WAIVER OF SHOW CAUSE NOTICE UNDER SECTION 124 OF CUSTOMS ACT, 1962

Issue of show cause notice before confiscation

Section 128 of the Customs Act, 1962 (‘Act’ for short) provides the procedure for issue of show cause notice before confiscation of goods. The said section provides that no order confiscating any goods or imposing any penalty on any person shall be made unless the owner of the goods or such person-

• is given a notice in writing with the prior approval of the officer of the Customs, not below the rank of Assistant Commissioner, informing him of the grounds on which it is proposed to confiscate the goods or to impose penalty;
• is given an opportunity of making a representation in writing within such reasonable time as may be specified in the notice against the grounds of confiscation or imposition of penalty mentioned therein; and
• is given a reasonable opportunity of being heard in the matter.

The notice and the representation as indicated above may be oral at the request of the person concerned. The Proper Officer may issue a supplementary notice under such circumstances and in such manner as may be prescribed.

Waiver of show cause notice

In view of Section 128 the Customs Authority may issue an oral show cause notice to the tourist in lieu of the written show cause notice at the request of the tourist. The Department, for this purpose, made ready a preprinted standard form for the waiver of notice for the issuance of show cause notice.

Case laws

In Mr. Makhinder Chopra Versus Commissioner Of Customs New Delhi - 2025 (3) TMI 19 - DELHI HIGH COURT, the High Court observed that the oral show cause notice cannot be deemed to have been served. If an oral show cause notice waiver has to be agreed to by the person concerned, the same ought to be in the form of proper declaration, consciously signed by the person concerned. Even, an opportunity of hearing ought to be afforded. The High Court further observed that the printed waivers of this nature would fundamentally violate the rights of the persons who are affected. Naturel justice is not merely lip-service. It has to be given effect and complied with in letter and spirit.

The High Court was of the opinion that the printed waiver of show cause notice and the printed statement made in the request for release of goods cannot be considered or deemed to be an oral show cause notice, in compliance with the provisions of Section 124 of the Act. The order passed in original without issuance of show cause notice and without hearing the petitioner, is not sustainable in law. The High Court set aside the order of Adjudicating Authority.

In Amit Kumar Versus The Commissioner of Customs - 2025 (2) TMI 385 - DELHI HIGH COURT, analysed the provisions of Section 128 of the Act. The High Court observed that the said section provides three fold requirements, as detailed below-

• a notice in writing informing the grounds of confiscation;
• an opportunity of making a representation in writing against the said grounds of confiscation;
• a reasonable opportunity of personal hearing.

The High Court held that the undertaking given by the petitioner cannot be sustained in law. The Customs Department failed to satisfy the requirements of Section 124 of the Act in the present case. The High Court set aside the detention of the petitioner’s gold chain.

The High Court further held that the practice of making tourists sign undertaking in a standard form waiving the show cause notice and personal hearing is contrary to the provisions of section 124 of the Act. The High Court further directed the Department to discontinue the said practice. The Customs Department is expected to follow the principles of Natural Justice in each case where goods are confiscated in terms of Section 124 of the Act.

In Asmin Versus Commissioner Of Customs - 2025 (6) TMI 381 - DELHI HIGH COURT, the petitioner returned from Mecca, Saudi Arabia on 11.02.2024. The Customs Department intercepted her at the Delhi International Airport while crossing the green channel. The Authorities found that two yellow metal bangles during the X-ray. The Authorities detained the two gold bangles worn by the petitioner weighing 128 grams respectively. The statement of the petitioner was recorded in which she informed that the said gold is not of her own. She admitted her action of omission and commission. She was well aware that Customs duty on import of the above goods is payable. For this detention no show cause notice was issued to her and also no personal hearing was offered to her. On 13.03.2024 she gave a letter to the Department requesting to appraise the detained goods and release the two bangles after observing the required legal formalities. She was ready to pay the Customs Duty, fine and penalty. She requested to take a lenient view since the two bangles are not of her own and they are meant for personal use only. She did not want any show cause notice and personal hearing and requested for order for release. The bangles are valued At Rs. 7,44582/-. On 19.08.2024, order in original was passed as detailed below by the Adjudicating Authority-

• Free allowance, if any admissible to the petitioner was denied for not declaring the detained goods to the Proper Officer at Red Channel as well as to green channel who intercepted her and recovered the golden bangles from her.
• The petitioner was declared as ‘ineligible passenger’ for the purposes of Notification No. 50/2017-Customs, dated 30.06.2017 read with Baggage Rules.
• Confiscation of the said two bangles.
• Rs. 1 lakh was imposed as penalty under Section 112(a) and (b).

Against the above said order the petitioner filed the present writ petition before the High Court.  The High Court considered the submissions of the parties to the petition. The High Court observed that the Department relied on the standard pre-printed waiver obtained from the petitioner. The High Court observed that this matter has been considered in various cases by various High Courts.

The High Court held that it is settled law that the Customs Department cannot rely on the pre-printed waiver of show cause notice as the same would contrary to the requirements of section 124 of the Act. The continued detention of seizure of goods by the Customs Department would be untenable in law, where the show cause notice or the personal hearing has been waived via pre-printed waiver.

The High Court set aside the impugned order and directed the department to release the confiscated goods to the petitioner or his authorised representative within a period of four weeks from the date of order.