Legal principle

The statutory consequence of automatic release under Section 110(2) of the Customs Act, 1962 is attracted only when no Show Cause Notice under Section 124 is issued within the prescribed period, including the validly extended period under the proviso to Section 110(2). Where a Show Cause Notice is issued before expiry of the extended period, the petitioner cannot claim release under Section 110(2). Questions relating to the validity of the extension and the genuineness of statements allegedly waiving statutory rights may be raised before the adjudicating authority and do not ordinarily require adjudication in writ proceedings if the Show Cause Notice has been issued within the period for which the department claims statutory authority. A writ petition seeking release filed before expiry of the extended statutory period is premature and cannot confer a right to unconditional release once the Show Cause Notice is issued within the permissible period.

Court decision

The writ petition was dismissed. The Court held that the Show Cause Notice dated 23.02.2026 was issued before expiry of the extended period of six months (which was to expire on 25.02.2026), hence the statutory consequence contemplated under Section 110(2) for failure to issue the notice within the prescribed period was not attracted. The petitioner was granted liberty to avail all remedies in the proceedings pursuant to the Show Cause Notice dated 23.02.2026, and the adjudicating authority was directed to consider objections independently without being influenced by observations in the judgment.

Facts

The petitioner arrived at Indira Gandhi International Airport, New Delhi, from Jeddah on 26.02.2025 by Flight No. SV 756. He opted for the Green Channel. Upon interception by Customs authorities, X-ray examination revealed nine gold bars and one gold chain weighing approximately 172 grams. The goods were detained vide Detention Receipt No. 36069 dated 26.02.2025. On the same date, a statement was recorded purportedly under Section 108 of the Customs Act, 1962, wherein the petitioner allegedly admitted non-declaration, waived the requirement of a Show Cause Notice and personal hearing, and expressed willingness to pay duty, fine, and penalty. The competent authority granted an extension vide approval dated 20.08.2025 for a further period of six months under the proviso to Section 110(2) of the Act, extending the deadline to 25.02.2026. Appraisement was conducted on 23.02.2026 in the presence of independent panch witnesses, determining the net weight as 170.6 grams, purity 995, and assessable value Rs.14,04,200/-. A Show Cause Notice dated 23.02.2026 was issued proposing confiscation under Sections 111(d), (j), (l), (m), and (o) and penalty under Sections 112(a), (b), and 114AA. The petitioner filed the writ petition on 01.12.2025 seeking release of the goods on the ground that the original six-month period under Section 110(2) had expired without issuance of a Show Cause Notice.

Key provisions

• Section 124, Customs Act, 1962 — Issue of show cause notice before confiscation of goods etc