Section 114 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.
Section 114 is the export-side penalty section. It applies to a person whose act or omission would make export goods liable to confiscation under section 113, or who abets it, and it sets three penalty heads: for prohibited goods, for dutiable goods other than prohibited goods, and for any other goods. This article explains the section as printed in the text on the CBIC portal updated to 30 March 2022.
Any person who does or omits to do any act that would render goods liable to confiscation under section 113, or abets it, is liable to a penalty. For prohibited goods: not exceeding three times the value as declared by the exporter or as determined under the Act, whichever is the greater. For dutiable goods other than prohibited goods, subject to section 114A: not exceeding ten per cent of the duty sought to be evaded or five thousand rupees, whichever is higher, reduced to twenty-five per cent of the penalty if duty and interest are paid within thirty days. For any other goods: not exceeding the declared or determined value.
The text consulted is the CBIC copy last updated on 30 March 2022 (the Act as amended up to the Finance Act, 2022). Later Finance Acts may have changed this section, so check it before acting.
Where section 114 fits
Section 114 is in Chapter XIV, "Confiscation of goods and conveyances and imposition of penalties". It matches section 112, which is the import-side penalty: see section 112. The confiscation clauses it depends on are in section 113. For a general overview of the penalty provisions, see our post on penalties under sections 112 to 117.
If you have received a notice under section 114, our legal dispute resolution team can help you prepare a reply.
Who is liable
Any person who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 113, or abets the doing or omission of such an act, shall be liable to a penalty under one of the three heads below.
Compare this with section 112, which has two clauses: (a) acts or omissions and abetment, and (b) dealing with goods with knowledge or reason to believe. Section 114 has only the first limb: an act or omission, or abetment. The text does not carry over a clause of the (b) kind. The section is also headed "attempt to export goods improperly", but the operative words are the act or omission that would render goods liable under section 113, not an attempt as such.
The three penalty heads
| Head | Goods | Penalty as printed |
|---|---|---|
| (i) | Goods in respect of which any prohibition is in force under the Act or any other law for the time being in force | A penalty not exceeding three times the value of the goods as declared by the exporter or the value as determined under the Act, whichever is the greater |
| (ii) | Dutiable goods, other than prohibited goods, subject to the provisions of section 114A | A penalty not exceeding ten per cent of the duty sought to be evaded or five thousand rupees, whichever is higher |
| (iii) | Any other goods | A penalty not exceeding the value of the goods, as declared by the exporter or the value as determined under the Act, whichever is the greater |
Notes on the table:
- Head (i) was changed by the Finance Act, 2003 (32 of 2003) with effect from 14.05.2003 (the words about three times the declared or determined value), after earlier changes in 2001, as the footnotes print. The earlier wording is not the rule.
- Head (ii) was substituted by the Finance Act, 2015 (20 of 2015) with effect from 14.05.2015, as the footnote prints, and is "subject to the provisions of section 114A".
- Head (iii) was substituted by the Finance Act, 2003 with effect from 14.05.2003.
- Each head says "not exceeding". The amount within the ceiling is for the adjudicating authority.
The proviso to head (ii): twenty-five per cent
Where the duty as determined under sub-section (8) of section 28 and the interest payable thereon under section 28AA is paid within thirty days from the date of communication of the order of the proper officer determining such duty, the penalty liable under the section shall be twenty-five per cent of the penalty so determined.
| Element | Text |
|---|---|
| What must be paid | Duty determined under section 28(8) and interest under section 28AA |
| Within what period | Thirty days from communication of the order determining the duty |
| Result | Penalty is twenty-five per cent of the penalty so determined |
The proviso is attached to head (ii). The text does not say that it applies to heads (i) or (iii). Example 1 (prohibited goods). Falcon Exports Pvt Ltd tries to export goods whose export is prohibited under another law. The goods are liable to confiscation under section 113(d). Head (i) allows a penalty not exceeding three times the value of the goods as declared by the exporter or the value as determined under the Act, whichever is the greater.
Example 2 (dutiable goods). An exporter is found to have acted in a way that makes dutiable, non-prohibited goods liable under section 113 and duty is determined under section 28(8). Head (ii) allows a penalty not exceeding ten per cent of the duty sought to be evaded or five thousand rupees, whichever is higher. If the exporter pays the duty and the interest within thirty days from the communication of the order determining the duty, the penalty payable is twenty-five per cent of the penalty determined.
Example 3 (other goods). A shipment of ordinary goods, neither prohibited nor dutiable, does not match the entry (section 113(h) or (i)). Head (iii) allows a penalty not exceeding the value of the goods as declared by the exporter or as determined under the Act, whichever is the greater.
How section 114 relates to other penalty sections
Head (ii) is "subject to the provisions of section 114A". Section 114A says that where a penalty has been levied under it, no penalty shall be levied under section 112 or section 114. So section 114 does not apply on top of a section 114A penalty for the same case; see section 114A. False or incorrect declarations or documents are dealt with separately in section 114AA.
What the section does not say
- It does not say how value is determined; the text says "as determined under this Act".
- It does not carry the reduced-penalty proviso to heads (i) and (iii).
- It does not itself deal with confiscation; section 113 lists the cases and other provisions deal with the order.
- It does not say who adjudicates; the adjudication provisions apply.
Practical points
- Identify the head. Prohibited, dutiable other than prohibited, or other goods: the ceiling changes.
- Check the declared value. Heads (i) and (iii) use the value declared by the exporter or the value determined under the Act.
- Watch the thirty-day window. The reduction to twenty-five per cent under head (ii) depends on payment of duty and interest within that period.
- Check section 114A. If a penalty is levied under it, no penalty is levied under section 112 or section 114.
- Keep the shipping documents. Section 113 clauses on mismatches and drawback claims often depend on the entry and the declarations.
Need help with an export penalty notice?
A section 114 penalty depends on which head applies and on the thirty-day window. Our team can help you read the notice against the text and plan a reply. See our legal dispute resolution page.
Key takeaways
- Section 114 penalises a person whose act or omission would make export goods liable to confiscation under section 113, or who abets it.
- Prohibited goods: a penalty not exceeding three times the declared or determined value, whichever is the greater.
- Dutiable goods other than prohibited goods, subject to section 114A: not exceeding ten per cent of the duty sought to be evaded or five thousand rupees, whichever is higher; twenty-five per cent of that if duty and interest are paid within thirty days.
- Other goods: not exceeding the declared or determined value, whichever is the greater.
- Later Finance Acts may have changed this section; check before acting.
Read next
- Section 112: penalty for improper importation of goods
- Section 113: confiscation of goods attempted to be improperly exported
- Section 114A: penalty for short-levy or non-levy of duty
- Penalties under the Customs Act: sections 112 to 117
Disclaimer: Based on the Customs Act, 1962 as published on the CBIC Tax Information Portal, updated to 30 March 2022 (amended up to the Finance Act, 2022), as consulted on 2 October 2026. Finance Acts of 2023 and later, and the current rules, regulations and notifications, should be checked. This article is general information, not legal advice; check the official text before acting.