CBIC revises guidelines on arrest, prosecution for Customs violations

Central Board of Indirect Taxes & Customs has streamlined the monetary limit for exercising arrest, prosecution and bail with respect to offences committed under the Customs Act

Central Board of Indirect Taxes & Customs (CBIC) has streamlined the monetary limit for exercising arrest, prosecution and bail with respect to offences committed under the Customs Act. While revising these guidelines, the circulars, issued on August 16, also provided detailed scenarios, which could trigger action like arrest for violating the Customs rules.

According to the indirect tax body’s circulars, outright smuggling of high-value goods such as precious metals like gold and unauthorised import of goods — where market value exceeds Rs 50 lakh — could trigger prosecution and arrest. 

Meanwhile, cases involving duty evasion and mis-declaration of goods worth Rs 2 crore or above will also face similar action. 

Similarly, if the amount of fraudulent availment of drawback or any exemption from duty in connection with export of goods exceeds Rs 2 crore, it will also trigger arrest. 

“While the Act (Customs) does not specify any value limits for exercising powers of arrest, it is clarified that arrest in respect of an offence should be effected only in exceptional situations,” CBIC said while spelling out the scenarios.

However, this threshold of value would not apply to certain items, including ammunition and explosives, antiques, art treasures, wildlife and endangered species. “In such cases, arrest if required, on the basis of facts and circumstances of the case, may be considered irrespective of the value of offending goods involved,” the CBIC note said.

Further, for cases involving non-declaration of foreign currency exceeding Rs 50 lakh by foreign nationals and non-resident Indians (NRIs) at the time of departure, prosecution need not be considered as a routine. That is, if it is claimed to be legally acquired but not declared inadvertently.

“CBIC has not merely increased the threshold monetary limit for arrest, prosecution and bail but has also provided a more illustrative list of scenarios where offences can lead to arrest. This move will help in reducing litigation and bring in more clarity for both importers and the Customs department,” Saurabh Agarwal, tax partner, EY, said.