Sections 142-142A 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 142 lists the modes in which the department recovers a sum payable under the Customs Act when it is not paid. They run from deducting the amount from money owed to the defaulter, through detaining and selling goods, to a certificate sent to the Collector of the district, distress of property and notices to third parties who owe money to the defaulter. Section 142A makes duty, penalty, interest and other sums payable under the Act the first charge on the property of the person liable, subject to the laws it names.
This article reads the sections 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 these sections before acting.
If a sum payable under the Act, including the amount to be paid to the credit of the Central Government under section 28B, is not paid, the Act provides these modes: (a) deduction from money owing to the person, (b) detention and sale of goods, (c) a certificate recovered as an arrear of land revenue, or distress of property with sale after thirty days, and (d) a notice to any other person holding or owing money for the defaulter. Under section 142A, such sums are the first charge on the property of the person, subject to the laws the section names.
Section 142(1): the four modes
The sub-section opens: where any sum payable by any person under the Act, including the amount required to be paid to the credit of the Central Government under section 28B, is not paid, the following modes are open. Section 28B is the section on duty collected from the buyer; see our article on section 28B.
| Mode | Who acts | What the text says |
|---|---|---|
| (a) | The proper officer | May deduct, or may require any other officer of customs to deduct, the amount from any money owing to the person which may be under the control of the proper officer or that other officer |
| (b) | Assistant Commissioner or Deputy Commissioner of Customs | May recover, or may require any other officer of customs to recover, the amount by detaining and selling any goods belonging to the person which are under the control of that officer or other officer of customs |
| (c) | Applies if the amount cannot be recovered by (a) or (b) | (i) a certificate to the Collector of the district; or (ii) distress by the proper officer |
| (d) | The proper officer | A notice in writing to any other person from whom money is due, or may become due, to the defaulter, or who holds or may subsequently hold money on account of the defaulter |
Note that clause (c) is a fallback: it applies "if the amount cannot be recovered from such person in the manner provided in clause (a) or clause (b)". Clause (d) is not prefaced by that condition in the text as printed.
If you have received a recovery step and want to understand the order and limits, our legal dispute resolution team can read the notice with you.
Clause (c)(i): certificate to the Collector
The Assistant Commissioner or Deputy Commissioner may prepare a certificate signed by him specifying the amount due and send it to the Collector of the district in which the person owns any property or resides or carries on business. On receipt, the Collector shall proceed to recover the amount "as if it were an arrear of land revenue".
Clause (c)(ii): distress and sale
The proper officer may, on an authorisation by the Principal Commissioner of Customs or Commissioner of Customs and in accordance with the rules made in this behalf, distrain any movable or immovable property belonging to or under the control of the person, and detain it until the amount payable is paid. If any part of the amount payable, or of the cost of the distress or keeping of the property, remains unpaid for a period of thirty days next after the distress, the officer may cause the property to be sold. The proceeds satisfy the amount payable and the costs including cost of sale remaining unpaid, and the surplus, if any, is rendered to the person.
The proviso: successor to a business
The proviso addresses a person (the "predecessor") who has not paid a sum payable under the Act and who transfers or otherwise disposes of his business or trade in whole or in part, or effects any change in its ownership, so that he is succeeded by another person. In that case, "all goods, materials, preparations, plants, machineries, vessels, utensils, implements and articles in the custody or possession of the person so succeeding" may also be attached and sold by the proper officer, after obtaining written approval from the Principal Commissioner of Customs or Commissioner of Customs, for recovering the amount payable by the predecessor at the time of the transfer, disposal or change.
For anyone buying a business or taking over a trade, this proviso is the reason to check the seller's customs position before the deal. It is printed under clause (c), and the footnote shows it was inserted by the Finance (No. 2) Act, 2004 (23 of 2004), with effect from 10 September 2004.
Clause (d): notices to third parties
Clause (d) has three parts.
- The proper officer may, by a notice in writing, require any other person from whom money is due, or may become due, to the defaulter, or who holds or may subsequently hold money for or on account of the defaulter, to pay to the credit of the Central Government, either forthwith upon the money becoming due or being held, or at or within the time specified in the notice (not before the money becomes due or is held), so much of the money as is sufficient to pay the amount due, or the whole of it when it is equal to or less than that amount.
- Every person to whom such a notice is issued is bound to comply. Where a notice is issued to a post office, banking company or an insurer, it is not necessary to produce any pass book, deposit receipt, policy or other document for any entry, endorsement or the like to be made before payment, notwithstanding any rule, practice or requirement to the contrary.
- A person who fails to pay in pursuance of the notice is deemed a defaulter in respect of the amount specified in the notice, and all the consequences of the Chapter follow.
The footnote shows clause (d) was inserted by the Finance Act, 2013 (17 of 2013), with effect from 10 May 2013. A customer, bank or other debtor of the defaulter who receives such a notice should read it closely and seek advice before ignoring it, because part 3 treats non-payment as a default by that person.
An example. Meridian Foods owes a sum under the Act and has not paid. The proper officer sends a written notice to the bank where Meridian keeps an account, requiring it to pay to the Central Government the amount held for Meridian, up to the sum due. The bank is bound to comply under part 2, and without insisting on producing a pass book. If the bank does not pay, part 3 treats it as a defaulter for that amount.
Section 142(2): bonds and other instruments
If the terms of any bond or other instrument executed under the Act, or any rules or regulations under it, provide that any amount due under the instrument may be recovered in the manner laid down in sub-section (1), the amount may, without prejudice to any other mode of recovery, be recovered in accordance with that sub-section. This is why bond terms matter; see our article on sections 143 and 143AA.
The rules on attachment
The rules that name section 142 in their opening lines are the Customs (Attachment of Property of Defaulters for Recovery of Government Dues) Rules, 1995, made under section 156 read with section 142. The copy consulted is dated 6 August 2014; that is the date of the rules copy, not of the Act text. Clause (c)(ii) itself refers to "the rules made in this behalf". We leave the rule-wise detail to a separate article and state nothing further here. Please check the rules in force before acting.
Section 142A: liability to be the first charge
Section 142A says: notwithstanding anything to the contrary in any Central Act or State Act, any amount of duty, penalty, interest or any other sum payable by an assessee or any other person under the Act shall be the first charge on the property of the assessee or the person, as the case may be, save as otherwise provided in the laws the section names. As printed, the section names a section of the Companies Act, 1956 (1 of 1956), the Recovery of Debts Due to Banks and the Financial Institutions Act, 1993 (51 of 1993), the Securitisation and Reconstruction of Financial Assets and the Enforcement of Security Interest Act, 2002 and the Insolvency and Bankruptcy Code, 2016.
The footnotes show that the section was inserted by the Finance Act, 2011 (8 of 2011), with effect from 8 April 2011, and that the later words were substituted with effect from 1 November 2016 as a result of the Insolvency and Bankruptcy Code, 2016. This article says nothing about what those laws provide; their effect on the priority of customs dues must be read in the laws themselves, as they stand now.
Practical points
- Recovery steps are layered. Clauses (a) and (b) come first, with clause (c) as the fallback, and clause (d) a separate route to money held by others.
- The thirty days in clause (c)(ii) runs from the distress.
- Section 142 covers "any sum payable ... under this Act". It is not limited to duty.
- If a demand is under appeal, read our articles on the appeal sections and pre-deposit, such as our guide on the customs appeal process, before paying or resisting.
Need help with a recovery notice?
If you have received a notice to pay, a certificate, a distress order or a request to pay money held for someone else, our team can help you understand the step and your options. Contact us through legal dispute resolution.
Key takeaways
- Section 142(1) offers four modes: deduction from money owing, detention and sale of goods, certificate or distress (as a fallback), and notices to third parties.
- Distress property may be sold if the amount or costs stay unpaid for thirty days after the distress.
- A successor to a business can have the goods and articles in his custody attached and sold for the predecessor's dues, with written approval.
- A person who fails to pay under a notice under clause (d) is deemed a defaulter.
- Section 142A makes sums payable under the Act the first charge on the property, save as the named laws provide.
Read next
- Section 143 and 143AA: bonds for import or export and simplified procedures
- Section 28B: duty collected from the buyer to be deposited with Government
- Sections 28BA and 28BB: provisional attachment and time limit for investigation
- Customs appeal process: Commissioner (Appeals), CESTAT and High Court
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.