Rules 17 and 18 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Rule 17 says when imported goods, goods for export and goods connected with services or technology are liable to confiscation by the Adjudicating Authority: where a condition on utilisation, distribution, sale or disposal is contravened. It protects goods imported for personal use, and lets the Authority permit redemption on payment of the market value. Rule 18 makes a conveyance or animal used to carry such goods liable to confiscation unless the owner proves he had no knowledge and took all reasonable precautions, and requires redemption for conveyances used for hire. Both rules give effect to section 11(8) and (9) of the Act, and the 2015 Amendment Rules widened them to exports and to services and technology. This article explains both as per the Rules as notified in 1993 read with the 2015 Amendment Rules.
Rule 17(1): goods are liable to confiscation where a condition on use, distribution, sale or disposal has been, is being or is attempted to be contravened, together with their package, and with any goods mixed in that cannot be readily separated; goods imported for personal use, not for trade or industry, are not to be confiscated. Rule 17(2): the Authority may permit redemption at the market value. Rule 18: a conveyance or animal used to carry such goods is liable to confiscation unless the owner proves no knowledge and all reasonable precautions; for hire, the Authority shall permit redemption.
The source in the Act
Section 11(8) of the Act, as substituted in 2010, says that where any contravention of the Act, the rules or orders or the foreign trade policy "has been, is being, or is attempted to be, made, the goods (including the goods connected with services or technology) together with any package, covering or receptacle and any conveyances shall, subject to such conditions and requirements as may be prescribed, be liable to confiscation by the Adjudicating Authority". Section 11(9) says the goods or the conveyance confiscated "may be released by the Adjudicating Authority, in such manner and subject to such conditions as may be prescribed, on payment by the person concerned of the redemption charges equivalent to the market value of the goods or conveyance, as the case may be". Section 19(2)(h) and (i) let the rules prescribe the requirements and conditions. Rules 17 and 18 are those rules. See our article on section 11(5) to (9).
If goods or a vehicle are facing confiscation, a legal consultation can help you check which limb of rule 17 or 18 is relied on.
What changed in 2015
The 2015 Amendment Rules extended rule 17(1) to goods for export and goods connected with services or technology, widened "licence" in clause (a), substituted clause (c) and widened sub-rule (2). They widened rule 18 to goods "imported or meant for export" and goods connected with services or technology.
Rule 17(1): when goods are liable to confiscation
Rule 17(1) applies to "Any imported goods or materials or goods or materials for export or goods or materials connected with import or export of services or technology in respect of which—":
| Clause | Condition contravened |
|---|---|
| (a) | Any condition of the licence (or certificate, scrip or instrument), or letter of authority under which they were imported, relating to their utilisation or distribution |
| (b) | Any condition relating to their utilisation or distribution, subject to which they were received from or through an agency recognised by the Central Government |
| (c) | (Substituted 2015) Any condition imposed under the Policy with regard to the sale, disposal, import or export of such goods or materials or goods or materials connected with services or technology |
If a condition "has been, is being, or is attempted to be, contravened", the goods "together with any package, covering or receptacle in which such goods ... are found, be liable to the confiscated by the Adjudicating Authority". Printing slip: the substituted rule prints "liable to the confiscated"; it is flagged and quoted as printed.
Three features:
- Conditions, not just licences. Clauses (a) and (b) tie confiscation to conditions of a licence or of receipt from a recognised agency (compare rule 13), and clause (c) to conditions in the Policy. Conditions deemed to attach to licences are in rule 6.
- Attempt is enough. The words "has been, is being, or is attempted to be" cover past, present and attempted contravention.
- Mixed goods. Where the goods "are so mixed with any other goods or materials that they cannot be readily separated, such other goods or materials shall also be liable to be so confiscated".
The proviso: personal use
"Provided that where it is established to the satisfaction of the Adjudicating Authority that any goods or materials or goods or materials connected with services or technology which are liable to confiscation under this rule, had been imported for personal use, and not for any trade or industry, such goods or materials or goods or materials connected with services or technology shall not be ordered to be confiscated."
The proviso works on proof: "it is established to the satisfaction of the Adjudicating Authority". Once it is, the goods "shall not be ordered to be confiscated". It covers goods "imported for personal use"; it does not mention goods for export.
Example: Mr. Sharma (an invented person) imports a musical instrument for his own use and later sells it, contravening a condition. If he establishes personal use and not trade or industry, the instrument cannot be ordered to be confiscated; ten instruments imported to sell would not be protected.
Rule 17(2): redemption of goods
"The Adjudicating Authority may permit the redemption of the confiscated goods or materials upon payment of redemption charges equivalent to the market value of such goods or materials."
The word is "may": the Authority has a discretion. The charge is "equivalent to the market value". The rule does not say how market value is determined or when it is fixed. Section 11(9) uses the same measure. Redemption on appeal: the second proviso to section 15(1) says that an appeal against an order imposing redemption charges is not entertained unless the amount is deposited, subject to a waiver for undue hardship; see section 15.
Rule 18: confiscation of conveyance
Rule 18(1)
"Any conveyance or animal which has been, is being, or is attempted to be used, for the transport of any goods or materials that are imported and which are liable to confiscation under rule 17, shall be liable to be confiscated by the Adjudicating Authority unless the owner of the conveyance or animal proves that it was, is being, or is about to be so used without the knowledge or connivance of the owner himself, his agent, if any, and the person in-charge of the conveyance or animal and that each of them had taken all reasonable precautions against such use."
| Element | What it says |
|---|---|
| Trigger | The conveyance or animal was, is being or is attempted to be used to transport goods liable to confiscation under rule 17 |
| Result | Liable to confiscation by the Adjudicating Authority |
| Defence | The owner proves use without knowledge or connivance of himself, his agent and the person in charge, and that each took all reasonable precautions |
The owner carries the burden: he "proves". All three persons (owner, agent, person in charge) must have been without knowledge, and each must have taken all reasonable precautions. "Conveyance" includes an aircraft, vehicle or vessel for the purposes of rule 15 (the Explanation in sub-rule (4)), and section 2(c) of the Act includes any animal.
Example: Harbour Logistics (an invented carrier) can ask the Authority not to confiscate its truck, which its driver used without its knowledge to carry goods imported in breach of a licence condition, by proving that neither it, its agent nor the driver knew or connived and that each took all reasonable precautions.
Rule 18(2)
"The Adjudicating Authority shall permit redemption of the confiscated conveyance or animal used for the transport of goods or passengers for hire upon payment of redemption charges equivalent to the market value of such conveyance or animal."
The difference from rule 17(2) is the word. For goods the Authority "may" permit redemption. For a conveyance or animal used for the transport of goods or passengers for hire it "shall" permit redemption. The charge is again market value. The rule does not say what happens to a conveyance that is not used for hire.
For the customs counterpart of confiscation, see our general guides on confiscation under the Customs Act and on customs penalties; they explain the Customs Act, not this Act.
Need help with a confiscation or redemption?
If goods or a conveyance have been seized or confiscated, our legal consultation service can help you read the order against rules 17 and 18, consider the personal-use proviso or the owner's defence, and plan an appeal. Later amendments to the Act, the Rules and the Policy should be checked.
Key takeaways
- Rule 17(1) makes goods liable to confiscation where a condition on utilisation, distribution, sale or disposal is contravened or attempted to be, along with their package and goods mixed in that cannot be separated.
- Goods imported for personal use and not for trade or industry are not to be confiscated if so established.
- Rule 17(2): the Authority may permit redemption at market value.
- Rule 18: a conveyance or animal used to carry such goods is liable to confiscation unless the owner proves no knowledge and all reasonable precautions; for hire, redemption at market value must be permitted.
- Sections 11(8) and (9) of the Act are the source; the 2015 Rules extended both rules to exports, services and technology.
Read next
- Section 11(5) to (9): recovery, confiscation and redemption
- Rule 15(3) to (5): seizure, return of goods and presumptions
- Rule 16: settlement of contraventions
- Section 15: appeal against adjudication orders
Disclaimer: Based on the Foreign Trade (Development and Regulation) Act, 1992 as enacted read with the Amendment Act of 2010, and on the Foreign Trade (Regulation) Rules, 1993 as notified read with the Amendment Rules of 2015, as consulted on 2 October 2026. Later amendments, the current Foreign Trade Policy and the Handbook of Procedures should be checked. This article is general information, not legal advice; check the official text before acting.