Customs Act, 1962 Section 106a — Power to inspect
Customs Act, 1962 · Power to inspect
Plain-English Explanation
Overview
Section 106A of the Customs Act, 1962 grants proper officers the power to inspect premises declared under Chapters IVA (concerning warehousing of goods) and IVB (relating to special economic zones) to ensure compliance with the Act. This section enables customs authorities to verify if goods are being handled legally and to prevent illegal import, export, or intended illegal export.
Who Does This Apply To?
This section applies to:
- Principal Commissioners of Customs and Commissioners of Customs who authorize proper officers for inspection.
- Proper officers authorized by the above-mentioned commissioners.
- Businesses and individuals operating under the provisions of Chapter IVA (Warehousing) and Chapter IVB (Special Economic Zones). Specifically, those who have declared places of storage or operation.
- Individuals in charge of the premises being inspected.
How It Works
The mechanism under Section 106A works as follows:
- Authorization: A Principal Commissioner of Customs or Commissioner of Customs authorizes a proper officer to conduct inspections.
- Entry and Inspection: The authorized proper officer can enter any place intimated under Chapter IVA or Chapter IVB at any reasonable time. The purpose is to ascertain compliance with the Customs Act.
- Goods Inspection: The proper officer can inspect goods kept or stored in the declared premises.
- Account Inspection: The person in charge of the premises must produce accounts maintained under Chapter IVA or Chapter IVB for inspection by the proper officer.
- Information Gathering: The proper officer can request any information reasonably required to determine if goods have been illegally imported or exported, or are likely to be illegally exported. This could include purchase invoices, sales records, and inventory logs.
- Reasonable Time: Inspections must be conducted at reasonable times. This prevents arbitrary or harassing inspections. What constitutes a reasonable time is determined based on the specific facts and circumstances.
Important Conditions & Exceptions
- Condition 1: The proper officer must be duly authorized by the Principal Commissioner of Customs or Commissioner of Customs. Unauthorized inspections are not permissible.
- Condition 2: Inspections can only be conducted at places intimated under Chapter IVA (Warehousing) or Chapter IVB (Special Economic Zones).
- Exception: The power to inspect applies only to places operating under Chapter IVA or IVB. Routine inspections of other businesses fall under different sections of the Customs Act, 1962 or other applicable laws.
Practical Example
ABC Logistics operates a bonded warehouse under Chapter IVA of the Customs Act, 1962. They store imported electronic components pending payment of customs duties. ABC Logistics has intimated the location of their warehouse to the Customs Department.
A proper officer, Mr. Sharma, authorized by the Commissioner of Customs, visits ABC Logistics' warehouse at 10:00 AM on a Tuesday to conduct an inspection. Mr. Sharma checks the physical stock of components against the records maintained under Chapter IVA. He asks the warehouse manager, Mr. Patel, to produce the relevant import documents and stock ledgers. Mr. Sharma also asks Mr. Patel about a recent discrepancy noted in the online inventory system. Mr. Patel provides the requested information, allowing Mr. Sharma to ascertain that the goods have not been illegally diverted and all procedures have been followed correctly.
Key Amendments
No major amendments since enactment.
No case laws found for this provision yet.
Browse all case laws →Frequently Asked Questions
What is the scope of the 'power to inspect' under Section 106A of the Customs Act, 1962?
Section 106A grants authorized Customs officers the power to enter and inspect premises intimated under Chapter IVA (relating to warehousing) or Chapter IVB (relating to special economic zones) of the Customs Act. The inspection aims to verify compliance with the Act's requirements regarding goods stored or kept at these locations, including ensuring they have not been illegally imported, exported, or are likely to be illegally exported. This power extends to inspecting accounts and seeking relevant information from the person in charge of the premises.
Who is considered a 'proper officer' authorized to conduct inspections under Section 106A of the Customs Act, 1962?
A 'proper officer' under Section 106A is any officer specifically authorized by the Principal Commissioner of Customs or Commissioner of Customs to conduct inspections. This authorization is crucial, as only officers with this explicit authorization can exercise the powers granted under this section. This ensures accountability and prevents unauthorized access or inspection.
What 'reasonable time' is considered appropriate for inspections under Section 106A, and how is it determined?
The term 'reasonable time' isn't explicitly defined in Section 106A, but it generally implies timings during normal business hours or at a time that does not unduly disrupt the operations of the premises being inspected. What constitutes 'reasonable' will depend on the specific circumstances and the nature of the goods or activities being undertaken at the location under Chapter IVA or IVB. It's subject to interpretation by authorities and courts.
Can a Customs officer demand any document during an inspection under Section 106A, or is it limited?
Under Section 106A, a Customs officer can require the production of accounts maintained under Chapter IVA or Chapter IVB for inspection. Furthermore, they can request other information reasonably required to ascertain whether goods have been illegally imported or exported, or are likely to be illegally exported. The demand must be relevant to the purpose of verifying compliance with the Customs Act and the respective chapter provisions, not an arbitrary fishing expedition.
What actions can be taken if a person refuses to cooperate with an inspection under Section 106A of the Customs Act, 1962?
While Section 106A itself doesn't explicitly outline penalties for non-cooperation, refusal to cooperate could lead to suspicion of non-compliance with the Customs Act. This could result in further investigation, potential detention of goods, or even prosecution under other relevant sections of the Act for obstructing a public servant in the discharge of their duties. Cooperation is generally advised to avoid escalating the situation.
Does Section 106A allow Customs officers to seize goods during an inspection?
Section 106A primarily grants the power to *inspect*, not to seize. However, if during the inspection, the officer finds evidence suggesting a violation of the Customs Act (e.g., illegal import/export), they may seize the goods under other relevant sections of the Act, such as Section 110 (Seizure of goods, documents and things) after following due process.
How does Section 106A relate to other provisions of the Customs Act concerning search and seizure?
Section 106A provides a specific power to inspect premises covered under Chapter IVA and IVB, focusing on verifying compliance with the Act. It is distinct from general search and seizure powers outlined in other sections (e.g., Section 105 - Power to search suspected persons entering or leaving India, Section 110 - Seizure of goods, documents and things). While an inspection under Section 106A might lead to the use of search and seizure powers if evidence of wrongdoing is discovered, the initial action is one of inspection for compliance verification.
Key Conditions & Requirements
| Condition | Details |
|---|---|
| Authorizing Officer | Inspection can only be done by a 'proper officer' authorized by the Principal Commissioner/Commissioner of Customs. |
| Purpose of Inspection | The inspection's sole purpose is to ascertain compliance with the Customs Act, 1962. |
| Location of Inspection | Inspection is limited to places intimated under Chapter IVA or Chapter IVB of the Act, such as warehouses. |
| Reasonable Time | The inspection must be conducted at a 'reasonable time', implying no unreasonable disruption. |
| Goods Kept or Stored | The officer can inspect the goods kept or stored in the intimated place. |
| Duty to Produce Accounts | The person in charge must produce accounts maintained under Chapter IVA or IVB for inspection. |
| Information Requirement | The person in charge must furnish information reasonably required to check for illegal import/export. |
| Scope of Inquiry | Inquiry is limited to whether goods have been illegally imported, exported, or are likely to be exported. |
Amendment History
Inserted by the Customs (Amendment) Act, 1969 (12 of 1969), section 3 (w.e.f. 03.01.1969)
Substituted by the Finance (No.2) Act, 2014 (25 of 2014), section 78, for "Commissioner of Customs" (w.e.f. 06.08.2014). Earlier the words "Commissioner of Customs" were substituted by Act 22 of 1995, section 50, for the words "Collector of Customs" (w.e.f. 26.05.1995).