Customs Act, 1962 Section 127k — Recovery of sums due under order of settlement
Customs Act, 1962 · Recovery of sums due under order of settlement
Plain-English Explanation
Overview
Section 127K of the Customs Act, 1962 empowers the Customs Department to recover dues arising from a settlement order issued under Section 127C and to impose penalties for non-payment. This section ensures that the terms agreed upon in a settlement order are enforceable, contributing to efficient revenue collection.
Who Does This Apply To?
This section applies to:
- Applicants who have been issued a settlement order under Section 127C(1) or 127C(5). These are generally importers or exporters who have approached the Settlement Commission to resolve disputes concerning customs duties, penalties, or other related matters.
- Proper Officers of the Customs Department who have jurisdiction over the applicant. These officers are responsible for enforcing the settlement order and recovering any outstanding dues.
How It Works
The section functions through the following steps:
- Settlement Order: The process begins with the Settlement Commission issuing an order under Section 127C(1) or (5). This order specifies the amount to be paid by the applicant to settle the customs dispute.
- Recovery of Sums: The sum specified in the settlement order becomes due to the Central Government.
- Enforcement by Proper Officer: The Proper Officer with jurisdiction over the applicant is authorized to recover the outstanding amount.
- Mechanism of Recovery: The Proper Officer recovers the amount as if it were a sum due to the Central Government under Section 142 of the Customs Act. This involves methods such as attachment and sale of movable and immovable property, arrest and detention of the defaulter, etc.
- Penalty for Default: If the applicant fails to pay the sum specified in the settlement order within the stipulated time (if any), the Proper Officer can impose and recover a penalty for the default. The penalty amount is determined based on existing laws and regulations.
Important Conditions & Exceptions
- Condition 1: The recovery is subject to any conditions specified in the settlement order. For example, the settlement order might allow payment in installments. If such conditions are not met, the recovery process is activated.
- Condition 2: The jurisdiction of the Proper Officer is crucial. Only the officer having jurisdiction over the applicant is authorized to initiate recovery proceedings.
- Exception: If the applicant successfully appeals the settlement order, the recovery process is stayed pending the outcome of the appeal.
Practical Example
Imagine a textile importer, "ABC Impex," faces a dispute with the Customs Department regarding the valuation of imported fabric. ABC Impex approaches the Settlement Commission. The Commission, after considering the facts, issues a settlement order under Section 127C(1) directing ABC Impex to pay Rs. 5,00,000 in full settlement of the dispute, payable within 60 days.
The settlement order specifies no further conditions. If ABC Impex fails to pay the Rs. 5,00,000 within 60 days, the Proper Officer having jurisdiction over ABC Impex can initiate recovery proceedings under Section 142. This might involve attaching ABC Impex's bank accounts or seizing their goods to recover the outstanding amount, along with any applicable penalties for the delayed payment. If the payment is made within 60 days, no further action will be taken.
Key Amendments
No major amendments since enactment.
No case laws found for this provision yet.
Browse all case laws →Frequently Asked Questions
How are sums due under a settlement order (Section 127C) recovered under Section 127K of the Customs Act, 1962?
Any sum specified in a settlement order passed under Section 127C(1) or (5) is recovered as sums due to the Central Government, as per Section 142 of the Customs Act. The proper officer with jurisdiction over the applicant initiates this recovery process, potentially subject to conditions specified in the settlement order itself.
Who is the 'proper officer' responsible for recovering dues under Section 127K, and what is their jurisdiction?
The 'proper officer' responsible for recovery under Section 127K is the one having jurisdiction over the applicant who sought settlement. Their jurisdiction is typically determined by the applicant's place of business or the location where the customs duty evasion occurred, as per established customs procedures.
What happens if there's a default in payment of the sum specified in the settlement order under Section 127K?
If there's a default in paying the sum specified in the settlement order, Section 127K allows for the imposition and recovery of penalties. These penalties are also treated as sums due to the Central Government and recovered under the provisions of Section 142 of the Customs Act.
Does Section 127K prescribe a specific time limit for recovery of dues after a settlement order is passed?
Section 127K itself doesn't explicitly state a time limit. However, the general time limit for recovery of customs duties, as per Section 142 read with other relevant provisions regarding limitation periods, would likely apply unless the settlement order specifies otherwise.
Can the conditions specified in a settlement order impact the recovery process under Section 127K?
Yes, Section 127K explicitly states that the recovery of sums is *subject to such conditions, if any,* specified in the settlement order. This means that the settlement commission can build in specific terms that relate to the timing and manner of payment, directly impacting the recovery process.
How does Section 142 of the Customs Act relate to the recovery process under Section 127K?
Section 127K directly refers to Section 142 of the Customs Act. Section 142 provides the mechanism for recovering sums due to the Central Government, including modes of recovery like attachment and sale of property, arrest and detention of the defaulter, and certificate proceedings.
Are there any recent changes or amendments to Section 127K or related sections (127C, 142) that affect the recovery of dues under settlement orders?
While the core text of Section 127K has remained relatively stable, it's crucial to stay updated on any judicial pronouncements interpreting its provisions or any amendments made to Section 142, which outlines the recovery mechanisms. Check official government notifications and circulars for the latest changes, as these often clarify the practical application of these sections.
Key Conditions & Requirements
| Condition | Details |
|---|---|
| Sum specified in settlement order | The provision applies to any sum specified in a settlement order passed under Section 127C(1) or 127C(5). |
| Conditions specified in the order | Recovery is subject to any conditions that may be specifically mentioned in the order of settlement itself. |
| Recovery as sums due to Central Govt | The sum is recovered as if it were a sum due to the Central Government, using the mechanisms provided in Section 142. |
| Proper officer having jurisdiction | The recovery process is initiated and managed by the proper officer who has jurisdiction over the applicant. |
| Penalty for default in payment | A penalty can be imposed and recovered for failing to pay the specified sum within the stipulated timeframe. The penalty is recovered as sums due to Central Govt. |
| Application of Section 142 | Section 142 of the Customs Act, 1962, will apply for the method of recovery of dues. |
| No specific monetary threshold | There is no specific monetary threshold mentioned in the section itself. The provision applies to *any* sum specified in the settlement order. |
| No specific exemptions mentioned | The section does not contain details about exemptions. |
Amendment History
Substituted by the Finance Act, 2007 (22 of 2007), section 107, for "(7)" (w.e.f. 01.06.2007).