DAY 10 | SEARCH → SEIZURE →ARREST → CONFISCATION & REDEMPTION FINE
India’s Customs Act empowers officers to search, seize, arrest and confiscate in revenue related offences— yet each step is fenced in by deadlines, evidentiary rules and judicial precedents. Day 10 distils this high-stakes journey into one coherent roadmap.
1 │ Statutory Spine – Customs Act 1962
| Stage | Section(s) | Core power | Statutory limits & safeguards |
| Intelligence & Entry | Section 100 (entry-into-premises) | Officer may enter land or building if goods are “liable to confiscation”. | Must carry authorisation (Supdt./ Appraiser+) except in factory; reasons recorded in file. |
| Search of Persons | Section 103 | Personal search; right to be taken before Gazetted officer /Magistrate on demand; female search by female officer. | Panchnama with two independent witnesses; copy to person. |
| Search of Premises | Section 105 | Warrantless if “reason to believe”; superior officer to record grounds. | Search list (Form C-23) signed by witnesses; video-graphy encouraged (CBIC Cir. 23/2022). |
| Seizure | Section 110(1) | Take possession of goods/documents/ things; issue seizure memo (panch-nama). | – SCN within 6 months (+6 months with Comm’r reasons).• Value note & test memo to importer. |
| Provisional Release | Section 110A | Bond + BG + duty & penalty surety. | No 6-month SCN extension if goods released (Delhi HC ★ Forech India 2015). |
| Arrest | Section 104 | Non-bailable if evasion > ₹50 lakh; Gazetted officer only. | Immediate grounds to arrestee; medical exam; produce before magistrate within 24h (BNSS). |
| Confiscation | Section Section 111 (imports) / 113 (exports) | Grounds: mis-declaration, prohibited goods, forged docs, improper removal, etc. | Strict liability (SC ★ A & K Nair 1972). |
| Redemption Fine | Section 125 | Importer may redeem; fine ≤ market value; duty still payable. | Quantum guided by profit margin & gravity (SC ★ Weston Components 2000). |
| Penalties | Section 112, 114 | Personal penalty on importer/agent for confiscable goods. | Requires culpable mental state (Kanpur Leather 2003). |
| Appeals | Section 128A → CESTAT → HC → SC | 60 days (C/A) + condonation 30 days. | Deposit 7.5 % (first appeal), 10% (second) of duty/fine/penalty. |
2 │ End-to-End Procedural Flow
Tip / Risk flags
│
├─► Authorised SEARCH (s.105 / 103)
│ └─► Panch-nama + List (2 witnesses)
│
SEIZURE (s.110) ← officer forms “reason to believe”
│
├─► Provisional release? (s.110A)
│ └─► Bond + BG + conditions
│
Show-Cause Notice (s.124) ← 6 months clock
│
Adjudication
│ • Absolute confiscation
│ • or Confiscation + Redemption fine (s.125)
│
├─► Payment of duty + fine + penalty → Release
│
└─► Appeal ladder (Commissioner-A → CESTAT → HC → SC)
Parallel track: ARREST (s.104) if evasion > ₹50 L
└─► BNSS bail / remand → Criminal trial (EC Court / CJM)
3 │ Frequently-Litigated Touch-Points
| Issue | Practical pointer | Leading precedent |
| Validity of search | Insist that officer notes “reason to believe” in file; challenge vague authorizations. | Ram Narain Bishwanath (SC 1976) – substance over form but grounds must exist. |
| Delayed SCN | After 6 (+6) months, seizure lapses; seek return + costs. | Ganesh Chandra Dholakia (SC 2023). |
| Redemption fine quantum | Fine ≤ market value minus landed cost; cite profit margin. | Weston Components (SC 2000) – proportionality. |
| Voluntariness of 108 statement | Retract early; seek medical. | Vinod Solanki (SC 2009) – timely retraction crucial. |
| Bail for customs arrest | Non-bailable but compoundable; cite health, cooperation. | Sunil Gupta (Bom HC 1993) – customs offences bailable by Magistrate. |
4 │ Landmark Judgments
| # | Citation | Ratio decidendi |
| 1 | A & K Nair (SC 1972) | Confiscation is civil; mens rea not required |
| 2 | Ram Narain Bishwanath (SC 1976) | Seizure list need not be formal if witnesses credible. |
| 3 | Deepak Mahajan (SC 1994) | Customs officers have CrPC (BNSS) arrest powers. |
| 4 | Weston Components (SC 2000) | Fine may coexist with penalty; cannot exceed market value. |
| 5 | K.T.M.S. Mohd. (SC 1992) | Confession to Customs officer admissible unless coerced. |
| 6 | Om Prakash (SC 2011) | Customs offence is non-cognisable; police FIR invalid. |
| 7 | Noor Aga (SC 2008) | Reverse burden valid but Customs must first establish “foundational facts”. |
| 8 | Vinod Solanki (SC 2009) | Retraction timing decides evidentiary weight of Section 108 statements. |
| 9 | Hero Pioneer (SC 2007) | Redemption fine must reflect profit & gravity. |
| 10 | Radheshyam Kejriwal (SC 2011) | Criminal acquittal doesn’t bar adjudication unless findings overlap. |
| 11 | Ganesh Chandra Dholakia (SC 2023) | Delay beyond Section 110 limit vitiates confiscation; return goods & pay costs. |
| 12 | G.M. Knitting (SC 2015) | Interest payable after warehousing even if goods under seizure |
| 13 | State of Gujarat v. Mohanlal Porwal (SC 1987) | Courts must balance revenue & trader hardship in release orders. |
| 14 | CCE v. Hissar Spg. Mills (P&H HC 2012) | Provisional release order appealable; HC can direct early release. |
| 15 | CCE v. Finesse Creation (CESTAT2022) | Confiscation set aside where SCN served on customs broker instead of importer. |
5 │ Nexus with New Criminal Codes
Bharatiya Nyaya Sanhita 2023 | Bharatiya Nagarik Suraksha Sanhita 2023 | Bharatiya Sakshya Adhiniyam 2023
- BNS Section 2(1)(c) adopts “cognisable / non-cognisable” definitions → Customs arrests remain non-cognisable unless expressly made cognisable.
- BNSS Section Section 35–48 now govern all arrests. Customs officers under Section 104 must:
- a) Issue digitally generated Arrest Memo (BNSS Form I).
- b) Facilitate “one phone call” & counsel within 3 hours.
- c) Produce arrestee before CJM / EC Court within 24 hours.
- BNSS Section Section 184-193 search procedure mirrors Section 100/105; take video or body-cam where practicable.
- BSA Section Section 22–24 set tests for voluntariness of statements; importer’s Section 108 statement assessed under these clauses.
(Customs Act overrides prevail on substantive offences; new codes govern procedure/evidence.)
6 │ FTP Intersection
| Customs action | FTP fallout |
| SCN for mis-declared origin | DGFT may suspend IEC under FTP paragraph 2.20. |
| Confiscation of export goods | Shipping bill invalidated; RoDTEP & IGST refund blocked. |
| Redemption fine + duty paid | Duty “paid” date governs EPCG duty-saved calculation. |
7 │ Practical Cases
A. Two Illustrative Case-Stories
| Stage | Story 1 – Assessee Ultimately Wins | Story 2 – Assessee Ultimately Loses |
| 1. Import & Intelligence | ABC Industries files BoE for 1 × 40’ container of “polyester film, duty-paid value ₹78 lakh.” DRI receives tip that no anti-dumping duty (ADD) has been declared. | XYZ Traders files BoE for “LED strip lights” (duty-free under EPCG). Intelligence shows container also holds e-cigarettes (prohibited). |
| 2. Search & Seizure (Section Section 100, 105, 110) | Joint team searches ABC’s factory; finds invoices & ADD notifications in order. They still seize container, alleging ADD evasion. Panchnama served. | 1. Officers’ open container at port, draw panchnama; seize entire consignment under Section 110(1) for misdeclaration & prohibited goods. |
| 3. Provisional Release (Section 110A) | Commissioner allows provisional release: ₹30 lakh BG + bond. ABC provides docs within 15 days. | XYZ requests release; Customs rejects citing “prohibited goods.” Stock deteriorates in port yard. |
| 4. Show-Cause Notice (Section 124) | SCN issued on Day 140 (within six months) demanding ADD + penalty. | SCN served on Day 210 (after 6 months) claiming absolute confiscation personal penalty. |
| 5. Defence & Evidence | ABC produces DGTR ADD schedule, supplier’s EU origin certificate; lab test confirms EU origin exempt from ADD. | XYZ’s invoices show only LED strips; no mention of e-cigs. Test report confirms e-cigarettes. XYZ claims ignorance, blames freight forwarder. |
| 6. Adjudication Order (Section 125/ Section 112 | Commissioner drops confiscation; demands ADD only. Personal penalty waived. | Commissioner orders absolute confiscation of e-cigs, redemption fine ₹40 lakh on LED strips + penalty ₹10 lakh on director. |
| 7. Appeal Outcome | C(A) upholds dropping of ADD; department’s appeal dismissed by CESTAT citing Ram Narain & Section 110A compliance. Assessee wins; BG released. | CESTAT upholds order; HC refuses relief citing Om Prakash (SC) — ignorance no defence, prohibited goods strict liability. **Assessee loses; fine + duty paid. |
| Key Reasons | Timely SCN; sound documentary proof; proper provisional release; relied on Weston Components for proportionality. | Late SCN argument failed (goods prohibited, Section 124 proviso); ignorance defence rejected; relied on A & K Nair strict liability. |
B. Top 10 Practical Pain-Points & Experience-Driven Tips
| Pain-Point (Seen in practice) | Why it arises | Experience-Based Tip / Reference |
| 1. Search authorisation too generic | Boilerplate “reason to believe” | Ask for copy; record protest; rely on Ram Narain Bishwanath (SC 1976). |
| 2. Seizure but no SCN even after 6 + 6 months | Back-log or weak case | File writ for release citing Section 110 time bar & Dholakia (SC 2023). |
| 3. High redemption fine near market value | Officer uses max discretion | Cite Weston Components for proportionality; submit profit-margin evidence. |
| 4. Bond & BG quantum excessive | “Triple” rule misapplied | Show landed-cost worksheet; BG equals differential duty, not CIF value. |
| 5. Statement under Section 108 obtained at midnight | Pressure tactics | Retract in writing within 24 h; rely on Vinod Solanki (SC 2009). |
| 6. No video or independent panch | Manpower shortage | Argue credibility gap; CBIC Cir 23/2022 urges video-graphy. |
| 7. SCN addressed to broker, not IEC holder | Clerical lapse | Raise jurisdictional objection; Finesse Creation (CESTAT 2022) sets aside similar order. |
| 8. Bail denied in customs arrest | Magistrate treats offence as cognisable | Cite Sunil Gupta (Bom HC 1993) & BNSS bail sections; show medical & cooperation. |
| 9. Delayed test report blocks provisional release | Lab queue | Seek release based on provisional test + surety under Section 110A; HC precedents permit. |
| 10. Goods deteriorate during seizure | Poor port storage | File early release motion; claim remission of duty or damages quoting Mohanlal Porwal (SC 1987). |
7 │ Complete Compliance Calendar
| Task | Deadline / Trigger |
| Issue SCN after seizure | 6 months (+6 months) |
| File reply & evidence | 30 days (Reg. 3(3) Adjudication Regs 2013) |
| Adjudication order | 365 days from SCN (Board Instr. 03/2023) |
| Payment of RF & duty | 30 days from order (else interest + penalty) |
| Appeal to C(A) | 60 days (+30 condonation) |
| Appeal to CESTAT | 3 months (+3 condonation |
Your Turn: Which segment of the seizure-to-fine journey needs the most clarity—grounds of arrest, SCN timelines, or fine negotiation? Drop your questions and let’s dissect them!
Feedback /suggestions welcome at CA Navjot Singh | navjot.singh@taxtru.in | +91 9953357935
Disclaimer
The information shared in this post (and throughout the 30-Day Customs Series) is provided solely for general, educational purposes. It is not intended to be—and should not be relied on as—legal advice or a substitute for professional guidance tailored to your specific facts and jurisdiction.
- No attorney-client relationship is created by reading, commenting on, or sharing these materials.
- Customs statutes, regulations, circulars and court rulings are subject to change, and their application can vary with minute factual differences.
- While every effort is made to quote current law and landmark judgments accurately, no warranty—express or implied— is given as to completeness, timeliness or fitness for a particular purpose
- You should consult a qualified customs or trade lawyer, or other licensed professional adviser, before acting (or refraining from acting) on any information herein.
- The authors, contributors and publishers disclaim all liability for any loss, damage or penalty arising from reliance on this content, whether in contract, tort (including negligence) or otherwise.
- By continuing to read or share this material, you acknowledge and accept the above terms.
About the Author & Office Locations
CA Navjot Singh is a seasoned indirect-tax specialist with deep expertise in Customs, Foreign Trade Policy and GST. He delivers strategic advisory and hands-on execution to conglomerates, Fortune 500 companies and high-growth enterprises.
- Key architect of long-term retainership models that pre-empt audit objections and mitigate litigation risk.
- Designs India-wide GST frameworks that optimise tax and cash-flow while dovetailing cross-border VAT regimes (EU VAT, GCC VAT).
- Advises clients through assessment proceedings, prepares robust submissions and representations, and drafts precise replies to show-cause notices, audit objections and spot memos.
- Represents taxpayers before adjudicating authorities, the Tribunal, the Sales-Tax Revisionary Board and the West Bengal Taxation Tribunal.
- Conducts comprehensive GST-impact assessments, incentive-scheme evaluations and cash-flow modelling; recommends mitigation strategies as benefits phase out.
- Prepares advance-ruling applications and engages with GST-Council committees to shape interpretative guidance.
- Develops end-to-end dispute-resolution roadmaps, from pre-litigation negotiation to appellate and judicial forums.
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