Customs Act, 1962 Section 124 — Issue of show cause notice before confiscation of goods etc
Customs Act, 1962 · Issue of show cause notice before confiscation of goods etc
Plain-English Explanation
Overview
Section 124 of the Customs Act, 1962, establishes the mandatory procedure of issuing a show cause notice (SCN) before any goods are confiscated or penalties are levied. This ensures fairness and provides the affected party an opportunity to defend themselves before any adverse action is taken by customs authorities. It’s a cornerstone of natural justice within customs law.
Who Does This Apply To?
This section applies broadly to:
* Owners of goods that Customs proposes to confiscate.
* Persons upon whom Customs proposes to impose a penalty under Chapter XIV of the Customs Act, 1962.
* Customs officers, specifically those not below the rank of an Assistant Commissioner of Customs, responsible for issuing the notice.
How It Works
The process dictated by Section 124 unfolds as follows:
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Issuance of Notice: Before confiscating goods or imposing a penalty, the proper officer (at least an Assistant Commissioner of Customs) must issue a written notice. This notice requires prior approval from the Assistant Commissioner of Customs. The notice must detail the specific grounds upon which the proposed confiscation or penalty is based.
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Opportunity to Represent: The recipient of the notice is granted a reasonable timeframe, as specified in the notice, to submit a written representation countering the grounds for confiscation or penalty.
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Opportunity to be Heard: The person is entitled to a reasonable opportunity to present their case orally or through representation and be heard by the customs authorities.
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Oral Request: The initial notice and the written representation can be made orally if the person concerned requests it.
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Supplementary Notice: The proper officer may issue a supplementary notice even after issuing the initial notice, under circumstances and in a manner that is prescribed by law. This allows for addressing any new information or clarifications that emerge after the initial notice.
Important Conditions & Exceptions
- Condition 1: The officer issuing the notice must be at least an Assistant Commissioner of Customs, ensuring a certain level of seniority and scrutiny.
- Condition 2: The opportunity for representation and being heard must be "reasonable," meaning it should allow sufficient time and scope for the individual to present their case effectively.
- Exception: The law allows for a supplementary notice to be issued after the initial notice. The specifics of when and how such supplementary notices can be issued are determined by the prescribed regulations.
Practical Example
A textile importer is suspected of mis-declaring the value of imported fabric. Customs believes the actual value of the goods is ₹1,00,000 while the declared value is ₹60,000, thus evading customs duty. Before confiscating the fabric, Customs must issue a show cause notice under Section 124. The notice would state:
- The intention to confiscate the fabric.
- The grounds for confiscation: mis-declaration of value leading to evasion of duty.
- Details of the alleged mis-declaration, like the difference between the declared and assessed value.
- The importer gets a reasonable time, say 30 days, to submit a written reply with evidence to challenge Customs' assessment.
- The importer is given a date for a personal hearing to further present his case.
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 purpose of Section 124 of the Customs Act, 1962 concerning show cause notices?
Section 124 of the Customs Act, 1962 mandates the issuance of a show cause notice (SCN) before confiscating goods or imposing a penalty. This section ensures that the owner of the goods or the person involved is informed of the grounds for the proposed action and given an opportunity to present their case, adhering to the principles of natural justice.
What information must be included in a show cause notice issued under Section 124 of the Customs Act, 1962?
A show cause notice under Section 124 must clearly state the grounds on which the confiscation of goods or imposition of a penalty is proposed. It must also specify a reasonable time within which the recipient can make a written representation against the proposed action, as highlighted in clause (b) of the section.
What are the conditions that must be met before issuing a show cause notice for confiscation of goods under Section 124 of the Customs Act, 1962?
Before issuing a show cause notice under Section 124, the Customs officer, not below the rank of an Assistant Commissioner of Customs, must have prior approval. The notice must inform the owner of the goods or the person involved about the reasons for the proposed confiscation or penalty, as outlined in clause (a).
What if the person concerned requests an oral hearing and representation under Section 124 of the Customs Act, 1962?
As per the proviso to Section 124, the notice informing of the grounds of confiscation (clause a) and the written representation (clause b) can be oral if the person concerned requests it. This offers flexibility in the proceedings and caters to situations where written communication may not be feasible or preferred.
Can a supplementary show cause notice be issued even after the initial notice under Section 124 of the Customs Act, 1962 has been issued?
Yes, a 'supplementary notice' can be issued under Section 124 by the proper officer even after the initial notice, as stated in the second proviso. The circumstances and manner in which a supplementary notice is issued are subject to prescribed regulations.
What happens if a show cause notice is not issued before confiscating goods or imposing penalties under the Customs Act, 1962?
Failure to issue a show cause notice as per Section 124 before confiscating goods or imposing a penalty renders the action illegal. The affected party can challenge the confiscation or penalty on the grounds of violation of natural justice, as the mandatory procedure was not followed. The order may be quashed.
Is there a specific time limit to respond to a show cause notice issued under Section 124 of the Customs Act, 1962?
Section 124(b) requires that the notice specify a 'reasonable time' for making a written representation. The determination of what constitutes a 'reasonable time' depends on the specific facts and circumstances of each case, but the response time will be noted on the notice itself. The adjudicating officer will consider if it was reasonable during adjudication.
Key Conditions & Requirements
| Condition | Details |
|---|---|
| Show cause notice required before confiscation/penalty | No confiscation order or penalty can be imposed without first issuing a show cause notice to the owner of the goods or the person concerned. |
| Written notice with grounds for action | The notice must be in writing and specify the grounds on which the confiscation or penalty is proposed. |
| Approval for notice: Assistant Commissioner level | The written notice requires prior approval from a Customs officer not below the rank of an Assistant Commissioner of Customs. |
| Opportunity for written representation | The owner/person must be given a reasonable time to make a written representation against the proposed action. |
| Reasonable opportunity of being heard | The owner/person must be given a reasonable opportunity to present their case in a hearing. |
| Oral notice/representation possibility | At the request of the concerned party, the notice and representation can be oral instead of written. |
| Supplementary notice issuance allowed | The proper officer can issue a supplementary notice even after the initial notice under prescribed circumstances and manner. |
Amendment History
Substituted by the Taxation Laws (Amendment) Act, 2006 (29 of 2006), section 28, for "writing informing" (w.e.f.13.07.2006).
Substituted by the Finance Act, 2011 (8 of 2011 )., section 49, for "a Deputy Commissioner of Customs" (w.e.f. 08.04.2011).
Inserted by section 94 (w.e.f. 29-3-2018) of the Finance Act, 2018 (13 of 2018).