CONFISCATION OF GOODS AT NHAVA SHEVA CUSTOMS, Customs - Exim - SEZ

[Anwar Uddin]

Dear Sir/Madam

One of my customers shipment is on HOLD at nhava sheva customs since last three months, shipment contains Copper bracelet which was declared Other articles of Copper, at time examination 178 kgs weight found short out of 1800 kgs, the examiner kept this shipment on HOLD for weight short & also told that shipment will fall under Artificial Jewellary, they confiscated goods and imposed redemption fine under section 125 plus penalty under section 114(iii) and 114AA, and also rejected export incentives, Our Customer paid the full amount of Redemption fine/penalties, and again approached to customs officer with challan paid to customs, but still officer asking for a letter stating that you'll not file appeal against this order and still shipment on HOLD after one week of payment of penalties, Can you please advise if they are correct and still can HOLD this shipment? Your urgent reply will be highly appreciated.

Thank you.

Anwar

Posts / Replies

[YAGAY andSUN]

Thank you for providing the detailed facts. Based on your situation, several legal and procedural aspects under Indian Customs Law must be considered. Here's a structured analysis and advice:

🔍 Summary of the Case:

• Export Item: Copper bracelets (declared as “Other Articles of Copper”).

• Issue Raised:

  • 178 kg short out of 1800 kg shipment.

  • Customs claims misdeclaration of goods as “Other Articles of Copper” instead of Artificial Jewellery.

• Action Taken by Customs:

  • Goods confiscated under Section 111 of the Customs Act, 1962.

  • Redemption fine imposed under Section 125.

  • Penalties under:

    • Section 114(iii) – for attempted export of prohibited/misdeclared goods.

    • Section 114AA – for knowingly submitting false documents/statements.

  • Export incentives rejected (likely due to misclassification/misdeclaration).

• Current Status:

  • Penalties/fines paid in full.

  • Customs officer now demanding a written undertaking not to file an appeal, and shipment is still on hold even after a week of payment.

⚖️ Legal Analysis:

1. Can the shipment still be held after payment?

   • NO, if the redemption fine and penalties have been paid and no conditions remain to be fulfilled under the adjudication order, the goods should be released.

   • Customs is bound to release the goods on payment of redemption fine unless:

     • There is a specific clause in the adjudication order delaying release.

     • They suspect further investigation or fresh legal action (which must be communicated in writing).

2. Can they ask for a letter not to file an appeal?

   • NO, such a requirement has no legal basis under the Customs Act or any procedural circular.

   • You (or your customer) have a statutory right to appeal under Section 128 of the Customs Act.

   • Asking for a waiver of appeal in exchange for release is procedurally improper and possibly coercive.

3. Is there any justification for continued hold post payment?

   • Only if:

     • The shipment is part of a broader investigation (e.g., DRI/ED), and written orders exist.

     • DGFT/licensing violations are being looked into.

     • The adjudication order itself specifies further steps or clearance from another authority.

   • In all cases, you are entitled to a written explanation for the delay under Section 26 of the Right to Information Act or through formal customs query.

✅ Immediate Steps You Can Take:

1. Write to the Deputy/Assistant Commissioner of Customs (Export Division), Nhava Sheva:

   • Reference the O-I-O number, payment challan, and request immediate release of goods.

   • Attach a copy of the payment proof and mention that no appeal has been filed yet, but reserving the right to appeal is legal.

2. File a grievance with the ICEGATE grievance redressal portal or PG Portal.

3. Seek personal hearing with the supervising officer (Joint/Additional Commissioner) and demand:

   • Written clarification if further hold is required.

   • If no legal reason exists, seek a release memo for immediate clearance.

4. File RTI if delay continues, asking:

   • Who is authorizing the continued hold?

   • What legal provision justifies the demand for a “no appeal” letter?

🧾 Conclusion:

• The officer cannot lawfully insist on a “no appeal” undertaking.

• Once penalties/fines are paid and redemption is complete, goods must be released.

• You should escalate to senior officers and consider legal recourse if no action is taken.

*** 

[YAGAY andSUN]

Below is a professionally drafted letter addressed to the Customs authority requesting immediate release of the consignment and objecting to the demand for a "no appeal" undertaking:

To,
The Deputy Commissioner of Customs
Export Department
Jawaharlal Nehru Customs House (Nhava Sheva)
Sheva, Taluka Uran, District Raigad
Maharashtra – 400707

Subject: Request for Immediate Release of Consignment Post Payment of Redemption Fine and Penalty – Objection to “No Appeal” Undertaking Requirement

Reference:
Order-in-Original No: [Insert O-I-O Number]
Exporter: [Customer Name]
Shipping Bill No: [Insert SB No.] dated [Insert Date]
Amount Paid: ₹ [Insert Amount] via Challan No. [Insert Challan No.] dated [Insert Date]

Respected Sir/Madam,

We write this letter with reference to the above-mentioned consignment that is currently on hold at Nhava Sheva Customs. We would like to bring to your kind attention that pursuant to the adjudication order issued under the referenced Shipping Bill, the redemption fine and penalty imposed under Sections 125, 114(iii), and 114AA of the Customs Act, 1962 have been fully paid on [insert date], vide the challan cited above.

We understand that once the conditions imposed under the Order-in-Original have been fully complied with—including payment of the redemption fine and penalty—the goods are eligible for release. However, despite compliance, the shipment continues to be held, and our customer has been verbally requested to submit a written declaration stating that no appeal will be filed against the said adjudication order.

We respectfully submit that such a demand has no basis in law. The right to appeal under Section 128 of the Customs Act, 1962 is a statutory right, and cannot be restricted or waived as a pre-condition for release of goods. Moreover, the Order-in-Original does not contain any clause that withholds release subject to any such undertaking. As such, any continued withholding of goods after full compliance with the adjudication order would amount to an arbitrary action and would be contrary to the principles of natural justice and administrative fairness.

We therefore request your good office to:

1. Immediately release the said consignment in accordance with the redemption clause of the adjudication order.

2. Confirm in writing the legal provision (if any) under which such an undertaking is being demanded.

3. Ensure that the matter is not unduly delayed, causing further commercial and reputational loss to the exporter.

We are hopeful of your urgent attention and a favorable resolution in accordance with law and equity.

Thanking you,
Yours sincerely,

[Your Name]
[Designation]
[Name of Exporter or CHA/Consultant]
[Email ID] | [Phone Number]
[Address]

[Anwar Uddin]

Dear Sir

Goods confiscated under section 113(i) and 113(ia) and redemption fine under section 125

Regards

Anwar

[YAGAY andSUN]

I will check the Legal Position and will revert by tomorrow.

[YAGAY andSUN]

Here's a consolidated legal and procedural response regarding the confiscation under Sections 113(i), 113(ia), redemption fine under 125, and the current issue of shipment still being on hold after payment.

✅ Legal Position Summary:

🔹 Sections Involved:

Section 113(i) – Goods liable for confiscation if exported against a prohibition under law.

Section 113(ia) – Goods liable for confiscation if concealed to misdeclare value, quantity, or description.

Section 125 – Permits release of confiscated goods on payment of redemption fine, at the discretion of Customs.

Section 114(iii) – Penalty for attempt to export goods that are prohibited or improperly declared.

Section 114AA – Penalty for knowingly using false or incorrect documents in export.

⚖️ Key Legal Points:

1. Right to Release After Redemption Fine Paid

Under Section 125(1):

"The confiscated goods shall be returned to the person on payment of the fine imposed, subject to the fulfillment of other conditions, if any, specified in the adjudication order."

✅ Therefore, once redemption fine and penalty are paid, and no further legal restrictions (like prohibition orders or parallel investigations) exist, Customs must release the goods.

2. Can Customs Demand a “No Appeal” Undertaking?

❌ No, this is not legally permissible.

Section 128 of the Customs Act provides a statutory right to appeal within 60 days of the Order-in-Original.

Customs cannot compel the exporter to waive this right.

It would amount to coercion and violation of natural justice if release is made contingent on not appealing.

3. Ongoing Hold Despite Payment – Is It Justified?

Only valid if:

The Order-in-Original specifically withholds release pending any other authority’s clearance. There is a written communication regarding DRI, ED, or DGFT issues. If none of the above apply, this is procedural delay without legal standing.

📢 What You Should Do Immediately:

Official Letter as You Drafted (Excellent Draft Above):

Use your draft to formally demand release, citing the full compliance with the order.

Object clearly to the “no appeal” request.

Escalate to Higher Authorities:

Email or physically submit the same to the Joint Commissioner or Commissioner of Customs (Export).

Mark a copy to Commissioner (Export Promotion) and Chief Commissioner, Mumbai Zone II for added visibility.

Grievance Filing:

File a complaint on ICEGATE Grievance Redressal Portal

Also raise it via PG Portal.

Use RTI if Delay Continues:

File an RTI seeking:

Reasons for delay after payment.

Legal authority demanding “no appeal” letter.

Status of any investigation, if applicable.

📝 RTI Sample Question:

“Please provide a certified copy of any instructions, internal note, or direction under which Customs is holding the consignment covered under SB No. XXX dated XXX despite full payment of redemption fine and penalty. Also confirm whether any legal basis exists for asking the exporter to submit a written statement that they will not appeal.”

Appendix – A

Here's a clear and concise explanation of goods confiscated under Section 113(i) and 113(ia) and redemption fine under Section 125 of the Customs Act, 1962 (India):

🔹 Section 113 of the Customs Act – Confiscation of Export Goods

Section 113 lists the circumstances under which export goods can be confiscated by Customs authorities.

➤ Section 113(i)

Goods are liable for confiscation if:

“Any goods which are attempted to be exported or brought within the customs area for the purpose of being exported, in violation of any prohibition imposed under this Act or any other law for the time being in force.”

🔹 Example: Trying to export endangered species or narcotics, which are prohibited under other laws.

➤ Section 113(ia)

Goods are liable for confiscation if:

“Any goods found concealed in a manner that shows intent to misdeclare the quantity, quality, or value for the purpose of export.”

🔹 Example: Hiding extra gold bars inside machine parts meant for export, without declaring them.

🔹 Section 125 – Option to Pay Fine in Lieu of Confiscation (Redemption Fine)

Even when goods are liable to confiscation, under Section 125, the adjudicating authority may allow the owner to redeem the goods on payment of a fine, called a redemption fine.

This is at the discretion of Customs.

Redemption fine is in addition to any duty and penalty payable.

📝 Key Points:

Confiscation doesn’t always mean the goods are taken away permanently.

The owner can pay redemption fine and get the goods back.

Redemption fine amount is based on the market value of the goods and severity of the offense.

📌 Summary Example:

If an exporter tries to smuggle out undeclared gold hidden inside machinery (a violation under Section 113(ia)), Customs can confiscate the goods. But under Section 125, the exporter may be allowed to pay a redemption fine (say, ₹5 lakhs) to reclaim the goods.

***