Detention and Storage of goods, Indian Customs Manual 2023


Indian Customs guidelines on Detention and Release/Storage of Imported/Export Goods


Chapter 15 of India Customs Manual 2023 explains about the guidelines about detention and storage of goods.  

The said Customs Manual  updated till 31st December, 2022  mainly elaborates the  Guidelines for expeditious Customs clearance/provisional release and  Guidelines for provisional release of seized imported goods pending adjudication under Section 110A of the Customs Act, 1962.

Please read below Chapter 15 of Customs Manual 2023:

Chapter 15: Detention and Release/Storage of Imported/Export Goods

1. Introduction:

1.1 Normally, the goods liable for confiscation under the Customs Act, 1962 are seized by the

Customs. However, in some cases where seizure is not practicable, it may become necessary to

detain the goods for investigation. The provisions for detention of goods are contained in Section

110 of the Customs Act, 1962. The goods are detained for various reasons and at the instance of

various agencies of the Department, such as the Directorate of Revenue Intelligence, the

Directorate General of Goods and Services Tax Intelligence, Narcotics Control Bureau and

Directorate of Enforcement and even other agencies, like the Central Bureau of Investigation.

Once order for detention of goods is served to the owner of the goods, he cannot remove, part

with, or otherwise deal with the goods except with the prior permission of the proper officer of the

Customs. During investigation and subsequent adjudication proceedings, if the contravention of

provisions of the Customs Act, 1962 and other allied laws is established, action is taken against

the importers/ offending goods as provided in the law. In other cases, the charges are dropped at

initial stages or at the appeal stage.

1.2 In respect of goods detained at the port/airport/ICD/CFS/LCS etc, the custodians of goods demand

their dues for storing the goods (i.e., the warehousing charges) from the importers/ exporters.

Likewise, the shipping lines demand container detention charges for the period the goods are kept

in their custody. When the goods are detained for a long period, the warehousing/demurrage

charges and container detention charges become high. In cases where the charges against the

importers or exporters are dropped, the Customs usually issues detention certificates for the

period when goods were under detention. The custodians normally remit the detention/demurrage

charges wholly or partially on the basis of detention certificates issued and recommendation made

by the Customs. However, it is not obligatory, as held in some recent Court judgments that

custodians must waive the rentals payable to them.

1.3 The Apex Court examined the matter of quantum of demurrage and payment of demurrage in the

cases of International Airport Authority of India vs. Grand Slam International [1995 (77) ELT 753

SC] and Trustees of Port of Madras vs. Nagavedu Lungi & Co., [1995 (80) ELT 241 SC] and held

that detention charges and warehousing charges are payable to the custodians and shall be paid

by the exporter or the importer even where the Customs detention has been finally held as


2. Guidelines for expeditious Customs clearance/provisional release:

2.1 To avoid delays in the release and minimize hardship to the trade if goods remain detained

pending investigation into any dispute in relation to assessment etc., the stress is on expeditious

assessment/investigations. Further, unless the goods are prohibited or involved in serious fraud

even if there is a dispute in assessment etc., provisional release option is given to the importers.

2.2 Goods are not to be detained on simple valuation or classification disputes. If it becomes

necessary to detain the goods for investigation of any serious suspected fraud etc., the importer/

exporter must be intimated in writing that he may shift the goods to a bonded warehouse under

Section 49 of the Customs Act, 1962, with a clear indication that if he does not avail of this facility

and the goods incur demurrage, etc., he would have to bear the demurrage and other charges

levied by the custodian/other agencies.

2.3 Seized imported goods shall be released provisionally, upon request of the owner of the seized

goods, subject to executing a Bond for the full value / estimated value of the seized goods.

2.4 In addition to the Bond, a Bank Guarantee or security Deposit to cover:

• The entire amount of duty/differential duty leviable on such goods;

• Amount of fine that may be levied in lieu of confiscation under Section 125 of the Act;

• Amount of penalties that may be levied under the Act as applicable at the time of


• The competent authority may increase or decrease the amount of Security Deposit.

2.5 The adjudicating authority, specifying the reason, may deny provisional release of any goods

which are liable to confiscation under Section 111 of 113 or as defined as “Prohibited Goods under

section 2(33) (Malabar Diamond Gallery Pvt Ltd Vs Additional Director General, Directorate of

Revenue Intelligence, Chennai- 2016 (341) E.L.T 65 (Mad.).


2.6 Distinction between Provisional Assessment & Provisional Release: The Hon`ble Madras High

Court in the Malabar Diamond Gallery Pvt Ltd Vs Additional Director General, Directorate of

Revenue Intelligence, Chennai- 2016 (341) E.L.T 65 (Mad.), held that although the import of gold

was not prohibited, if the import was in violation of the Conditions attached to such import amounts

to smuggling and that a prayer for release could be refused. Further, the Hon`ble High Court of

Delhi in Petrochemical & Polymers Vs. The Addl. Director General, DRI & Anr, held that the

power under Section 110A of the Act involves exercise of discretion & the scope of judicial review

if the discretion has been rightly exercised, that treatment of all types of wrongful imports on an

equal footing might result in miscarriage of justice, hence the said Section leaves some margin to

the Customs in the exercise of their discretion.

2.7 The Bond shall contain an undertaking that the importer shall pay the duty, fine and or penalty as

the case may be adjudged by the Adjudicating Authority.

2.8 Further, where security is furnished by way of Bank Guarantee, the Bank Guarantee should

contain a clause binding the issuing Bank to keep it renewed valid till final adjudication of the case.

In the case of non-renewal of guarantee, the guaranteed amount be credited to the Government

account by the Bank on its own.

2.9 While provisional release of seized imported goods under Section 110A of the Customs Act, 1962

may normally be considered by the competent adjudicating authority upon a request made by the

owner of the seized goods, provisional release shall not be allowed in the following cases –

(i) Goods prohibited under the Customs Act, 1962 or any other Act for the time being in force;

(ii) Goods that do not fulfill the statutory compliance requirements/obligations in terms of any Act,

Rule, Regulation or any other law for the time being in force;

(iii) Goods specified in or notified under Section 123 of the Customs Act, 1962;

(iv) Where the competent authority, for reasons to be recorded in writing believes that the

provisional release may not be in the public interest.

[Refer circular 35/2017 dated 16.08.2017]


3. Guidelines for provisional release of seized imported goods pending adjudication under

Section 110A of the Customs Act, 1962.

3.1 The provisional clearance should be allowed as a rule and not as an exception. Provisional release

may not be resorted to in the cases mentioned in para 2.9 but here too option for storage in

warehouses under Section 49 of the Customs Act, 1962 should be provided to the importers

(goods can be allowed entry into the country only after the laid down quality standards etc. are


3.2 In case of containerized cargo, wherever the parties are not in a position to execute bond and

bank guarantee for taking provisional release or the Department is of the view that clearance

cannot be allowed, the goods may be de-stuffed after giving notice to all concerned and stored in

the port`s godowns and warehouses to avoid container detention charges.


3.3 In order to ensure expeditious clearance of export cargo it is provided that:

(a) In case the export goods are found to be mis-declared in terms of quantity, value and

description and are seized for being liable to confiscation under the Customs Act, 1962, the

same may be ordered to be released provisionally on execution of a Bond of an amount

equivalent to the value of goods along with furnishing an appropriate security in order to

cover the redemption fine and penalty.

(b) In case the export goods are either suspected to be prohibited or found to be prohibited in

terms of the Customs Act, 1962 or ITC (HS), the same should be seized and appropriate

action for confiscation and penalty initiated.

(c) In case the export goods are suspected of mis-declaration or where declaration is to be

confirmed and further enquiry / confirmatory test or expert opinion is required (as in case of

chemicals or textiles materials), the goods should be allowed exportation provisionally. The

exporters in these cases are required to execute a Bond of an amount equal to the value of

goods and furnish appropriate security in order to cover the redemption fine and penalty in

case goods are found to be liable to confiscation. In case exports are made under any

Export Promotion / Reward Schemes, the finalization of export incentives should be done

only after receipt of the test report / finalisation of enquiry and final decision in the matter.

The Bond executed for provisional release shall contain a clause to this effect.

(d) Export goods detained for purpose of tests etc., must be dealt with on priority and the export

allowed expeditiously unless the prohibited nature of goods is confirmed. Continued

detention of any export goods in excess of 3 days must be brought to the notice of the

Commissioner of Customs, who will safeguard the interest of the genuine exporters as well

as the revenue.

3.4 Wherever in adjudication proceedings, the parties have been allowed to clear the goods on

payment of redemption fine and penalty and parties, instead of clearing the goods on payment of

fine and penalty, prefer an appeal, they will have to pay demurrage/ detention charges, etc., even

if they succeed in appeal, as the liability has arisen due to their filing appeal and not clearing the

goods for which option was available.

3.5 The Departmental officers will be held accountable for cases where detention of goods have been

ordered on insufficient and weak grounds resulting in unconditional release of detained goods in

adjudication stage itself, where importers have to suffer avoidable demurrage charges/loss by

pilferage etc.

[Refer Instruction F.No. 450/82/95-Cus. IV, dated 7-7-1997 and Circulars No.42/2001-Cus,

dated 31-7-2001 and No.1/2011-Cus, dated 4-1-2011]

3.6 Board has reiterated that special care will have to be taken by field formation to avoid any

unwarranted delays in clearance that may lead to possible demurrage liability on Customs. Where

for justifiable reasons in certain types of exceptional situations, release of consignments is not

considered advisable even on provisional basis, options must be given by sending intimation in

writing to the importers / exporters or their agents to keep the goods in warehouses in terms of

Section 49 of the Customs Act. It should be made clear that if the facility is not availed and the

goods incur any demurrage, the importers/exporters will be wholly responsible for its payment.

[Refer Instruction F.No.450/160/2011-Cus.IV, dated 13-2-2012]

3.7 There can be no justification to hold up export consignments for long periods unless the export

goods are prohibited under Customs Act, 1962 or ITC (HS) Policy. Essentially, genuine exports

must be facilitated and there should be no delays or hold ups of export goods. Therefore, the

Board has reiterated that it shall be the responsibility of Commissioner of Customs concerned to

ensure strict compliance of extant instructions in this regard and deviation or lapse shall be

proceeded against.  Refer Circular No. 30/2013- Cus., dated 5-8-2013

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