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CONFISCATION OF GOODS UNDER CUSTOMS ACT, 1962

Customs - Import - Export - SEZ - By: - Mr.M. GOVINDARAJAN - Dated:- 15-2-2017 - Seizure Section 110 of Customs Act, 1962 ( Act for short) provides for seizure of goods, documents and things. Section 110 (1) provides that if the proper officer has reason to believe that any goods are liable to confiscation under this Act, he may seize such goods. Where it is not practicable to seize any such goods, the proper officer may serve on the owner of the goods an order that he shall not remove, part wi .....

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e of the goods. Section 110 empowers the proper officer to seize such goods if he has reasonable belief that any goods are liable to confiscation under the Act. Section 111 of the Act provides for confiscation of improperly imported goods. Mere fact that betel nuts are not prohibited goods, it does not mean that they are not liable to confiscation under the Act when goods having seized near land frontier of Nepal without clearance order. In Principal Commissioner of Customs (Import), ICD V. Sant .....

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equired to be served only on the owner of goods or on person specially authorized by owner for this purpose. Sale of seized goods The provisions of the Act does not provide for the sale of seized goods except the perishable goods. Section 110 (1A) provides that the Central Government may, having regard to- the perishable or hazardous nature of any goods; depreciation in the value of the goods with the passage of time; constraints of storage space for the goods; or any other relevant consideratio .....

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notice is issued within six months the goods shall be returned to the person from whose possession they were seized. The 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. Provisional release of goods Section 110A provides that any goods, documents or things seized under section 110, may, pending the order of the adjudicating authority, be released to the owner on taking .....

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18 - Confiscation of packages and their contents; Section 119 - Confiscation of goods used for concealing smuggled goods; Section 120 - Confiscation of smuggled goods notwithstanding any change in the form etc., Section 121 - Confiscation of sale proceeds of smuggled goods. Confiscation of improperly imported goods Section 111 provides that the following goods brought from a place outside India shall be liable to confiscation: - (a) any goods imported by sea or air which are unloaded or attempte .....

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Indian customs waters for the purpose of being imported, contrary to any prohibition imposed by or under this Act or any other law for the time being in force; (e) any dutiable or prohibited goods found concealed in any manner in any conveyance; (f) any dutiable or prohibited goods required to be mentioned under the regulations in an import manifest or import report which are not so mentioned; (g) any dutiable or prohibited goods which are unloaded from a conveyance in contravention of the provi .....

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ermission of the proper officer or contrary to the terms of such permission; (k) any dutiable or prohibited goods imported by land in respect of which the order permitting clearance of the goods required to be produced under section 109 is not produced or which do not correspond in any material particular with the specification contained therein; (l) any dutiable or prohibited goods which are not included or are in excess of those included in the entry made under this Act, or in the case of bagg .....

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avention of the provisions of Chapter VIII; (o) any goods exempted, subject to any condition, from duty or any prohibition in respect of the import thereof under this Act or any other law for the time being in force, in respect of which the condition is not observed unless the non-observance of the condition was sanctioned by the proper officer; (p) any notified goods in relation to which any provisions of Chapter IVA or of any rule made under this Act for carrying out the purposes of that Chapt .....

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liable to be upheld. In Commissioner of Customs, Chennai V. Kamatchi Sponge & Power Corporation Limited - 2016 (3) TMI 220 - CESTAT CHENNAI the respondent filed bill of entry for import of goods declaring as Heavy Melting Steel Scrap . On examination the goods were found to be 10% scrap and 90% secondary welded pipes. Samples were drawn and sent to private laboratory. Based on the test report, the Adjudicating Authority confiscated the goods and imposed redemption fine and personal penalty .....

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tory is not reliable as the said laboratory is not approved by Customs. Even otherwise secondary welded pipes are nothing but scrap. The importer is not a trader to import goods in guise of scrape but bona fide actual use. The Tribunal upheld the order of Commissioner (Appeals). In Kuber Casting Private Limited V. Commissioner of Customs, Amritsar - 2016 (2) TMI 981 - CESTAT CHANDIGARH the Tribunal found that a part of the consignment was found re-rollable scrap but the appellant has placed an o .....

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tion fine to ₹ 20,000/- from ₹ 160000/- and penalty to ₹ 10000 from ₹ 110000/-. In Xing International V. Commissioner of Customs, New Delhi (Import & General) - 2016 (5) TMI 914 - CESTAT NEW DELHI the appellant had placed order for LED panels. The examination report of customs officers and re-examination report categorically stated that the goods were branded LED Panels and encased in TV casing but without the speakers, without the remote controls, with the power cabl .....

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he Tribunal was of the view that the goods have to be treated as LED panels and not as LED television. LED panels are freely importable and do not require any BIS registration. As such these goods are not liable for confiscation. The Tribunal set aside the impugned order. Confiscation of improperly exported goods Section 113 gives powers to the authorities for confiscation of improperly exported goods. According to this section any goods- (a) attempted to be exported by sea or air from any place .....

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o be exported or brought within the limits of any customs area for the purpose of being exported, contrary to any prohibition imposed by or under this Act or any other law for the time being in force; (e) found concealed in a package which is brought within the limits of a customs area for the purpose of exportation; (f) any goods which are loaded or attempted to be loaded in contravention of the provisions of section 33 or section 34; (g) loaded or attempted to be loaded on any conveyance, or w .....

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baggage with the declaration made under section 77; (j) entered for exportation under claim for drawback which do not correspond in any material particular with any information furnished by the exporter or manufacturer under this Act in relation to the fixation of rate of drawback under section 75; (k) on which import duty has not been paid and which are entered for exportation under a claim for drawback under section 74; (l) cleared for exportation which are not loaded for exportation on accoun .....

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of the godown and the wife of the appellant No. 1 reveal that the seized goods were meant for illegal export to Nepal. Opportunity was not given to the appellants to cross examine the persons who gave statements. However the documentary evidences reveal that the appellants illegally exported similar goods to Nepal in tractor trolleys. With effect from 14.05.2013, the provisions of Section 113 (c) are applicable to any goods brought near to land frontier for purpose of being exported. The appell .....

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ssue of LEO. In the instant case the fact remains that the goods were loaded to the vessel for export and the vessel set sail before the Let Export Order was given by Customs. Therefore it is a clear breach of the provisions of the Customs Act. Consequently the goods are liable to confiscation under Section 113 (h) of the Customs Act and the appellant is liable to penalty under Section 114 (iii). There is no mens rea required for imposition of penalty under Section 114. Any action or omission on .....

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tion and penalty. No other provision other than Section 113 is applicable for confiscation of goods. As regards, redemption, discretion to grant redemption or not was that of adjudicating authority which has been rightly exercised. In view of complicity and involvement of appellants in the said smuggling, penalty is also rightly imposed. The Tribunal having considered all these aspects including that of retracted statements of appellants, its order confirming absolute confiscation and penalty ca .....

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llegal acquisitions and movement in India of these goods may be violation of any other law but not of Customs Act. The applicant is not having any valid visa on his passport or ticket to go abroad. There is no evidence on record to indicate that the appellant is indulging in illegal export of the said goods on his earlier two visits abroad. The activities of the appellant may be suspicious, but not enough to hold charge of attempted export. In the absence of positive evidence, mere interaction/p .....

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t and Export Policy/Hand book of Procedure. The Tribunal upheld the confiscation of the goods. The Tribunal reduced the redemption fine from ₹ 1,24,000/- to ₹ 50,000/-. The Tribunal did not find it to be a fit case for imposing penalty and set aside the same. Confiscation of conveyances Section 115 provides the list of conveyances that are liable confiscation as detailed below- (a) any vessel which is or has been within the Indian customs waters, any aircraft which is or has been in .....

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cleared for exportation, or any other goods cleared for exportation under a claim for drawback, are unloaded, without the permission of the proper officer; (e) any conveyance carrying imported goods which has entered India and is afterwards found with the whole or substantial portion of such goods missing, unless the master of the vessel or aircraft is able to account for the loss of, or deficiency in, the goods. Confiscation of packages Section 118 provides that if a package contains the goods .....

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scation. Confiscation of smuggled goods Section 120 provides for the confiscation of smuggled goods even there is any change in their form. If the smuggled goods are mixed with other goods, by which separation of smuggled goods is not possible, the whole of the goods is liable for confiscation. If the owner of the goods proves that he had no knowledge or reason to believe that they included any smuggled goods, only such part of the goods the value of which is equal to the value of the smuggled g .....

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uch goods liable to confiscation under section 111, or abets the same, or acquires possession of or is in any way concerned in carrying, removing, depositing, harboring, keeping, concealing, selling or purchasing, or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under section 111, shall be liable to penalties as follows- (a) in the case of goods in respect of which any prohibition is in force under the Customs Act or any other law f .....

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alue and the value thereof or five thousand rupees, whichever is the greater; (d) in the case of goods falling both under clauses (i) and (iii), to a penalty not exceeding the value of the goods or the difference between the declared value and the value thereof or five thousand rupees, whichever is the highest; (e) in the case of goods falling both under clauses (ii) and (iii), to a penalty not exceeding the duty sought to be evaded on such goods or the difference between the declared value and .....

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g in force, to a penalty not exceeding the value of the goods or five thousand rupees, whichever is the greater; (ii) in the case of dutiable goods, other than prohibited goods, to a penalty not exceeding the duty sought to be evaded on such goods or five thousand rupees, whichever is the greater; (iii) in the case of goods under claim for drawback, to a penalty not exceeding the amount of drawback claimed or five thousand rupees, whichever is the greater. Penalty for Short-levy or Non-levy of d .....

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r interest, as the case may be, and the interest payable thereon, is paid within thirty days from the date of the communication of the order, the amount of penalty to be paid shall be reduced to 25% of the duty or interest. If the duty or interest determined to be payable is reduced or increased by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be, the Court, then, the duty or interest as reduced or increased, as the case may be, shall be taken into account. Also, in a ca .....

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all be levied under section 112 or section 114. Penalty for not accounting for Goods If any goods loaded in a conveyance for importation into India, or any goods transshipped under the provisions of this Act or coastal goods carried in a conveyance, are not unloaded at their place of destination in India, or if the quantity unloaded is short of the quantity to be unloaded at that destination, and if the failure to unload or the deficiency is not accounted for to the satisfaction of the Assistant .....

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the amount of export duty that would have been chargeable on the goods not unloaded or the deficient goods, as the case may be, had such goods been exported. Penalties for contravention, etc., not expressly mentioned Any person who contravenes any provision of this Act or abets any such contravention or who fails to comply with any provision of this Act, with which it was his duty to comply, where no express penalty is elsewhere provided for such contravention or failure, shall be liable to a p .....

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; Up to ₹ 5,00,000/- 3 Principal Commissioner of Customs or] Commissioner of Customs or a Joint Commissioner of Customs; Without limit Section 122A provides that the adjudicating authority shall, in any proceeding under this Chapter or any other provision of this Act, give an opportunity of being heard to a party in a proceeding, if the party so desires. The adjudicating authority may, if sufficient cause is shown at any stage of proceeding referred to in sub-section (1), grant time, from .....

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ssession of any person, - on the person from whose possession the goods were seized; and if any person, other than the person from whose possession the goods were seized, claims to be the owner thereof, also on such other person; in any other case, on the person, if any, who claims to be the owner of the goods so seized. This section shall apply to gold, and manufactures thereof, watches, and any other class of goods which the Central Government may by notification in the Official Gazette specif .....

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the goods were held liable to confiscation. The Tribunal held that burden of proof under Section 123 of Customs Act is on the Revenue that the seized goods brought illegally by smuggling. The documentary evidence produced by the respondent in respect of licit import of seized goods found to be correct. The Department failed to bring tangible evidence to prove smuggled nature of goods in question. The Tribunal set aside the order of confiscation of goods and penalty sustainable. In Commissioner o .....

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Section 124 requires the issue of show cause notice before confiscation of goods. No order confiscating any goods or imposing any penalty on any person shall be made under this Chapter unless the owner of the goods or such person - is given a notice in writing with the prior approval of the officer of Customs not below the rank ofan Assistant Commissioner of Customs, informing him of the grounds on which it is proposed to confiscate the goods or to impose a penalty; is given an opportunity of m .....

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