Customs Act, 1962 Section 28ba — Provisional attachment to protect revenue in certain cases
Customs Act, 1962 · Provisional attachment to protect revenue in certain cases
Plain-English Explanation
Overview
Section 28BA of the Customs Act, 1962 allows customs officers to provisionally attach property to protect government revenue while investigations (Section 28, 28AAA, or 28B) are ongoing. This ensures that assets are available to recover potential customs duty liabilities later determined to be due. It's a powerful tool to prevent revenue loss during the investigation phase.
Who Does This Apply To?
This section potentially affects:
- Importers and Exporters: Individuals or entities involved in import or export activities who are under investigation for potential customs duty evasion or short payment under Sections 28, 28AAA, or 28B of the Customs Act.
- Customs Officers: Specifically, the proper officer investigating the case and the Principal Commissioner/Commissioner of Customs who must approve the provisional attachment.
- Settlement Commission: In cases where the importer or exporter applies for settlement under Section 127B.
How It Works
The process of provisional attachment under Section 28BA involves the following steps:
- Initiation: During the pendency of proceedings under Section 28, 28AAA, or 28B, the proper officer forms an opinion that provisional attachment is necessary to protect revenue interests.
- Approval: The proper officer seeks and obtains prior written approval from the Principal Commissioner/Commissioner of Customs to provisionally attach the property.
- Order: The proper officer issues a written order provisionally attaching the property belonging to the person on whom a notice has been served under Section 28(1) or 28(4), Section 28AAA(3), or Section 28B(2).
- Attachment: The attachment is carried out in accordance with the rules made under Section 142 of the Customs Act (Rules for Recovery of arrears). These rules specify the procedures for attachment and sale of property.
- Duration: The provisional attachment is valid for a maximum period of six months from the date of the order.
- Extension: The Principal Chief Commissioner/Chief Commissioner of Customs may extend the attachment period for a further period, not exceeding two years in total, after recording reasons in writing.
- Settlement Commission Application: If an application for settlement of the case is made to the Settlement Commission under Section 127B, the period between the application date and the date of the Settlement Commission's order under Section 127C(1) is excluded from the attachment period.
Important Conditions & Exceptions
- Condition 1: The attachment can only be made if proceedings are pending under Sections 28, 28AAA, or 28B. The attachment is directly linked to these specific types of investigations.
- Condition 2: The Principal Commissioner/Commissioner's approval is mandatory before any property can be attached. This acts as a safeguard against arbitrary actions.
- Exception: The time period for attachment is excluded during the settlement commission process to avoid conflict between the provisional attachment and the settlement proceedings.
Practical Example
ABC Importers is suspected of undervaluation of imported goods. A notice is issued under Section 28(4) demanding ₹50 lakhs in unpaid duty. The investigating officer believes ABC Importers might dispose of their assets before the case concludes. With the Principal Commissioner's approval, the officer provisionally attaches ABC Importers' factory building, valued at ₹75 lakhs, for six months under Section 28BA. This ensures that the building can be used to recover the unpaid duty if ABC Importers is found liable. After five months, the Chief Commissioner extends the attachment for another six months to allow the investigation to conclude.
Key Amendments
No major amendments since enactment.
No case laws found for this provision yet.
Browse all case laws →Frequently Asked Questions
When can the Customs department provisionally attach property under Section 28BA of the Customs Act, 1962?
Provisional attachment under Section 28BA is permissible only when proceedings are ongoing under Section 28 (demand for unpaid or short-paid duties), Section 28AAA (erroneous refunds), or Section 28B (non-levy or short-levy due to collusion etc.). The proper officer must have a well-founded opinion, approved by the Principal Commissioner/Commissioner of Customs, that such attachment is necessary to protect the interests of revenue, as per Section 28BA(1).
What types of properties can be attached provisionally under Section 28BA?
Section 28BA(1) allows for the provisional attachment of "any property" belonging to the person served with a notice under Section 28, 28AAA, or 28B. This includes both movable and immovable property, and is subject to the rules made under Section 142 for the attachment of property.
How long does a provisional attachment under Section 28BA last?
The initial period of provisional attachment under Section 28BA(2) is six months from the date of the attachment order. This period can be extended by the Principal Chief Commissioner/Chief Commissioner of Customs, for reasons recorded in writing, but the total extension cannot exceed two years. Therefore, the maximum possible duration is 2.5 years.
Can the extension of provisional attachment under Section 28BA be challenged?
Yes, the extension of the provisional attachment can be challenged if the reasons recorded in writing by the Principal Chief Commissioner/Chief Commissioner of Customs are not justifiable or are based on irrelevant considerations. The decision to extend the attachment is subject to judicial review, ensuring fairness and preventing arbitrary actions by the department.
What happens to the provisional attachment if a settlement application is filed with the Settlement Commission?
Section 28BA(2) includes a proviso that specifically addresses this scenario. If an application for settlement is made under Section 127B of the Customs Act, the period from the date of the application until an order is made under Section 127C(1) is excluded from the calculation of the attachment's duration. This effectively suspends the attachment period during the settlement proceedings.
What is the recourse available to a person whose property has been provisionally attached under Section 28BA?
A person whose property has been provisionally attached under Section 28BA can challenge the attachment order before the appropriate judicial forum, such as the High Court, by filing a writ petition. Grounds for challenge can include the lack of a valid basis for the proper officer's opinion or procedural irregularities in issuing the attachment order, referencing the provisions of Section 28, 28AAA, or 28B which initiated the proceedings.
Are there specific rules under Section 142 regarding the provisional attachment process mentioned in Section 28BA?
Yes, Section 28BA(1) explicitly states that the provisional attachment must be done "in accordance with the rules made in this behalf under section 142". Section 142 empowers the board to create rules to carry out provisions. Therefore, it is crucial to consult the relevant rules under Section 142 for the detailed procedures governing the attachment, sale and disposal of attached properties.
Key Conditions & Requirements
| Condition | Details |
|---|---|
| Pending Proceedings under specified sections | Provisional attachment is permissible only when proceedings are ongoing under Section 28, 28AAA, or 28B of the Customs Act, 1962. |
| Proper Officer's Opinion & Revenue Protection | The proper officer must form an opinion that the attachment is necessary to protect the interests of revenue. |
| Prior Approval Required | Attachment requires prior written approval from the Principal Commissioner or Commissioner of Customs. |
| Property of Notice Recipient | The attachment can only be applied to property belonging to the person served with a notice under the relevant sub-sections of Section 28, 28AAA or 28B. |
| Initial Attachment Duration | The provisional attachment is valid for a maximum period of six months from the date of the order. |
| Extension by Chief Commissioner | The Principal Chief Commissioner or Chief Commissioner of Customs may extend the attachment period, with written justification. |
| Maximum Extension Period | The total extension period for provisional attachment cannot exceed two years. |
| Settlement Commission Application Exclusion | The period during which a settlement application is with the Settlement Commission is excluded from the overall attachment period. |
Amendment History
Inserted by the Taxation Laws (Amendment) Act, 2006 (29 of 2006), section 23( w.e.f.13-7-2006)
Substituted by the Finance Act, 2012 (23 of 2012), section 123(a), for "or section 28B" ( w.e.f. 28-5-2012)
Substituted by the Finance (No.2) Act, 2014 (25 of 2014), section 78, for "Commissioner of Customs" (w.e.f. 06-08-2014)
Substituted by the Finance Act, 2013 (17 of 2013), section 67, for "sub-section (1) of section 28" ( w.e.f. 10-5-2013)
Substituted by the Finance Act, 2012 (23 of 2012), section 123(b), for "or sub-section (2) of section 28B" ( w.e.f. 28-5-2012)