Section 135 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 135 is the main punishment section for fraud and smuggling-type conduct in the Act. Sub-section (1) lists five kinds of conduct, then splits the punishment into a serious band, up to seven years with fine, and an ordinary band, up to three years, or fine, or both. Sub-sections (2) and (3) deal with repeat offenders and with reasons that do not count as "special and adequate".
This article is based on the text as per the text on the CBIC portal updated to 30 March 2022 (the Act as amended up to the Finance Act, 2022). Please check later Finance Act changes to section 135 before acting.
A person who is knowingly concerned in misdeclaration of value or fraudulent evasion of duty or prohibition, who deals in goods known to be liable to confiscation, who attempts illegal export, who fraudulently avails of drawback or exemption on export, or who obtains an instrument by fraud, is liable under section 135(1). For the serious cases the punishment is imprisonment up to seven years and fine, with a minimum of one year unless special and adequate reasons are recorded. In any other case it is up to three years, or fine, or both.
The five kinds of conduct in section 135(1)
The text opens "Without prejudice to any action that may be taken under this Act". That means prosecution under section 135 sits alongside confiscation and penalty, not in place of them. Our article on section 111 explains confiscation of imported goods, and section 113 covers goods attempted to be exported improperly. If a notice or an investigation raises section 135, our legal dispute resolution team can explain the allegation and the steps.
| Clause | Conduct |
|---|---|
| (a) | In relation to any goods, being in any way knowingly concerned in misdeclaration of value, or in any fraudulent evasion or attempt at evasion of any duty chargeable on them, or of any prohibition for the time being imposed under this Act or any other law for the time being in force with respect to such goods |
| (b) | Acquiring possession of, or being in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing, or in any other manner dealing with, any goods which the person knows or has reason to believe are liable to confiscation under section 111 or section 113, as the case may be |
| (c) | Attempting to export any goods which the person knows or has reason to believe are liable to confiscation under section 113 |
| (d) | Fraudulently availing of, or attempting to avail of, drawback or any exemption from duty provided under this Act in connection with export of goods |
| (e) | Obtaining an instrument from any authority by fraud, collusion, wilful misstatement or suppression of facts, where the instrument has been utilised by that person or any other person |
Clauses (d) and (e) carry footnotes showing they were substituted or inserted by the Finance (No. 2) Act, 2019 (23 of 2019), with effect from 1 August 2019. The meaning of "instrument" for this section comes from the Explanation, which says it has the same meaning as in Explanation 1 to section 28AAA.
Note the mental element in each clause. Clause (a) speaks of being "knowingly concerned" and of "fraudulent" evasion. Clauses (b) and (c) require that the person knows or has reason to believe the goods are liable to confiscation. Clause (d) is about fraudulently availing of drawback or exemption. Clause (e) names fraud, collusion, wilful misstatement or suppression of facts. A simple mistake with no such element does not appear to be within the words, although whether any given case meets the test is a question of facts.
The punishment in section 135(1): two bands
The text after the five clauses says "he shall be punishable", and then splits into two cases.
Case (i): the serious band. This applies to an offence relating to:
- (A) any goods the market price of which exceeds one crore of rupees; or
- (B) the evasion or attempted evasion of duty exceeding fifty lakh of rupees; or
- (C) such categories of prohibited goods as the Central Government may, by notification in the Official Gazette, specify; or
- (D) fraudulently availing of or attempting to avail of drawback or any exemption from duty referred to in clause (d), if the amount of drawback or exemption from duty exceeds fifty lakh of rupees; or
- (E) obtaining an instrument by fraud, collusion, wilful misstatement or suppression of facts, where the instrument has been utilised by any person and the duty relatable to utilisation of the instrument exceeds fifty lakh rupees.
The punishment is imprisonment for a term which may extend to seven years and with fine. The footnotes show that "fifty lakh" replaced "thirty lakh" by the Finance Act, 2013 (17 of 2013), with effect from 10 May 2013.
A printing point: in the copy, clause (E) is printed after the words "with imprisonment for a term which may extend to seven years and with fine:" and before the proviso. Read the clause as part of the list in (i). The text of the sub-section runs on without a full stop at this point. We flag it rather than correct it.
The proviso. In the absence of special and adequate reasons to the contrary to be recorded in the judgment of the court, such imprisonment shall not be for less than one year.
Case (ii): any other case. Imprisonment for a term which may extend to three years, or fine, or both.
So the punishment bands depend on value or amount, or on a notified category of prohibited goods. The Act does not print the notified categories under (C); the Central Government specifies them by notification, and this article names none.
An example. Rohan Impex is accused of knowingly concerning itself in a misdeclaration of value that evaded duty of an amount above the figure in clause (B). If convicted, the court looks at the serious band, with imprisonment up to seven years and fine, subject to the proviso. If the evaded duty is below the thresholds and no other limb of case (i) applies, case (ii) applies, with its lower maximum and with fine as an option.
Section 135(2): repeat offenders
Sub-section (2) says that if a person convicted of an offence under section 135 or under section 136(1) is again convicted of an offence under section 135, he shall be punishable for the second and every subsequent offence with imprisonment which may extend to seven years and with fine. The proviso keeps the same idea: absent special and adequate reasons recorded in the judgment, the imprisonment shall not be less than one year. The footnote shows "one year" replaced "six months" by the Customs, Central Excises and Salt and Central Boards of Revenue (Amendment) Act, 1978 (25 of 1978), with effect from 1 July 1978. Our article on section 136: offences by officers of customs explains the other section referred to.
Section 135(3): what is not a special and adequate reason
For the purposes of sub-sections (1) and (2), the text says the following shall not be considered special and adequate reasons for a sentence of less than one year:
- the fact that the accused has been convicted for the first time for an offence under the Act;
- the fact that in a proceeding under the Act other than a prosecution, the accused has been ordered to pay a penalty or the goods have been ordered to be confiscated or other action has been taken for the same act which constitutes the offence;
- the fact that the accused was not the principal offender and was acting merely as a carrier of goods or otherwise was a secondary party to the commission of the offence;
- the age of the accused.
This list closes several common arguments. A penalty already paid, or goods already confiscated, does not by itself reduce the sentence below the floor.
How section 135 connects to the rest of the chapter
- Cognizance by a court needs the previous sanction under section 137(1); see our article on section 137.
- An offence under section 135(1)(i) or (2) is outside the summary-trial provision of section 138, which our article on sections 138 to 138B explains.
- Section 138A, on presumption of a culpable mental state, applies in a prosecution for an offence which requires such a state.
- Section 140 deals with offences by companies; see our article on sections 140 and 140A.
- For the penalty side, read our overview of penalties under sections 112 to 117.
Need help with a customs investigation?
If you have received a summons, an arrest memo or a notice that refers to section 135, it is wise to take advice before giving statements. Our team can walk you through the text and your options through legal dispute resolution.
Key takeaways
- Section 135(1) lists five kinds of conduct, from knowing involvement in misdeclaration or evasion to obtaining an instrument by fraud.
- Serious band: market price above one crore of rupees, evasion above fifty lakh of rupees, notified prohibited goods, drawback or exemption above fifty lakh of rupees, or an instrument where the duty exceeds fifty lakh rupees; up to seven years with fine.
- The one-year minimum can be reduced only for special and adequate reasons recorded in the judgment.
- Section 135(3) lists four facts that are not special and adequate reasons.
- Section 135(2) provides for repeat convictions.
- Section 135 works alongside confiscation and penalty.
Read next
- Section 136: offences by officers of customs
- Section 137: cognizance and compounding of offences
- Sections 135A and 135B: preparation to export illegally and publication of convictions
- Confiscation of goods under section 111
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.