Customs Act, 1962 Section 110 — Seizure of goods, documents and things
Customs Act, 1962 · Seizure of goods, documents and things
Plain-English Explanation
Overview
Section 110 of the Customs Act, 1962 deals with the seizure of goods, documents, and things that are believed to be liable for confiscation under the Act. This section empowers customs officers to seize such items and outlines the procedures to be followed, including timelines for issuing notices and dealing with perishable or hazardous goods. It's a crucial tool for preventing customs violations and protecting revenue.
Who Does This Apply To?
This section applies to:
- Importers and Exporters: Particularly those suspected of violating customs regulations.
- Owners of Goods: Whether or not they are directly involved in the import/export process.
- Beneficial Owners: Those who ultimately benefit from the goods, even if they don't have direct possession.
- Persons Holding Out as Importers: Individuals who present themselves as the importer, even if they aren't officially.
- Custodians of Goods/Documents: Anyone in possession of goods or documents that are relevant to customs proceedings.
- Customs Officers: Specifically, the "proper officer" authorized to carry out seizures.
- Magistrates and Commissioners (Appeals): Who oversee certain procedures related to seized goods.
How It Works
The process generally unfolds as follows:
- Belief of Confiscation: If a proper officer has reason to believe that goods are liable for confiscation under the Customs Act, they may seize those goods.
- Physical Possession: The proper officer typically takes physical possession of the seized goods. However, if it is not practicable to remove, transport, or store the goods, the officer may entrust their custody to the owner, beneficial owner, or another person. This requires an undertaking from that person that they will not tamper with the goods without permission. Alternatively, the officer can issue an order prohibiting the owner, etc. from dealing with the goods.
- Perishable/Hazardous Goods: The Central Government can specify perishable or hazardous goods (or goods subject to depreciation or storage constraints). These goods must be disposed of by the proper officer as soon as possible after seizure, following a procedure determined by the government.
- Inventory and Magistrate/Commissioner Involvement: For specified goods, the officer must prepare an inventory with details like description, quality, quantity, origin, etc. The officer makes an application to a Magistrate/Commissioner (Appeals) (for gold), who will certify the inventory's correctness, take photographs, and/or draw representative samples of the goods.
- Notice Requirement: If goods are seized, a notice must be issued under Section 124(a) within six months of the seizure. If no notice is given, the goods must be returned to the person from whom they were seized.
- Extension of Time: The Principal Commissioner or Commissioner can extend the six-month period by a further period not exceeding six months, provided they record their reasons in writing and inform the person from whom the goods were seized. This does not apply if there is an order for provisional release of seized goods under Section 110A.
- Seizure of Documents: The proper officer may also seize documents or things that they believe are useful or relevant to customs proceedings.
- Right to Copy Documents: The person from whom documents are seized has the right to make copies or take extracts from them in the presence of a customs officer.
- Provisional Attachment of Bank Account: If deemed necessary to protect revenue or prevent smuggling, the proper officer, with the approval of the Principal Commissioner or Commissioner, may provisionally attach a bank account for up to six months. This can be extended for another six months with written justification.
Important Conditions & Exceptions
- Practicability of Seizure: If physically seizing the goods is impractical, alternate arrangements for custody or control are permitted.
- Nature of Goods: Perishable or hazardous goods are subject to expedited disposal procedures.
- Time Limit for Notice: Failure to issue a notice within the specified timeframe (potentially extended) results in the return of the goods.
- Reasonable Belief: The officer's belief that goods are liable for confiscation must be based on reasonable grounds.
Practical Example
XYZ Imports brings in a consignment of electronic components. Customs officers suspect that the declared value of the components is significantly lower than the actual transaction value, potentially evading customs duties. The officers seize the components under Section 110. Since the electronic components are not perishable but require specialized storage, the customs officer, with the consent of XYZ Imports, allows XYZ Imports to keep the goods in their warehouse under an undertaking that they will not remove or deal with the goods. If, after five months, no notice under Section 124(a) is issued, XYZ Imports can request the return of the goods. However, the Commissioner can extend the time limit to eleven months with proper justification.
Key Amendments
- Subsections (1A), (1B), and (1C) were inserted in 2009 to deal with the disposal of perishable or hazardous goods and to provide a mechanism for ensuring the integrity of the process.
- Subsection (1D) was introduced to provide a special provision regarding disposal of seized gold, involving the Commissioner (Appeals).
- Subsection (5) was added to enable the provisional attachment of bank accounts to protect revenue or prevent smuggling.
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Browse all case laws →Frequently Asked Questions
Under what circumstances can Customs officials seize goods under Section 110 of the Customs Act, 1962?
A proper officer of Customs can seize goods if they have reason to believe that the goods are liable to confiscation under the Customs Act, 1962. This belief must be based on specific information or evidence indicating a violation of the Act's provisions that makes the goods subject to confiscation.
What happens if seized goods are not subject to a notice under Section 124 within a certain timeframe?
If goods are seized under Section 110(1) and no notice is given under Section 124(a) within six months of the seizure, the goods must be returned to the person from whose possession they were seized. However, the Principal Commissioner or Commissioner of Customs can extend this period by up to six more months for reasons recorded in writing, informing the person from whom the goods were seized before the initial six-month period expires, as per Section 110(2).
Can the Customs department dispose of seized goods immediately after seizure? If so, under what conditions?
Yes, the Central Government may specify certain goods or class of goods (e.g., perishable or hazardous items) via notification, which the proper officer can dispose of as soon as possible after seizure under Section 110(1). This is permissible if the goods are perishable, hazardous, depreciating in value, or if there are storage constraints, as detailed in Section 110(1A).
What procedures must be followed when seizing perishable or hazardous goods under Section 110?
When seizing goods specified under Section 110(1A), the proper officer must prepare an inventory detailing the description, quality, quantity, and origin of the goods. Subsequently, an application must be made to a Magistrate for certifying the inventory's correctness, taking photographs of the goods, or drawing representative samples, as outlined in Section 110(1B) and (1C).
What is the procedure for handling seized gold under Section 110?
If the seized goods are gold in any form as notified under Section 110(1A), the proper officer makes an application to the Commissioner (Appeals) having jurisdiction, instead of a Magistrate. The Commissioner (Appeals) must allow the application and thereafter, the proper officer shall dispose of such goods in such manner as the Central Government may determine, as outlined in Section 110(1D).
Can Customs officials seize documents or things that are not goods under Section 110?
Yes, under Section 110(3), the proper officer can seize any documents or things if, in their opinion, those items will be useful or relevant to any proceeding under the Customs Act. This is broader than just the seizure of goods and can include any item that could assist in an investigation or adjudication.
What is the effect of a provisional release order on the time limit for issuing a notice under Section 124 after goods are seized?
If a provisional release order has been passed under Section 110A for seized goods, the six-month time limit specified in Section 110(2) for issuing a notice under Section 124(a) does not apply. This means the Customs authorities have a longer period to issue the notice if the goods have been provisionally released.
Key Conditions & Requirements
| Condition | Details |
|---|---|
| Reason to believe goods are liable to confiscation | A proper officer can seize goods if they have reason to believe the goods are liable for confiscation under the Customs Act, 1962. |
| Custody of seized goods | If it is not practicable to remove seized goods, custody can be given to the owner, beneficial owner, importer, or the person from whose custody the goods were seized, after executing an undertaking. |
| Disposal of perishable or hazardous goods | The Central Government can specify goods which are perishable or hazardous, which will be disposed of soon after seizure by the proper officer as per procedure. |
| Inventory and Magistrate application | For specified goods, the officer shall prepare an inventory and make an application to a Magistrate for certification of inventory, taking photographs or drawing samples. |
| Disposal of seized gold | If the seized goods is gold, the proper officer needs to make the application to the Commissioner (Appeals) instead of a Magistrate. |
| Time limit for notice after seizure | Seized goods must be returned if no notice is given under Section 124(a) within six months of seizure, extendable by another six months with written reasons. |
| Seizure of documents | A proper officer can seize documents relevant to proceedings under the Act, and the person from whose custody they were seized can make copies. |
| Provisional attachment of bank account | To protect revenue or prevent smuggling, a bank account can be provisionally attached for up to six months with Principal Commissioner/Commissioner approval, extendable by another six months. |
Amendment History
Substituted (w.e.f. 1-8-2019) s. 74 (i) of the Finance (No.2) Act, 2019 (23 of 2019).
Inserted by the Customs (Amendment) Act, 1985 (80 of 1985), section 3 (w.e.f. 27.12.1985)
Inserted (w.e.f. 28-03-2021) s. 94 of Finance Act 2021 (13 of 2021)
Substituted by section 92 (w.e.f. 29-3-2018) of the Finance Act, 2018 (13 of 2018). Before substitution, the proviso stood as under: "Provided that the aforesaid period of six months may, on sufficient cause being shown, be extended by the Principal Commissioner of Customs or Commissioner of Customs for a period not exceeding six months."
Inserted (w.e.f. 1-8-2019) s. 74 (ii) of Finance Act(No. 2) 2019 (23 of 2019)