IBC Section 248: Amendments of Act 52 of 1962

Section 248 of Insolvency and Bankruptcy Code, 2016: Amendments of Act 52 of 1962

Official Bare Act Text

Override / Mandate Mens Rea (Intent) Actus Reus (Conduct) Punishment Limitation Monetary

The Customs Act, 1962 shall be amended in the manner specified in the Fourth Schedule.

Legal Commentary & Landmark Judgments: Section 248

Section 248 amends the Customs Act, 1962 to harmonize customs duty recovery and warehouse lien enforcement with the moratorium and waterfall provisions of the Code.

Subordination of Customs Dues: Amends Act 52 of 1962 in the manner specified in the Fourth Schedule to the Code.
Subject to Moratorium and Waterfall: Restricts customs authorities from auctioning seized goods or enforcing sovereign liens once a moratorium is declared under Section 14 or Section 128.
Equality of Treatment: Ensures that customs duty claims are proved and ranked in the statutory distribution waterfall.

Key Landmark Precedents:

Sundaresh Bhatt, Liquidator of ABG Shipyard v. Central Board of Indirect Taxes and Customs (2023) 1 SCC 472: The Supreme Court delivered an authoritative ruling holding that upon the imposition of a moratorium, customs authorities cannot initiate confiscation or auction of corporate debtor goods and must submit their claims to the liquidator.
Paschimanchal Vidyut Vitran Nigam Ltd. v. Raman Ispat (2023) 10 SCC 60: Reiterated that the priority of customs dues is subordinate to secured creditors under the Code.

Courtroom Practice & Strategic Litigation Guidance:

Liquidators holding imported goods in customs bonded warehouses must cite *ABG Shipyard* and Section 248 to obtain release of the goods without paying pre-CIRP customs penalties, realizing them for the liquidation estate.