CUSTOMS ACT 1962

1878 Sea Customs Act was the earlier one.

1962 Customs Act replaced it.
17 chapters marked I to XVII
Sections 1 to 161

Chapter - IPreliminary
Section 01
Title Customs Act 1962
Extent: Whole of India
Section 2
Definitions: 50 definitions with numbers 1 to 45
Important definitions:
import, with its grammatical variations and cognate
expressions, means bringing into India from a place outside
India;
export, with its grammatical variations and cognate
expressions, means taking out of India to a place outside
India;

Section 2 contd
goods includes (a)vessels, aircrafts and vehicles; (b)stores;
(c)baggage;(d)currencyand negotiable instruments;
and(e)anyother kind of movable property;
prohibited goods means any goods the import or
export of which is subject to any prohibition under
this Act or any other law for the time being in force
but does not include any such goods in respect of
which the conditions subject to which the goods are
permitted to be imported or exported have been
complied with;
smuggling, in relation to any goods, means any
act or omission which will render such goods liable to
confiscation under section 111 or section 113;

Section 2 contd
customsairport means any airport appointed
under clause (a) of section 7 to be a customs
airport;
(11)customs area means the area of a
customs station and includes any area in which
imported goods or export goods are ordinarily kept
before clearance by Customs Authorities;
(12)customs port means any port appointed
under clause (a) of section 7 to be a customs port
and includes a place appointed under clause (aa)
of that section to be an inland container depot;

Chapter - IIOfficers of
Customs

Officers of CustomsCC AC and

others as may be appointed.
Officers can exercise powers given
by act
Senior can exercise juniors power
Govt has power to authorise other
Cen/state govt officers to exercise
Customs officers powers.

Chapter - III Appointment of Customs

Ports, Airports, Warehousing Stations e
tc.
(sec above
7 to 10)
Board can notify
places and

also land , rail and river routes,

LCSs , ICDs, CFSs for Customs
purposes

Chapter - IVProhibitions on impo

rtation and exportation of
goods (sec 11)
Board can prohibit specific goods for reason of

security,
morality,
Law & order,
antismuggling,
forex consrvn
Protection of life,
patent,
trademarks,
industry

Fulfiling
international
obligation
Prevention of
contravention of
law
Conserve resource
etc

Chapter - IVA/IVB
Detection of illegally imported
/Exported goods
and prevention of the disposal the
govt can notify
Notified goods
reof
smuggling prone

imported for
goods to strictly
personal use are
monitor their
not affected by
import.
these sections.
people handling
Also certain classof
them need to
goods may be
intimate place of
exempted from this
storage, maintain
if govt thinks fit
accounts properly
(Chapter IVC)
Sec 11A11G
and sell against
and 11H-11M
proper vouchers.

Chapter - VLevy of, and Exemption fr

om, Customs Duties
SECTION 12.Dutiable
goods. (1) Except as
otherwise provided in this Act,
or any other law for the time
being in force, duties of
customs shall be levied at
such rates as may be specified
under the Customs Tariff Act,
1975 (51 of 1975)], or any
other law for the time being in
force, on goods imported into,
or exported from, India.

Charging sec. Most

imp

SECTION 14.Valuation of goods

Transaction value, the price
actually paid or payable for the
goods when sold for export to India
for delivery at the time and place of
importation, or as the case may be,
for export from India for delivery at
the time and place of exportation,
where the buyer and seller of the
goods are not related and price is
the sole consideration for the sale
subject to such other conditions as
may be specified in the rules made
in this behalf :
We shall treat them in greater
detail in our session on
Valuation.

End session 1

Chapter - VLevy of, and Exemption fr

om, Customs Duties
Sec 17: Assessment
Imp/exp self assessment
Assessing officer may call
for documents, test, verify
If self assmt found wrong
AO can Reassess after
following Natural justice
and pass speaking order.
If no re assessment , AO
may audit such
transactions afterwards.

Sec18 Prov. Assmt

Importer unable to assess and
requests for assessment by
AO or
AO feels test necessary
Or AO deems necessary to
make further inquiry in case
all documents produced or
not produced
PA is ordered with security to
cover prov and final assmt

Sec 18(2): When PA is finalised, for

Home consumption clearance-difference
is paid or refunded. For Wh goods,

Chapter - VLevy of, and Exemption fr

om, Customs Duties

Sec 18 contd

Power to exempt

18(3,4)
Interest to be paid by
either party if amount
not settled within
month of finalisation.
18(5)
Refund amount goes to
Welfare fund if
difference passed
on,/goods for personal
use, /diff. relates to
DBK,

Sec 25
By notification (absolutely
of subject to conditions to
be flfilled) from whole of
part of duty leviable as
per tariff.
By spl order , casewise
NO duty if liability upto Rs
100.
Clarification can be
inserted within one yr of
notificn.

Chapter - VLevy of, and Exemption fr

om, Customs Duties
Of import duty
Refund
(SEC 26A)
Of export duty if Defective goods
paid (sec 26)
not worked upon,
identified by AC as
If goods returned
imported one and
to exporter except
exported or title
re sale.
relinquished or
If goods re
destroyed or
imported within
declared of NCV
one yr
within 30days of
Application within
clearance
six months of

Chapter - VLevy of, and Exemption from, Cu

stoms Duties

Refund(contd)

Application to be
made within 6
month of relevant
date
No refund for
perishable goods
beyond shelf life.
Sec 27A
Interest payable on
refund delayed
beyond 3 months

Sec 27
Refund claim(duty or
interest): to AC within 1 yr
of payment
Refund amount goes to
Welfare fund if difference
passed on,/goods for
personal use, /DBK is
permissible for the case
28D: incidence
presumed to be passed
on unless proved OW

Chapter - VLevy of, and Exemption from, Cus

toms
Duties
SECTION
28.Recovery of duties not levied or
Non/short
levy/erroneous
short-levied or erroneously
refunded

Non/short levy/erroneous
refund (not for any
offence)
Demand notice within a
year of relevant date(duty
and interest).
If dues paid before
demand and informed-no notice if appropriate
officer finds it alright. If
found short again , notice
for difference to be
issued..

refund for
fraud,collusion,wilful
misstatement/suppression
Demand within 5 yrs with
interest (28AA) and
penalty demand.
If everything is paid(with
25% of duty demanded as
penalty), matter
concludes after the officer
checks and finds all
satisfactory. OW demand
for the differential.
Interest payable even if
not expressly demanded.

Chapter VIconveyance carrying

impex goods
Section 29: no
incoming craft or vessel
to land anywhere except
customs port/airport
Provisoexcepting
accident or other
unavoidables , in which
case nearest
Customs/police auth to
be informed and no
goods shifted WO their
permission.

Section 30
Incoming
vessel/craft/vehicle
carrying import goods to
submit detailed import
manifest within 12 hrs of
arrival or beforehand.
Disobedience 50000 Rs
penalty for person in
charge.
Amendment allowed if
cause is found genuine
and unavoidable

Chapter VIconveyance carrying

impex goods (sec 31 to 42)
Unloading of import
goods not permitted
without
Entry inward
Approved places
Customs Supervision
Working days except
prior notice and
payment of fees.
NO conveyance to
leave WO written order

Loading export
goods not permitted
without
Entry outward
Being passed by
Customs Officer
Export manifest

Officers empowered
to board vessel and
ask for documents

Chapter VII Clearance of IMPEX

goods
Sec 46:
Bill of Entry to be
submitted (for WH or
Home consumpn)
electronically after IGM
or within 30 days prior
to arrival of vessel
Electronic submission
can be waived by
Commissioner in
suitable cases.

Sec 47
Proper officer satisfied
about no malafide and
full payment of duty
order for clearance for
home consumption.
Interest chargeable(10
to 36% as fixed) if not
paid within 5 days of
return of BE for
payment.

Chapter VII Clearance of

IMPEX goods
Sec 48: If goods not cleared
within 30 days of unloading or
such time as allowed by proper
officer, or relinquished, custodian
can sell them off under
permission of proper officer with
intimation to importer.

End session 2

Chapter VIII (S 5256)Transit/transshipment

Transit goods
Goods mentioned as transit goods in
Import manifest donot attract duty(S 52)
Transhipment goods
To another country after touching Indian soil- bill of transit
to be filed (prescribed form)
To another country under an international treatyA
Transhipment declaration and no duty (prescribed form) No
duty
To another Indian Customs Destination: Allowed WO duty
against Bill of Transhipment.
Transitted or transhipped to another Indian destination:
formalities and duty liability at destination.

Chapter IX: WAREHOUSING

(Sections 57-73)
Public warehouses or
private WHs can be
appointed/licensed for
deposit of dutiable goods
at any Customs stn
For WH of goods
assessed U/S 17/18,
bond for double the @
assessed for observance
of all conditions,
payment of dues and
rents and penalties.

WH period
Capital goods for
100%EOU-5yrs (extendible
as deemed fit by Commr)
Other goods for 100%
EOU-3 yrs and all others1
yr. (extension not
exceeding 6 mnths by
Commr or any other
period)
WH license
cancellation:clear or
relocate to another WH
within 7 days or such time
as deemed fit by proper
officer.

Chapter IX: WAREHOUSING

(Sections 57-73)
Manufacturing can be
done in WH
If exported, no import
duty. If cleared in DTA,
import duty of portion
of WH goods included
in product.(S65)
Illegitimate clearance,
clearance as sample,
overstay at WH
forthwith payment of
all dues and penalties
on demand.

WH goods can be
cleared for Home
consumption on
presentation of a HC B/E
and payment of all
duties and WH rents
WH goods can be
exported on presentation
of proper SB on payment
of all dues like Export
duty applicable,
penalties rent etc.

Chapter X-Drawback(S 7476)

S-74
S-75
Re-export within 2 yrs of duty On export of goods
paid import thru
manufactured out of
Normal
imported material with a
channel/port/baggage
value addition.
Goods identifiable as such
Tobe given on imported
duty paid imports
material part
98% of import duty payable as
Unnecessarily large value
DBK
addition not allowed.
(Time extendible by proper
If sale proceeds not
officer)
received within stipulated
period, dbk is to be
S-76
reversed or adjusted.
If market price is less than DBk
or DBk is less than 50 Rsno
DBk.

Chapter XIII Search Seizure

arrest(100 to 110A)
If proper officer has
reason to believe that
a person landing from
or boarding in a
foreign origin or
foreign bound
vessel/craft/vehicle or
any person in a
Customs area has
secreted about his
person, any goods
liable to confiscation
or any documents
relating thereto, he

102-to take person to be

searched to gazetted officer of
Customs or a magistrate if so
desired.
104: power to arrest
general or special order of the
Commissioner of Customs
reason to believe that any person
in India or within the Indian
customs waters has committed an
offence punishable under any of
section 132 133 135 ,135A or 136.
Arrested person to be taken to a
magistrate.
Customs officer has powers of a
police officer WRt release on bail
or OW as under CrPC.

Chapter XIII Search Seizure

arrest(100 to 110A)

SECTION 105.Power to
search premises.

Also been made applicable to

Central excise with suitable
modification

SECTION 106.Power to
stop and search
conveyances.
SECTION 106A.Power to
inspect. Any proper
officerauthorisedin this
behalf by the Commissioner
of Customs may, for the
purpose of ascertaining
whether or not the
requirements of this Act have
been complied with, at any
reasonable time, enter any

SECTION 107.Power to examine

persons. Any officer of customs
empowered in this behalf by general
or special order of the Commissioner
of Customs may, during the course
of any enquiry in connection with
the smuggling of any goods,
(a)requireany person to produce
or deliver any document or thing
relevant to the enquiry;
(b)examineany person acquainted
with the facts and circumstances of
the case.
SECTION 108.Power to summon
persons to give evidence and
produce documents.

Back to end

Back to end

Chapter XIII Search Seizure

arrest(100 to 110A)
Perishable goods seizure

SECTION 110.Seizure of
goods, documents and things.
Ifthe proper officer has reason to
believe that any goods are liable
to confiscation under this Act, he
may seize such goods:
where it is not practicable to
seize any such goods
Supurdnamah
Also been made applicable to
Central excise with suitable
modification

110A Provisional release of seized

goods before adjudication on
permission by adjudicating authority
with conditions, bonds etc as fixed by
adjudicating auth.

(as notified by Govt)

Can be disposed of during
seizure
During seizure:

Inventory,
photographs,
Sample drawal.
Witnesses.

No notice U/S 124 within 6

months of seizure= seizure
to be lifted (Time extendible
by Commissioner upto 6
months..

Chapter XIV-confiscation and penalty

(S 111-127) highlights

Import:S 111 Confiscation and Section 112 PenaltyExport S113 Confiscation, section 114 Penalty
(dutiable or
prohibited goods)
Unauthorised

Import/exports,
Routes,
landing place,
Clearance from
WH/Cus area
Concealment

Contrary to baggage
rules
Undervalued/less
duty paid by wrong
notification/classificat
ion.
Etc.

Chapter XIV-confiscation and

penalty (S 111-127) highlights
S 114A
Penalty for short
levy/non levy in fraud
collusion suppression
wilful misstatementEqual to duty and
interest.
If duty_interest+penalty
voluntarily paid within
30 days of
determination-25% of
duty and/or interest

No penalty U/s
112,114 if 114A
clause invoked.
114AA: False
/misleading
document
submissionupto 5
times value of
goods.

End session

Chapter XIV-confiscation and

penalty (S 111-127) highlights

S 115: Conveyance
confiscation
1. Altered for concealment
2. Thrown goods overboard
3. Asked to stop but
disobeyed.
4. Conveyance entering
India has substantial
goods missiong
5. Conveyance from which
WHd goods or drawback
export goods
unauthorisedly unloaded.
6. Conveyance used for
smuggling goods.
Also been made applicable

SECTION 117.Penalties for

contravention, etc., not expressly
mentioned.
SECTION 118.Confiscation of
packages and their contents.
118(a) import situation Also been
made applicable to Central excise
with suitable modification
118(b)-export situation.

SECTION 119.Confiscation of
Also
been
goods used for concealing
made
SECTION 120.Confiscation of
applica
smuggled goods notwithstanding
ble to
any change in form, etc.
Central
smuggled goods
excise
SECTION 121.Confiscation of
with
suitable
sale-proceeds of smuggled
modific
goods.

Back to end

ation

Chapter XIV-confiscation and

penalty (S 111-127) highlights
SECTION
122.Adjudication of
confiscations and
penalties
SECTION 124.Issue of
show cause notice
before confiscation of
goods, etc
Also
been

made
applica
ble to
Central
excise
with
suitabl
e
modific
ation

Notice in writing with the prior

approval of the officer of
Customs not below the rank
of an Assistant Commissioner
Natural justice principals
observed

SECTION 125.Option
to pay fine in lieu of
confiscation.
SECTION 126.On
confiscation, property
to vest in Central
Government.
SECTION 127.Award of
confiscation or penalty
by customs officers
not to interfere with
other punishments.
Back to end

CHAPTER XIV A Settlement of

cases
Application
before
adjudication
Admits offence
Pays additional
duty and
interest.
On receipt The
commission asks
applicant by a
notice why its

On hearing explanation
commission admits or rejects
application.
If admitted , adjudicating
authority asked for records
and report.
On receipt if necessary
Commr(investigation at
Settlement Comm asked to
further investigate
Then hearing of both sides
and settlement. Settlement
amount cannot be less than
duty+interest together.
(Partys benefit is Benefit is
probable reduced penalty)

CHAPTER XV Appeals and

Revision

SECTION 128.Appeals to
SECTION 129D.Powers
Commissioner (Appeals)
of Committee of Chief
SECTION 128A.Procedure
Commissioners of
in appeal to C(Appeal)
Customs or
(against this: RA to Central
Commissioner of
Govt U/S129DD)
Customs to pass certain
orders (commissioners
SECTION 129.Appellate
adjudn reviewd and if
Tribunal(judicial member,
necessary appeal to
Technical member and a
CESTAT ordered.
high court judge or other
Appeal against CESTAT
member as president.
order lies with High
court(S 130)
130E (RA)High court of its
own or being appealed for
and finding fit may certify a
case to be fit for appealing
to the Supreme Court

CHAPTER XVI Offences and

prosecutions
SECTION 132.False
declaration, false
documents, etc
SECTION 133.Obstruction
of officer of customs
ECTION 134.Refusal to be
X-rayed.
SECTION 135.Evasion of
duty or prohibitions

138C micro films, facsimile

copies of documents and
computer print outs admissible
as documents and as evidence.

SECTION 135A.Preparation
for illegalexport
SECTION 136.Offences by
officers of customs for acts
resulting in fraudulent
export or duty evasion.
SECTION 137.Cognizance
of offences. (1) No court
shall take cognizance of any
offence under section 132,
section 133, section 134 or
section 135 or section 135A,
except with the previous
sanction of the Commissioner
of Customs.

CHAPTER XVII Misc

Recover
y
142.Recovery
of sums due to Government.
(1) 3[ Where any sum pay- able by any
person] under this Act is not paid,(a) amount deductible from other payables
by Customs
(b) recovery by detaining and selling any
goods belonging to such person which are
under the control of Department
if above fails, Certificate specifying @
due to be sent to District Collector where
the persons property exists for recovery
(2) Same method applies in case of dues
arising out of bonds or other instrument
executed under this Act or

(b), (c)
Also
been
made
applica
ble to
Central
excise
with
suitabl
e
modific
ation

Back to end

CHAPTER XVII Misc

150. Procedure for sale of goods and application of saleproceeds.
(1) Godds not confiscated but sold (overstay in WH or perishable
Also
goods seized) to be sold after intimation to owner.
(2) The proceeds of any such sale shall be applied-

(a) to meet sale expenses

(b) freight and other charges
(c) payment of duty if any
(d) Custodian dues
(e) any other govt dues from owner
Balance will be paid to owner of goods.

been
made
applica
ble to
Central
excise
with
suitabl
e
modific
ation

Back to end

Customs provisions applicable

to Central Excise

Section 12 in the Central Excise Act, 1944

The Central Government may, by notification in the Official

Gazette, declare that any of the provisions of the
1[Customs Act, 1962 (52 of 1962)] relating to
levy of and exemption
drawback
warehousing,
offences and penalties,
confiscation, and
procedure relating to offences and appeals
with such modifications and alterations as it may consider
necessary or desirable to adapt them to the circum
stances, be applicable in regard to like matters in respect
of the duties imposed by section 3.

Customs provisions applicable to Central Excise

Sub-section (1) of Section

105

See slide 24

Section 110

See slide 25

Section 115 [excluding clauses

(a) and (e) of sub-section (1)]

See slide 28

(clause (a) of Section 118,

Sections 119, 120, 121

(See slide 28

Section 124

See slide 29

Clause (b) clause (c) of subsection (1) of Section 142

see slide 33

Section 150

see slide 34

End session 4