Adjudicating authority can now allow provisional release of seized goods u/s 110A of Customs Act, 1962 – no need to put up file to the Commissioner

NEW DELHI, FEB 28, 2011: SECTION 110A was inserted in the Customs Act, 1962 by section 26 of the Taxation Laws (Amendment) Act, 2006 w.e.f 13.07.2006.

It reads –

“SECTION 110A. Provisional release of goods, documents and things seized pending adjudication. - Any goods, documents or things seized under 110, may, pending the order of the adjudicating officer , be released to the owner on taking a bond from him in the proper form with such security and conditions as the Commissioner of Customs may require.”

It may be noted that even before the insertion of this section, goods, documents or things seized under section 110 of the Customs Act, 1962 were being released to the owner on provisional basis on execution of bond along with such security in the form of Bank Guarantee as the Commissioner may require.

Incidentally, on the Central Excise side, the vintage rule 206(3) of the Central Excise Rules, 1944 laid down the following in the matter of release of seized goods. It read –

“(3) Anything seized by a Central Excise Officer may, pending the orders of the adjudicating Central Excise Officer , be released to the owner on taking a bond from him in the proper Form, with such security as the Commissioner may require.”

Admittedly, the power to seize was being exercised by the Central Excise officers through section 110 of the Customs Act, 1962 owing to section 12 of the Central Excise Act, 1944 and the notification 68/63-CE as amended.

Be that as it may, as mentioned, the Customs Act, 1962 saw the insertion of section 110A by the Taxation Laws (Amendment) Act, 2006 for more clarity.

Nonetheless, pending the order of the adjudicating officer, the goods/documents/things could be released on a provisional basis ONLY by the Commissioner of Customs. Possibly this was creating administrative difficulties inasmuch as since as per the revised monetary limits of adjudication prescribed by the Board vide Circular 23/2009-Cus dated 01.09.2009 even the Additional Commissioner/Joint Commissioner could adjudicate cases involving duty/value of Rs.50 lakhs and the Asst. Commissioner/Deputy Commr. could decide cases involving value of Rs.2 lakhs. So also, in the case of Baggage, the Additional Commissioner or Joint Commissioner continued to adjudicate the cases without limit.

The section is, therefore, amended by clause 46 of the Finance Bill, 2011 so as to substitute the words “adjudicating officer” and “Commissioner of Customs” by the words “adjudicating authority”.

Accordingly, the ‘adjudicating authority' is now being empowered to allow release of seized goods.

Needless to mention, this was long overdue and the amendment would be welcome by the ‘adjudicating authority' and the Commissioner too.

Interestingly, the Central Excise Supplementary Manual [para 3.2 (Part 1) of Chapter 17] [as on 01.03.2005] mentions the following about provisional release of seized goods –

“3.2     The power to release seized goods emanates from the power to seize. The goods seized may be released provisionally under bond in the Format specified under the erstwhile Central Excise Rules, 1944 [B-11 bond] along with 25% security or surety by the officer who is normally competent to adjudicate the case. The adjudicating officer will also consider the importance of such goods for evidence, and will release the goods provisionally if the bond is furnished….”

A step ahead…as always.