CBIC urges caution in attaching bank accounts in customs violation cases

CBIC warns: The Central Board of Indirect Taxes and Customs (CBIC) has advised its field offices to exercise caution and avoid mechanically attaching bank accounts in cases of customs violations. 

In an instruction issued to field formations, the CBIC underlined that the power to attach bank accounts should be used judiciously, with a thorough examination of the facts. Additionally, it stressed the importance of completing investigations and adjudications promptly in cases where bank accounts have been attached.

Under the Customs Act, a Principal Commissioner or Commissioner of Customs can order the attachment of bank accounts for up to six months if it serves the interest of revenue or prevents smuggling. This period can be extended by another six months.

The CBIC instructed tax officers to exercise due diligence by carefully considering the facts of each case. This includes evaluating the nature of the offence, the amount of revenue involved, and the value of smuggled goods before proceeding with attachment. These considerations must be documented.

The instruction also highlighted the need for tax officers to provide reasons for believing that the bank account holder might use the funds if the account is not provisionally attached.

The CBIC further directed that the Principal Commissioner of Customs should thoroughly examine the facts of attachment cases and avoid using the power of provisional attachment in a routine or mechanical manner.

The CBIC stressed that while provisional attachment protects revenue interests, it can also affect the business operations of the person whose bank account is attached. Therefore, it urged that investigations and adjudications be completed as swiftly as possible within the attachment period. This ensures that any due liability, including duty, tax, interest, and penalties, can be recovered, thereby fulfilling the purpose of the attachment.

The CBIC issued this instruction on July 22.

(With PTI inputs)