Source: Delhi High Court   

Why in News?  

A bench of Justices Prathiba M. Singh and Dharmesh Sharma has held that the Baggage Rules, 2016 should be revised based on the amount of gold or gold jewellery that can be carried by a person travelling to India by air to prevent the harassment of the genuine air Travellers. 

• The Delhi High Court held this in the case of Qamar Jahan v. Union of India, Represented by Secretary, Ministry of Finance & Ors. (2025). 

What was the Background of Qamar Jahan v. Union of India, Represented by Secretary, Ministry of Finance & Ors. Case?   

• The case is titled Qamar Jahan vs. Union of India and was filed as Writ Petition in the Delhi High Court. 
• The petitioner challenged two orders: 
  • Order-in-Original issued by the Joint Commissioner of Customs. 
  • Order-in-Appeal issued by the Commissioner of Customs (Appeals). 
• The Joint Commissioner of Customs, in the Order-in-Original: 
  • Ordered the confiscation of two gold kadas and one gold chain belonging to the petitioner. 
  • Imposed a redemption fine of Rs. 75,000/- 
  • Levied a personal penalty of Rs. 1,10,000/- under the Customs Act, 1962 (CA). 
• The petitioner appealed against the Order-in-Original to the Commissioner of Customs (Appeals). 
• On 24^th September 2024, the Commissioner of Customs (Appeals) dismissed the petitioner's appeal. 
• The case involves the interpretation and application of the Baggage Rules, 2016, which: 
  • Came into force on 1st April 2016. 
  • Were passed under Section 79 of the CA. 
  • Define permissible limits for bringing jewelry into India. 
  • Set different weight and value caps for male and female passengers. 
  • The matter involves questions regarding the declaration and carrying of personal jewelry by travelers entering India. 

What were the Court’s Observations?  

• The Delhi High Court made the following observations:  
  • Regarding Declaration Requirements: 
    • The Court noted that when travelers carry jewelry exceeding prescribed limits, they must declare it. 
    • Upon declaration, no duty payment is required, but travelers must provide an undertaking stating they intend to carry the declared jewelry back. 
    • However, the court observed that this declaration requirement is not clearly explained in either the Baggage Rules or the Declaration Form. 
  • Issues with Current Rules: 
    • The Court found that even small quantities of jewelry are sometimes seized from passengers using the green channel (meant for non-dutiable goods). 
    • The value caps in the Baggage Rules were observed to be outdated considering current gold prices. 
    • The Court specifically noted that with the Rs. 1,00,000/- limit, only about 15 grams of gold could be purchased, far below the 40-gram weight limit. 
  • Concerns about Implementation: 
    • The Court expressed concern about Customs officials having too much arbitrary power and discretion. 
    • This discretion could potentially lead to harassment of genuine passengers. 
    • The Court acknowledged the Customs Department's concern about frequent travelers potentially smuggling gold. 
  • Balance Needed: 
    • While recognizing the need to curb illegal gold smuggling, the court emphasized that genuine tourists/travelers shouldn't face harassment. 
    • Special mention was made of Indian Origin travelers (OCI Cardholders, PIOs) who might visit for social events like marriages. 
    • The court felt that requiring detailed declarations could make the airport entry/exit process unfriendly and burdensome.  
  • Need for Rule Revision: 
    • The Court observed that the Baggage Rules need to be reconsidered by the CBIC. 
    • Current gold value limits were found to be out of sync with market prices. 
    • The rules need updating to balance preventing smuggling while not harassing genuine travelers. 
• The court's observations led to a direction for reconsideration of the Baggage Rules 2016 by the Chairman, CBIC, in coordination with other relevant departments and ministries. 

What are the Baggage Duty Exemptions and Regulatory Framework under Section 79 of CA? 

Duty-free Allowances  

• Personal Use Articles: 
  • For Passengers and Crew Members: 
    • Articles demonstrating prior use for specified minimum period. 
    • Subject to customs officer's satisfaction regarding duration of use. 
• Personal and Gift Items: 
  • Permitted Categories: 
    • Articles for passenger's personal use. 
    • Articles for passenger's family use. 
    • Bona fide gifts. 
    • Souvenirs. 
• Value Restrictions: 
  • Individual article value must not exceed prescribed limits. 
  • Aggregate value must comply with specified total limits. 

Rule-Making Authority 

• Central Government Powers: 
  • Authority to formulate rules for: 
    • Implementation of section provisions. 
    • Specification of detailed requirements. 
    • Establishment of procedural framework. 
  • Specific Areas of Rule-Making: 
    • Authority to specify minimum period of use. 
    • Applicable to passenger and crew baggage. 
    • Power to set maximum value per article. 
    • Authority to establish aggregate value limits. 
    • Applicable to duty-free allowances. 
    • Pre-clearance requirements. 
    • Post-clearance obligations. 
    • Procedural compliance measures. 

Differential Treatment 

• Classification Authority: 
  • Power to establish different rules for: 
    • Various categories of persons. 
    • Different classes of travelers. 
• Implementation Flexibility: 
  • Authority to: 
    • Create distinct regulatory frameworks. 
    • Apply varying standards. 
    • Establish class-specific requirements. 

Discretionary Powers 

• Customs Officer Authority: 
  • Powers include: 
    • Evaluation of usage duration. 
    • Assessment of intended use. 
    • Verification of gift/souvenir status. 
    • Determination of value compliance. 
• Satisfaction Requirement: 
  • Officer must be satisfied regarding: 
    • Authenticity of claims. 
    • Compliance with prescribed conditions. 
    • Adherence to value limitations. 

What Are Customs Duty Regulations for Personal Imports As per the Baggage Rules 2016? 

• These regulations cover the limits and restrictions provided under Rules 3, 4 and 6 of the Baggage Rules provided under Annexure 1: 
  • Rule 3: Passenger arriving from countries other than Nepal, Bhutan or Myanmar 
  • Rule 4: Passenger arriving from Nepal, Bhutan or Myanmar 
  • Rule 6: Transfer of residence 

General Duty Structure for Excess Baggage  

• Standard Duty Rate: 
  • Basic customs duty shall be levied at 35%. 
  • Additional education cess shall be imposed at 3%. 
  • Effective cumulative duty rate shall be 36.05%. 
• Calculation Methodology: 
  • For items exceeding duty-free allowance: 
    • Duty shall be calculated only on the excess value. 
    • Base value shall be the amount exceeding free allowance. 
• Special Categories: 
  • Alcoholic Beverages 
    • Basic customs duty: 150%. 
    • Additional customs duty: 4%. 
    • Duty calculation as per Commercial Import Rules under Customs Tariff Act, 1975. 
  • Tobacco Products: 
    • Basic customs duty: 100%. 
    • Additional cess: 3%. 
    • Tariff calculation under Customs Tariff Heading 98.03. 

Gold And Silver Import Regulations  

• Eligibility Criteria: 
  • The following persons may import:  
    • Passengers of Indian origin. 
    • Holders of valid passports issued under the Passports Act, 1967. 
  • Residency Requirements 
    • Mandatory foreign stay: 
      • Minimum period of six months abroad. 
      • Short visits allowance:  
        • Total duration not exceeding 30 days. 
        • Such visits shall not affect eligibility. 
  • Import Conditions: 
    • Duty Payment: 
      • Must be paid in convertible foreign currency. 
      • Current rate: 10% plus 3% additional duty. 
    • Quantity Restrictions:  
      • Gold (including ornaments): Maximum limit is one kilogram per passenger. 
      • Silver: Maximum limit is ten kilograms per passenger. 
• Import Procedures: 
  • Time Limitations:  
    • At time of arrival, or 
    • Within fifteen days of arrival. 
  • Alternative Import Method: 
    • May take delivery from authorized customs bonded warehouses:  
      • State Bank of India. 
      • Minerals and Metals Trading Corporation Ltd. 
• Declaration Requirements: 
  • Mandatory filing of prescribed declaration form. 
  • Declaration must be made before proper customs officer. 
  • Intent to take delivery from bonded warehouse must be declared. 
  • Duty payment required prior to customs clearance. 
• Valuation Methodology: 
  • Based on U.S. Dollar valuation. 
  • Conversion rates as per M.F. (D.R.) notifications. 
  • Bi-monthly revision of tariff values and conversion rates. 

Rule 5: Jewlery 

• This rule states that a passenger residing abroad for more than one year, on return to India, shall be allowed clearance free of duty in his bona fide baggage of jewellery upto a weight, of twenty grams with a value cap of fifty thousand rupees if brought by a gentleman passenger, or forty grams with a value cap of one lakh rupees if brought by a lady passenger.