AN INTRODUCTION TO THE LAW AND PRACTICE OF

CUSTOMS

- Mrinal satish
- Sonali mohapatra
- Juhi mehta
Divya bharati sharma

The Customs Act was passed with the objective of curbing large-scale smuggling. The Land
Customs Act and the Sea Customs Act had become too obsolete to deal with such problems and
many other aspects related to customs. It was also necessary to regulate air customs specifically, as
opposed to the old approach of governance of air customs by way of rules made under the Indian
Aircraft Act, 1911.
IMPORTANT DEFINITIONS
1. Assessment [Section 2(2)]: the definition of assessment is an inclusive one. In the context of
Income Tax, the Supreme Court has opined that assessment could mean all proceedings for
raising money by the exercise of the power of taxationi. In the context of customs, the word
assessment would mean the computation and fixation of the duty payable on a particular good,
in accordance with the procedures laid down under the Act.
2. Baggage [Section 2(3)]: the term baggage has been inclusively defined under the Act to include
unaccompanied baggage. The provisions of Chapter IX of the Baggage Rules, 1978, as framed
under Section 79 by Notification No. 101-Cus., dated 16.5.78, further state that articles
imported by a passenger with her/him on person or in their accompanied baggage fall under the
category of baggage.
3. Goods [Section 2(22)] are defined as inclusive of vessels, aircrafts, vehicles, stores, baggage,
currency, negotiable instruments, and other kinds of movable property.
4. Dutiable goods [Section 2(14)] are defined to mean any goods on which duty is payable under
the Act and the same has not been paid.
5. Export [Section 2(18): simply speaking export means the act of taking goods from India to a
place outside India. The question that then arises is what is meant by taking the goods outside
India. It is a well-settled principle now that goods are said to be exported when they are actually
taken out beyond the territorial limits of India. However for the goods to have been lawfully
exported outside India, the procedure laid down under the Customs Act must have been
followed. Unlawful taking out of the goods amounts to smuggling under the Act.
artTitle AN INTRODUCTION TO THE LAW AND PRACTICE OF CUSTOMS
artAuthor SATISH artAuthor SONALI artAuthorJUHI MEHTA artAuthorDIVYA BHARATI SHARMA:1
artLaws Customs
artSubmissionDate 19/08/2000

Final Year, B.A. LL.B. (Hons), National Law School of India University.

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6. Import [Section 2(23) : Import means the act of bringing into India from a place outside India.
Since under Section 2(27), India is said to include the territorial waters of India, the act of
import can be said to have been completed only when the goods are brought within the
territorial waters of India. Here also import is said to have taken place when the goods have
been imported in accordance with the provisions of the Customs Act.

CHAPTER II
Chapter II (Sections 3-6) of the Act deals with officers of Customs. The Chapter specifies the
classes of officers concerned, manner of their appointment and their powers.

CHAPTER III
APPOINTMENT OF CUSTOMS PORTS, AIRPORTS, WAREHOUSING STATIONS,
ETC.
S.7: APPOINTMENT OF CUSTOMS PORTS, AIRPORTS, ETC.:
This section gives the power of appointment of customs ports and airports to the central
government for the unloading of imported goods and the loading of export goods or any class of
such goods. Further specific powers have been given to notify coastal ports for the carrying on of
trade in coastal goods. A distinction therefore has been made between coastal and customs ports
and the latter phrase no longer apply to ports, which handle coastal goods only.

S.8 POWER TO APPROVE LANDING SPACE AND SPECIFY LIMITS OF CUSTOMS

AREA:
The Board under the previous Act exercised this power. The revised section however
provides that the Collector of Customs shall exercise this power.

CHAPTER IV
SECTION 11
Under S.11, the central Government is given the power to prohibit or restrict, the
importation and/or the export of the goods which are specified by it. Prohibition/restriction, and the
goods to which the same applies have to be notified in the official gazette by the central
government , and such restriction/prohibition has to be for the purposes within those specified in
sub-section 2.There is a voluminous list of prohibitory/regulatory orders under this section both for
export and import
OTHER STATUTES
This section has to be read with certain other statutes:

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1) Imports and Exports (Control) Act,1947, and the orders made thereunder, as these are deemed
to be prohibitory orders under S.11.(This Act has now been repealed.The orders under it are
now deemed the orders under S.4 of the Foreign Trade (Development and Regulation
)Act,1992.Though an order made under S.3(1) of the Imports and Exports (Control ) Act is
deemed to be an order under S.11, this does not mean that such an order is restricted to the
purposes mentioned in Section 11(2) of the Customs Act.( Hoare Miller & Co. Ltd v. Asst
Collector of Customs AIR 1935 Cal 440, at pp.443,444)
2) Foreign Trade (Development and Regulation )Act,1992- Scetions 3(2) and 3(3), and the orders
made thereunder, which are deemed to be orders under S.11.
3) Rule 55 of the Aircraft Rules, 1937, which states that no person in any aircraft entering or
departing from India shall carry or allow to be carried in the aircraft any goods of which the
import or export by sea or by land is prohibited by or under any law
4) Livestock Importation Act, 1898- Under S.3, the central Government may , by notification in
the official gazette regulate, restrict or prohibit the importation of any livestock which may be
liable to be affected by infectious or contagious disorders, and also the import of any material
appertaining to/in contact with such livestock.(The list of such infectious and contagious
disorders has been notified by the Government by notification dated 29 July 1950).This section
has be read with notification dated 19 December, 1951and Notification dated 10th December ,
1959( as amended on 31st July, 1961 and 5th September, 1962) by which the central
Government has prohibited the import of certain livestock to places other than a few places and
also from certain places.
CONSEQUENCES:
Violation of prohibition/restriction under this section makes the goods liable to confiscation
under under S.111 and the offender subject to penalties under S.112.Where the charge had been
unlawful import and the unlawful importers were not detected, the penalty of confiscation was held
imposable in whosoevers possession the goods were found. ( Kanungo and Co. v. Collector of
Customs AIR 1965 Cal 248)Penalties for contravention are applicable even where the customs
authorities permitted clearance by mistake. It is the importers duty to obey the law.(Collector of
Customs and Central Excise v. Hindustan Motors AIR 1975 Cal 368, Best and Co. v.Additional
Collector of Customs AIR 1965 Cal 478)
SCOPE:
The Government is empowered only to prohibit or restrict import/export of specified
articles or things and it is not sufficient to describe the different commodities ejudsem generis
under a vague description ( see Karl Ettlinger and Co v Chagandas and Co AIR 1915 Bom 232.)
WHAT AMOUNTS TO CONTRAVENTION:
Contravention of S.3(1)( of the Imports and Exports Control Act , 1947 , S.3 of the Import
Control Order, 1955 and S.11 of the Customs Act, 1962 would have arisen only if the importers
had presented the Bill of Entry and made all the arrangements for the clearance of the goods with
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the willful intention of importing wrong goods .which is not the case here.(Uma Textiles v.
Collector of Customs 1990(480 E.L.T 433 ( Tribunal)). Mere possession of prohibited goods does
not attract the conclusion of unlawful import; the customs authorities must prove the breach of the
prohibition.
ASSEMBLED PARTS:
Whereas particular part is capable of being a component of more than one item, and only
one of such items is banned from being imported, import of the part is legal.(Wire Melting Stores v.
Union of India 1964 Punj L.R.(Supp)132)But where a part has no other use than as a component of
an article whose import is prohibited, import of the part is illegal since the importers cannot be
permitted to do indirectly what they cannot do directly.(Giridhar Lal Bansidhar.v. Union of India
AIR 1964 SC 1519 at p.1521)
FERA:
All restrictions with regard to the articled dealt by the FERA , howsoever imported, shall be
deemed to be under S.11.Notification under S.8(1) , FERA, is deemed to be a notification under
S.11.Though currency is not a good, export of currency in violation of S.8 is a violation of S.11
and invokes consequent penalties under the Customs Act.(Aggarwal Trading Corporation v. Asst
Collector of Customs, Calcutta AIR 1972 SC 648)
INDIAN MERCHANDISE MARKS ACT,1889
The Customs Act and this Act have to be ead together in certain instances and action may
be taken under S.11 to prevent import of goods bearing fraudulent trademark.(Imperial Tobaco Co
v. Albert Bonann AIR 1928 Cal 1)
CLASSIFICATION OF GOODS
It is the import control authority, i.e the Government which, primarily is to determine the
head or the entry under which a particular commodity falls, but the court has the competence to
interfere in cases of perverse classification. The court cannot, however, set aside a classification
only because another classification which was more favourable to the importer was possible
(Collector of Customs v. Ganga Setty AIR 1963 SC 1319, K.Ganga Setty v. Collector of Customs
AIR 1957 Mad 19). Classification under Import Trade Control Policy and the Tarriff Act should be
the same ,each being complementary to the other. It is good fiscal policy not to put the people in
doubt over their liability to duty , and thus when a particular product known to trade and commerce
in this country as well as abroad is imported, it would have been better if the article had been
properly classified to avoid controversy.(Dunlop India v. Union of India AIR 1977 SC 597).While
in a case where the notification is clear, the interpretation put upon it y a customs Officer of the
rank of Assistant Collector can estop the Government from claiming afterwards that the
interpretation was wrong, in other circumstances, interpretation by such officer can be used as an
indication of what the notification means , and can in certain cases be binding upon the
Government (Collector of Customs , Madras v. Lala GopiKissen Gokuldas AIR1955 Mad 187)

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POWERS OF CUSTOMS AUTHORITIES

The Act confers wide discretionary powers of confiscation and fine on the Customs
Authorities. The fact that proceedings with respect to smuggling have been instituted before the
magistrate does not mean that acquittal by the magistrate entitles the claimant to recovery of the
property- it can be held by he customs authorities until duty and discretionary penalty consequent to
their own adjudication under the Act have been paid. Authorities can even proceed independently
without instituting proceedings before the magistrate.(Asst Collector of Customs and Excise v.
Krishna Pillai AIR 1956 Mad 42 at p.43) .The offending goods may be confiscated b without
proceeding personally against any person and without coming to a finding as to who was the
smuggler.(Sherrnal Jain v. Collector of Central Excise AIR 1956 Cal 621)But the confiscation was
held to be unjustified where the appellant had purchased the goods from a third party without
knowing that they were smuggled. Kamrup Industries v. Collector of Customs and Central Excise
1990 (48) ELT 271(Tribunal))
NATURAL JUSTICE
Though procedure of courts need not be followed, principles of natural justice must be
observed. A notice must be served to the person against whom [proceedings for confiscation are
sought to be initiated, whether or not the statute provides for the same, disclosing the circumstances
of initiation of proceedings(East India Commercial Company. v. Collector of Customs AIR 1962
SC 1893).But a person not interested in the importation of goods is not entitled to a notice about the
confiscation of goods.(Collector of Customs v. Calcutta Cycle Syndicate AIR 1964 Cal 225).The
customs authority (in this case the collector of customs) passing an order of confiscation is a quasijudicial authority against whom a writ of certiorari could be issued by the High Court.( Satyendra
Kumar Pal v. Collector of Customs and Excise AIR 1960 Assam 150)

CHAPTER IV-A
DETECTION OF ILLEGALLY IMPORTED GOODS AND PREVENTION OF THE
DISPOSAL THEREOF
The President issued a Customs (Amendment) Ordinance in January 1969 to deal with the
increase in the smuggling of silver out of the country and various consumer articles into the
country. Chapters IV-A, IV-B and IV-C later replaced by the provisions of this ordinance as
introduced by Act 12 of 1969.

S.11-A: DEFINITIONS
This section defines the following expressions used in this chapter:
a) Illegal import
b) Intimated place
c) Notified date
d) Notified goods

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Illegal import has been defined as import of any goods in contravention of the provisions of this
act or any other law in force for the time being. A false denial or the credibility of a particular story
[Isardas Daulat Ram v. Union of India, (1962) Supp. 1 SCR 358.] of a story can be treated as a
relevant piece of evidence.
S.11-B: POWER OF CENTRAL GOVERNMENT TO NOTIFY GOODS
This section empowers the Central Government to notify goods to which these provisions
will apply (see S.11-A(d) for definition of notified goods) if it is satisfied that the magnitude of
smuggling in the such goods is such that it is expedient to take special measures.
Where any goods have been so notified under this section, the onus to prove the illicit character is
upon the Department. Mere foreign origin of goods does not indicate that the goods have been
smuggled [Premji Electronics v. Collector of Customs, New Delhi, 1988 (16) ECR 534 at 535
(CEGAT)].
S. 11-C: PERSONS POSSESSING NOTIFIED GOODS TO INTIMATE THE PLACE OF
STORAGE, ETC.
This section primarily provides for the following:
All persons possessing notified goods on the notified date have to deliver a statement within
seven days to the proper officer of customs indicating the place of storage and such
particulars of the goods as may be specified under the rules.
Those acquiring such goods afterwards for the first time also have to furnish similar
information, the intimation in respect of the place of storage being delivered to the customs
officer in advance and the particulars of the goods being furnished immediately on
acquisition.
The transport of such goods from one place to another shall either be under cover of a
voucher referred to in S.11-F, or by a transport voucher.
S.11-D: PRECAUTIONS TO BE TAKEN BY PERSONS ACQUIRING NOTIFIED GOODS
This section provides that no person shall acquire, except by gift or succession, any notified
goods unless a sale voucher or evidence of clearance through customs accompanies them. Where
the purchase is made from a person not having a fixed place of business the purchaser is also
required to take such steps as specified by the rules so as to ensure that the goods acquired are not
smuggled goods.
S.11-E: PERSONS POSSESSING NOTIFIED GOODS TO MAINTAIN ACCOUNTS
Where notified goods are found within the premises of a shop, accounts for the same have
to be maintained immaterial of the fact whether they are for sale or not. The Act categorically
provides that person owning, possession or having control of the notified goods in the shop
premises have to maintain accounts in the prescribed manner [Abedali Rehmatali Mulwalla v.
Collector of Customs and Central Excise, 1988 (37) E.L.T. 597 (Tribunal)].
This section, however, does not apply to repairers of notified goods. The repairers are, however,
required to issue maintain a booklet showing the articles received for repairs. They are further
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required to issue receipts in duplicate, the original to be given to the person who gives the goods for
repairs and the duplicate to be maintained [Ratan Ahuja v. Collector of Customs (Appeals),
Bombay, 1988 (33) E.L.T. 622 (Tribunal)].
S.11-F: SALE, ETC. OF NOTIFIED GOODS TO BE EVIDENCED BY VOUCHERS.
S.11-G SECTIONS 11-C, 11-E AND 11-F: NOT TO APPLY TO GOODS IN PERSONAL
USE.
The regulatory provisions of Sections 11-C, 11-E and 11-F do not apply to goods in
personal use or goods kept in residential premises for personal use. But if such goods are sold, a
sale memo has to be issued. Where the memorandum of transfer of goods is not issued the goods
are liable to confiscation [Mani Ram Gupta v. Collector of Customs, 1989 (40) E.L.T. 161
(Tribunal)].

CHAPTER IV-B
PREVENTION OR DETENTION OF ILLEGAL EXPORT OF GOODS
S. 11-H: DEFINITIONS
Sub-clause (c) defines specified area as such area as may be identified by the Central
Government but such area shall not exceed one hundred kilometers from any coast or other border
of India. However, if any part of village, town or city falls within a specified area, the whole of
such village, town or city shall be deemed to be included in the specified area, not withstanding that
the whole of it is not within the abovementioned limit of one hundred kilometers.
S. 11-I: POWER OF CENTRAL GOVERNMENT TO SPECIFY GOODS.
S.11-J: PERSONS POSSESSING SPECIFIED GOODS TO INTIMATE THE PLACE OF
STORAGE, ETC.
This section applies only to goods the market price of which exceeds Rs. 15,000/S.11-K: TRANSPORT OF SPECIFIED GOODS TO BE COVERED BY VOUCHERS
This section has been introduced to ensure that where the time, place, mode, etc. of
transport is suspicious the customs officer should know beforehand about such transport. The
section provides that whenever any specified goods are transported from, into and within any
specified area, they shall be accompanied by a transfer voucher prepared by the person owning,
possessing, controlling or selling such goods. This voucher however is not necessary where the
market price of the goods does not exceed Rs. 1000/-. In certain circumstances the Central
government has been empowered to specify that in certain circumstances it may specify that
transport vouchers of goods of a market price exceeding a specified sum shall have to be
countersigned by the proper officer of the customs.

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S.11-L: PERSON POSSESSING SPECIFIED GOODS TO MAINTAIN ACCOUNT

This section provides that any person possessing notified goods of market pricing Rs.
15,000/- shall maintain accounts in the prescribed manner. There is also a rebuttable presumption
that when the stock of goods is less than the balance shown in the books the shortfall is due to
goods having being smuggled out.
A firm is required to enter every transaction in the notified goods into his books. Where however
the proprietor was not present at the time the consignment was received and within 15 minutes of
the receipt of the goods (in this case, silver) the customs officer visited the premises of the shop for
verification but no other transaction had taken place between the receipt of the goods and the
arrival of the customs officer, it cannot be said that there has been a violation of S.11-L [Shah
Champaklal Balubhai v. Additional Collector of Customs, Ahmedabad, 1988 (16) E.C.R. 1.]
NATURE OF SS. 11-J, 11-K AND 11-L
These provisions are in the nature of prohibitions and not mere regulations, which will
entail confiscation of goods under S.113 (1). This becomes clear when one considers that the object
behind introduction of Chapter IV-B is the prevention and detection of illegal export of goods.
However, the prohibitions under this chapter cannot be considered to be prohibitions with regard to
acts, which are preparatory to export. In such cases even the contravention of such prohibitions will
only entail confiscation under the Act. Although the definition of smuggled goods has been
extended to goods which are not properly the subject matter of exportation, the prosecution has to
prove that the person charged with the commission of an offence under S.135 of the Act knowingly
concerned himself in any fraudulent evasion or attempt at evasion of any prohibition. Whether or
not there is in fact any such fraudulent evasion or attempt at evasion of any prohibition will have to
be determined in a given case in the light of the facts and circumstances and the nature of the
accusation contained in the complaint [State of Maharastra v. Union of India (1974) 76 Bom.L.R
738].
S.11-M: STEPS TO BE TAKEN BY PERSON SELLING OR TRANSFERRING ANY
SPECIFIED GOODS
This section has been introduced to ensure that people do not account for smuggled goods
by drawing up factitious sales accounts. Thus, unless a seller/transferor receives payment by cheque
drawn by the purchaser, he shall obtain on his copy of the sales voucher, the signature and full
postal address of the purchaser/transferee and shall also take such reasonable steps as specified by
the rules. If on investigation the purchaser/transferee is either discovered to be fictitious or is not
easily traceable, there is a presumption that such goods have been illegally exported. This
presumption, however, is rebuttable and fair and adequate opportunity has to be given to the
accused to rebut the same [Manilal Bhanabhai Patel v. Union of India, (1992) 38 E.C.C. 113].

CHAPTER IV-C
Chapter IV C of the Customs Act contains only one section, S.11 N. The section empowers
the Central Government to exempt certain goods from the provisions of Chapters IV A and IV B
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CHAPTER V
SECTION 12: DUTIABLE GOODS
Customs duties are levied at rates specified under The Customs and Tariff Act, 1975. Duties
are levied on both import and export of goods. Amendments to the rates are made every year by the
Annual Finance Act. In order to decide the quantum of duty payable the present Section has to be
read along with the Customs and Tariff Act and the amendments thereto.
Section 12 is the charging section of the Act. Judicial decisions under the Section have tried to
distinguish between chargeability and assessment. It has been observed by the courts of law that
chargeability is an issue that has to be decided under the section, since this section lays down the
rates of duty that are to be levied on the goods. Thus once the goods are charged under the Section
the question of assessment of the amount of the duty payable would ariseii The time of occurrence
of the taxable event is crucial to the issue of chargeability. A taxable event is said to have occurred
when the goods enter into the territorial waters of India. This is evident from a joint reading of the
definition of import contained in Section 2(23) and Section 12(1). The liability to pay import duty,
however, attaches the moment the good are brought into the territory of India, irrespective of
whether they have been unloaded from the ship or no. Case law has also reiterated such a position.
In the case of export duty, duty becomes chargeable when goods are to be exported from the
landmass of India. Since it would be an impossibility to collect duty when the goods are actually
taken out of the territorial waters of India, for the sake of administrative convenience the export
duty is to be collected before the goods leave the landmass of India.
SECTION 13: DUTY ON PILFERED GOODS
The purpose of the Section is to ensure that an importer is not made to pay duty on the
goods that have been pilfered. The Section clearly states that imported goods pilfered after an order
for clearance for home consumption/deposit in a warehouse of the same has been made, shall be
liable to payment of duty by the importer unless the goods are restored to the importer.
SECTION 14:VALUATION OF GOODS FOR PURPOSES OF ASSESSMENT
This Section lays down the following parameters on whose basis goods are to be valued for the
purpose of assessment-:
1. The price at which the imported/exported goods are offered for sale;
2. The price offered for delivery at the time and place of importation or exportation;
3. Price quoted in the ordinary course of international trade, where the seller and the buyer
have no interest in the business of each other and where the price is the sole consideration
for the sale or the offer for sale.
As such the value of the goods to be ascertained above, is a deemed value of the goods. It would
thus follow that even if the prices of the goods have been commercially negotiated the value of the
goods can be ascertained in accordance with the price of the goods concerned in the ordinary
course of business. Case law has recognized this principle.
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The section clearly lays down that the price of the goods is to be ascertained in accordance with the
rates of exchange in force at the time the bill of entry is presented under Section 46, or the rates
prevailing at the time of the presentment of the shipping bill or bill of export, as under Section 50.
The Customs authorities are usually supposed to go by the invoice price of the good in ascertaining
their value. However, if the price quoted in the invoice is too low, or if the authorities are satisfied
that the invoice itself is a false document, the contract in question is not a genuine one, the
authorities may go against the invoice price and ascertain the price of the goods in accordance with
the prevailing price at which goods of similar quality, characteristic, origin etc are offered for sale.
The onus of proving under invoicing, low pricing or misdeclaration is upon the Department.
The following are included as part of the price of the goods for the purpose of valuation-:
1. Expenses such as landing charges can be included as part of the price of the goods. This is
because, goods cannot be sold without payment of these charges and because they are paid
prior to the unloading of the goods. This principle was laid down in a number of cases.
2. It has further been laid down that all payments made in due course up to the stage of
unloading are to be treated as part of the price of the goods. In cases where machinery is
sold on the assurance that the seller would install the same also, the costs of installation
shall also form part of the cost/price of the machinery. This was laid down in Aarkeyees
Imports Corporation, New Delhi v. Collector of Customs, New Delhiiii. As a corollary to
this principle it has further been observed that dismantling charges, if they form part of the
contract of sale are also to be included while computing the price of the goods in question.
The following reductions are permitted-:
1. Depreciation in case old goods are being traded in are also permitted while arriving at the
price of the goods for the purpose of valuation.
2. Discounts made by the seller to the buyer are also deducted. Special discounts made to a
buyer are however not permitted to be excluded from the price of the goods.
The relevant date for the levy of duty under this Section is the date the goods entered the territorial
waters of India. Thus duty would be levied on goods even if at the date of levy the goods are
exempt from payment of duty, in case duty was leviable on the goods on the date they entered the
territorial waters of India.
SECTION 15: DATE FOR DETERMINATION OF RATE OF DUTY AND TARIFF
VALUATION OF IMPORTED GOODS
Rate of duty and tariff valuation on imported goods is to be paid at the following rate and
valuation-:
1. In respect of goods entered for home consumption under Section 46 on the date of the bill of
entry in respect of the goods in question. Thus the date at which the goods entered into the
territorial waters of India has no relevance to the rate of duty to be levied on the goods,
except the fact that as sated under Section 12, such a date is relevant to ascertain the time of
occurrence of the taxable event. Furthermore the delivery of the bill of entry is deemed to

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have been delivered on the date on which an order is given under Section 57 for the entry of
the vessel inwards.
2. In case of goods cleared from a warehouse under Section 68, on the date on which the
goods are removed form the warehouse. Thus if the between the time the goods were put
into the warehouse and the time that they were taken out from the warehouse, the duty is
increased, the duty leviable on the goods would on the basis on the rates prevailing at the
time the goods were taken out from the warehouse.
3. In case of any other goods, on the date of payment of duty.
The decisive date as far as chargeability of duty is concerned is the date of filing of the bill if entry.
Therefore duty is leviable as per the rates prevailing on the date of entry inwards of the vessel. This
principle was laid down in M/S Shah Devchand and Company v. Union of Indiaiv, Northern
Corporation v. Union of India.v.
SECTION 16: DATE FOR DETERMINATION OF RATE OF DUTY AND TARIFF
VALUATION OF EXPORT GOODS
Rate of duty and tariff valuation on export goods is to be paid at the following rate and
valuation-:
1. In case of goods entered for export under Section 50, on the date on which an order
permitting clearance and loafing of the goods is made (Such orders are made under Section
37 of the Act). This basically means that the relevant date in case of export goods as far as
valuation of rate of duty payable would be the date of entry outwards of the vessel,
irrespective of the date of filing of the shipping bill, as the shipping bill may have been filed
prior to the date of entry outwards. On such date of entry the shipping bill must have been
duly passed by a proper officer and obligations such as examination and testing of the goods
intended for export must have also been complied with. ;
2. In any other case on the date of the payment of the duty.
As far as exports by land are concerned the relevant rate is the rate and valuation prevalent at the
time the application for permit to export is filed. This was laid down in Anant Atmaram Wara
Wadekar v. Land Customs Officer-in-Chargevi.
SECTION 17:ASSESSMENT OF DUTY
This Section lays down the procedure to be followed as regards assessment of duty.
SECTION 18: PROVISIONAL ASSESSMENT OF DUTY
Section 18(1) (a), (b) and (c) clearly spell out the conditions under which provisional
assessments can be made, manner of adjustment of provisional assessments against final
assessments etc.
SECTION 19: DETERMINATION OF DUTY WHERE GOODS CONSIST OF ARTICLES
LIABLE TO DIFFERENT RATES OF DUTY

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SECTION 20: RE-IMPORTATION OF GOODS PRODUCED OR MANUFACTURED IN

INDIA
The exemptions listed under the Section are available only if the goods re-imported are
essentially the same as the goods that had been exported initially.
SECTION 21: GOODS DERELICT, WRECK, ETC
SECTION 22: ABATEMENT OF DUTY ON DAMAGED OR DETERIORATED GOODS
This Section lays down the manner and proportion in which duty is to be payable on
damaged or deteriorated goods.
SECTION 23: REMISSION OF DUTY ON LOST, DESTROYED OR ABANDONED
GOODS
Under this Section, if it is proved that the goods had been damaged/lost/destroyed before
they were cleared but subsequent to the passing of an order for clearance, the duty payable on such
goods shall be remitted. It has been held by way of judicial decisions that lost in the context of
Section 23 means loss by way of natural causes and it does not include loss of goods by theft, since
theft is not a natural cause.
SECTION 24: POWER TO MAKE RULES FOR DENATURING OR MUTILATION OF
GOODS
SECTION 25: POWER TO GRANT EXEMPTION FROM DUTY
Section 25(1) empowers the Central Government to exempt either absolutely or
conditionally any category of goods from the levy of duty, in whole or in part.
Section 25(2) empowers the government to issue exemption orders with respect to goods selected
from a category. The reasons for such exemption are to be exceptional, required in public interest.
The reasons have to be mentioned in the exemption order passed by the Government.
The difference between Section 25(1) and (2), is that while no duty is leviable on goods falling
under categories mentioned in clause (1), goods covered under Clause (2) are such that normally
duty is liable to be paid on them, but not in the cases falling under the said clause due to specific
exemptions being granted to the importer in question. This power can be exercised at any point of
time. The exemption may be granted before the levy of the duty, after the levy of the duty but
before its collection, and even after the collection since an order for refund of the same can be
made. This was laid down in M.R.F. Ltd. v. Union of Indiaviiand M.S Shawhney v .M/S Sylvania
Laxman Ltdviii.
In this context a lot of judicial controversy has focused on whether the plea of promissory Estelle is
available against the government. Generally speaking the plea of promissory estoppel is not
available against a statute. The government has the power to levy duties and the alter the rates fixed
as and when it is thought fit. Thus the mere fact that the duties have been altered to the
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disadvantage of a party does not mean that the power under Section 25 has been exercised
arbitrarily. This principle is accepted by majority of cases, though there are some contrary decisions
also.
It has also been held that in case of ambiguities in the exemption notifications, the matter \should
be resolved in favour of the taxpayer. This principle is a well settled one in the context of
interpretation of fiscal legislations. Moreover the exemptions granted must be given effect to by the
authorities. These principles were laid down Tamil Nadu Newsprint and Papers Ltd., Madras v.
Appraiser, Madras Customsix and Haryana Plywood Industries v. Collector of Customsx.
SECTION 26: REFUND OF EXPORT DUTY IN CERTAIN CASES
The section clearly lays down the conditions under which refund of export duty paid may be
asked for.
SECTION 27: CLAIM FOR REFUND OF DUTY
An application for refund can be made only within six months of the date of payment of the
duty. The effect of this provision like any other provision relating to limitation is that it bars a
persons remedy to claim refund of duty after a certain point of time, but does not extinguish such a
right.
The right to refund arises only when duty has been paid under a legal obligation. It has been
observed by way of case law that when duty is paid in pursuance of orders of authorities that lack
jurisdiction, the provisions of Section 27 are not. This was laid down in Atul Products v. Union of
Indiaxi and East Angila Plastics (I) Ltd. v. Asst. Collector Of Customsxii.
The application for refund can be made only within 6 months of the from the date of payment of the
duty in normal circumstances, or within 1 year in case the duty had been paid under protest. It has
been held that the limitation period so prescribed is not liable to be extended or condoned. In other
words the Customs authorities are said to be devoid of the power to condone delays in filing
applications for refund of duty. This was laid down in Andhra Pradesh State Electricity Board
Vidyut Soudha v. Government of India, Ministry of Finance (Department of Revenue Insurance)xiii,
(1989) 30 E.l.T. 641(1) (SC), Randip Shipping and Transport Company Limited. v. Collector of
Customsxiv.
SECTION 28: NOTICE FOR PAYMENT OF DUTIES NOT LEVIED, SHORT-LEVIED OR
ERRONEOUSLY REFUNDED
Under this Section, Customs authorities may issue notice for payment of duties not levied,
short levied or erroneously refunded. The person is required to show cause why they should not pay
such duty back to the Customs authorities. The notice under this Section is to be issued within 6
months of the date of non-levy, short levy or erroneous refund. In G.F. Industries v. Union of
Indiaxv, it was observed that a notice for reclaiming refunds which were erroneously made must be
made within 6 months of the making of such a refund.

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The applicability of this Section is said to be limited only to final assessments. The Section
therefore does not apply to provisional assessments.xvi The notice of refund is to be made to the
owner of the concerned business. Notice to agents can also be made if the Customs authorities are
satisfied that the same can be recovered from the owner, importer or exporter.xvii This principle is in
line with the normal principles of agency which lay down that the agent cannot have more powers
that those of her/his principal.
It has been observed in a number of cases that the requirement of giving notice under this Section is
a principle of natural justice and in the event of non-observance of the same liability for repayment
cannot be imposed upon an individual.
SECTION 28-A: POWER NOT TO RECOVER DUTIES NOT LEVIED OR SHORT
LEVIED AS A RESULT OF GENERAL PRACTICE
This Section empowers the Central Government to recover duties lower than what would
normally be levied on goods or not to recover duties on such goods, in case the normal practice is
that no duties to duties lower than normal duties are recovered in respect of such goods.
Furthermore, duties if any paid may be refunded to the person concerned under Section 27(2), in
case they have been paid in respect of goods for which no duty is leviable or lower duties are
leviable by virtue of a notification under this Section.
SECTION 28-B: DUTIES COLLECTED FROM THE BUYER TO BE DEPOSITED WITH
THE CENTRAL GOVERNMENT
Any duties collected from buyers, by any person, are required to be deposited with the Central
Government. This amount is later liable to be adjusted against the duty to be paid by the person
under a final assessment order. Excess amounts can either be credited to the fund or can be
refunded to the person concerned.

CHAPTER V-A
INDICATING AMOUNT OF DUTY IN THE PRICE OF GOODS, ETC., FOR
PURPOSE OR REFUND
S.28-C AND S. 28-D
These sections provide that where a person who is liable to pay duty in goods shall at the
time of clearance of goods prominently indicate in all documents relating to assessment, sales
invoice, etc, the amount of such duty which will form part of the price at which such goods are t o
be sold. They also raise a presumption that every person who has paid a duty under this act, unless
the contrary is proved, has passed on the full incidence of such duty to the buyer of such goods.
SECTION 29
Section 29 provides that any vessel or aircraft entering India for the first time has to land
only at a customs airport or Customs port. Customs Airport and Customs Port refer to ports and
airports duly notified under S.7
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SECTION 30
This section requires the submission of an Import manifest or an Import report within 24
hours of a vessel, aircraft or vehicle arriving at a customs station. Customs station refers to
Customs ports, Customs Airports and Land Customs stations which have been notified under S.7
Imported Goods have been defined in S.2(25) as any goods brought into India from a place
outside India, but does not include goods which have been cleared for house consumption. The
definition of import and imported goods does not imply requirement of intention of knowledge
or intention on part of the person in-charge of the conveyance. Thus, although the prohibited goods
may have been carried in the vessel without the knowledge of the person in charge of the vessel, the
fact that the goods arrived in India from a place outside India makes them imported goods . The
responsibility to submit a correct return or suffer the consequences of an incorrect return is a strict
liability of the master of the vessel. The safeguard provided is that he would be given a chance to
amend the manifest a discovery.(B-218, James David Crighton v. S.K.Srivastava AIR 1969 Cal
260). However, only legitimate goods and not contraband are to be included in the manifest;
penalty is not imposable for non-amendment of the manifest by inclusion of contraband after its
seizure in absence of fraudulent intention. The import manifest s amendable in case of accidental
slip or omission to include
IMPORT MANIFEST
In case if a vessel, it is open to submit the manifest before the arrival of the vessel at the
port. Submission does not necessarily or inevitably add up to the probability that the ship ha entered
into the territorial waters of India.( National Textile Corporation Ltd. v. Collector of Customs ,
Madras 1986(26) E.L.T 275 (Tribunal))
S.30 has to be read with the Import Manifest (Vessels) Regulations,1971, the Import Manifest
(Aircraft) Regulations, 1976 and the Import Report (Form) Regulations, 1976.
Goods are liable for confiscation of the import manifest id found to be forged. (J.B. Trading
Corporation v. Union of India 1990 (45) E.L.T 9 (Mad)).This is under S.111(f). Penalty is
prescribed in S.112(a).
PENALTY
Where incorrect declaration was made by the Chief Purser on behalf of the master, it is the
master who is liable for penalty under S.112 and the chief Purser is liable for abetment under
S.112(be). It is the person in charge of the conveyance and not his agent who is made
responsible.(Ramesh Amritlal Shah v. Collector of Customs , Bombay 1986(26) E.L.T
795(Tribunal)). Where there is a shortage in goods as per import manifest under S.30, imposition of
penalty for short-loading of goods under S.116, Customs Act is justified. (Savitri & Company. v.
Government of India 1983 E.L.T 900 (A.P).Since the Customs Act provides for the extension of the
24 hour tie limit for submission of the import manifest/report in certain cases, S.10 of the General
Clauses Act cannot be invoked.( National Textile Corporation v. Collector of Customs , Bombay
1987(14) E.C.C.T-449 at pp.T-450,451(A.T))

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SECTION 31
This section provides that unloading of goods from a vessel can commence only upon
entry inwards order being made by he proper officer which order is to be made only after the
submission of import manifest. Grant of entry inwards depends upon the availability of berthing
accommodation and there is no duty upon the proper officer to grant the entry inwards forthwith
upon the submission of manifest. (Devpal Dhir v.B.V.Kumar, Collector of Customs 1987 (32)
E.L.T 459 (Bom))
Though the importer may present the Bill of Entry (see S.46) before the entry inwards is granted,
the Bill of Entry shall be deemed to have been presented only on the date of such grant. Therefore,
the rate of duty has to be ascertained and assessed with respect to the date of entry inwards.(
Anantpur Textile Ltd. v. Collector of Customs 1988 (33) E.L.T 12 (Cal)) The customs officer has
no jurisdiction to assess the Bill of Entry prior to this date, and even if this is done, it cannot be
treated as completed assessment. (Devpal Dhir v.B.V.Kumar, Collector of Customs 1987 (32)
E.L.T 459 (Bom))
Change of berthing of the vessel within the same port does not make a higher rate of duty
prevailing on date of such change applicable.( Kailash Chander Kapur v. Collector of Customs
1990 (45) E.L.T 586 , at p.589 (Tribunal))
SECTION 32
This Section prevents the unauthorized landing of goods. Imported goods not specified in
the import manifest cannot be unloaded at a customs station unless specific permission of the
proper officer is taken.
Proper officer under this section and the previous sections means ( as defined in Section 2(34) ) the
officer of customs who is assigned to the functions in question by the Central Board of Excise and
Customs or the Collector of customs.
SECTION 33
Under this Section, loading and unloading of goods is to take place only at places approved
under S.8(a). S.8(a) gives the Collector of Customs the power to approve proper places in any
Customs port, airport or coastal port for the unloading and loading of goods or class of goods.
However, loading/unloading may be at any other place provided the proper officer had permitted
the same.
SECTION 34
It is required that unloading/loading must be only under the supervision of the proper
officer unless permitted by the board ( by way of general permission) or the proper officer (In
specific cases) to load/unload without supervision. Where the port trust has been given the authority
to give direct delivery of bulk cargo to the importers , weightment certificate given by the authority
has to be respected by the Customs authorities to ascertain shortage in terms of the proviso to this
section.
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SECTION 35
The section lays own the requirement that goods must be accompanied by a boat- note when
they are water- borne for being landed/shipped. In case of goods for export, this is required only
when no shipping Bill accompanies the goods. This provision must be read with Boat note
Regulations, 1976, (issued by notification dated 23-10-1976, as amended by notification dated 2210-1977) which specifies the form and other details of the boat- note.
SECTION 39
There is no difference between the words entry outwards of the vessel used in S.16, and
the words entry outwards to the vessel used in this section.(Gangadhar Narsingdas v. Asst.
Collector of Customs AIR 1968 Goa 105). Baggage includes any unaccompanied baggage, but
does not include motor- vehicles (S.2(23))
SECTION 40
No action can be taken under this section where provisional assessment has been made and
the assessee has consented to pay the balance amount after the final assessment has been
completed.(B.W. Maltazan v. Collector of Customs AIR 1958 A.P.122)
SECTION 41
The section requires delivery of export- manifest/export-report before a vessel, aircraft or
other vehicle leaves a customs port , airport oor land- customs station. This has to be read with the
Export Manifest (Vessels) Regulations, 1976 and the Export Report (Form ) Regulations, 1976.
SECTION 42
This section delays the departing of a conveyance from a Customs station until all the
requirements under the Act have been satisfied. Deposit of amount or execution of bond under this
section is independent of deposit under S.129-E. The two are mutually exclusive.(Shaw Wallace &
Company. Ltd. v. Collector of Customs, Bombay 1987 (27) E.L.T 489, at pp.491-92 (Tribunal))

CHAPTER VII
Chapter VII of the Act deals with clearance of imported and exported goodS. It consists of 8
sections, 44-51.
The Chapter does not apply to baggage and postal articlesxviii. S.45 of the act deals with restriction
on custody and removal of improved goodS. It mandates that goods unloaded in a customs area,
shall remain in the custody of such person as may be approved by the Collector of Customs, until
they are cleared for home consumption or are warehoused or are transhipped. The person having
custody of any imported goods in a customs area is expected firstly, to keep a record of such goods
and a copy of thereof to the proper officer and secondly, he is under an obligation not to permit

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such goods to be removed from the customs area or otherwise deal with, except under and in
accordance with the permission in writing of the proper officer.
S.46 of the Act deals with the entry of goods on importation. It says that the importer of any goods,
other than goods intended for transit or transshipment shall make entry thereof, by presenting to the
proper officer, a bill of entry for home consumption or warehousing in the prescribed form.
However, if the importer makes and subscribes to a declaration before the proper officer, to the
effect that the he / she is unable to furnish all the particulars of goods required under the subsection
for want of full information, the proper officer, has been empowered, pending the production of
such information, to permit the importer, previous to the entry thereof, to examine the goods in the
presence of an officer of customs or deposit the goods in a public warehouse, appointed under S.57,
without warehousing the same.
With respect to the contents of the bill of entry, the section says that it shall include all the goods
mentioned in the bill of lading or any other receipt given by the carrier to the consignor.
The bill of entry may be present at any time after the delivery of the import manifest or import
report, as the case may be. However, the collector of customs is empowered, under special
circumstances, to permit a bill of entry to be presented before the delivery of such report. Further,
the bill of entry may be presented even before the delivery of such manifest, if the vessel by which
the goods have been shipped for importation to India is expected to arrive within a week from the
date of such presentation.
The importer, while presenting the bill of entry has to declare on the Bill of Entry (BoE) that the
contents of the BoE are true ands support this declaration has to produce to the proper officer, the
invoice if any, relating to the imported goodS.
If the proper officer, is satisfied that the interests of revenue are not prejudicially affected and there
was no fraudulent intention, he may permit substitution of a bill of entry for home consumption for
a bill of entry for warehousing and vice versa.
S. 46 along with S.15 quantify the liability for payment of duty on imported goodS. The crucial
date for this purpose is the date on which the BoE is presented. The Bill of Entry, thus given the
value of the goods and the importer has to declare this value in the BoE. If the real value of the
goods is higher than the value declared in the BoE, it amounts to evading payment of the proper
customs duty. In such a case, the importer would be liable for punishmentxix
The issue here is whetherS.46 is mandatory or directory. This arose in the case of Chowgule and
Co. v. Union of India xx. The Court in this case ruled that the use of the word shall in S.46 makes it
appear mandatory. However, this does not appear to be correct when it is read with S. 48 of the Act.
The essence of the provision is the making of the entry of the imported goods, the manner in which
the entry is made being only an issue of procedure. The presentation of the Bill of Entry is a pure
procedural aspect of the making of the entry of imported goodS. The legislature did not wish to
make Section 4 mandatory and the section is merely directory as regards the requirement of
presentation of the Bill of Entry in the prescribed form.

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Filing of the BoE is merely to facilate assesment of duty and by itself does not create liability. This
is by virtue of S.12. It has been held in S.P.A and A.R Chockalingam Chettar Firm v. National
Steamship Co., Bombayxxi that declarations made under S.29, Sea customs Act, which corresponds
to this section cannot be said to be conclusive.
CLEARENCE OF GOODS FOR HOME CONSUMPTION [S. 47]
If the proper officer is satisfied that any goods entered for home consumption are nor
prohibited goods and their importer has paid the import duty, if any assessed thereon and any
charges payable under the Act in respect of the same, the proper officer may make an order
permitting clearance of the goods for home consumption.
Where the importer fails to pay import duty under S. 57 (1) within seven days from the date on
which the BoE is returned to him for payment of duty, he has to pay interest at the rate fixed by the
board, which will not be less than 20% and not greater than 30%, on the duty till date of payment of
such duty.
The section contains a provision which states that where the bill of entry is returned for payment of
duty before the commencement of the Customs (Amendment) Act, 1991 ands the importer has not
paid such duty before such commencement, the date of return of such bill of entry to him shall be
deemed to be the date of such commencement for the purpose of the section.
Once the goods have been cleared after verification and check under S. 47, there is no scope for
issuing a show-cause notice. The section attracts finality to the decision of the officer and this
cannot be disturbed unless the department is able to prove that there was fraud or deliberate
suppression.
The role of the officer, as per this section, is to examine whether the goods are prohibitted or not
and whether the import duty and other charges under the Act have been paid. If he / she is satisfied
that the above conditions are met, he / she is empowered to clear the goodS. Once cleared, the only
option available to the Department is Revision under S. 130.
S. 48 lays down the procedure in case of goods that are not cleared, warehoused or transhipped
within 30 days or such time as the power officer may allow after unloading or if the title to any
such imported goods is relinquished, such goods may be sold by the person having the custody
thereof. Prior to such sale, the permission of the proper officer has to be taken and notice of the
same has to be given to the importer.
The section contains a proviso to the effect that animals, perishable goods and hazardous goods
may be sold at any time, with the permission of the proper officer and in case the goods are arms
and ammunition, as defined in the Arms Act, 1959, they can be sold at such time, place and manner
as the central government may direct.
S. 49 provides for storage of imported goods in a public or private warehouse pending clearance.
The section states that in case of any imported goods, whether dutiable or not, entered for home
consumption, the Assistant Collector of Customs is satisfied on the application of the importer, that
the goods cannot be cleared within a reasonable time, the goods may pending clearance be
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permitted to be stored in a public warehouse or in a private warehouse. If facilities for deposit in a

public warehouse are not available. But, such goods for the purposes of this Act, and accordingly,
the provisions of chapter IX shall not apply to such goods.
CLEARANCE OF EXPORT GOODS
Sections 50 and 51 deal with the clearance of export goodS.
S. 50 states that the exporter of any goods shall make entry thereof presenting to the proper officer
in the case of goods to be exported in a vessel or aircraft, a shipping bill, and in the case of goods to
be exported by land, a bill of export in the prescribed form. The exporter, while presenting such a
shipping bill or bill of export has to make and subscribe to a declaration as to the truth of its
contents.
S. 51 deals with the clearance of goods for exportation. As per the Section, where the proper officer
is satisfied that any goods entered for export are not prohibited goods and the exporter has paid the
duty, if any, assessed thereon and any charges payable under the Act in respect of the same, the
proper officer may make an order permitting clearance and loading for the goods for exportation.

CHAPTER VIII
GOODS IN TRANSIT
Sections 52-56 deal with goods in transit. The basic principle underlying these Sections is
that goods in transit are not liable to be subjected to any customs duty. This exemption is applicable
to goods imported by vessels or aircrafts and which are mentioned in the import manifest as meant
transit goods (Section 53). Under Section 54 a bill of transshipment is required to be presented in
respect of goods which are meant to be transshipped.
Imported goods, under Section 56 may be transported without payment of any duty form one land
customs station to another, either through any part of India or any other foreign territory, without
the payment of any duty in respect of such goods.

CHAPTER IX
WAREHOUSING
S.57: APPOINTING OF PUBLIC WAREHOUSES
The power to appoint public warehouses now rests with the Asst. Collector of Customs.
S. 58: LICENSING OF PRIVATE WAREHOUSES
This section has introduced the following amendments:
The asst. collector of customs has been granted the power to license private warehouses
It has been specifically provided that in private warehouses, ordinarily only the goods
belonging to the licensee shall be kept
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There are comprehensive grounds on which the license can be cancelled

There is also a provision for suspension of license pending enquiry.

Cancellation of license and refusal to renew the same:

Licensees of private bonded warehouses cannot be refused a renewal of their licenses or their
license cancelled on the simple ground that public warehouses have been constructed and the same
shall be used. Every application for issuance or renewal of license for a private warehouse has to be
considered on its merit [Pesticides Limited v. Assistant collector of Central Excise & Customs,
Udaipur, 1987 (30) E.L.T. 651]. It has also, however been observed that it may be sound policy not
to grant a license under this section in any warehousing station in case a public warehouse under
the previous section has already been at that warehousing station [Bajaj Plastic Limited v. Collector
of Central Excise, Nagpur, 1987 (32) E.L.T. 383].
S.59: WAREHOUSING BOND
This section introduces the following amendments:
Goods imported by land are allowed to be warehoused.
It enables an importer to enter into a general bond for the warehousing of goods to be
imported by him within a specified future period.
It provides that even if the goods are transferred to another person, the bond executed by the
seller shall remain in force, but if the transferee executes a fresh bond in respect of the
purchased goods, the bond executed by the transferor shall be deemed to be reduced to the
extent of the amount for which the transferee executes the bond.
Where the Shipping Corporation of India corrected a freight bill, the customs authorities are under
an obligation to proceed on the basis of the corrected freight. Where any assessment has already
been made as per the incorrect freight, such assessment has to be redone on the basis of corrected
freight. Where no assessment has been made, such assessment shall be made strictly in accordance
with the corrected freight as shown by Shipping Corporation of India [Hindustan Products v.
Collector of Customs, 1988 (34) E.L.T. 13]
With regard to interest, the words together with interest in S.59 (b) are sufficient to show that
interest is linked with duty. The liability to pay interest cannot be delinked from the liability to pay
duty. The importers liability to pay duty arises at the time of clearance of goods from the
warehouse. There is no obligation to pay while the goods are in the warehouse. Thus, where the
duty on the goods are lifted before clearance, there is no duty to pay interest [Thengubhandra
Fibres Limited v. Union of India, 1990 (30) E.C.C. 388].
S. 59-A: CONDITIONS FOR WAREHOUSING OF CERTAIN GOODS
S.60: PERMISSION FOR DEPOSIT OF GOODS IN A WAREHOUSE
S. 61: PERIOD FOR WHICH GOODS MAY REMAIN WAREHOUSED
An application for the extension of warehousing period need not necessarily be made before
the expiry of the original warehousing period. The authorities are bound to consider an application
for extension, unless they have already initiated coercive steps to recover customs duty and
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warehousing and other charges [Sunil Jugalkishore Gupta v. Union of India, 1987 (14) E.C.C.
165].
Interpretation of non-consumable stores- non-consumable stores in S. 61 (1) (a) has been
interpreted to mean only the non-consumable stores for use in a vessel or aircraft as the term
stores has been defined in S. 2 (38) as goods for use in a vessel or aircraft [Collector of Central
Excise, Jaipur v. Rajasthan Spinning and Weaving Mills 1987 (12) E.C.R. 1015].
S. 61(2)- this section contemplates collection of interest on amount of duty on the warehoused
goods from the period of expiry of three months till the date of clearance of goods from warehouse
[Hindustan Zinc Limited v. Collector of Customs, 1990 (49) E.L.T. 419]
Prospective effect of the Amendment- it is a well-accepted principle of law that fiscal legislation
imposing liability is generally prospective in nature. In this amendment, there is nothing to show
that it is meant to operate retrospectively and neither is there any implied inference in this regard.
Keeping these considerations in mind, the tribunal has decided that the amendment is applicable
prospectively [Collector of Customs and Central Excise v. J.K. Synthetics Ltd. 1991 (56) E.L.T.
236].
S.62: CONTROL OVER WAREHOUSED GOODS
S.63: PAYMENT OF RENT AND WAREHOUSE CHARGES
Charges for storage and upkeep of goods- where goods are seized from the premises of a
person and kept in places other than a warehouse, the Customs department cannot claim the
expenses incurred by it in storing the goods in different places from the petitioners, as it is up to the
department to make arrangements for the upkeep of the confiscated goods. [Biramani Sahu v.
Collector, Customs and Excise, Sambalpur, 1980 Cr. L. J. 54]
S.64: OWNERS RIGHT TO DEAL WITH WAREHOUSED GOODS
S. 65:MANUFACTURE AND OTHER OPERATIONS IN RELATION TO GOODS IN A
WAREHOUSE
This section permits the destruction of any refuse or surplus goods from any operations and
allows the remission of duty thereof only on such portion of the refuse as has resulted from an
operation connected with goods, which are exported. Where the manufactured goods are cleared for
home consumption, duty on the refuse which has resulted from the manufacture of such goods shall
not be remitted. This is so because refuse in manufacture is not a loss to the manufacturer and the
cost of wasted material is added to the cost of production. Thus, where the product is consumed in
India, duty has to be paid on the waste material.
Notification No. 163/Cus., dated 16th Oct. 1965- this notification exempts any ocean going vessel
manufactured in the warehouse from customs duty leviable thereon at the time of clearance.
Imported parts or accessories are not exempted from customs duty under this notification [Cochin
Shipyard Limited, Cochin v. Collector of Customs, Cochin, 1987 (27) E.L.T. 286].

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S.66: POWER TO EXEMPT IMPORTED MATERIALS USED IN THE MANUFACTURE

OF GOODS IN WAREHOUSE
S.67: REMOVAL OF GOODS FROM ONE WAREHOUSE TO ANOTHER
S.68: CLEARANCE OF WAREHOUSE GOODS FOR HOME CONSUMPTION
Clearance of goods- warehoused goods can be cleared for home consumption only after
assessment and payment of duty. Where the petitioners clear after filing proper bills of entry, unless
it is positively shown that the clearance was allowed on provisional assessment, it stands to reason
that clearance was made only on assessment [International Computes Indian Manufacturers Ltd. v.
Union of India, 1981 E.C.R. 403].
Rate of duty on actual removal of goods- if a party discharges its liability by complying with the
requirement of law, and presents papers for clearance of goods, the revenue authorities are obliged
to pass the order immediately. If the authorities either refuse to pass the order on some erroneous or
imaginary ground or due to misconception of law they cannot take advantage of their mistake and
demand a higher rate of duty from the importer [Priyanka Overseas Pvt. Ltd. v. Union of India,
1991 (51) E.L.T. 185].
Where goods have been passed for delivery, they cannot be detained on the basis of internal
instructions- the petitioners were refused to allow the goods from the warehouse even though the
bills of entry had been endorsed as passed out of customs charge as they approached the warehouse
superintendent at 4 p.m. on the grounds that he had been instructed by the Asst. Collector of
Customs not to allow withdrawal after 4 p.m. the next day the petitioners were asked to pay
increased duties which had come into effect that day. It was held that such internal instructions did
not bind the citizens and therefore the department was unjustified in its demand [Harish Silk Mills
Pvt. Ltd. v. Union of India, 1989 (43) E.L.T. 614].
S. 69: CLEARANCE OF WAREHOUSED GOODS FOR EXPORT
S. 70: ALLOWANCE IN CASE OF VOLATILE GOODS
This section amended the older provisions to the extent that the concessions that ere
available to wine, spirit and beer in casks and salt have now been extended to other volatile goods.
Duty is now remitted on the quantity genuinely deficient due to natural loss without fixing any
statutory maximum limit.
The scope of the section is still limited in the sense that it covers only losses due to storage and not
those due to transfer [Bharat Petroleum Corporation Ltd. v. Collector of Customs, 1988 (33) E.L.T.
563]. Whereas this section deals with loss due to natural causes, S.23 deals with loss due to other
reasons (except pilferage).
S. 71: GOODS NOT TO BE TAKEN OUT OF WAREHOUSE EXCEPT AS PROVIDED BY
THIS ACT.
S.72: GOODS IMPROPERLY REMOVED FROM WAREHOUSE, ETC.

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In case:
Goods are removed in contravention of S. 71
They are not removed from the warehouse at the expiration of period prescribed under S.61
Warehoused goods have been taken under S. 64 as samples without payment of duty
Goods in respect of which bond has been executed under S. 59 or S, 59-A and which have
not been cleared fir home consumption or exportation are not duly accounted for to the
satisfaction of the proper officer
The owner of such goods is bound to pay the full amount of duty chargeable on account of such
goods together with all penalties, rent, interest and other charges payable on such goods.
If the owner fails to pay the abovementioned amount, the proper officer may, without prejudice to
other remedies, cause to be detained and sold after giving notice to the owner, notwithstanding any
transfer of the goods, such portion of his goods, if any, in the warehouse, as the officer may select.
S. 73: CANCELLATION AND RETURN OF WAREHOUSING BOND

CHAPTER X
SECTION 74
Drawback refers to refund of import duty. This section provides that in case of goods
capable of being easily identified, where imported goods are exported within two years of being
imported, a refund of import duty may be claimed. This has to be read along with the Re-export of
Imported Goods (Drawback of Customs Duties ) Rules, 1995 , which prescribes the form and
procedure for claiming drawback.
The words capable of being identified refer to the nature of the goods( H.S.Mehra v. Union of
India AIR 1968 Del 142, at p.143)
The Section also has to be read with the notification which deems certain goods not easily
identifiable,( dated 10-6-1881 (No. 1117) and the notification which prescribes drawback rates in
respect of goods taken into use after importation.(dated 6-2-1965, as amended on 8-11-1969 and 25-1970)
SECTION 75
This Section relates to the drawback of export goods in the manufacture of which imported
goods have been used. Such drawback would be allowed in respect of those classes or descriptions
of goods in respect of which the central government has issued a notification in the official gazette.(
see Notification dated 30-5-1997 , as amended on 10-9-97 and 17-10-97- this specifies all-industry
drawback rates subject to the general notes mentioned therein.)
However, where the value of the export goods is less than the value of the imported goods, or less
than a particular percentage of the value of the imported goods, if such percentage be specified by
the Central Government, no drawback would be available.
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Drawback proceeds would be recovered as per the procedure in Rule 16A of the Customs and
Central Excise Duty Drawback Rules, 1995 in case of export proceeds are not realised within the
period allowed by FERA (and from 1-6-2000, under FEMA).These rules also lay down procedures
for claiming and grant of drawback under S.75.Thse repeal the 1971 rules. Where the whole of the
imported goods have not been used in the manufacture of the export goods, then the quantity of
imported goods which has actually been used in the manufacture would be deemed to be the
imported goods upon which the drawback upon the Central Government declaring the same.( The
notification dated 30-5-1991, as amended on 1-6-1992 and 1-9-1998 gives a list of goods in respect
of which the central government has made such declaration.)The requirement of export under this
section is satisfied by the taking of goods outside the territorial waters of India, and the fct that the
ship was brought back to India because of damages in the ship does not affect the position.(
Collector of Customs, Calcutta v. Sun Industries 1988(17)E.C.C ,at p.73 (S.C))

SECTION 76
This section restricts the operation of Sections 4 and 75, and provdes that drawbak shall not be
allowed in the following circumstances:
1) When the market price of the goods is lesser than the drawback due on them
2) When the drawback due is less than Rs.50
3) When the Central Government notifies that no drawback shall be allowed in respect of
particular goods due to the likelihood of those goods being smuggled back into India. The
Government has notified such prohibitions in notification dated 1-2-1963, as amended on 2910-1968 and notification dated 1-10-1977, as amended on 10-12-1987, 27-6-1988, 3-3-1994
and 4-1-1995)

CHAPTER XI
SPECIAL PROVISIONS REGARDING BAGAGE, GOODS IMPORTED OR
EXPORTED BY POST AND STORES
Chapter XI of the customs Act provides for special provisions regarding baggage, goods
imported or exported by post and stores. It is pertinent to note that these are excluded by the
preceding chapters.
S. 77 states that the owner of any baggage shall, for the purpose of clearing it, make a declaration
of its contents to the proper officer.
The definition of the term baggage is not provided in the act, but it is included in the definition of
goods under S. 2(22) of the Act. The definition of goods is an inclusive definition and includes
any other kind of morable property in addition to baggage. Hence, any item of movable
property or any article which may be goods can be part of or contained in baggage.
What is required to be done by a passenger, by virtue of S. 77, is that he/she the owner of any
baggage has to declare its contents to the proper officer, for the purpose of clearing it.

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S. 78 deals with the determination of rate of duty and tariff valuation in respect of baggage. It say s
that such rate of duty or tariff valuation would be that which has in force when the declaration was
made in respect of such baggage under S. 77.
S. 79 of the Act exempts bona fide baggage from duty. Under this section the proper officer is
empowered, subject to rules made by the central government, to pass free of duty, any article in the
baggage of a passenger or a member of the crew, in respect of which, the officer is satisfied that it
has been in use for such minimum period as specified in the ruleS. He/she is also empowered to
pass free of duty any article in the baggage of a passenger in respect of which, he/she is satisfied
that it is for the use of the passenger or his/her family or is a bona fide gift or souvenier, provided
that the value of each such article and the total value of all such articles does not exceed such limits
as is specified
The central Government is empowered, under this section, to make rules for the purpose of carrying
out the provisions of the section. The rules so made may specify the minimum period for which any
article needs to be used by a passenger or crew for it to be exempted from duty, the maximum value
of any individual article and the maximum total value of all articles which may be passed free of
duty and the conditions subject to which any baggage may be passed free of duty. The Central
Government is further empowered to make different rules for different classes of persons.
S. 80 provides for temporary detention of baggage. It states that where the baggage of a passenger
contains any article which is dutiable or the import of which is prohibited and in respect of which a
true declaration has been made under S. 77, the proper officer may, at the request of the passenger,
detain such article for the purpose of being returned to him/her on his/her leaving India.
S. 81 of the Act empowers the board to make regulations providing for the manner of declaring the
contents of any baggage; providing for the custody, examination, assessment to duty and clearance
of the baggage; providing for the transit or transshipment of baggage from one customs station to
another or to a place outside India.
S.113
This section provides for confiscation of goods attempted to be improperly exported. It
states that goods shall be liable to confiscation if:
1. The goods are attempted to be exported by sea or by air from a place other than a
customs port or customs airport appointed for the loading of such goodS.
2. The goods are attempted to be exported by land or inland water through any route other
than a route specified in a notification issued under S. 7 (c) of the Act, for the export of
such goods.
3. If any dutiable goods or prohibited goods are brought near the land frontier or the coast
of India or near any bay, gulf, creek or tidal river for the purpose of being exported
from a place other than a customs station or port, appointed for the loading of such
goods.

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4. If any prohibited goods are attempted to be exported and for this purpose are brought
within the limits of any customs area.
5. Any dutiable or prohibited goods are found concealed in a package, which is brought
within the limits of a customs port for the purpose of exportation.
6. Any dutiable goods or prohibited goods are loaded or attempted to be loaded in
contravention of the provision of sections 33 or 34 i.e. if loading takes place without
customs supervision or at a place other than an approved loading place.
7. Dutiable or prohibited goods are loaded or attempted to be loaded on any conveyance,
or water-borne or attempted to be water borne for being loaded on any vessel, the
eventual destination of which is a place outside India, without the permission of the
proper officer.
8. Any dutiable or prohibition goods are not included or are in excess of those included in
the entry mode under the Act or in the case of baggage, in the declaration made under S.
77.
9. Any dutiable or prohibited goods or goods entered for exportation under claim for
drawback do not correspond in any material particular with the entry made under the
Act or in the case of baggage, with the declaration under S. 77 in respect thereof.
10. Any goods entered for exportation under claim for drawback do not correspond in any
material particular with any information furnished by the exporter or manufacturer
under the Act, in relation to the fixation of rate of drawback under S. 75.
11. The goods are those on which import duty has not been paid and which are entered for
exportation under a claim for drawback under S. 74.
12. The goods are those, which are cleared for exportation under a claim for drawback, but
are not loaded for exportation on account of any willful act, negligence order fault of the
exporter, his agent or employee. The goods are liable to be confiscated even if they are
unloaded after having been loaded for exportation, without the permission of the proper
officer.
13. The goods are specified goods in relation to which any provisions of chapter IV-B or of
any rule made under the Act for carrying out the purposes of that chapter are
contravened.

CHAPTER XII
PROVISIONS RELATING TO COASTAL GOODS AND VESSELS CARRYING
COASTAL GOODS
SECTION 91:CHAPTER NOT TO APPLY TO BAGGAGE AND STORES

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SECTION 92: ENTRY OF COASTAL GOODS

Consignors are required to make entries of coastal goods by presenting a bill of coastal
goods to the proper officer, in the prescribed format. Such a bill is to contain a declaration by the
consignor about the truth of the contents of the consignment.
SECTION 93: COASTAL GOODS NOT TO BE LOADED UNTIL BILL RELATING
THERETO IS PASSES ETC.
This Section imposes an obligation on the master of the ship to disallow loading of the
goods, unless a bill relating to such goods has been passed by the proper officer and has been
delivered by the consignor to the master.
SECTION 94: CLEARANCE OF COASTAL GOODS AT DESTINATION
The master of the vessel is to submit all bills relating to the goods at the port where the
goods are intended to be unloaded.
SECTION 95: MASTER OF A COASTING VESSEL TO CARRY AN ADVICE BOOK
The advice book delivered by the Customs authorities to the master of the ship is to be
carried by the master. At each port of call, a proper officer may make entries with respect to goods
loaded. At each port of call the master is obliged to deliver the advice book to a proper officer for
inspection.
SECTION 96: LOADING AND UNLOADING OF COASTAL GOODS AT CUSTOMS OR
COASTAL PORT ONLY
Ports for the purpose of loading and unloading of coastal goods are notified under Section 7
of the Act. As such loading and unloading of coastal goods can be undertaken only at such
prescribed ports.
SECTION 97: NO COASTING VESSEL TO LEAVE WITHOUT WRITTEN ORDER
This Section disallows the master from permitting departure of a ship from a
loading/unloading port, unless a written order to that effect has been obtained. The order is to be
made by the proper officer after compliance with Sub-section 2 has been ensured.
SECTION 98: APPLICATION OF CERTAIN PROVISIONS OF THIS ACT TO COASTAL
GOODS, ETC.
SECTION 99: POWER TO MAKE RULES IN RESPECT OF COASTAL GOODS AND
COASTING VESSEL

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CHAPTER XIII
SEARCHES, SEIZURE AND ARREST
S.100: POWER TO SEARCH SUSPECTED PERSONS ENTERING OR LEAVING INDIA,
ETC.
The power of search under this section can be exercised if a person is suspected to have
secreted about his person any documents relating to goods liable to confiscation as such documents
may provide clues and can also be tendered as evidence.
Maintenance of diary not required- there is no provision in this Act which requires that diaries are
to be maintained and neither have the provisions of the Code of Criminal Procedure been made
applicable. The customs officers are not primarily concerned with the detection or punishment of
crime. Their prime interest lies in smuggled goods and not the smugglers.
S. 101: POWER TO SEARCH SUSPECTED PERSONS IN CERTAIN OTHER CASES
This provision enabled the empowered officers to search suspected persons anywhere in
India if they are suspected to have secreted about their persons gold, precious stones, watches and
other notified articles liable to confiscation.
S. 102: PERSONS TO BE SEARCHED MAY REQUIRE TO BE TAKEN BEFORE
GAZETTED OFFICER OF CUSTOMS OR MAGISTRATE
Witness of the search- signing of the search list is not an obligation imposed by the written
order nor is the refusal to sign such a list made punishable under this section
Income Tax authorities cannot issue a warrant to seize the money in the possession of the Customs
authorities- when the cash is in possession of the Customs authorities and not the petitioner no
warrant can be issued by the Income Tax authorities to get hold of the money under S. 132 of the
Income-Tax Act [Tarsem Kumar v. Commissioner, Income Tax, Haryana, Himachal Pradesh,
Delhi, (1975) Cencus, Vol. III, 72].
S. 103: POWER TO SCREEN OR X-RAY BODIES OF SUSPECTED PERSONS FOR
DETECTING SECRETED GOODS
This section has to be read with S. 134 which makes the refusal to co-operate in the process
of screening and x-ray punishable.
S. 24 of the Indian Evidence Act- S. 24 of the Evidence Act will be applicable only if:
It appears to the court to have been caused by any inducement, threat or promise
The said inducement, threat or promise must have reference to the charge against the
accused person
It shall proceed from a person in authority

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The court shall be of the opinion that the said inducement, threat or promise is sufficient to
give the accused person grounds which would appear to him reasonable in supposing that he
would gain an advantage or avoid an evil of a temporal nature in reference to the
proceedings against him.
Thus, section 24 would be applicable where customs authorities can be taken to persons in
authority.
S. 104: POWER TO ARREST
Unlike the old Act, this section provides that for the purpose of releasing a person arrested
under Sub-section (1) on bail, the officer shall have the same powers and be subject to the same
provisions as an officer in-charge of s police station as under the Code of Criminal Procedure.
Also, Sub-section (4) specifically states that all offences under this Act are not cognizable and
therefore automatically excludes the power of the police to investigate into any offence under this
Act.
Scope- the officer before arresting a person under this section should have reason to believe that the
person is guilty of an offence punishable under S. 135. However, by merely informing such person
of the ground of his arrest, the officer does not formally accuse him of an offence. Until a
complaint is filed in compliance with S.137, the person does not stand in the position of an accused.
The customs officer, even under this Act continues to be a revenue officer. He is not a police
officers and the information conveyed by him, when a person is guilty of contravening the law
make the person an accused. It has been held in Soni Vallabhdas Liladhar v. Assistant Collector of
Customs, Jamngar, AIR 1965 SC 481 that a customs officer is not a police officer and S. 25 of
Code of Criminal Procedure is not applicable to statements made to them [See Also Raja Ram v.
State of Bihar, AIR 1964 SC 828]. Also, he has no power to submit your charge sheet under S.173
Code of Criminal Procedure [Asst. Collector of Customs, New Delhi v. Tilak Raj Shiv Dayal, AIR
1969 Delhi 301].
Arrest and Custody- What amounts to arrest is laid down by the legislature in express terms in S.46
of the Code of Criminal Procedure, whereas the words in custody which are to be found in
certain sections of the Evidence Act only denote surveillance or restriction on the movements of the
person concerned, which may be complete or partial. The two cannot be equated [Harsbansingh
Sardar Lenasingh v. State, AIR 1970 Bom. 79].
Power to remand-S 4(2) of the Code of Criminal Procedure provides that all offences under any law
shall be investigated and tried as per the Code but where a particular enactment provides a
particular procedure, that procedure would take precedence over the provisions of the Code.
Chapter XXXIII of the code is applicable to offences under the Act because provisions with regard
to bails and bonds have no place in the Act at all. Going by this logic, S. 437 of the code becomes
applicable to the Act. Thus, where there is an express power to refuse bail, there is necessarily a
power to retain or place a person in custody as a consequence of that refusal [Dalam Chand Baid v.
Union of India, 1982 Cr. L. J. 747, Dave N. H. v. Mohmed Akhtar Hussain, (1982) 2 G.L.R. 792].
Furthermore it is a statutory obligation to record reasons while granting or refusing bail.

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Producing the person arrested before the Magistrate- Art. 22(2) of the Constitution of India
mandates that arrestee has to be produced before the magistrate within 24 hours. This is applicable
to the Customs Act, too [Roshan Beevi v. Joint Secretary to Government of Tamil Nadu, 1984 Cr.
L. J. 134].
Jurisdiction of the High Court under Art. 226- all that the High Court could consider while dealing
with a Habeas Corpus writ petition under Art. 226 was whether there was sufficient material on
record to justify the detention. The Court is not to function as an appellate authority and cannot be
called upon to decide the correctness of the allegations of the parties against each other [Rajendra
Prasad v. State of Uttar Pradesh, 1984 A. Cr. R. 237].
S. 105: POWER TO SEARCH PREMISES
Constitutionality of the Code of Criminal Procedure provisions regarding search- searches
under or pursuant to a warrant under S. 93 of the Code of Criminal Procedure did not involve any
violation of protection against testimonial compulsion guaranteed by the Constitution under Art. 20
(3) or the fundamental right of acquiring, holding or disposing property under S. 19 (1) (f) as it is
only a temporary restriction for the limited purpose of investigation [M.D. Sharma v. Satish
Chandra, AIR 1954 SC 300].
Formalities to be observed while conducting a search- the following formalities have to be
observed by a customs officer while conducting a search:
1. The person of the officials and search witnesses must be searched before they are allowed to
enter premises so as to avoid any suspicion that any member of the search party had planted
the thing recovered surreptitiously in the premises.
2. The customs officer shall call upon at least two respectable inhabitants of the locality to be
search witnesses. A respectable person is one who is impartial and on whom the owner of
the owner of the place can prima facie rely. Persons living more than a mile away cannot
said to be persons of he locality [Mahtway, In re, 1925 (26) Cr.L.J.827]. The fact that the
search witnesses are not respectable people does not vitiate the legality of the proceedings
but affects the weightage of the evidence.
3. The search shall be made in the presence of the search witnesses and a list of all the things
seized and the place in which they were found shall be prepared by the officer. The list need
not contain details of how the things were found
4. The witnesses shall sign the said list.
5. The occupant of the place searched or some other person on his behalf shall be permitted to
attend the search. The absence of any such person would vitiate the legality of the search
[Ramesh Chandra v. Emperor of India, I.L.R. 41Cal. 350].
6. The copy of the list prepared and signed by the witness shall be delivered to the occupant.
When there is a reasonable suspicion that somebody might be hiding something on his person, such
person can be searched. In case a woman has to be searched, it shall be done by a woman with strict
regard to decency.

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Under S. 47 (2) the customs officer is allowed to break open any outer or inner door or window of
any place, of accused or any other person, if upon notification of his authority and purpose he is
still denied access. If such place is occupied by a zanana, the police officer shall give her adequate
opportunity to withdraw before entering the place.
In Gopi Kishen Agarwal v. R.N. Sen, AIR 1967 SC 1298, it was held that the procedure prescribed
under S. 165 (1) of the Code of Criminal Procedure is not applicable to this section as the two
sections deal with two entirely different situations and recording of reasons in writing by Asst.
Collector is not required.
Warrant of Search- where the premises to be searched have been clearly specified in the warrant,
the search of those premises would be valid even if the owner or possessor of the premises is not
specified [Rai Bahadur Seth Sriram Durgaprasadn (P.) Ltd. v. Deputy Collector of Customs,
Visakapatnam, AIR 1965 A.P. 294].
Reasonable Belief- the statutory requirement of reasonable belief has been introduced to protect
the citizens from vexatious proceedings. Although the concerned officer does not have to put down
his beliefs in writing, if it is contested that he had no reason to believe he will have to produce the
material upon which his belief has been based [Sheonath Singh v. Appellant Assistant
Commissioner of Income Tax, AIR 1971 SC 2451, the same principle applies to this Act too]. The
belief should be of a reasonable and honest man. Mere suspicion cannot be the basis of any search
or seizure.
Article 14 and S. 105- a scrutiny of the section reveals the underlying policy as well as well as the
various checks and safeguards introduced to safe guard fundamental rights. The fact that the Asst.
Collector is liable to account for the reasonableness of his belief if the same is challenges and under
S. 165 (5) of the Code of Criminal Procedure he has to send to the collector a copy of any record
made by him are proof of the safeguards provided to prevent abuse of the power. Another control
placed upon him is in the form of S. 136 (2) of the Act.
Secreted- secreted in this section should be understood in its context. It means documents
which are kept not in the normal or usual place with a view to conceal them or it may even mean
documents or things which are likely to be secreted [Durga Prasad v. H.R. Gomes,
Superintendent (Prevention) Central Excise, Nagpur, AIR 1966 SC 1209].
Effect of non-compliance with S.165 of Code of Criminal Procedure- non-compliance with S. 165
makes the search illegal but does not vitiate the trial or make the evidence of the search
inadmissible in evidence [C. Velayudhan v. State of Kerala, AIR 1961 Ker 8].
S.106: POWER TO STOP AND SEARCH CONVEYANCES
Power to detain- the power to detain is inherent or implied in the power to check and verify.
But detention without indicating either reasons or the authority at that time is neither fair nor proper
[Orbital Enterprises v. Collector of Customs, 1988 (15) E.C.R. 211]
S. 106-A: POWER TO INSPECT

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S. 107: POWER TO EXAMINE PERSONS

Scope- any person in this section covers every person including a suspect and potential
accused. Any place also includes any place. These words have to be interpreted in the light of the
policy and purpose of the law. S. 107 has been introduced to take care of investigatory
emergencies.
Competent officer- only officers especially empowered in this behalf by a general or special order
of the Collector of Customs cab record statements under this Section. When the statements are not
recorded by a competent officer under the Act it is doubtful whether these statements can be looked
into for any purpose [Union of India v. Abdulkar Abdul Gani Hasmani, 1991 (55) E.L.T. 497].
Investigation by customs officers- any statement made under S. 107 of the Customs Act by a person
against an enquiry is made by a customs officer is not a statement made by a person accused of an
offence [Illias v. Collector of Customs, AIR 1970 SC 1065].
Article 22 (2)- at the stage of enquiry, or investigation or interrogation held under S. 107 and 108,
the person required or summoned under these provisions is not arrested nor has he become accused
and therefore Art. 22(2) cannot be invoked. Ss. 107 and 108 do not authorize the officer to detain a
person for a prolonged custody and deprive him of the elementary facilities and privileges to which
he is entitled. If he does detain a person for a prolonged period of time he is overstepping his
authority and any confessional statement obtained by such a person as such confession could have
been obtained from maltreatment [Roshan Beevi v. Joint Secretary to Government of Tamil Nadu,
1984 Cr. L. J. 134].
S.25 of the Evidence Act- neither the enquiry under S. 107 nor under S.108 can in any way, in
substance or law be considered to be the same as an investigation into a criminal offence, by an
officer-in-charge of police station under Chapter XII of the Code of Criminal Procedure.
Consequentially, these statements recorded under S. 107 and S. 108 are also not hit by S. 162 of the
Code of Criminal Procedure [Collector of Customs, Madras v. Kotumal Birumal Phalajani, (1967)
1 M.L.J. 408].
Art 20(3)- Although it has been held in M. P. Sharma v. Satish Chandra, 1954 S.C.R. 1077, that
Art 20 (3)applies to any compulsory process or production of evidentiary documents, which are
reasonably likely to support the prosecution against the accused, it was also observed that the
search or seizure of a thing or documents cannot be treated as compelled production of the same.
This decision read with the judgment in State of Bombay v. Kathi Kalu, AIR 1961 SC 1808,
establishes that Art 20 (3) will apply only to situations where the person is an accused at the time of
making the statement. Thus Art 20 (3) is inapplicable to S. 107 and S. 108.
Retracted statement- even if a statement is retracted at a later stage it can still be relied upon by the
court if it is found to be voluntary or truthful [S. G. Rajadhyaksha v. Leela Daulatram
Uttamchandani, 1991 (51) E.L.T. 91].

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S. 108: POWER TO SUMMON PERSONS TO GIVE EVIDENCE AND PRODUCE

DOCUMENTS
Constitutional Validity of the section- the proceedings under this section are not in relation
to a criminal prosecution. This section just facilitates the implementation of administrative
punishment. Art 20 (3) does not apply to S. 108. For more details check under S. 107.
Are the Customs authorities judicial tribunal- the Customs authorities are not a judicial tribunal and
the adjudging of confiscation, increased rate of duty or penalty under the provisions of the Act do
not constitute a judgment or order of a court of judicial tribunal necessary for the purpose of
supporting a plea of double jeopardy.
Power to summon- a customs officer is not required to summon a person by issuing a written
summons. Summons here is not a summons in the sense of Code of Criminal Procedure as the
officer who has the power to summon does not have the to administer oath.
Under this section, not only the witness for the prosecution but also the witness for defense can be
summoned [M. S. Naina v. Collector of Customs, 1975 Census., Vol. III, 81].
Admissibility of confession is vitiated for non-compliance with S. 164 (2) of the Code of Criminal
Procedure- the Court has held that a plain reading of the section makes it clear that it does not
enable the empowered authority to record a confessional statement from a person summoned there
under. In the absence of any such power, the empowered authority can only fall back upon S. 164
of Code of Criminal Procedure to record a confessional statement from a person summoned. Thus,
the empowered authority is bound to warning or caution to the summoned person that his statement
could be used against him. Non-compliance with this mandate would render the statement recorded
inadmissible in evidence [N.S.R. Krishna Prasad v. Directorate of Enforcement, New Delhi, 1991
(II) Andh. L. T. 514]
Presence of lawyer- there is no fundamental right to a person summoned under this section to have
a lawyer of his choice present at the time of his questioning. However it is advisable to have a
lawyer present at the scene. Also if the presence of a lawyer is demanded and refused, the ultimate
statement recorded will become questionable as not voluntary or as statements obtained under
duress [Anil G. Merchant v. Director of Revenue, Intelligence, Madras, 1986 Cr. L. J. 1273].
Inculpatory part of the statement- an inculpatory part of the statement can be admitted even if the
exculpatory part is rejected [Ambukar Haji Usman Sena v. State of Gujarat, 1980 J.S.C.T.L. 321].
S. 132 of the Evidence Act- as the Evidence act does not apply to interrogations by the Customs
officers under this Section, S. 132 of the Evidence Act does not apply to it [Hira H. Advani v. State
of Maharashtra, AIR 1971 SC 44].
S.109: POWER TO REQUIRE PRODUCTION OF ORDER PERMITTING CLEARANCE
OF GOODS IMPORTED BY LAND

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SECTION 110: SEIZURE OF GOODS, DOCUMENTS AND THINGS

This Section empowers the Customs authorities to seize any goods that are liable to be
confiscated. The basic purpose of the Section is to empower a proper officer to seize an goods
which the officer believes are liable to be confiscated on account of their illegal importation or if
they contravene any prohibition under the Act.
Goods confiscated have to be returned to the person concerned after the expiry of six months after
the date of their seizure, unless an extension order in respect of the same has been obtained, from
the Collector of Customs.
A number of decided cases have clarified various aspects of the Section. The grounds on which
goods can be seized have been questioned in a number of cases. The Section uses the words if the
proper officer has reasons to believe. This phrase has been subject to judicial scrutiny. It has been
held that goods can seized by an officer only if the officer believes that they are liable to be
confiscated, and not if the officer suspects that the goods are liable to be confiscatedxxii. Once it is
clear that the decision of the officer concerned has been based on certain grounds, it is not
necessary to disclose the same, as the grounds of belief are not subject to judicial review. This was
held in Vijay Engineering Corporation, Bijnor v. Union of Indiaxxiii.
From the scheme of the Section it is clear that it is for the Department to prove that the goods were
smuggled goods and therefore liable to confiscation. Once the authorities discharge this burden, it
is for the person concerned to show that the goods were not smuggled goods, so as to be able to
claim the goods back from the authorities. Moreover, merely because the goods are foreign goods,
the authorities cannot reach the conclusion that the goods must be smuggled. The Section clearly
speaks of confiscation of illegally imported goods, or goods which are in possession of persons in
spite of certain prohibitions. As such the burden is on the authorities to specifically prove that the
goods confiscated are smuggled goods. These principles are evident from a plain reading of the
Section and are supported by numerous decided cases.
Goods that are illegally imported or possessed illegally as well as the vehicle carrying such goods
are liable to confiscation under the Section. It cannot be argued that the goods vehicle seized be
returned to the person concerned, while the goods remain in possession of the Customs authorities.
According to case law, both the goods as well as the vehicle, may be lawfully retained by the
authoritiesxxiv.
The customs authorities are also empowered to dispose confiscated goods that are perishable, liable
to depreciate or detoriate due to storage. Section 110-B lays down the procedure to be followed in
such as case. In Ishwar Parasram v. Union of Indiaxxv, it was held that the accused must be given
an opportunity of being heard before the Customs authorities dispose goods. This assumption was
said to be implicit to the scheme of the Section.
.
In computing the period of six months for which goods seized can be kept by the authorities, the
date of seizure is to be excluded. This principle was recognized in Muni Lal v. Collector of Central
Excise, Chandigarhxxvi.

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The other important aspect of the Section is the power of the Collector of Customs to grant
extension orders. It has been observed that the power to grant extension orders is a quasi-judicial
power. Principles of natural justice therefore find a place here. The Collector of Customs is under
an obligation to hear both parties and then pass an order for extension. This is because the effect of
the extension order is to deprive a person of the valuable right of possession of their goods.
Moreover, once the initial six-month period is over, a person has a civil right to claim their goods
back. The extension order seeks to suspend the exercise of this right by another six months, and
therefore it is only fair to give the aggrieved person a chance of being heard, before issuing an
extension order. This principle was recognized in the well-known case of Assistant Collector of
Customs v. Charan Das Malhotraxxvii and Chuharmal v. Union of Indiaxxviii.
Even though an extension order cannot be passed without prior notice and without hearing the
parties concerned, no such requirement needs to be fulfilled while seizing the goods initially. Such
a position of law has been recognized in Chemitex, Goa and another v. Union of Indiaxxix. The
justification for such an approach is that the purpose of seizure is to enable the authorities to
investigate into matters where smuggling is believed to have taken place. If the accused persons are
given notice of seizure it is possible that they may dispose the goods before they are actually
seized, thus defeating the entire purpose of the Section.
An order for extension cannot be passed mechanically; it must be based on actual facts. In order to
follow this principle it is evident that both parties would have to be heard, even though the
procedure adopted at such a hearing may not be akin to an elaborate Court procedure. This is
because the Collector of Customs is a quasi-judicial body, and is therefore not expected to follow
Court procedures strictly.
A lot of discussion has gone into assessing the scope of Section 110 and Section 124. Section 124
empowers the Customs authorities to confiscate goods or levy penalties on the same after serving a
notice on the person concerned and giving the person a fair hearing. Case law has distinguished
between the scope of these two Sections. Even though it is necessary to issue a notice under Section
110, so as to be able to take action under Section 124, it does not mean that a failure to give notice
under Section 110 disempowers the authorities from taking action under Section 124. Both these
Sections are seen to be independent of each other. This principle was recognized in Mahendra
Kumar Jain v. Collector of Customs and Excise, Tiruchirapallixxx and Satramdas Mehta v. Union of
Indiaxxxi.

CHAPTER XVI
CONFISCATION OF GOODS AND CONVEYANCES AND IMPOSITION OF
PENALTIES
S.111: CONFISCATION OF IMPROPERLY IMPORTED GOODS, ETC
This section introduces the following amendments to the previously existing provision in this
regard:
Clause (d) introduces the amendment that goods brought within the Indian customs water
for the purpose of being imported contrary to any prohibition will also be liable to
confiscation.
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Clause (g) is a new introduction which specifies that any dutiable good not mentioned in the
import manifest for unloading at a particular customs station will become liable to
confiscation if they are unloaded there. However, goods, which are inadvertently unloaded
but are included in the record kept by the port trust or by the person in whose custody the
goods are unloaded, are excluded from the scope of this section.
Under clause (i), action for concealment can be taken even before the presentation of the
bill of entry.
Clause (l) provides that goods shall continue to be liable under confiscation even after they
have been cleared.
Clause (o) is a new provision under which any goods exempted from duty or from import
prohibitions subject to certain conditions will become liable to confiscation if those
conditions are not observed without the prior permission of the proper officer. This
provision was introduced to check misuse of exemptions granted in respect of baggage,
postal goods, etc.

S. 2 (c) of COFEPOSA read with S.111 of Customs Act- it is not possible to dub goods as
smuggled goods without showing that they fell under any one of the clauses of S.111. Even if the
goods are of a very high value (in this case, diamonds) and they are concealed in a secret place and
the detenu has access to the secret place and that secret place is not the normal place of residence of
the detenu, it does not lead to the conclusion that the goods are smuggled goods unless it can be
shown that any one of the clauses of S. 111 is attracted [Amirali Sadak Thamby v. State of
Maharastra, (1983) 2 Bom. C. R. 55. a contrary opinion was however expressed by the Calcutta
High Court in Harshadray n. Doshi v. Collector of Customs- Calcutta, 1985 (19) E.L.T. 156.]
S. 111 (o)- this section speaks of goods and not of imported goods. When the definition of
goods exists under S. 2(22) there is no question of resorting to the definition of imported goods
under S. 2 (25) [R.K. Industrial v. Collector of Customs and Central Excise, 1989 (39) E.L.T. 316].
Jurisdiction under S. 111 (o)- any order passed by a proper officer under S. 47 of the Act, cannot
oust the jurisdiction of the Customs Authorities to confiscate the goods under S. 111 (o) [R.K.
Industrial v. Collector of Customs and Central Excise, 1989 (39) E.L.T. 316].
Confiscation- where it is found that a person has not by any acceptable legal evidence established
title to the goods, and that the goods, which are seized from his possession, are proved to be
contraband goods the goods are liable for confiscation [Jain Enterprises and Shri Raichand v.
Collector of Customs, 1988 (15) E.C.R. 50].
Where the collector of Customs does not exercise his discretion independently, but acts on the
direction of the Board, the confiscation is not proper [S.S. Kothari, In Re, 1985 (6) E.C.C. 81].
Where the tribunal has already ordered that the seized goods are to be returned to the appellants, a
subsequent order of the Collector, is a flagrant violation of the law [Kamrup Industries v. Collector
of Customs and Excise, 1990 (48) E.L.T. 271].
Confiscation under S. 111 (d)- there is no question of an elaborate interpretation of the list attached
to the license. Only the items listed in the list are said to be covered by the list and ancillary items
cannot be included within it [Collector of Customs v. Seth Ramesh Kumar Gopaldas, 1992 (57)
E.L.T. 669]
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Also where the normal trade practice describes a particular good in one way but the goods listed are
described in another manner, and the goods actually shipped correspond to the former, there is a
misdescription and the goods are liable to confiscation [Rattan Exports Ltd. Delhi v. Collector of
Customs, Calcutta, 1987 (29) E.L.T. 102]
The expression any prohibition applies to complete as well as partial prohibitions. In other
words, it is inclusive of restrictions, too [Hasmukh Dalpatrai Ganatra v. Collector of Customs,
Bombay, 1987 (29) E.L.T. 81]
Detention certificate and demurrage charges-the detention certificate is to be issued if the goods are
detained by the customs house for bona fide operation of import control formalities without any
default on the part of the importers.
Declaration under S. 77- Clause (m) of this section specifically envisages a declaration made under
S. 77 and not any general declaration as is understood in any court of law. Moreover the act of
making a false declaration is also accompanied by an element of mens rea. A statement is said to be
false when it is narrated in wrong manner knowing it to be wrong and that particular statement is
made with some ulterior motive. [Harkishin Khushalani v. S. G. Rajadhyaksha, 1984 Cr. L. J.
1464]. Where there is no malafide in the declaration, I t cannot be said to be a misdeclaration so as
to attract S.111(m).
Rule5 of the Baggage Rules, 1970- where this rule is applicable to the facts of a case, S.111 (d)
would apply. If instruments used in professional calling followed by passengers or along with their
baggage, this may be allowed clearance free of duty [Animesh Halder v. Union of India, 1978 J.S.
C.T.L. 157].
Importation contrary to restrictions and prohibitions- the act of importation contrary to restrictions
and prohibitions is completed when the goods cross the customs barrier. Whatever is transacted
with reference to the goods after the customs barrier has been crossed amounts to dealing in
smuggled goods and/or goods imported contrary to prohibitions and restrictions. This does not
amount to an act of importation contrary to prohibition and restriction [Gopal Mayaji Parab v. T.C.
Seth, AIR 1960 Bom. 478].
Where two views are possible with regard to the validity of a particular import and the Customs
house has been taking the view that the practice is valid over a number of years, it cannot apply S.
111 and confiscate those goods [Gujarat State Export Corporation Limited v. Union of India, 1984
E.C.R. 886]
In determining whether gold had been smuggled into the country the court took the following
points into consideration in coming to the conclusion that the gold had smuggled: [Issardut
Daulatram v. Union of India, AIR 1966 SC 1867]

Gold was in the shape of bars

Seized gold was of foreign origin
Purchase price of gold was less than the market price
The hurry exhibited by the petitioner in trying to get the gold melted at the refinery with bits
of silver added to it to reduce its fitness.
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Also, gold converted into a different form or shape is also liable for confiscation under S. 120 of
the Act as the same is an enabling provision and does not detract from S. 111. [Also refer to S.123].
Scope and Applicability of S. 111(o) and 111(p) read with S.135- refer to S. 135.
Value under S. 111(m)- when th bill of entry or declaration appended thereto or S.111(m) speak
value it has to be value as defined in the Act and not the invoice price if suych price is different
from the value [Macneill and Magor Ltd. v. Collector of Customs, Calcutta, 1987 (28) E.L.T.
318). The mis-declaration of value, either upward or downward, is punishable with confiscation of
goods.
Burden of proof with regard to smuggled goods- where goods are liable to be confiscated under S.
111 (d) and under S. 123 (1) the officer has reasons to believe that they are smuggled goods, the
burden of proof to establish that the goods are not smuggled rests with the accused.
Proceedings in rem- it was held in Collector of customs v. V.D. Bhoormul, AIR 1974 SC 859, that
proceedings under S. 167 (8) of the 1878 Act (section corresponding to S.111 (d) of the 1962 Act)
are proceedings in rem and such goods can be confiscated without proceedings against any person
and without ascertaining who is their real owner or who actually is concerned with their illegal
import.
Statutory notice- the notice under S. 124 is a statutory notice and the conditions as provided as for
in the section have to be strictly adhere to. It is necessary to inform a person whose goods are being
confiscated or who is sought to be seriously affected or penalized the grounds upon which such
action is sought to be taken against him and he should be given an effective opportunity of
defending himself. A show-cause notice issued without application of mind cannot stand the
scrutiny of law [S. A. International v. Collector of Customs, 1988 (15) E.C.C. 216].
Where the notice required under S.124 is not given there is a flagrant disregard of the principles of
natural justice and the confiscation is bad. For details refer to S.124.
Imposition of Fine- it is not necessary that confiscation be accompanied by the imposition of fine
[Dolphin Laboratories, Calcutta v. Collector of customs, Calcutta, 1987 (29) E.L.T. 243].
Mens rea- the classical view that no mens rea, no crime has to be rejected, especially regarding
economic offences. Mens rea may or may not be an essential ingredient in all cases and there may
be a situation where the fact of the violation of law may be self evident and may, ipso facto, amount
to sufficient justification for imposition of penalty [Calcutta Motor Dealers Association v.
Collector of Customs, 1988 (37) E.L.T. 400.
Whether or not knowledge is essential ingredient in imposing the redemption fine and penalty is a
different question. Both redemption fine and penalty cannot be considered at par because while the
former is in lieu of confiscation and is a fine in rem enforced against the goods, the latter a penalty
in personam against the person involved in smuggling of goods or in illegal importation. While
imposing the redemption fine under S. 125, the authorities do not have to prove anything against a
particular person, while imposing a penalty under S. 112, the authorities have to establish that a
particular person was involved in smuggling or illegal importation.

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Quasi- judicial Proceedings- the proceedings under the section are quasi- judicial in nature and
whether or not there is a provision for notice it is incumbent upon the authority to issue notice to
the person concerned. Also a speaking order has to be issued in accordance with principles of
natural justice [Honesty Traders v. Collector of Customs, Cochin, 1990 (28) E.C.C. 130].
Liability of penal action- proceedings before the Customs officer is not a prosecution and is merely
a departmental proceeding. The evidence adduced does not have to be beyond reasonable doubt. In
case where goods are only of the restricted variety and are available in the open market, it is
justifiable for the authorities to demand proof of licit origin from a person in possession of the
goods. This also applies to foreign currency.
The Collector cannot order confiscation of goods merely on suspicion and disbelief.
Where smuggled goods are fused with other goods so that they loose their separate identity, it is not
open to the authority to confiscate any part of the goods [Valimahomed Gulamhussain Sonavala &
Co., Messrs. v. C.T.A. Pillai, Addl. Collector of Customs, AIR 1961 Bom. 48].
Confiscation under S.111 (d)- S. 111(d) authorizes confiscation not only where there is a
contravention of the Customs Act but also any other law in force has been violated.
Import of goods permissible only under current policy- if under current policy the import of certain
items is not allowed, although such imports were permissible under the previous policy, the
importers have to go by the current policy.
Importation of goods on the basis of suspended licensed- where a license has been issued under the
none of a person who doesnt exist or who is dead, then even if the person acted bona fide, no
rights are conferred upon him as the license is void ab initio.
Competence of authorities under Customs act and Imports and exports (Control) Act to take action
in cases of breach of condition of license- in case of a breach of condition of license, both the
authorities under Customs act and Imports and exports (Control) Act can take action under the
respective Acts.
Goods imported under an advanced license subsequently cancelled- Goods imported under an
advanced license which is subsequently cancelled on a date after the arrival of goods at Bombay
port cannot be confiscated because confiscation is allowed only in cases where the importation
itself bad in law [Sampat Raj Dugar v. Collector of Customs, 1988 (15) E.C.R. 388].
Powers of Customs authorities- under Ss. 11 and 111 (d) the Customs authorities have very wide
discretionary powers of confiscation. The fact that instituted prosecution in the magistrates court
against a particular person in relation to such property does not mean that it must in any event be
handed over to him in the event of his acquittal [Assistant Collector of Customs, Central Excise,
Kandamangalam v. Krishna Pillai, AIR 1956 Mad.42].

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Illegal Confiscation- where the goods have already been cleared in the normal course of customs
and have been taken over, they cannot be confiscated during subsequent proceedings [Dolphin
Laboratories, Calcutta v. Collector of Customs, Calcutta, 1988 (14) E.C.R. 45].
Smuggling- where any goods have been exempted from paying duty but they are imported
without complying with the conditions laid down, it amounts to smuggling.

CHAPTER XVI
SECTION 112
Section 112 imposes penalties upon persons who act in a manner which make goods liable
to confiscation under S.111, abettors of suh acts, and persons acquiring possession of, or dealing
with goods liable to confiscation with knowledge (either real or constructive) of such liability to
confiscation.
The acts subject to penalty under this section are:
1) Unloading of goods at places other than Customs ports and airports, attempting to do so,
importing goods through routes other than specified routes
2) Import in violation of any prohibition, any attempt to do so.
3) Concealment of dutiable/prohibited goods, non-mentioning of dutiable/prohibited goods in
import manifests or reports or in declarations, entries under the act.
4) Unloading of dutiable/prohibited goods without following the mandated procedure, removing
the same from a customs area or warehouses without proper permission.
5) Other requirements of the Act not satisfied
This section, with respect to dutiable goods penalizes any attempt to evade payment of duties, and
with respect to prohibited goods, penalizes the import of goods in violation of such prohibition,
whether such prohibition be complete or conditional.
With respect to dutiable goods, it is clear from clause (ii) that penalty is attracted under that clause
only in a case where the duty is sought to be evaded on the imported goods. Where goods liable to a
much lesser rate of duty were imported under a licence which related to goods liable to a higher
rate of duty, and a higher rate was actually paid, S.112 has no application.(Ahmad Sait v. Collector
of Customs , Cochin 1973 Ker. L.T.686, at p..689)
MENTAL ELEMENT
Before delivering the import manifest, the master of the ship has a duty to check up and
ascertain what goods the ship has brought into the customs station so that he may declare them truly
and fully in hjs import- manifest. Bare knowledge or consciousness of the act or the omission is
enough to attract the operation of S.112. In this context, knowledge means not only what one
knows, but what one is reasonably expected to know.(Collector of Customs v. James David
Crighton 1977 J.S.C.T.L 50, at p.70 (Cal). However, see Garware Shippiing Corpn Ltd. v.Addl
Collector (Prev), Bombay, 1989(23)E.C.R 296, at p.299(Bom)). Under S.112, penalty ca\n be
levied only if the person in possession of the goods has knowledge that the goods in question are
liable to confiscation under S.111.( Boddu Ramaiah v.Government of India1987(32) E.L.T 355, at
pp.357-58(A.P). Lack of mens rea on part of the importers would be a strong mitigatring factor
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determ9mining the quantum of redemption fine (Shree Tirupati Plastics v. Collector of Customs
1989 (410 E.L.T 512, at p.516 (Tribunal)). Owner of the godown where goods were stored is
entitled to benefit of doubt where he claims that he had no knowledge of the goods, where the
godown mukadam claims that he stored the goods on his own behalf without the knowledge of the
owner.( Ramesh Prabhudas Modi v. Collector of Customs 1989(44) E.L.T 791, at p.794)
DOUBLE PENALTY
Where the goods were imported in contravention of the ITC regulations, it comes under the
import of prohibited goods, penalty for which is provided for under S.112.In such a situation,
imposition of a separate penalty with reference to duty evaded is not well founded.(International
Computer Indian Manufacturers Ltd. v. Collector of Customs, Bombay 1990(26) E.C.C 83, at p.89
(CEGAT))
UNDER-INVOICING
The section makes mis-declaration of value, whether upward or downward, punishable. It
can be invoked both with respect to under- invoicing s well as over-invoicing.( Macneill & Magar
Ltd .v. Collector of Customs 1987(10) E.C.R 609, at p.613(CEGAT))
CRIMINAL PROCEEDINGS AND PROCEEDINGS UNDER THE CUSTOMS ACT
Criminal proceedings under S.135 and [proceedings before the Customs authorities are
independent of each other. Acquittal of the person under the former will not affect the
latter.(S.A.Thete v. Collector of Customs (Prev.), Bombay 1989(39) E.L.T 98, at p.105(Tribunal))
NATURE OF PROCEEDINGS
The power and discretion given to the authority functioning under S.112 are judicial in
character and are open to judicial review, and if they are found to have been exercised on an
irrational and ambiguous basis, the Court will stroke down the orders.(Lakshmichand v.
Government of India 1983 J.S.C.T.L 63, at pp.68-70). The authority is required to discuss in his
order as to the acts or omissions of each of the persons on whom he has imposed the penalty which
act ir omission renders the seized goods liable to confiscation. (Prem Narayan Doulatian Verma v.
Collector of Customs and Central Excise, Ahmedabad 1989(410 E.L.T 116, at pp.121122(Tribunal))
ACTS LIABLE FOR PENALTY
The mere awareness or knowledge of the appellant with respect to the offence committed by
the others would not ipso facto make for an offence of abetment under law.( R.P Hussain v.
Collector of Customs 1990(49) E.L.T 452, atp.454(Tribunal)). Anybody taking part in importing or
exporting from India any goods which are subject to prohibition/restriction would be committing an
offence under this section. If, for instance, a number of persons enter into a scheme whereby gold is
to be brought into India from oversesas through Calcutta and Patna, the ultimate destination of the
gold being Delhi, anybody who takes part in the carriage of the gold from Calcutta to Delhi ,
although the gold has already found its way into India, may be a person concerned in the importing
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of gold into India. But such participation has to be shown. ( Sitaram Agarwalla v. Addl. Collector
of Customs , Calcutta, AIR 1960 Cal 676, at p.679). However, the interest of the person must be at
a stage prior to the completion of the offence of illegal importation of goods into the country. Once
the goods have been imported, any subsequent interst etc in the smuggled goods cannot bring the
person wothin the purview of the section. The offence of importation of goods is complete when
the goods have crossed the customs frontier.( Radha Krishna Bhatia v.Union of India AIR 1965 SC
172, at pp.1074-75)
ASSESSMENT OF PENALTY
The power to levy penalty must be exercised with judicial discretion and not arbitrarily. The
past conduct of the persons charged is a relevant fcator. The purpose is to make the levy a deterrent
and not to treat the punishment as retributive.( Gyanoba Taswant Jadav v. Collector of Customs
and Excise, Hyderabad AIR 1974 A.P 76, at p.83). Profit- margin of the goods is relevant in
deciding the penalty. Nominal and marginal variations are inevitable when a quasi- judicial
authority is called upon to exercise a discretion. (Kishan Lal Balaram v. Collector of Customs and
Excise 1989(41) E.L.T 74, at p.76 (Tribunal)). The Supreme Court has held that a penalty in excess
of Rs.1000 can be imposed , and an order imposing such a penalty is not open to challenge where
the penalty does not exceed three times the value of the goods concerned.( Ranchoddas Atmaram
v.Union of India AIR 1961 SC 935). Where an order made against certain arties is in any way
altered, it is but just and fair that it should be altered in their presence, although they may have no
conceivable case to make out against the alteration.(Radha Kissen More v. Rajaram Rao AIR 1955
Cal 241, at pp.243,244).
Where the appellants had deliberately mis-described, in the correspondence leading to the grant of
advance licence and in seeking for the duty exemption certificate, the nature of the goods to be
imported, with full knowledge that the description given by them would not be in conformity with
the goods that were to be actually imported, reduction of penalty was held not to be justified.(
Ratan Exports v. Collector of Customs , Calcutta 1987(29) E.L.T 102, at pp.110-111(Tribunal)).
But where the person was only a petty employee and a certified goldsmith and a name-lender to
another for a petty monetary consideration , interests of justice would be met if the penalty is
reduced.( A.C.Damodaran v. Collector of Customs and Excise, Cochin 19888(14)E.C.R 185 , at
p.191 (CEGAT)).
BURDEN OF PROOF
Where the importation of goods was admitted nad the customs authprity prima facie showed
the goods not to be covered by the import licence, the burden of proof was on the appellant to show
that hey were covered by the lcence.( East Jamuria Company Pvt Ltd v. Collector of Customs,
Calcutta 1978 Tax L.R.i693 at pp.1697-98(Cal)). In order to achieve the underlying purpose of
stopping or even impairing the evil of gold smuggling, it must be considered to be reasonable to
enact a rule of evidence, that if a public officer in the discharge of his official duty entertains a
reasonable belief that there is, in the possession of a person , smuggled gold, then it would be for
that person to prove that it is not smuggled gold. (Sharp Business Machines (P) Ltd. v.Collector of
Customs 1990 (46) E.L.T 317, at p.324 (Tribunal)). The appellant admitted seizure of contraband
articles from his house. None else in the house claimed it. Since the appellant was the persn
concerned with the storing of these goods for the purpose of dealing with the same, he was liable
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for the penalty (Md. Alamgir v. Collector of Customs 1990(48) E.L.T 307, at p.310 (Tribunal)).
Once it is shown that the goods are of foreign origin, burden shifts to the person ( in possession) to
show that they are not smuggled goods.(Yusuf Noor Mohd. V. Collector of Customs (Prev.) 1991
(51) E.L.T 565, at pp.569-70(Tribunal))

SHOW-CAUSE NOTICE
If the substance of the charge, accusation or allegation is clearly brought out in the showcause notice, it will not be open to a party to contend that by reason of the clause of S.112 under
which a person is sought to be brought is not mentioned, he has suffered prejudice.(A.
Nizammuddin Haja Mohideen v. Collector of Customs and Excise 1988(35) E.L.T 519, at
p.523(Tribunal)). But also see Harbhajan Kaur v. Collector f Customs 1991 (56) E.L.T 273, at
p.275(CEGAT)). Service of the show-cause notice only to the managing partner is sufficient to
make the firm liable for the contravention, since each partner is, in law, the agent of the other
partners, and can bind thjem by his actions.(Kerala Commercial Corporation v. Addl Collector of
Customs AIR 1972 SC 648). Where the show-cause notice has been waived and opportunity of
personal hearing is given after orally explaining the charges, natural justice is not violated.( Balbir
Singh v. Collector of Customs 1991(56) E.L.T 64, at p.66(CEGAT)).
EVIDENTIARY PRINCIPLES
In departmental proceedings, there is no bar to use the confession of the company- accused
where it is one of the pieces of evidence which can be taken into consideration.(R.S.Kalyanaraman
v. Collector of Customs, Madras 1978 Tax L.R.1735 (Mad)). The confession of the companyaccused alone is insufficient to fix liability on the appellant (Balbir Singh v. Addl Collector of
Customs (Prev.), Ind0-Nepal Border, MuzzafarPur, 1991(33( E.C.R 684, at p.686(CEGAT)).The
appellant cannot be found guilty on the statement of the company-accused without sufficient
corroboration coming from other quarters. ( Debu Saha v. Collector of Customs 1990(48) E.L.T
302, at p.305 (CEGAT)). Charges can be proved on retracted confession in certain circumstances.(
Haresh Chimanlal Vora v. Collector of Customs 1988(35) E.L.T 182, at p.187 (Tribunal)). In
clandestine activities like smuggling, departments cannot be expected to prove the charge of guilt
beyond all reasonable doubt. Guilt of an accused can be found on pre-ponderance of probabilities.
(Sriyansh Woollen Mills v. Collector of Customs 1990 (46) E.L.T 190, at p.1999(Tribunal)).
NATURAL JUSTICE
The Evidence Act is not applicable by its own force to the proceedings under S.12, but
usually principles as to burden of proof and onus, procedure for examination of witnesses are
inevitably followed as the basis of judicial determination. It may not always be necessary to record
evidence in context of particular issues before the tribunal or authority, but when serious questions
of rights of parties are involved and the determination may involve penal consequences, it is fit and
proper that evidence should be recorded. This will ensure substantial justice( East Jamuria
Company Pvt Ltd v. Collector of Customs, Calcutta 1978 Tax L.R.1693 at pp.1699-1700(Cal)).
Where the show-cause notice states that the department relies upon certain documents , nonfurnishing of copies of the same to the appellant after repeated requests is a flagrant violation of

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natural justice. (N.Anil Kumar v. Collector of Customs and Excise, Mumbai 1987(10) E.C.R 431,
at p.432 (CEGAT))
MISCELLANEOUS
1) Obligation/liability under S.112 is of a personal nature and no recovery can be made from
the heir or legal representative of the offender.(Koyal Bai v. Collector of Customs and Excise,
Indore 1987(10) E.C.R 669, at pp.672-73(CEGAT)).
6) The master is the person in charge of the ship, and it is not a defence under S.112 on his part
thathe had issued instructions to all the members of the crew that they should be law- abiding
and behave themselves.(SCI v.Collector of Customs, Cochin 1987(10) E.C.R656, at
p.660(CEGAT)).
7) S.112, and Defence of India Rules,1962 and Gold Contrl Act,1968 are quite different and
independent of each other.( Madhav Saran v. Collector of Customs and Excise 1987(10)E.C.R
656, at p.660(CEGAT))
8) S.112 and S.125 are independent and mutually exclusive.( .(R.S.Kalyanaraman v. Collector of
Customs, Madras 1978 Tax L.R.1735, at p.1737 (Mad)).
S.113
This section provides for confiscation of goods attempted to be improperly exported. It
states that goods shall be liable to confiscation if:
14. The goods are attempted to be exported by sea or by air from a place other than a
customs port or customs airport appointed for the loading of such goodS.
15. The goods are attempted to be exported by land or inland water through any route other
than a route specified in a notification issued under S. 7 (c) of the Act, for the export of
such goodS.
16. If any dutiable goods or prohibited goods are brought near the land frontier or the coast
of India or near any bay, gulf, creek or tidal river for the purpose of being exported
from a place other than a customs station or port, appointed for the loading of such
goodS.
17. If any prohibited goods are attempted to be exported and for this purpose are brought
within the limits of any customs area.
18. Any dutiable or prohibited goods are found concealed in a package, which is brought
within the limits of a customs port for the purpose of exportation.
19. Any dutiable goods or prohibited goods are loaded or attempted to be loaded in
contravention of the provision of sections 33 or 34 i.e. if loading takes place without
customs supervision or at a place other than an approved loading place.

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20. Dutiable or prohibited goods are loaded or attempted to be loaded on any conveyance,
or water-borne or attempted to be water borne for being loaded on any vessel, the
eventual destination of which is a place outside India, without the permission of the
proper officer.
21. Any dutiable or prohibition goods are not included or are in excess of those included in
the entry mode under the Act or in the case of baggage, in the declaration made under S.
77.
22. Any dutiable or prohibited goods or goods entered for exportation under claim for
drawback do not correspond in any material particular with the entry made under the
Act or in the case of baggage, with the declaration under S. 77 in respect thereof.
23. Any goods entered for exportation under claim for drawback do not correspond in any
material particular with any information furnished by the exporter or manufacturer
under the Act, in relation to the fixation of rate of drawback under S. 75.
24. The goods are those on which import duty has not been paid and which are entered for
exportation under a claim for drawback under S. 74.
25. The goods are those, which are cleared for exportation under a claim for drawback, but
are not loaded for exportation on account of any willful act, negligence order fault of the
exporter, his agent or employee. The goods are liable to be confiscated even if they are
unloaded after having been loaded for exportation, without the permission of the proper
officer.
26. The goods are specified goods in relation to which any provisions of chapter IV-B or of
any rule made under the Act for carrying out the purposes of that chapter are
contravened.
S. 113(d)
The moment the goods are attempted to be exported out of India in contravention of law, the
offence becomes complete in turns of S. 113(d),
rendering the goods liable to confiscation.xxxii
Even if the goods are successfully exported and the goods may not available for confiscation, that
would not wipe out the penal liability.xxxiii
S. 113(c)
In order to attract the provision of S. 113(c), the Department has to firstly establish that the
seized goods will brought near land frontier or the coast of India or near any bay, gulf, creek or
tidal river for the purpose of being exported and secondly, that the silver so brought was to be
exported from a place other than a Land Customs station or a customs port, appointed for the
purpose of loading of such goods.xxxiv
The Supreme Court in Kukma v. state of Rajastanxxxv has held that it is not correct to say that only a
few miles near the frontier can be considered to be adjoining the frontier. It further said that the
entire village, as well as District nearest the frontier could be said to be adjoining the frontier.
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S.114 of the Act makes provision for penalties for attempt to export goods improperly. It states that
any person, who in relation to any goods, does or omits to do any act, which act or omission would
hinder such goods liable to confiscation under S. 113, or abets the doing or omission of such an act,
shall be liable to penaltieS. The penalties imposed by the section are:
1. If the goods are prohibited goods by virtue of this act or any other law for the time being
in force, the penalty would be RS. 1000/- or five times the value of the goods,
whichever is greater.
2. If the goods are dutiable goods, other than prohibited goods, the penalty would be RS.
1000/- or an amount not exceeding five times the duty sought to be evaded, whichever is
greater.
3. If the goods are under claim for drawback the penalty would be RS. 1000/- or an amount
not exceeding five times the amount of drawback, whichever is greater.
The supreme court, discussing the nature of penalties, in a case of Collector of Customs, Madras v.
D Bhoormullxxxvi, ruled that the penalty of confiscation is a penalty in him, which is enforced
against the goods, while the second kind of penalty, that is the penalty under S. 114, is a penalty in
person which is enforced against the person concerned in the smuggling of the goodS. In the case
of the former, the court ruled that it is not necessary for the customs authorities to prove that any
particular person is concerned with their illicit importation or exportation. It is enough if the
Department furnishes prima facie proof of the goods being smuggled stockS. In the case of the
latter penalty, the Department has to prove further that the person proceeded against was concerned
in smuggling.
As per Kanwarjeet Singh v. Collector of Customs,xxxvii the standard of proof required is
preponderance of probabilities, and not beyond reasonable doubt. The tribunal in this case
ruled that it is a settled proposition of law that strict principles of evidence for prosecution in
criminal proceedings do not apply to quasi-judicial proceedings initiated by the Department.
Another important aspect in this regard is whether customs officer are police officer for the
purposes of S. 24, Indian Evidence Act and S. 162, Cr.P.C.
S. 115 of the Act provides for confiscation of conveyanceS. It states that the undermentioned
conveyances would be liable to confiscation.
1. Any vessel, which is or has been within the Indian customs waters, any aircraft which is
or has been in India, or any vehicle which is or has been in a customs area, while
2. Any conveyance from which the whole or any part of the goods is thrown overboard,
stayed or destroyed so as to prevent seizure by an officer of customS.
3. Any conveyance, which having been required to stop or land under S. 106 fails to do so,
except for good and sufficient cause.

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4. Any conveyance from which any warehoused goods cleared for exportation, or any
other goods cleared for exportation under a claim for drawback, are unloaded without
the permission of the proper officer.
5. 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.
Further, the section states that any conveyance or animal used as a means of transport in the
smuggling of any goods or in the carriage of any smuggled goods shall be liable to confiscation,
unless the owner of the conveyance or animal proves that it was so used without the knowledge or
connivance of the owner himself, his agent, if any, and the person in charge of the conveyance or
animal provided that where any such conveyance is used for the carriage of goods of passengers for
hire, the owner of any conveyance shall be given option to pay in lieu of the confiscation of the
conveyance, a fine, not exceeding the market price of the goods, which are sought to be smuggled
or the smuggled goods, as the case may be. The market price, referred to in the section means
market price at the date when the goods are seized.
The burden of proof, as per S. 115(2) is on the owner or his agent or any person in charge of the
vessel to establish that the vessel was used for the purpose of smuggling without their knowledge or
connivance. The term person in charge has been defined under S. 2(31) of he customs Act, an in
relation to the vessel means the master of the vessel. The owner, not only has to prove that he had
no knowledge, but also has to prove that the smuggling was done without the knowledge or
connivance of his agent, if any. It has also to be shown that the owner or his agent had taken all
such precautions against contradiction of the act and ruleS.xxxviii
Another contentious issue is the interpretation of the term police officer under sections 457 and
190 of the Cr.P.C., which have advanced to this section. The Supreme Court in State of Punjab v.
Barkat Ramxxxix held that customs officers cannot be considered to be police officers for the
purposes of the Cr. P.C., since the power of the custom officer are unlike those of police officers,
which are mainly for the effective prevention and detention of crime and in order to maintain law
and order. Since, the powers of a customs officers are not for this purpose, he/she cannot be
considered as a police officer for the purposes of Cr.P.C. and the Evidence Act. Hence, courts
have ruled that a sub-divisional magistrate, under S. 457, Cr.P.C. does not have the power to return
a conveyance seized under the provisions of the customs act.xl
In the case of Indo-China steam Navigation Co. Ltd., v. Jasjit Singh, Additional Collector of
customs, Calcutta,xli there was a contention before the Supreme Court by a foreign company that
seizure of the vessel amounts to a violation under ArtS. 31(1) and 14 of the constitution of India,
since privileges under Art. 19 would not be available to it. Court ruled that the argument cannot be
sustained, since the company to support the plea, would have to fall back upon art. 19(1) (f). Since,
Art. 19 is not available to foreigners, the plea cannot be raised.
Under S. 115(2), a conveyance can be seized if it is used in the smuggling of goodS. It necessarily
has to be used as a means of transport for smuggling the goodS. Mere presence of the goods in the
vessel, would not make it liable for confiscation.

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The proviso to S. 115 talks about the option to pay in lieu of confiscation. The giving of this option
depends upon the character of the vessel. If it is a commercial vessel, bringing goods of others for
hire, and has been registered for that purpose, the option of payment in lieu of confiscation has to
be offered.
S. 116 deals with penalties for not accounting for goodS. It says that 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 to the satisfaction of the Assistant collector of customs,
the liability will be as follows:
1. Increase the goods are goods loaded in a conveyance for importation into India or are goods
transshipped under the provisions of this Act, the person in charge of the conveyance shall be
liable to a penalty not exceeding twice the amount of duty that would have been chargeable on
the goods not unloaded or the deficient goods, as the case may be, had such goods been
imported.
2. In case of coastal goods, the person in charge shall be liable to a penalty not exceeding twice
the amount of export duty that would have been chargeable on the goods not unloaded or the
deficient goods, as the case may be, has such goods been exported.
S. 117 of the act deals with penalties for contravention not expressly mentioned. It is a provision
which provides for a penalty, where such express penalty has not been provided for by the Act. It
says that any person who contravenes any provision of the customs Act or any such contravention
or who fails to comply with any provision of the Act with which it was his/her duty to comply,
where no express penalty is elsewhere provided for such contravention or failure shall be liable to
a penalty not exceeding RS.1000/- The provision is hence, in the nature of a residuary provision.
S-118 deals with confiscation of packages and their contents. It says that where any goods imported

in a package are liable to confiscation, the package and any other goods imported in that package
shall also be liable for confiscation. It further states that where any goods are brought in a package
within the limits of a customs area for the purpose of exportation and are liable to confiscation, the
package and any other goods contained there in shall also be liable to confiscation.
S-118 will not have application where either the offending goods and the non offending goods
have not been imported in a single package xlii
S-119 of the Act makes any goods that have been used for concealing smuggled goods liable to
confiscation. The goods here do not include a conveyance used as a means of transport.
S-120 deals with a situation where the form, state of the smuggled goods are changed. It say that
smuggled goods may be confiscated nourish standing any change in their form. It further states that
where smuggled goods are mixed with other goods in such a manner that the smuggled goods
cannot be separated from such other goods, the whole of the goods shall be liable to confiscation.
However, if the owner of such goods is able to prove 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 goods shall be liable to confiscation.
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S-121 deals with confiscation of sale proceeds of smuggled goods. It states that where any
smuggled goods are sold by a person having knowledge or reason to believe that the goods are
smuggled goods, the sale proceeds thereof shall be liable to confiscation.
Adjudication of confiscations and penalties is a very important area and this is dealt with by S-122
of the customs Act. It gives the pecuniary jurisdiction of the Adjudicating officers. It says that in
every case under the present chapter, in which any thing is liable to confiscation or any person is
liable to a penalty, such penalty or confiscation may be adjusted by a collector of customs or a
Deputy collector of customs. There is no pecuniary bar on their jurisdiction. In case the value of
the goods liable to confiscation does not exceed RS.25000/- , jurisdiction where the value of goods
liable to confiscation does not exceed RS.2500/-, the matter can be adjudicated by a gazetted officer
of customs, lower in rank than an Assistant collector of customs.
The issue is whether civil courts have jurisdiction in these matters. The Act appears to have
impliedly barred the civil court from taking jurisdiction when there is a designated authority under
the Act, provided by S-122, it makes no sense to argue that the civil court can assume jurisdiction.
This is also clear by reading S.9 of the CPC which says that a civil court has the jurisdiction to try
all matters except those expressly or impliedly barred by a statute. That being the case here, it is
the opinion of the author that civil courts do not have jurisdiction. But, under the constitution, high
courts and the supreme court can shell retain their supervisory authority over such tribunals. They
would also be the ultimate applicant bodies. This view was also expressed by the Privy Council in
Mirza Akbar v. King Emperorxliii
The issue of Burden of proof is another important aspect. The basic rule in criminal prosecutions
as laid down in Woolminglon v. DPPxliv is that the prosecution has the burden to prove that the
accused has committed the crime. This burden is reversed if there is a statutory exception. This
statutory exception is provided for by S 123 of the customs Act. This section says that the burden
of proving that the goods are not smuggled goods shall be on the person from whose possession
goods were seized. This applies to certain category moreover of goods as per S. 106 of the Indian
evidence Act, the facts that are specially within the knowledge of the accused have to be proved by
him/her.xlv
A plea of double jeopardy cannot be taken by a person, against whom action has been taken under
this section, since he / she cannot be said to have been prosecuted and punished for an offence, by
vishue of action under this section. This was held by the supreme court in Maqbool Hussain v.
State Of Bombay.xlvi
S 123 of the customs Act deals with the important aspect of Burden of proof. It says that where
any goods to which this section applies are seized under this Act in the reasonable belief that they
are smuggled goods, the burden of proving that they are not smuggled goods shall be, in the case
where seizure is made from the possession of any person, on the person from whose possession the
goods were seized and incase any person, other than the person from whose possession the goods
were seized claims to be the owner there of, on that person. The section further says that in other
cases, the burden of proving that the goods are not smuggled goods would be on the owner of the
goods so seized. The section, dealing with its applicability states that it shall apply to gold and

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manufacturers there of, watches and any other classes of goods, which the central Government may
by notification in the official Gazette specify.
The Supreme Court in Babulal Mehta v. Collector of Customs, Calcuttaxlvii said that for the section
to be applied, the prerequisite is that the customs officer should reasonably believe that the goods
are smuggled. Dealing with the burden of proof in cases where the goods are not notified as
required by S-123, the Supreme Court in Ram Kripal Bhagat v. State of Biharxlviii held that in such
a case once cannot be placed on persons whose goods are seized for violation of other provisions of
the customs Act.
The issue of the definition of Smuggled goods was dealt with by the Supreme Court in Babulal
Amthalal v. Collector of Customsxlix. The court in this case said that Smuggling must be
understood as having the meaning of carrying goods clandestinely into a country. This may be to
evade payment of customs duty or any prohibition or restriction on the import of such goods.
What amounts to Reasonable Belief ? This was the issue in Income Tax Officer, Calcutta v.
Lakshmi Meural Das.l In this case, the court ruled that the reasons for the formation of the belief
must have a rational connection with or relevant bearing on the formation of the belief. Rational
connection, according to the court postulates that there must be a direct nexus or live link between
the material coming to the notice of the officer who seized the gold and the formation of his belief
that it was smuggled gold. The court should not go into the sufficiency or adequacy of the material
and substitute its own opinion for that of the officer concerned. At the same time, the court said
that it should bear in mind that it is nit dry and very material, however vague and indefinite or
distant, remote and far- fetched, which would warrant the formation of the belief relating to
smuggling of gold.
S- 124 of the customs Act makes the issual of a show cause notice mandatory before the goods
are confiscated. It says that no order of confiscation of goods or imposition of penalty can be made
under the present chapter, unless the owner of the goods or the person against whom the penalty is
being imposed is given a notice in writing informing him of the grounds on which it is proposed to
confiscate the goods or impose a penalty. Secondly, the person has to be given as opportunity of
making a representation in writing within such reasonable time as may be specified in the notice,
against the grounds of confiscation or imposition of penalty. Thirdly, the concerned person should
be a given a reasonable opportunity of being heard in the matter. The section, however says that
the show cause notice or the representation may be oral, at the request of the person concerned.
The period within which the notice required under S. 124 is not mentioned. Therefore, unlike S.
110, which deals with the seizure of goods, S. 124 does not mandate a specific time period within
which the show cause notice has to be issued.
S. 125 of the customs Act gives the opinion to pay a fine in lieu of compensation. It states that
whenever confiscation of any goods is authorized by the Act, the officer adjudicating the offence, if
the importation or exportation of such goods is prohibited under the customs Act or any other law
may and in the case of any other goods, give the owner or shall in case the owner is not known, the
person from whose custody or possession such goods have been seized, an option to pay a fine in
view of confiscation. The section further says that without prejudice to S. 115(2),li such fine shall
not exceed the market price of the goods confiscated. In the case of imported goods, this is less the
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duty chargeable there on. The owner or other person, shall in addition to the fine be liable to pay
any duty and charge payable in respect of such goods.
S. 126 of the Customs Act vests the property that has been confiscated or penalty that has been
imposed under the Act in the Central Government. The officer adjudging confiscation has to take
and hold possession of the goods.
The award of confiscation or penalty by Customs officers does not prevent the infliction of any
punishment that the person would be liable for under Chapter XVI of the Act or under any other
law. This is provided for by Section 127 of the Act.

CHAPTER XV
SECTION 128
This section provides for appeals from decisions or orders of customs officers lower in rank
than a commissioner of customs. Appeals from the orders of higher officers are provided for in
S.129-A. Limitation period for an appeal under S.128 is 3 months from the date of the
communication of the original decision or order to the party. This section has to be read with the
Customs (Appeals) Rules, 1982.
DECISION OR ORDER
The expression decision or order is of wide amplitude and includes all orders or decisions
passed under the Cat. The authorities deciding the appeal are quasi- judicial authorities. (Oriental
Paper Mills v. Union of India AIR 1969 SC 48). Decision refers to a real and not a purported
determination.(Union of India v. Tarachand Gupta and Bros. AIR 1971 SC 1556). Order includes
interlocutory order
LIMITATION
For extension of the time-limit, the expression sufficient cause should receive a liberal
construction so as to advance substantial justice when no negligence, inaction or want of bonafides is imputable to the appellant. (DinBandhu v. J.Mangaraj AIR 1954 SC 411). Where the party
had, without preferring an appeal, approached executive authorities including the Ministry of
Finance, and subsequently filed an appeal after the expiry of the time- limit, delay was not
condoned.(Baba Industries v. Asst. Collector of Customs , Customs House, Madras 1988 (17)
E.C.C 279, at pp.282-83 (Mad)) Where the department had initially decided not to contest the
order, and subsequently changed their mind, there was found to be no proper ground for
condonation of delay.( Collector of Customs v. Carborandum Universal Ltd. 1990(47) E.L.T 61, at
p.62(Tribunal)). There is no power to condone delay beyond three months. (Shah Brothers v.
Collector of Customs, Bombay 1988(33) E.L.T 169, at p.171 (Tribunal))

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JURISDICTION OF CIVIL COURTS

Sections 128, 128-A and 137 provide a complete machinery for affording relief against the
levy of duty by Customs authorities. Jurisdiction of civil courts must be deemed excluded.( Union
of India v. A.V. Narasimhalu 1969(2) SCC 653)
However, where the customs authority has not complied with the provisions of the statute or the
officer of Customs has not acted in conformity with the fundamental aspects of judicial procedure
or he has made an order which is not within his competence, or the statute which imposes liability
is unconstitutional or where the order is alleged to be mala-fide, a civil suit will lie for obtaining
relief.( see also Secretary of State v. mask and Co. I.L.R (1940) Mad 599).
MAINTAINABILITY OF WRIT
Exclusion of the jurisdiction of the civil court to entertain a suit does not exclude the
jurisdiction of the High Court to issue high prerogative writs against the illegal exercise of authority
by administrative or quasi judicial tribunals.( Union of India v. A.V.Narasimhalu, Cencus, 1976,
Vol. IV, 31-D, at pp.32-D,33-D,34-D). When there was no justification for the issue of the notice
demanding the payment of Customs duty which in law was not leviable, the order is without
jurisdiction, and a High Court will not stay its hand from giving relief to the petitioner on the
ground that he could have approached the appellate authorities provided under the Customs Act.
(Sethi Bros v. asst Collector of Customs, Excise and Land Customs, Gauhati AIR 1959 Assam
136). Exhaustion of alternate, statutory remedies is a rule of policy that must generally be complied
with , but can be done way with in certain, keeping in mind particular facts ad circumstances.
(Babu Ram Prakash Chand Maheshwarii v. Antarim Zila Parishad 1969 (1) SCJ 878).Where a
writ petition is filed ignoring the provision for appeal under the Cat, the petitioner may be directed
to file the appeal and the delay may be condoned.(A.Z.Industries v. Union of India 1988(16) E.C.R
124, at pp.124,125(Bom). While the jurisdiction of the High Court under Art.226 has not been
taken away, the court cannot disregard legislative provisions and entertain pleas which could be
validly and legitimately agitated before the authorities constituted under Chapter 15 of the Cat,
especially where the case does not involve any vires or legislative competence.(United Linear
Agencies of India Pvt Ltd. v. Union of India 1991 (55) E.L.T 145, at pp.146-147(Mad)). Vires of
any provision off the Customs Act cannot be challenged in appeal under the Act. (Dhirubhai v.
State of M.P AIR 1969 SC 78)
NATURAL JUSTICE
Any order passed under the Act has to be a speaking order, and thw absence of reasons, the
order is liable to be quashed.(Shri Ram Durga Prasad v. Union of India AIR 1962 Punj 360).
Personal hearing has to be given only where the appellant desires it, or the appellate authority
proposes to enhance any penalty or fine in lieu of confiscation or confiscating goods of higher
value. There is no rule of naatural justice that at every stage a person is entitled to a personal
hearing and specially where the appeal is time-barred and there is no violation of any rule of natural
justice if the appeal is dismissed without hearing the appellant. (F.N. Roy v. Collector of Customs
AIR 1957 SC 648). Denial of opportunity to cross- examine witnesses is a denial of natural justice.
(Raja Inports and Exports v. Collector of Customs 1991 (56) E.L.T 220, atp.221 (CEGAT))

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RIGHT OF APPEAL
Right of appeal is available only to the aggrieved arty, and it is necessary for the appellant
to state in the appeal memorandum that he is aggrieved by the decision of the lower authority, and
to substantiate the same. In the absence of this, rejection of the appeal on the basis of absence of
locus standi is well- founded ( STC India Ltd v. Collector of Customs 1989(41) E.L.T 328, at
pp.3031 (Tribunal))
APPEAL DISMISSED ON TECHNICAL GROUNDS
Where the order of the lower authority is dismissed on purely technical grounds, there is
nothing to prevent fresh adjudicatory proceedings by such authority.( Thimmasundaram Tobaco
Company. v. Asst Collector of Customs and Excise, Nellore Division AIR 1961 A.P 324, at p.325)
BINDNG EFFECT OF APPELLATE ORDER
Appellate orders become binding on all subordinate authorities. For instance, when the
appellate authority rules that a particular item has to be assessedc under a particular head, this has
to be followed by all subordinate authorities. (Khemka Travels v. Collector of Customs, Bombay
(1991) 36 E.C.C 217, at p.219 (CEGAT)).
SECTION 128-A
This section specifies the procedure to be followed in appeal by the appellate authority. It
basically requires that certain aspects of natural justice must be adhered to., as has been discussed
under S.128.
SECTION 129
This Section provides for the constitution of the appellate tribunal known as the Customs,
Excise and Gold (Appellate) Tribunal (CEGAT) by the Central Government, and lays down rules
and qualifications for the appointment of members thereto.
SECTION 129-A
This section provides for appeals to the appellate tribunal. First appeal lies from the orders
of the Collector of Customs, and second appeal from the Collector (Appeals) under S.128-A. The
section also provides for certain exclusions i.e, orders relating to certain matters where no appeal to
the tribunal lies. The period of limitation for preferring an appeal to the tribunal is again 3 months.
DELAY
The time spent in prosecuting a writ petition before the High Court can be taken into
consideration for judging sufficient cause for the condonation of delay.( Mirah Dekor (P) Ltd. v.
Collector of Customs 1988 (17) E.C.R 558, at pp.559, 561(CEGAT)).In considering whether delay
should be condoned, considerations similar to those under S.128 apply.

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RIGHT OF APPEAL
Even if the points raised in the memorandum of appeal are frivolous or are covered by
previous decisions, the tribunal cannot be prevented from hearing the appeal that has been
preferred.(General Foods Pvt Ltd.v. Union of India 1989 (41) E.L.T. 64, atp.65 (Cal)). The
collector of Customs has no authority to prefer an appeal from an ordr passed by a hiher authority.
In the instant case, the porder had been passed by the special secretary acting in revisionary
capacity in accordance with the judgement of the Supreme Court in Indo-China Steel Navigation
Company. Ltd. v.Addl Collector of Customs , Calcutta 1983 E.L.T 1392) Right of appeal is only of
that person whose rights are adversely affected by the order against which appeal is
preferred.(Hindustan Foto Films v. Collector of Customs 1989 (43) E.L.T 429 , at p.438
(Tribunal)). The collector is not the aggrieved person in case of an order passed by the Central
Board of Excise and Customs. (Collector of Customs , Calcutta v. Brooke Bond India Ltd. 1990
(26) E.C.R 347, at p.348 (CEGAT)).
WHAT CAN BE RAISED AT THE APPELLATE STAGE
If a particular ground had not been taken while issuing show- cause notice to the appelants
originally, such ground accnot be taken at the appellate stage, or , in other words, thwcustoms
authorities canno make out a completeely different case at the appellate stage. (Susha Electronics
Industries v. Collector of Customs and Excise 1989(39) E. L.T 585, at p.590 (Tribunal)).
Additional grounds of appeal which are of a legal mature can be allowed, but not additional
evidences.(Kerala State Electrnics Development Corporation v. Collector of Customs 1990(50)
E.L.T 51, atp.562(Tribunal))
SECTION 129-B
This section provides for passing of orders by the appellate tribunal, and for the rectification
of any mistakes apparent from the record in these orders within a period of four years from the date
of such order. This is only with respect to rectification of mistakes, and there is no power under the
Act for the tribunal to review its own orders.
The trem mistake apparent from the record indicates that it should be something which appears to
be ex-facie erroneous and is incapable of argument or debate..It is not open to the party to seek
review of the basis of the decision in the garb of a rectification application.( Shri Siri Ram Bansal
v. Collector of Customs, Bombay 1988(16) E.C.R 265, at p.268(CEGAT))
FINALITY
The principle of constructive res-judicata applies here, and the order of the tribunal should
be held conclusive and final even in respect to those issues which the party might have and ought to
have litigated and omitted to do so.(SAIL v. Collector of Customs 1988 (14) E.C.R 413, at
p.417(CEGAT))

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SECTION 129-C
This section lays down the procedure for the hearing of appeals by the tribunal. It has to be
read along with the Customs, Excise and Gold (Control) Appellate Tribunal (Procedure) Rules,
1982.
DIFFERENCE OF OPINION
S,129-C (5) refers only to a difference of opinion arising amongst members of a bench in a
particular case, and not to a case where the members of a bench doubt the correctness of an earlier
decision. However, S.129-C confers the power of reference upon the president, and this power is
wide enough to enable the president to make a reference where the members of the bench are
unable to act because of an impediment arising from what they perceive to be an incorrect decision
(Union of India v. Paras Laminates (P) Ltd. 1990(49) E.L.T T-35, at pp.T-3,T-42(CEGAT))
SECTION 129-D
This section grants to the Board and the Collector the power in the nature of revision. They
can call for the record for the purpose of satisfying themselves of the legality and propriety of any
decision or order. In case they find something amiss, they can direct the authority specified in the
section to apply to relevant authority for deciding disputed points which are specified by the board/
collector. The Board can do so with respect to cases decided by the Collector of Customs, and the
Collector can do so with respect to a decision or order passed by an authority subordinate to him.
The applications are to be made by the Collector deciding the case to the Appellate tribunal or
Customs and Excise Revenues Appellate Tribunal where the direction is given by the Board, and
by the subordinate deciding authority to the Collector (Appeals) where direction to apply is given
by the Collector. These applications would be treated as appeals. The section also provides for
certain specific exclusions to which this power of revision does not apply.
DUTY OF THE BOARD
The Board, before directing the collector to make an application, is expected to examine the
correctness of findings of the deciding authority. The Board is expected to act in a just, fair and
proper manner so that no injustice is done.(Pratibha Silk Mills v. Collector of Central Excise,
Vadodara 1989(20) E.C.R 307, atp.312 (CEGAT))
SCOPE OF THE POWER THAT CAN BE EXERCISED UNDER THIS SECTION
The power of the Collector under this section is revisional in nature, and can lead to a
direction to the deciding authority to apply to the Collector (Appeals) to decide a particular issue.
Therefore, when the collector acted as an original adjudicating authority under this section by
issuing a show-cause notice to the party, the order was without jurisdiction, (Dcor India v.
Collector of Customs, New Delhi 1987(31) E.L.T 400, at p.406 (Tribunal)).The Board can direct
the filing of an application before the tribunal only in respect of suh proceedings which were quasijudicial in nature.(Collector of Customs v.Metro Exporters Pvt Ltd. 1988(37) E.L.T 610, atp.629
(Tribunal)).

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The Board can direct the application to be made either by the collector or the Additioal
Collector.(Collector of Customs v. Mirah Exporters Pvt. Ltd 1987 (29) E.L.T 401,
atp.421(Tribunal))
SECTION 129-DA
This section grants to the Board the power of revision. They can not only examine the
decision or order, as under the previous section, but also pass any order thereon as they think fit.
This is to be done after giving persons who would be affected a reasonable opportunity of being
heard.
SECTION 129-DD
This section grants the Central Government the power of revision in certain cases.
Where there is a complete omission on part of the government to consider the factual features urged
by the petitioner in the revision petition, and the petitioner goes ahead to approach the High Court
under A.226, the High Court cannot convert itself into qa Court of revision. The Court in such
circumstances will be obliged to delete the non- speaking order, and remit the matter to the
revisional authority for a fresh consideration on merits.(George Thangiah v. Union of India 1987
(32) E.L.T 627, at p.631(Mad))
SECTION 129-E
This section provides for the deposit of any penalty levied or any duty due under any
decision during the pendency of an appeal against that decision.In case of duty due on goods,
deposit has to be made only if the goods are not wi8thin the control of the Customs authorities. The
Collector (Appeals) and the Tribunal are given the discretion to waive the deposit in certain
circumstances.
GRANT OF WAIVER
Authorities have considered different kinds of grounds as fit grounds for waiving the
requirement of pre-deposit. In one case, the violation of principles of natural justice by the
adjudicating authority was considered to be sufficient for grant of waiver.(Raja Imports and
Exports v. Collector of Customs 1991(56) E.L.T 220, atp.221(CEGAT)) In another case, the fact
that there was a prima-facie case in favour of the appellant was the basis on which waiver was
granted.(Panchamahal Steel Ltd. v. Collector of Customs, Rajkot 1991 (32) E.C.R 209, at p.210
(Tribunal)). It is not incumbent upon the appellate authority to dispense with the requirement of the
entire deposit. It could consider all the circumstances and waive a aprt of the deposit. It could lso
impose conditions alongside.( V.Vembu Iyer v. Union of India (1973)1 Mys.L.J.258, at p.260.)
TIME LIMIT
There is no time limit provided in the section for deposit. Therefore, once the grounds for
waiver if deposit have been rejected, the appellate authority should direct the party to make the
deposit within a reasonable time. If this is not done, the authority has the jurisdiction to reject the
appeal (Deochand Sarda v. Union of India AIR 1976 Gau 21, at p.24.)
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SECTION 130
S.130 speaks of reference being made to the High Court of certain matters. A reference
could be made under this section if the question of law to be referred to the High court arises out of
S.129-B. It is settled law that the tribunal is under no obligation to refer settled questions of law.
(S.D.Sakpal v. Collector of Customs (P), Bombay 1988(33) E.L.T 181, at p.185(Tribunal)).
PROVISO
The proviso to S.130(1) is restrictive in nature, and therefore the tribunal has no power to
condone delay beyond the specified period. (Brij Kishore Maheshwari v. Collector of Customs
1987 (13) E.C.R 126, at p.129 (CEGAT))
WHAT QUESTIONS CAN BE REFERRED
The section makes it clear that only questions of law can be referred. It was held that the
question whether the non-framing of rules contemplated under S.115 forms a valid defence is a
question that is referable under S.130.(Great Eastern Shipping Co Ltd. , Bombay v. Addl Collector
of Customs , Vishakhapatanam 1988 (33) E.L.T 594, at p.597 (Tribunal))

CHAPTER XVI
Chapter XVI of the Customs Act deals with Offences and Prosecution. It states that
whoever makes, signs or uses or causes the same to be done on the transaction of any business
relating to customs knowing that such a thing is false will be liable for imprisonment for 6 months
or fine or both. lii Similarly, if a person obstructs a customs officer in the exercising of his / her
duty, he / she will be liable to the same punishment.liii Similar punishment is provided for a person
who refuses to get himself / herself X Rayed to determine whether he / she has ingested any goods
that are liable for seizure under the Customs Act.

CHAPTER XVII
SECTION 141
The section provides for the control of Customs officers over goods and conveyances.
Where goods are seized by the Customs authorities and subsequently there is an order by the
appellate authority setting aside the order of the Customs officer, it is the duty of the Customs
authorities to return the goods in proper condition to the importers. The state government (through
its officers) is charged with the duty of maintaining the property intact.(State of Guajrat v. Memn
Mohd. Haji Hasam AIR 1907 SC 1885)
The government may also be liable to pay compensation for damage to goods in certain cases
(Oswal Spinning and Weaving Mills Ltd v. Collector of Customs 1988(16) E.C.R 424, at p.426)

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SECTION 142
This section lays down the methods for recovery of sums due to the Government in respect
of duty, penalty, recoverable drawback etc.
SECTION 143
This section grants the Assistant Collector of Customs the discretion to allow a person to
import/export before fulfilling the conditions which he is ,in law required to fulfill for such
export/import, on the execution of a bond by that person.
SECTION 143-A
SECTION 144
This section gives the proper officer the power to take samples of goods when they are
passing through a customs area.
SECTION 146
The section lays down the requirement for a Customs House Agent to be licensed under the
Regulations made under this section.
SECTION 147
This section lays down the general principle that anything required to be done by an owner,
importer or exporter under the Act can be done by their agent. Both the principal and agent are,
under this section liable for any act or omission which fastens liability on them under the Act.
However, it is also laid down that except in cases of wilful act, negligence or default of the agent,
liability shall not ordinarily be fastened on him. This can be done only if the Assistant collector is
of the opinion that the amount cannot be recovered from the owner. This indicates a situation where
all steps have been taken to recover the amount from the owner, but recovery was not possible due
to some reason or the other. Difficulty of contacting the importer by post cannot suffice.(Mohd.
Ghouse K.M and Co. v. Asst Collector of Central Excise and Customs (1980) 9 Excus C/63, at pp.C
66-67.
SECTION 148
The agent of a person in charge of a conveyance is liable for obligations of such person
under the Act, and to consequent penalties and confiscations.
SECTION 150
This Section lays down the procedure for the sale of goods under the Act. This is not
applicable to confiscated goods.

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SECTION 151
The section names officers who are empowered to assist customs officers.
SECTION 151-A
The section empowers the Board to issue directions of a general nature to Customs officers.
SECTION 152
This section empowers the central government to delegate the powers exercisable by certain
authorities under the Act to certain additional authorities, if it so thinks fit.
SECTION 153
The section lays down the alternative methods of serving any order, decision, notice or
summons under the Act,. Reference may be made to S.27 of the General Clauses Act, which states
that the ordinary presumption is that effective service has been made once the document is properly
addressed, pre-paid and posted.
SECTION 154
Acceptance of the value as declared by the appellants in the Bill of entry by the Customs
officer does not constitute a clerical or arithmetical mistake.(Minerals and Metals Trading
Corporation of India Ltd. v. Collector of Customs, Bombay 1987 (28) E.L.T 128,
atp.131(Tribunal)) This section has to be read with S,27 and both have to be construed
harmoniously. Refund is not possible under S.154 as it would render the mandatory bar of S.27
useless.(Kelvinator of India Ltd v. Collector of Customs 1988 (17) E.C.R 414, at p.415 (CEGAT))
SECTION 155
This section provides protection to the central government and its officials in respect of
duties performed or intended to be performed in good faith under the Act. This protection does not
extend to a situation where the officer ignores the procedure specified under the Act.(Sakuntala Bai
v. VenkataHrishna Reddi AIR 1948 F.C 128) A suit against the Collector of Customs for damage
caused to the plaintiffs goods while in the custody of the former must fail, unless it is proved that
the damage was occasioned by the wilful act or neglect of the former.(Monoranjan Roy v. Collector
of Customs AIR Cal 753)
SECTION 159
The fact that a notification is required to be laid before the parliament under this section
does not substantially affect the jurisdiction of the court to pronounce on its validity.(Indian
Express Newspapers Pvt Ltd v. Union of India (1985)4 E.C.C 111, atp.149

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Lakshman Shenoy v. Income Tax Officer, (1958) 34 I .T.R. 752(S. C.).

ii

Wallace Brothers and Co. Ltd. V. Commissioner of Income Tax (1948) I.T.R. 240, Kesoram Industries and

Cotton Mills Ltd. v. C.W.T (1965) I.T.R.767.

iii

1988 (37) E.L.T. 118.

iv

AIR 1991 SC 1931

AIR 1991 SC 764.

vi

AIR 1960 Cal 452.

vii

1987 (32) E.L.T. 465.

viii

( 1975) 77 Bom. L.R. 380.

ix

1988 (33) E.L.T. 22.

1990 (47) E.L.T.. 93.

xi

(1985) 22 E.L.T. 714.

xii

(1990) 50 E.L.T. 508(Cal).

xiii

1975 J.S.C.T.R.8.

xiv

(1989) 41 E.L.T. 392.

xv

AIR 1977 SC 456.

xvi

International Computers (India) Manufacturers Ltd. v. Union of India, 1981 E.L.T. 632.

xvii

Collector of Customs, Bombay v. Presto Works, Jallandhar, 1987(28) E.L.T.469.

xviii

S.44.

xix

S.167(37) r/w S.29, Sea Customs Act.

xx

1988 (38) ELT 401.

xxi

AIR 1958 Ker. 47, 50

xxii

M.G Abrol v. Amichand, AIR 1961 Bom 227.

xxiii

(1985) 20 E.L.T. 3(All).

xxiv

Supdt. Of Customs and Central Excise v. Ravichand, AIR 1970 Guj. 273.

xxv

1990 (48) E.L.T. 224.

xxvi

AIR 1975 Punj.130.

xxvii

AIR 1972 S.C. 689.

xxviii

AIR 1988 S.C. 1474.

xxix

1983 E.L.T.2130.

xxx

1987 (11) E.C.R. 22.

xxxi

1989 (39) E.L.T. 6(Raj).

xxxiixxxii

Penguin Mfg. International v. Collector of Customs and Central Excise, 1988 (35) ELT 388.

xxxiii

Ibid.

xxxiv

Natwarlal Jethalal Solanki v. Collector of Customs, Ahmedabad, 1988 (34) ELT 257.

xxxv

AIR 1965 SC 476.

xxxvi

(1974) 2 SCC 544.

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xxxvii

1990 (47) ELT 695

xxxviii

Laxmi Sahni v. Additional collector of Customs, 1990 (47) ELT 108.

xxxix

AIR 1966 SC 1746

xl

Assistant collector of customs v. Tilak Raj, AIR 1969 Del. 301

xli

AIR 1964 SC 1140

xlii

- Rishi Exports V Collulor of customs, 1988 (37) ELT 7.

xliii

AIR 1940 PC 176

xliv

(1935) AC 462.

xlv

See Collect of Customs v. Sampathu Chetty, AIR 1962 SC 316, Sombunath Mehra v. State of Ajmer, AIR

1956 SC 404.
xlvi

AIR 1953 SC 325.

xlvii

AIR 1957 SC 877

xlviii

AIR 1970 SC 951.

xlix

AIR 1957 SC 877.

AIR 1976 SC 1753.

li

Refer to the part on S.115.

lii

Section 132.

liii

Section 133.

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