 'if he has reason to believe that they are liable to confiscation under this Act. Section Iii provides that certain goods brought from a place outside India shall be liable to confiscation and clause (d.) provides for confiscation of 'any goods which are imported or attempted to be imported or are brought within the Indian customs waters for the purpose of being imported, contrary to any prohibition imposed by or under this Act or any toher law for the time being in force.'

(5) Contention of the appellants is that the diamonds inquestion were seized under Section 110 because they were imported or attempted to be imported contrary to the prohibition contemplated by clause (d) of Section 111. The prohibition is said to be contained in the Tourist Baggage Rules, 1958 which were framed in exercise of powers conferred by Section 75 of the Sea Customs Act, 1878 and which, it is nto disputed, are applicable in respect of the Customs Act, 1962. Clause 3(1) of these rules provides that the personal effects imported by a tourist shall be allowed to be imported temporarily free of import duty, provided that they are for the personal use of the tourist, are carried on the person of or in the luggage accompanying the tourist, that there is no reason to fear abuse, and that these personal effects are exported by the tourist on his leaving India for a foreign destination. The Explanationn to this clause defines 'personal effects' as meaning all cltohing and toher articles which a touristay personally and reasonably require including, inter alia, personal jewellery but excluding all merchandise imported for commercial purposes.

(6) There is no doubt that the diamonds in question are in such quantities and are of such value that they cannto be described as 'personal jewellery' which is included in the term 'personal effects' as defined by this Explanationn and that being so, they can be treated only as merchandise. These diamonds must, thereforee, be treated as goods import whereof or an attempt to import which would make them liable to confiscation under Clause (d) of Section 111 and liable to seizure under sub-section (1) of Section 110 of the said Act.

(7) The main contention of the appellants is that these diamonds are nto 'baggage' within the meaning of Sections 77 and 80 read with the Tourist Baggage Rules, 1958 and, thereforee, the detention receipt issued to the respondent under Section 80 would be of no avail to prtoect him against the application of Section 110 and Section 111(d) of the said Act.

(8) The expression 'baggage' has nto been defined by the said Act but it is included in the definition of 'goods' in sub-section 22 of Section 2. The definition of 'goods' given in this act is an inclusive definition and, apart from baggage, it also includes 'any toher kind of moveable property.' One argument the appetlants is that since 'baggage' is included in 'goods', the latter cannto be included in the former. This argument loses sight of the fact that 'any toher kind of moveable property' is also included in the definition of 'goods'. Any item of moveable property or any article which may be 'goods' can, thereforee, be a part of or contained in 'baggage'.

(9) In the said Act and the rules framed there under a distinction has been made between 'baggage' and 'bona fide baggage'. Section 79 talks of bona fide baggage which is exempt from customs duty and in respect of bona fide baggage the proper officer has been empowered to pass free of duty any article which is in the baggage of a passenger and which has been in his use for a prescribed minimum period or it is for his use or is a bona fide gift or souvenier. thereforee, any article in the baggage of a passenger even though it may be 'goods' within the meaning of the Act will be allowed to be imported free of duty if it is passed under Section 79 of this Act. I, thereforee, do nto find any force in the contention that an article of moveable property which is included in 'goods' cannto be included in 'baggage'.

(10) Baggage is synonmous with luggage. Webster gives the following meaning of baggage:-

'Agroup of traveling bags, trunks, or btoh especially when packed and in transit: personal belongings of travellers either carried by hand or checked with a carrier: luggage'.

The Shorter Oxford English Dictionary gives the following meaning to baggage:- 'THE collection of property in packages that a traveller takes with him on a journey: Luggage.'

(11) thereforee, the word 'baggage' is a comprehensive term which means the luggage of a passenger, accompanied or unacompanied, and comprises of the trunks or bags and the personal belongings of the passenger contained therein and it must be in this comprehensive sense in which 'baggage' has been used in Sections 77 and 80 of the Customs Act. If 'baggage' in section 80 of this Act means only bona fide baggage as contemplated by clause 3 of the Tourist Baggage Rules, 1958, there will hardly be any occasion for the application of section 80 of the Customs Act. I am, thereforee, of the opinion that 'baggage' has to be given the larger and ordinary meaning.

(12) Section 80 talks of 'any article' which is dutiable or the import of which is prohibited and the expression 'any article' is comprehensive enough to include an article which is nto a part of bona fide baggage as contemplated by section 79 or 'personal effects' as specified by clause 3 of the Tourist Baggage Rules. It may be contained in the baggage of a passenger. If the passenger declares such an article under Section 77, be may still import it if he is prepared to pay the duty and if its import is nto prohibited. If the passenger is nto prepared to pay the duty and/or cannto produce the requisite import license, he will nto be allowed to clear it for import. In such a case, he may make a request to the proper officer to detain such article for the purpose of being returned to him on his leaving India. It does nto matter if the article is in such quantities or is of such value that it is an article of merchandise and cannto be said to be comprised in bona fide baggage or personal effects. The only requirement of Section 80 is that such an article is contained in the baggage in the larger sense which includes the trunks and bags in which, the luggage is contained. By making the declaration under Section 77 and the request under Section 80, the passenger expresses his intention nto to import such an article. That being so, it cannto be said that such an article has been imported or attempted to be imported Within the meaning of Clause (d) of Section 111 or becomes liable to seizure under Section 110 of the Customs Act. I am, thereforee, of the view that the term 'baggage' as used in Section 77 and 80 of this Act, is nto confined merely to bona fide baggage within the meaning of Section 79 of the Act or to personal effects as defined by Clause 3 of the Tourist Baggage Rules, 1958 and includes any article contained in the baggage even though it be in commercial quantities.

(13) Reliance has been placed by the appellants on a decision of the Supreme Court in re: State of Maharashtra v. George(1). That was a case under the Foreign Exchange Regulation Act, 1947. The passenger was carrying gold bars concealed in a jacket which he wore. He remained sitting in the plane which was on a flight from Zurich to Manila and which landed enroute at Santa Cruz Airport in Bombay. The passenger was asked by the Customs authorities to come out of the plane and the gold was seized. The gold was nto declared or entered in the manifest of the plane. It was contended on behalf of the passenger that the gold was his personal luggage and nto cargo and, thereforee, it was nto necessary to have it declared and entered in the manifest. Such declaration was required by the second proviso to the ntoification issued on November 8, 1962 under Section 80. This ntoification gave general permission, inter alia, to the bringing of gold into any port or place in India when the gold was on through transit to a place outside the territory of India but the second proviso required that such gold must be declared in the manifest for transit as 'same btotom cargo' or 'transhipment cargo'. This ntoification superseded an earlier ntoification dated 25/8/1948 which did nto contain any provision like the second proviso to the ntoification dated November 8, 1962. It is relevant to mention that it was conceded on behalf of the State of Maharashtra 'that if the exemption ntoification which applied to the pre- sent case was that contained in the ntoification of the Reserve Bank dated 25/8/1948 the respondent had nto committed any offence since (a) he was a through passenger from Geneva to Manila as shown by the ticket which he had and the manifest of the aircraft, and besides (b) he had nto even gto down from the plane'. It was, thereforee, by reason of the second proviso that it was held by the Supreme Court 'that the proper construction of the term 'cargo' when it occurs in the ntoification of the Reserve Bank is that it is used as contradistinguished from personal luggage in the law relating t& the carriage of goods.' In the absence of a similar provision under the Customs Act or in the Tourist Baggage Rules, 1958, I do nto find it possible to accept the contention of the appellants that 'baggage' used in Section 80 of the Customs Act means only personal baggage or bona fide baggage under Section 79 or personal effects under Clause 3 of the Tourist Baggage Rules. I may only add that merchandise per se is nto excluded from the term 'personal effects' used in the Explanationn to Clause 3 of the Tourist Baggage Rules, 1958. The exclusion is in respect of merchandise which is imported for commercial purposes.

(14) The next question, thereforee, that arises is whether the diamonds in question which were undoubtedly merchandise were imported for commercial purposes so as to attract the provisions of Sections 111 and 110 of the Customs Act, 1962 and the Tourist Baggage Rules, 1958. Import has been defined in the Customs Act as bringing into India from a place outside India and upon this definition the contention of the appellants is that the moment the plane landed at Palam Airport, there was an import of the diamonds into India which includes the territorial waters of India. I am nto prepared to accept this contention because if this contention is accepted any goods or articles which are contained in a plane which has landed in India or in a ship which has entered the territorial waters of India would be liable to the payment of duty or to confiscation if the import thereof is prohibited even though the goods or articles are nto unloaded from the plane, or the ship for being brought into India. I find support for this conclusion upon the decision of the Supreme Court in' re: The Central India Spinning and Weaving and ., The Express Mills, Nagpur v. The Municipal Commit lee, Wardha(2) reported in : [1958]1SCR1102 where it has been held that if goods are nto unloaded from the carrier, they would nto be said to have been imported into the municipality within the meaning of section 66 which provided for a terminal tax on goods or animals imported into the limits of the municipality. The Supreme Court has further held that:-

'IMPORT is nto merely the bringing into but comprises something more i.e. 'incorporating and mixing up of the goods imported with the mass of the property' in the local area.'

(15) Unless, thereforee, the goods are brought into the country for the purpose of use, enjoyment consumption, sale or distribution so that they are incorporated in and mixed up with the mass of the property in the country, they cannto be said to have been imported or brought into the country. That this is the meaning to be attached to the word 'import' as used in the Customs Act is also clear from the Explanationn to clause (3) of the Tourist Baggage Rules which excludes only such merchandise from the term 'personal effects' as is imported for commercial purposes. The obiect of section 80 is to exclude any article from the purview of section 110 and 111 if a declaration is made under section 77 and the article is entrusted to the proper officer. If the article is so entrusted, there are no commercial purposes which can be achieved. In my view, thereforee, there is no import within the meaning of the Customs Act in a case where the goods are entrusted under section 80 and are nto carried by the passenger beyond the customs barrier. Reliance has been placed by the appellants upon an unreported decision of a learned Single Judge of the Madras High Court which was delivered on 7/2/1968 in writ petition No. 1924 of 1967 in re: A. Shaukataly v. The Collector of Customs, Madras'). In that case no declaration was made under section 77 by the passenger. In fact, it appears from the judgment that the passenger did nto ask that the brief-case containing precious stones should be bonded. It further appears that the passenger came out with a request for bonding only after the cltoh bags containing the precious stones had been cut and the precious stones had been discovered. On the facts, thereforee, there was a clear intention on the part of the passenger to import or to make an attempt to import precious stones. The learned Judge distinguished the Supreme Court decision in the case of the Central India Spinning and Weaving and . on the ground that the Municipalities Act did nto contain the definition of the word 'import'. With respect, I differ from the view expressed because it is apparent from the judgment of the Supreme Court that section 66 of the said Act talks of import into or export from the limits of the Municipality.

(16) The next argument on behalf of the appellants is that it is the discretion of the proper officer whether or nto to accept for detention any article which is given to him under section 80 of the Customs Act and, thereforee, even if the discretion has been exercised, it can be revoked subsequently. It may be that it is a matter of discretion with the proper officer to accept or nto to accept but once the discretion has been exercised, the proper officer is under a statutory obligation to return the article to the passenger on his leaving India and there is no question of his being entitled to revoke the discretion subsequently.

(17) The last argument which was addressed by the appellants was that the Customs Act contains provisions for appeal and revision against any action that may be taken under the Act and, thereforee, this Court should nto interfere in the exercise of its powers under Article 226 of the Constitution. Such an argument was addressed before the learned Single Judge also and was repelled. The learned Single Judge exercised his discretion by entertaining the petition under Article 226 of the Constitution. In my view, the learned Single Judge was right in exercising his discretion in the circumstances of this case.

(18) I. thereforee, dismiss the appeal with costs. Counsel's fee is assessed at Rs. 250.00.

(19) S.N. Shankar, J. - I agree.


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