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INTRODUCTION The provisions in the custom Act deal with any deliberate evasion of prohibition /restrictions on import and export of specified goods. The traders have to be well conversant with the provisions of clearance rules as given under FTP 2009-14(Foreign Trade Policy), the custom Act, as also other allied Acts. They sure that before any imports are effected or export planned, they are aware of any prohibition/ restrictions and requirements/regulations subject to which alone goods can be imported/exported, so that they do not get penalised and goods do not get involved in confiscation proceeding at the hands of custom authorities.
1. CLEARANCE OF WAREHOUSED GOODS FOR HOME CONSUMPTION(SECTION68) The importer of any warehoused goods may clear goods for home consumption. if:- • A bill of entry for home consumption in respect of such goods has been presented in prescribed form. • The import duty livable on such goods and all penalties, rent, interest and other charges payable in respect of such goods have been paid; and • An order for clearance of such goods for home consumption has been made by the officer. The rate of duty and tariff valuation, if any applicable to imported goods, shall be the rate and valuation in force in the case of goods cleared from a warehoused under section 68,on the date on which the goods are actually removed from the warehouse(section15 (1) (b) )
PROCEDURE FOR CLEARANCE OF WAREHOUSED GOODS FOR HOME CONSUMPTION
2.CLEARANCE OF WAREHOUSED GOODS FOR EXPORTATION(SECTION69) Any warehoused goods may be exported to a place outside India without payment of import duty if. (1 )A shipping bill of export in the prescribed form is presented in respect of the warehoused goods sought to be cleared for export. (2) The appropriate export duty including cess leviable on such goods on export should be assessed & paid. (3) The import dues on the goods, namely penalties, warehouse rent, interest and other warehouse charges is paid, only payment of import duty otherwise livable on such warehoused goods is waived.
(4) The proper officer of customs should satisfy himself that all regulations , restrictions & prohibition in force in respect of export of such goods, is complied with or fulfilled. After satisfying himself about this aspect as well as payment of all duties and other charges payable he will permit removal of the goods from the bounded warehouse for export. (5) In case Govt. of India is of the opinion that goods of any specified description are likely to be smuggled back into India, it may (A) Demand payment of import duty payable otherwise on the warehoused goods: (B) Prescribe conditions to be fulfilled including execution of an Indemnity bond undertaking to produce proof of export or pay the import duty otherwise livable.
(6) The Govt. of India, by notification prescribes the circumstances under such conditions can be imposed. The supreme court made it clear in m.j.export ltd.(1992) s.c. that there is no such prohibition in the act and so the imported goods can be exported. * at the point of importation itself * from the warehouse, whether they are kept deposited pending clearance under section 49 or * from the warehouse under section 69.
PROCEDURE TO BE FOLLOWED BY IMPORTER The procedure to be followed by importer are as under follows * CLEARANCE OF IMPORTED GOODS (SECTION 46&47) * ENTRY OF GOODS ON IMPORTATION (BY FILLING BILL OF ENTRY) (SECTION 46)
(1) CLEARANCE OF GOODS FROM PORT-IMPORTER SHALL COME WITH BILL OF ENTRY • METHOD-1 Pay import duty &take home –File B/E for home consumption. • METHOD-2Don’t pay import duty (Execute W/ hinge Bond )-transfer goods to custom warehouse file B/E for warehousing. The importer of any goods. Other than goods intended for transshipment (i.e. intended to be transported to some further part) shall
(2) FILLING OF BILL OF ENTRY:ELECTRONIC OR MANUAL FA, 2011 has made electronic –filling of Bill of Entry Mandatory. however, in exceptional cases, commissioner of customs has been empowered to allow manual filling of entry. Filing of electronic declaration (himself) or (at service centre) (regulation 3) The authorised person may enter the electronic declaration in the Indian Customs EDI System *by himself through ICEGATE *by way of data entry through the SERVICE CENTRE BY FURNISHING THE PARTICULARS , IN THE FORMAT SET OUT IN ANNEXURE
DATA ON WHICH BILL OF ENTRY IS DEEMED TO BE FILED (REGULATION 4) The bill of entry shall be deemed to have been filed & self assessment of duty completed when, - After entry of the electronic declaration in the Indian Customs EDI System (either through ICEGATE or by way of data entry through the service centre),a BILL OF ENTRY NUMBER IS GENERATED by the Indian Customs EDI System for the said declaration.
ISSUE OF OUT –OF –CHARGE ORDER BY PROPER OFFICER (REGULATION 5) After the completion of assessment, The authorised person shall present - The original bill of entry (custom copy) and - Duty –paid challan and - Supporting import documents TO PROPER OFFICER for making an order permitting clearance ,after examination of the imported goods if so required.
GENERATION OF ADDATIONAL BILL OF ENTRIES BY PROPER OFFICER(REGULATION 6) After making an order under regulation 5, Proper Officer shall generate - DULICATE BILL OF ENTRY (importer’s copy) and • TRIPLICATE BILL OF ENTRY (exchange control copy) DISTRIBUTION OF COPIES BY PROPER OFFICER (REGULATION7) The Original Bill of Entry (customs copy) along with supporting import documents shall be retained by the Proper Officer And after suitable endorsement the Duplicate Bill Of Entry (importer’s copy) and the Triplicate Bill of Entry(exchange control copy )shall be handed over to the authorised person.
(3) BILL OF ENTRY SHALL BE FOR ALL GOODS COVERED IN BILL OF LADING A Bill Of Entry shall include all the goods mentioned in the -Bill Of Lading -Other receipt given by the carrier to the consignor (e.g. Lorry Receipt /Rail Receipt /Air Way Bill).
(4) TIME LIMIT FOR FILING BILL OF ENTRY: NORMAL B/E VS ADVANCE B/E A Bill of Entry may be presented at any time AFTER the delivery of the IGM/IR Provided that Bill Of Entry may be filed before filing of IGM/IR under the following cases: (b) B/E can be filed before filing of IGM if the VESSEL or the AIRCRAFT carrying imported goods expected to arrive within 30 days from the date of such presentation. (C) B/E can be filed before filing of IR if the Commissioner of Customs in any special circumstances, permits a Bill Of Entry to be presented before filing of IR:
(5) DECLARATION AS TO TRUTHNESS OF CONTENTS OF B/E The importer while presenting a BILL OF ENTRY • Shall at the foot thereof make and subscribe to a declaration as to the truth of the contents thereof, and • Shall , in support of such declaration, produce to the Proper Officer the invoice.
(6) SUBSTITUTION OF B/E SUBSTITUTION OF B/E: B/E for H/C filed, can later on substituted with B/E for W/ Hing (and vice-versa ) but only with permission of proper officer If the Proper Officer is satisfied that - The interests of revenue are not prejudicially affected and -There was no fraudulent intention. He may permit substitution of a bill of entry for home consumption for a bill of entry for warehousing or vice-versa.
WAREHOUSING WITHOUT WAREHOUSING Warehousing without warehousing refers to a situation where goods are allowed to be stored into the custom warehouse without insistence upon compliance of all or any of the conditions relating to the normal warehousing provisions contained in sec.57 to 73 of the Custom Act, 1962.
(B) PROCEDURE TO BE FOLLOWED BY PERSON –IN –CHARGE OF CONVEYANCE CARRYING IMPORTED GOODS: ARRIVAL OF VESSELS AND AIRCRAFTS IN INDIA(SEC. 29) 1 CALLING OR LANDING AT CUSTOM PORT/ AIRPORT ONLY The person –in –charge of a vessel or an aircraft entering India from any place outside India shall not cause or permit the vessel or aircraft to call or land at any place other than a customs port or a customs airport as the case may be. Section29 doesn’t make any provisions for goods imported through land route. But the person-in-charge of vehicle shall en sure that while carrying the goods in vehicle he comes to the land customs station only because any failure on his part in this regard will render the goods liable to confiscation as is clear from sec111 as given below: CONFISCATION OF IMPROPERLY IMPORTED GOODS , ETC.(SECTION111) Any goods imported by land through any route other than the specified rotes.
(2)CALLING OR LANDING AT OTHER PLACE :OBLIGATIONS OF PERSON –IN -CHARGE The above provisions shall not apply in relation to any vessel or aircraft which is compelled by accident ,stress of weather or other unavoidable cause to call or land at a place other than a customs port on customs airport. But the person–in-charge of any such vessel or aircraft- (A)Shall immediately report the arrival of the vessel or the landing of the aircraft of the nearest customs officer/officer –in –charge of a police station ; (b)Shall not without the consent of any such officer permit (1)Any of goods carried in the vessel /aircraft to be loaded from the vessel /aircraft (2)Any of the crew or passengers to depart from the vicinity of, the vessel /aircraft ; and (c) Shall comply with any direction given by any such officer with any respect to any such goods. and Any passenger or member of the crew shall not, without the consent of any such officer , leave the immediate vicinity of the vessel or the aircraft However , if the departure or removal is necessary for the reasons of - Health , safety or preservation of life or property . Then it shall be allowed.
DELIVERY OF IMPORT MANIFEST OR IMPORT REPORT (SECTION 30) Person in-charge shall submit details of imported cargo –by filling IGM/IR • Person in-charge of a conveyance carrying imported goods ;or • Any other person as may be specified by the CG, by notification in the official gazettes. • Shall • In case of a vessel or an aircraft, deliver to the proper officer an Import Manifest before the arrival of the vessel or aircraft , and • In case of a vehicle , deliver to the proper officer anImport Report without 12 hours after its arrival in the custom station. • If the IGM/IR is not delivered to the proper officer within the specified time , it can be filed belatedly if proper officer is satisfied that there was sufficient cause for such delay. • If the proper officer is not satisfied as to sufficient of cause leading to delay, then IGM/IR shall be acceptable subject to a penalty not exceeding Rs.50,000/-
(2)DECLARATION AS TO TRUTHNESS OF CONTENTS OF IGM/IR The person delivering the IGM/IR shall at the foot thereof make & subscribe to a declaration as to the truth of its contents. (3)IGM/IR CAN BE AMENDED OR SUPPLEMENT –WITH PERMISSION OF PROPER OFFICER If the proper officer is satisfied that • The IGM/IR is in any way incorrect or incomplete , and • That there was no fraudulent intention. He may permit it to be amended or supplemented
Imported Goods not to be unloaded from vessel until entry Inwards granted (section31) (1)The Master of vessel shall not permit the unloading of any imported goods -until an order has been given by the proper officer granting ENTRY INWARDS to such vessel. “entry inward” is required only for unloading of goods from VESSEL . For unloading of such goods from Aircraft/ vehicle, no “Entry Inward” is required
ENTRY INWARD (1) Entry Inward shall be given only when IGM has been delivered by the vessel.[ in case the proper officer is satisfied that there was sufficient cause for not delivering IGM, then on exceptional basis he can grant Entry Inward.] (2) Entry Inward shall not be required for unloading of • Baggage accompanying a passenger or member of the crew • Mail bags, • Animals • Perishable goods and • Hazardous goods
UNLOADING OF GOODS FROM CONVEYANCE *Imported goods not to be unloaded unless mentioned in IGM/IR (section 32) *Unloading of goods approved places on. For unloading at any other place, the permission of a proper officer is necessary.(section 33) *Goods to be unloaded under supervision of custom officer (section 34) *No imported goods shall he water-borne for being unloaded from any vessel unless the goods and accompanied by a BOAT –NOTE (Section 35) *“Every boat not shall be issued by the proper officer…….. *No imported goods shall be unloaded from any conveyance. (section 36) - On any Sunday or - On any holiday observed by the Customs Department or - On any other day after the working hours Except on payment of “Prescribed fees” -
Person-in charge can leave customs station –only after taking “DEPARTURE PERMISSION” (section 42) Restrictions on custody and removal of imported goods in custody of custodian (section 45) • Goods unloaded-Custodian will take them into custody (goods remain in custody till removed in accordance with customs) All imported goods unloaded in a custom area shall go to the custody of such person as may be approved by the CCI [ such person is known as “custodian” of goods] Goods will remain in custody of custodian until they are -cleared for home consumption [importer comes and take delivery of goods] or -warehoused [importer comes and gets the goods transferred to the warehouse –he will subsequently take delivery from warehouse ]or - Transshipped [goods unloaded are not for clearance at this station – They are to be further carry to their ultimate destination where only the importer will come to take delivery of goods]
(2) Custodian’s Obligation Custodian Obligation –Keep record of unloaded goods + Removal only as per proper officer instruction The person having custody of any imported goods in a custom area- • Shall keep a record of such goods and send a copy thereof to the proper officer; • Shall not permit such goods • To be removed from the customs area or • Otherwise dealt with (e.g. packing, stuffing into container) Except under and in accordance with the permission in writing of the proper offices.
(3) Custodian’s Liability Custodian’s Liability-Goods pilfered in his custody – Import Duty recoverable from custodian’s by proper officer Notwithstanding anything contained in any law, • If any imported goods are pilfered after unloading thereof in a customs area while in the custody of custodian. • The custodian shall be liable to pay duty on such goods.
(2) CLEARANCE OF GOODS FOR HOME CONSMPTION[ SECTION 47] Where the appropriate officer is satisfied that goods entered for home consumption are not prohibited goods and importer has paid import duty (if any) and any other charges payable under the act, he can permit clearance of goods for home consumption.
(3) PROCEDURE IN CASE OF GOODS NOT CLEARED, WAREHOUSED,OR TRANSHIPPED WITHIN 30 DAYS AFTER UNLOADING (SECTION 48) If any goods brought into India from a place outside India are not cleared for home consumption or warehoused or transshipped within 30 days from the date of the unloading thereof at a customs station (or within such further time as the proper officer may allow) or If the title to any imported goods is relinquished, such goods may, after notice to the importer and with the permission of the proper officer be sold by the person having the custody thereof.
NOTE: • Animals, Perishable goods and Hazardous goods ,may, with the permission of the proper officer , be sold at any time(i.e., even before expiry of 30 days) • Arms and ammunition may be sold at such time and place and in such manner as the Central Government may direct Sections 44,45,46,47,48,49 shall not apply to (1)BAGGAGE GOODS INPORTED BY POST. [clearance system for ‘Postal Articles’ is different . In case of postal imports – attached label (showing description , quantity and value of articles inside ) is deemed to be the ‘entry’ of the goods –no B/E under section 46 required to be filled.]
Export Procedure :- • Like import procedure , export procedure also depends upon the mode of transport & are not applicable to goods exported by post or as baggage. Export procedure :-
PROCEDURE TO BE FOLLOWED BY EXPORTER :(a) Entry of goods for Exportation.(Sec.50) • The exporter of any goods shall make entry thereof by presenting to the proper officer electronically :(i) in the case of goods to be exported in a vessel or air-craft-A Shipping Bill.(ii) in the case of goods to be exported by land-A Bill of export . • Provided that - The Commissioner of Customs may ,in cases where it is not feasible to make entry by presenting electronically. Allow any entry to be presented in any other manner (Manually) Section 50 Analysed :- * Exporter shall come forward with shipping Bill / Bill of export for clearing goods from customs.(b) Clearance of goods for exportation.( Sec.51)Where the proper officer is satisfied that the goods entered for export are not prohibited goods and the exporter has paid the duty , if any , assessed thereon & any charges payable under this act in respect of the some, the proper officer may make an order permitting clearance & loading of the goods for exportation.
PROCEDURE TO BE FOLLOWED BY PERSON-IN-CHARGE :(a) Export goods shall be loaded at approved places only.( Sec.33) Loading of export goods is allowed at approved places only. For loading at any other place, permission of proper officer is essential.(b) Loading under supervision. ( Section 34)(c) Restriction of goods being water-borne.( Section 35) • Export goods can be water-born if these are accompanied by shipping Bill (Sec.35) • If export goods are not accompanied with Shipping Bill, then BOAT NOTE is required. • No exported gods shall be loaded on any conveyance. (Sec.36) • On any Sunday • On any holiday observed by the customs Department • On any other day after the working hours • Except on payment of “prescribed Fees “(d) Restriction on Loading of goods on holidays.(Section.36) • No exported goods shall be loaded on any conveyance on Sunday or any holiday observed by the customs department or any other day after working hours except on payment of prescribed fees.
Export goods not to be loaded on vessel until entry-outwards granted (sce.39) The master of a vessel shall not permit the loading of any export goods , other than baggage & mail bags , until an order has been given by the proper officer granted entry – outwards to such vessel. • Export goods not to be loaded unless duly passed by proper officer (Section.40) The person-in-charge of a conveyance shall not permit the loading at a customs station- • Of export goods (other than baggage & mail bags)------Unless a shipping bill or bill of export/ A Bill of transshipment duly passed by the proper officer , has been handed over to him by the exporter • Of baggage & mail bags------Unless their export has been duly permitted by the proper officer.
Delivery of export Manifest or Export Report (Sec.41) The person-in-charge of a conveyance carrying export goods shall , before departure of the conveyance from a customs station, deliver to the proper officer ;in the case of a vessel or aircraft-an export Manifest,& in the case of a vehicle & export report.
CLEARANCE PROCEDURE FOR TRANSIT OF GOODS AND TRANSSHIPMENT OF CARGO (Section.52-56) • Transit and transhipment :Section 52 and 56 cover the provisions relating to goods in transit and transshipment of cargo.
Meaning of Transit Goods :Goods remaining in the same ship for unloading of another port while other goods are being unloaded from board of conveyance . These are termed as ‘Some bottom cargo’ • Meaning of Transhipment :- Transfer of goods from one conveyance to another conveyance by reloading without intention to unload the goods at the landed port. For example , cargo meant for third country lands at an Indian port Or airport before it is carried to its actual destination. AS per the customs Act , duty becomes payable immediately after imported goods are landed at a port or airport. To avoid payment of duty at the port of landing in cases where goods are to be carried to another port /airport or ICD/CFS or to a port /airport abroad the customs act provides a facility of transshipment of cargo without payment of duty.
Procedure for Transhipment of Containerized IMPORTED CARGO :- • From gateway port to another port /ICD /CFS in India :- • Transhipment permit - A transshipment is the permission granted by the customs ,at the port /airport of unloading of imported goods, to shipping agents for carriage of goods to another port/airport/ICD/CFS in India . The shipping agent submits an application along with transshipment forms (5 copies), sub-manifest & a copy of IGM to the customs . The customs officer scrutinizes the details furnished by the shipping agents in the application for transshipment. In case the documents are in order & there is no alert notice against the shipping agent, permission for transshipment is granted by the customs. b) Bond & bank guarantee – A bond with bank guarantee @15 % of bond value is executed by the carrier engaged for the transshipment of the goods. The carriers in public sector i.e. CON COR & CWC are exempted from the requirement of bank guarantee for transshipment of goods.
Bond for Re-export of containers – The shipping agents are required to file this bond with the container cell of the custom house, binding themselves to re-export containers with in 6 months of their import into India. • Sealing of containers – After issuance of transhipment permit & execution of bonds containers are sealed with ‘one time’ bottle seal by the customs . In case containers are already sealed , they are not required to be sealed again . In such cases , shipping agents are required to inform the serial no. of seals to customs , which is just verified by the customs officer. • Carriage of containers – After sealing or checking of seals by the customs , containers are moved from the gateway port & carried by the shipping agents to destination ports/ICD/CFS by vessels ,rail or roads.
Carriage by rail – Presently , only CONCOR < a (PSU) under the ministry of railways, undertakes rail movement. The CONCOR , being a (PSU) is exempt from execution of bank guarantee for transhipment . After completing all the above said formalities, containers are allowed to be loaded on wagons under the supervision of customs. • Carriage by vessels – The formalities required to be followed for transhipment through vessels are similar to those followed for transhipment by rail. To optimize the capacity utilization of vessels , carriers have been allowed to carry domestic cargo. • Carriage by road – many custodians of ICDs/CFSs ,particularly those which are not connected by rail, carry the containers by road. The formalities to be followed are similar to those followed for transhipment by rail.
Formalities at the destination – The customs checks the particular of containers ,seals etc. .The carrier is required to obtain a certificate regarding landing of container from the customs. If the seals are found to be broken at the time of examination , a survey of contents of the containers is conducted in the presence of the customs officer, carrier ,importer/ his representatives or the representatives of the insurance company. If any shortage is recorded & is signed by all those persons. The carriers are required to pay the duty for pilferage in terms of the condition of bond executed by them with the customs at the port of loading . This is apart from other action, which can be taken under section 16 of the customs act 1962.
Submission of landing certificates to customs at the originating port – The carriers have to obtain the landing certificates .& submit the same to the customs at the originating port The customs reconciles its record & closes IGMs on the basis of the goods. After safe landing of containers at the destination , the importers or their authorized agents are required to follow all customs formalities such as filling of bill of entry , assessment examination of goods, for clearance of the goods.
From gateway port to a port abroad :- For transhipment of containers from a port in India to port abroad , shipping agents have to file transhipment application along with relevant documents to customs. The customs scrutinizes the application & if these are found to be in order , permission to tranship the cargo is granted . In such cases the execution of bond or bank guarantee is not required. After issuance of transhipment permit, goods are allowed to be loaded on the ship under the customs supervision . The preventive officer supervising the loading is to acknowledge loading of such cargo. The record is reconciled on the basis of endorsement of the preventive officer & copy of EGM showing details of such transhipment.
