Customs Violation Cases: Power to attach bank accounts should be exercised after examining facts carefully, CBIC tells field offices

The Central Board of Indirect Taxes and Customs (CBIC) has said the power to attach bank accounts in customs violation cases should be exercised after careful examination of facts and not in a mechanical manner.

In an instruction to field formations, the CBIC said in cases where bank accounts have been attached, the investigation and adjudication should be completed at the earliest.

Under the Customs Act, Principal Commissioner or Commissioner of Customs can order in writing about the attachment of bank accounts for up to six months in cases where it is in the interest of revenue or for preventing smuggling. Such attachments can be extended by another six months.

The CBIC instruction said the tax officer should exercise due diligence by thoroughly considering and examining the facts of the case, including examining the nature of offence, amount of revenue involved or value of smuggled goods before going ahead with attachment and record the same in file.

"Moreover, it must contain the reasons to believe that the bank account holder may utilise the funds from the bank account if it is not provisionally attached," the CBIC said.

The CBIC further said that the principal commissioner of customs should make careful examination of facts of such attachment cases and the power of provisional attachment must not be exercised in a 'routine/mechanical manner'.

"As the provisional attachment of bank account is resorted to protect the interests of the revenue and may also affect the business and functioning of the person whose bank account is provisionally attached, it may be endeavoured that in all such cases, the investigation and adjudication are completed at the earliest, well within the period of attachment, so that the due liability of duty/tax as well as interest, penalty etc. Arising upon adjudication can be recovered from the said person and the purpose of attachment is achieved," the CBIC said in an instruction dated July 22.