Indirect Tax Laws and Practice · Remission of Duties

Abandonment of Goods and Relinquishment of Title under Section 23(2)

Updated 11 October 2026 · Fact-checked

Under Section 23(2) of the Customs Act, 1962, the owner of imported goods may give up (relinquish) title to them at any time before an order for clearance for home consumption under section 47, or an order permitting deposit in a warehouse under section 60, is made. He then owes no duty. The right is not available where an offence appears to have been committed.

Understand Abandonment of Goods and Relinquishment of Title

When goods are imported, duty becomes a worry for the importer. Sometimes the goods turn out to be unwanted: wrong specification, a fall in market demand, or a cancelled contract. The Act lets the owner walk away from such goods without paying duty, provided he acts early enough.

This is relinquishment of title, often called abandonment. Section 23(2) says the owner may relinquish his title to the goods at any time before an order for clearance for home consumption under section 47, or an order permitting deposit in a warehouse under section 60, has been made. Once he does, he is not liable to pay the duty on them.

The timing is the whole rule. Think of the order for clearance (or the order for warehousing) as a point of no return. Before it, the importer can still exit. After it, the duty liability has crystallised and the goods must be dealt with under other provisions, such as the refund of duty under section 26A or the warehouse rule in section 68.

There is one firm exception. The proviso to section 23(2) says the owner cannot relinquish title to goods regarding which an offence appears to have been committed under the Customs Act or any other law in force. The importer cannot dodge a prosecution or confiscation by simply abandoning the goods.

Do not confuse this with remission under section 23(1). Remission applies when goods are lost (other than by pilferage) or destroyed before clearance, and the Assistant or Deputy Commissioner is satisfied. There the goods have gone and the officer remits the duty. In relinquishment the goods still exist and the owner chooses to give them up.

Key rules to remember

Relinquishment rule, Section 23(2): Owner relinquishes title BEFORE order under s.47 (home consumption) or s.60 (warehousing) ⇒ no duty payable; Timing is the test. After either order is made, section 23(2) is no longer available.
Proviso to Section 23(2): Offence appears to have been committed ⇒ relinquishment NOT allowed; Applies to offences under the Customs Act or any other law for the time being in force.
Remission, Section 23(1): Goods lost (not by pilferage) or destroyed before clearance for home consumption + satisfaction of AC/DC ⇒ duty remitted; Without prejudice to section 13. Pilferage is dealt with under section 13.
Warehoused goods, Section 68 second proviso: Relinquish before clearance order + pay penalties payable ⇒ no duty; For goods already in a warehouse, the owner must pay penalties that may be payable. Again, not allowed where an offence appears to have been committed.
Section 26A comparison: Duty paid and goods cleared ⇒ refund only if conditions met, including relinquishment/export/destruction within 30 days of the section 47 order; Refund application within six months from the relevant date. Extension of the 30 days: up to three months by the Commissioner on sufficient cause.

How to solve Abandonment of Goods and Relinquishment of Title questions

Use the same sequence for any question on abandonment or relinquishment of imported goods.

1Identify the stage of the goods: just imported, order for clearance made, ordered into a warehouse, or already warehoused or cleared.
2Check the order: has an order under section 47 (home consumption) or section 60 (deposit in a warehouse) been made? If yes, section 23(2) is not available.
3Check for an offence: does the fact pattern show that an offence appears to have been committed (for example, misdeclaration or prohibited goods)? If yes, relinquishment is barred by the proviso.
4If the goods are in a warehouse, switch to section 68: relinquishment is allowed before the clearance order on payment of penalties payable, with no duty.
5If duty was already paid and the goods were cleared, test section 26A: defect or non-conformity, identification, no drawback claimed, and relinquishment, export or destruction within 30 days of the section 47 order.
6State the result: duty payable or not, and name the section.
7Write one line distinguishing remission (goods lost or destroyed) from relinquishment (goods exist, owner gives up title) if the question hints at both.

Quickest way: Two-question test

When to use it: Use for MCQs and short case scenarios where you must decide quickly whether duty is payable.

Question 1: Has the section 47 or section 60 order been made? If yes, section 23(2) fails.
Question 2: Does an offence appear to have been committed? If yes, relinquishment fails.
If both answers are no, relinquishment is allowed and no duty is payable. If the goods sit in a warehouse, add: penalties payable must be paid (section 68).
If the goods are lost or destroyed rather than given up, think section 23(1) remission instead.

Common mistakes in Abandonment of Goods and Relinquishment of Title

Treating relinquishment as available at any time, even after the clearance order.
Students remember that duty is not payable but forget the time limit.
Fix: Anchor on the phrase 'before an order for clearance under section 47 or deposit under section 60'. After it, think section 26A or drawback.
Allowing relinquishment where the goods are liable to confiscation or an offence appears to have been committed.
The proviso is short and easy to miss.
Fix: Always scan the facts for misdeclaration, prohibited goods or any other offence before applying the rule.
Mixing up remission under section 23(1) and relinquishment under section 23(2).
Both sit in one section and both end with no duty.
Fix: Remission: goods lost (not pilfered) or destroyed, officer satisfied. Relinquishment: goods intact, owner's choice and his act.
Applying section 23(1) remission to pilfered goods.
Pilferage looks like a loss.
Fix: Section 23(1) excludes loss by pilferage. Pilfered goods are covered by section 13: no duty unless the goods are restored to the importer after pilferage.
Ignoring penalties when the goods are in a warehouse.
Students carry the 'no duty' result over from section 23(2).
Fix: Under section 68, relinquishment of warehoused goods needs payment of the penalties payable. Duty is not payable.
Confusing relinquishment before clearance with relinquishment under section 26A for a refund.
Both use the word relinquish.
Fix: Section 23(2) is pre-clearance and no duty is ever paid. Section 26A is post-clearance, duty is refunded, and strict conditions and time limits apply.

Worked examples

Example 1

Sunrise Traders Pvt. Ltd., Chennai, imports a consignment of machine parts. Before the proper officer makes any order for clearance under section 47, the company finds the parts do not match its requirement and decides to give them up. No offence is alleged. Is duty payable?

Show the solution

Stage: goods are imported, but no order for clearance for home consumption under section 47 has been made.
Section 23(2) lets the owner relinquish title at any time before such an order.
Check the proviso: no offence appears to have been committed, so relinquishment is not barred.
Effect: on relinquishment, the owner is not liable to pay the duty.

Answer: Yes, Sunrise Traders may relinquish title under Section 23(2). No customs duty is payable on the goods.

Example 2

Kaveri Exports Ltd. imported goods. The proper officer made an order for clearance for home consumption under section 47 and the company paid duty. Two weeks later it finds the goods are defective and wants to give them up. Can it rely on Section 23(2)? If not, what is the remedy?

Show the solution

Section 23(2) works only before the section 47 order. Here the order was made and duty paid, so the section is not available.
Look at section 26A, which covers duty paid on goods cleared for home consumption.
Conditions: goods are defective or not in conformity with the agreed specifications; not worked, repaired or used (except use indispensable to discover the defect); identified to the officer's satisfaction; no drawback claimed; no offence appears to have been committed.
Action: the goods must be exported, or title relinquished and goods abandoned to customs, or goods destroyed in the officer's presence, within 30 days of the section 47 order. Two weeks is within this period.
Refund application: within six months from the relevant date. For relinquishment, that date is the date of relinquishment.

Answer: Section 23(2) is not available because the clearance order has been made. Kaveri Exports can claim a refund of duty under Section 26A if it satisfies the conditions, including relinquishing title or exporting or destroying the goods within 30 days of the order, and applies within six months from the relevant date.

Exam tips

In MCQs, the trap is almost always timing. Check whether the section 47 or section 60 order has been made.
If the facts mention misdeclaration, prohibited goods or any suspected offence, the answer is that relinquishment is not allowed.
For long answers, state the rule, the proviso and the effect, then apply them to the facts and conclude clearly.
Be ready to contrast section 23(1) remission, section 23(2) relinquishment, section 13 pilferage and section 26A refund in a short table-style comparison written as lines.

Practice questions from Remission of Duties

Abandonment of Goods and Relinquishment of Title: frequently asked questions

What is relinquishment of title under the Customs Act?

It is the owner's act of giving up his right to imported goods before clearance. Under Section 23(2), if he does so before the order for clearance under section 47 or the order for warehousing under section 60, he is not liable to pay duty.

Can I abandon goods after the bill of entry is cleared?

Not under Section 23(2), because the clearance order has already been made. If duty was paid and the goods are defective or non-conforming, Section 26A may give a refund, subject to its conditions and time limits.

What is the difference between remission of duty and relinquishment of title?

Remission under section 23(1) applies when goods are lost (other than by pilferage) or destroyed before clearance and the officer is satisfied. Relinquishment under section 23(2) applies when the goods exist and the owner chooses to give up title. Both end with no duty payable.

Can goods involved in an offence be relinquished?

No. The proviso to Section 23(2) bars relinquishment of goods regarding which an offence appears to have been committed under the Customs Act or any other law in force.