Recovery of sums due to Government [Section 142] :

The recovery procedures of any sums due under this Act, is covered under this section. The need to recover sums due to Government normally arises in two situations:

(a) on confirmation of demand for short levy of duty; and

(b) on imposition of fine or penalty in an adjudication proceedings.

Recovery by deducting the amount payable from the money owing to the defaulter or by detaining/selling goods of the defaulter: Two methods of recovery are provided for in this section. Either of the methods can be followed to recover the dues.

Sl No.	Recovery procedure	Power given to
1	To deduct the amount so payable from any money owing to such person which may be under the control of the proper officer or such other officer of customs [Section 142(1)(a)].	Proper officer himself or any other officer of customs
2	By detaining and selling any goods belonging to such person which are under the control of the Asst or Deputy Commissioner of Customs or such other officer of customs [Section 142(1)(b)].	Assistant Commissioner of Customs or Deputy Commissioner of Customs; or The above authorities may require any other officer of customs to recover the amount due

Recovery as arrears of land revenue or by distraining and detaining movable/immovable property of the defaulter: If the amount cannot be recovered from such person in the manner provided in sl. nos 1 and 2 above, recovery is made in the manner given below. Here again, either of the procedures can be followed to recover the dues.

Sl No.	Recovery procedure	Power given to
1	Prepare a Certificate signed by Assistant or Deputy Commissioner of Customs, specifying the amount due from such person and send it to the Collector of the district in which such person owns any property or resides or carries on his business. Thereon the said collector shall recover the dues as if it were an arrears of land revenue [Section 142(1)(c)(i)].	Assistant Commissioner of Customs or Deputy Commissioner of Custom
2	Distrain any movable or immovable property belonging to or under the control of such person, and detain the same until the amount payable is paid. In case, any part of the said amount or the cost of distress remains unpaid for 30 days next after such distress, may cause the said property to be sold and satisfy the amount payable and the costs including cost of sale remaining unpaid from the sale proceeds. The surplus if any, shall be paid back to such person [Section 142(1)(c)(ii)].	The proper officer on any authorisation by a Principal Commissioner/Commissioner of Customs and in accordance with the rules made in this behalf

The proviso to section 142(1) states that if a person from whom some recoveries are due, transfers his business in whole or in part to another person, then all goods, materials , preparations, plants, machineries, vessels, utensils, implements and articles in the possession of the transferee can be attached and sold for recovery. An officer empowered by the Central Board of Excise and Customs, after obtaining written approval from the Principal Commissioner/Commissioner of Customs, can make such recovery.

Recovery from a person other than from whom money is due – Garnishee Proceedings [Section 142(1)(d)]: If the amount cannot be recovered in any of the manner discussed above, the Proper the Officer can recover the monies due to the Government from any person other than from whom money is due, if that other person holds money for/on account of the first person. The procedure for the same is as under:-

(i) Issue of notice: The Proper Officer may issue a written recovery notice to the following persons:

•  any person from whom money is due to such person
•  any person from whom money may become due to such person
•  any person who holds money for or on account of such person
•  any person who may subsequently hold money for or on account of such person.

The noticee would be required to pay to the credit of the Central Government so much of the money as is sufficient to pay the amount due from such person or the whole of the money when it is equal to or less than that amount.

The money would be paid either forthwith upon the same becoming due or being held, or at or within the time specified in the notice. However, in no case the money would be required to be paid before the same becomes due or is held.

(ii) Noticee bound to comply with the notice: Every person to whom a notice is issued under this sub-section shall be bound to comply with such notice. In case any such notice is issued to a post office, banking company or an insurer, it shall not be necessary to produce any pass book, deposit receipt, policy or any other document for the purpose of any entry, endorsement or the like being made before payment is made, notwithstanding any rule, practice or requirement to the contrary.

(iii) Consequences of default in payment by noticee: In a case where the person to whom a notice under this sub-section has been issued, fails to make the payment, he shall be deemed to be a defaulter in respect of the amount specified in the notice. Therefore, all the consequences prescribed for assessee in default would apply for such other person as well.

Sub section (2) of section 142 provides that, where the terms of any bond or other instrument executed under this Act or any rules or regulations made thereunder provide that any amount due under such instrument may be recovered in the manner laid down in sub -section (1), the amount may, without prejudice to any other mode of recovery, be recovered in accordance with the provision of that sub-section.

Customs (Attachment of Property of Defaulters for Recovery of Government Dues) Rules, 1995 was notified vide Notification No. 31/95-Cus.(N.T) dt 26-5-1995 amended by Notification No. 67/97-Cus.(N.T) dt 11-12-1997. These rules were framed by the Central Government in exercise of the powers conferred by section 156 read with section 142 of the Customs Act. The rules give procedure for attachment of property, for sale of property and also special provisions in respect of sale of immovable property.