Customs Appeals, Settlement, Offences and Allied Laws
This domain tests customs appellate remedies and pre-deposit, the settlement mechanism, offence and confiscation provisions, and the allied laws of FEMA and COFEPOSA.
Appeals
Section 128 provides a first appeal to the Commissioner (Appeals) within 60 days. Section 129E requires pre-deposit of 7.5% of the duty demanded or penalty levied, capped at ₹10 crore. A further appeal lies to the CESTAT under section 129 within 60 days. Appeals on substantial questions of law go to the High Court under section 130 and to the Supreme Court under section 130E. The department may also appeal; no pre-deposit is required for departmental appeals.
Settlement
The Settlement Commission under the Customs Act has been discontinued; the Finance Act, 2021 omitted the relevant chapter, and pending cases were transferred to the Interim Board for Settlement. New settlement applications are therefore not available.
Offences and penalties
Sections 111 and 113 provide confiscation of improperly imported or exported goods. Section 112 imposes penalties for improper import, section 114 for improper export, and section 114A for short levy. Section 125 permits redemption fine. Section 135 provides prosecution for evasion and fraudulent drawback.
Allied laws
FEMA, 1999 regulates foreign exchange transactions, with adjudication under section 13, appeal to the Appellate Tribunal, and compounding. COFEPOSA, 1974 provides preventive detention for smuggling and foreign exchange violations.
Worked example
An order confirms duty of ₹1 crore and penalty of ₹20 lakh. An appeal to the Commissioner (Appeals) requires pre-deposit of 7.5% of the duty, that is ₹7,50,000, subject to the ₹10 crore cap.
Traps
- Filing a first appeal directly before the CESTAT.
- Assuming the Settlement Commission still accepts new applications.
- Ignoring the redemption fine and confiscation exposure.