Customs Summary Book Nov 20 by CA Yachana Mutha Bhurat

SUMMARY BOOK
CUSTOMS – NOV 20
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By CA Yachana Mutha Bhurat

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Index
Sr.No Chapters
1. Introduction & Levy Of Customs Duty And Exemption

Under Custom Duty
2. Types of Duty and Classification of Goods in Tariff
3. Importation, Exportation And Transportation Of Goods
4. Valuation Under Customs Act, 1962
5. Baggage Under Customs
6. Duty Drawback
7. Refund
8. Audit
©Author
No part of this book may be reproduced, stored in a retrieval system, or distributed in any form, or by
any means, electronic, mechanical, photocopying, recording, scanning, web or otherwise without the written
permission of the author. Information and contents of this book have been collated with utmost care,
caution and dedication in order to provide a reliable and comprehensive textual reference for readers.
However, any mistake or errors that may have crept in due to any inadvertence does not impose any legal
liability over the author.
CHAPTER 1 Introduction and levy of Custom Duty and Exemption
under custom duty
⇒ Stages for Imposition of taxes and duties
Assessment is the The final stage is

Levy is stage
procedure of where the tax or
where declaration
quantifying the duty is actually
of liability is made
amount of liability collected
⇒ What is India as per Customs Act, 1962
India includes the territorial waters of India.

The definition of India is an inclusive definition and includes not only the land mass of India but
also the territorial waters of India.
The territorial waters extend to 12 nautical miles into the sea from the appropriate base line.
⇒ Charging Section 12
Analysis: The following are the conditions for levy of custom duty
• Duties of customs shall be levied on goods
• The goods shall be such as are imported or exported to or from India;
• The duty shall be charged at such rates as may be specified under the Customs Tariff Act,
1975.
• Government goods shall be treated at par with non-Governmental goods for the purposes of
levy of customs duty.
CA Yachana Mutha Bhurat 09669357770 gst.yachana@gmail.com

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Note: Sec. 2 (22) Goods include

1) Vessel, Vehicle & aircraft
2) Stores
3) Baggage
4) Currency and negotiable instruments
5) Any kind of movable Property.
Import : Import with its grammatical variation and cognate expressions, means bringing into India
from a place outside India
Important case laws related to Import of Goods

Garden Silk Mills v. UOI
The SC observed that :
• Import of goods will commence: when they cross the territorial waters,but continues and is
completed when they become part of the mass of goods within the country;
• The taxable event: being reached at the time when the goods reach the customs barriers and
bill of entry for home consumption is filed.
Kiran Spinning Mills v. Collector of Customs
In case of warehoused goods, the custom barriers would be crossed when they are sought to be taken
out of customs and brought to the mass of goods in the country.
Export : Export with its grammatical variation and cognate Expressions is defined to mean taking
out of India to a place outside India

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Important Case laws for Export of Goods
Rajendra Dyeing & & Printing Mill ltd:
Facts of cases: Rajendra Dying & Printing Mill Ltd were manufacturers of readymade
garments. They exported certain goods and filed shipping bill. The goods were examined by the
customs authorities and loaded onto the ship. While it was within the territorial water, the ship
sank. The cargo of assesse was destroyed.
Issue: The assesse filed their claim for duty drawback in relation to the goods which were
destroyed. Whether the claim is valid
Court Decision: Their claim was rejected on the grounds that the goods had not crossed the
territorial water and hence no export has taken place

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⇒ Remission / Abatement of duty
If any imported goods are pilfered after the unloading thereof and before
the proper officer has made an order for clearance for home consumption
Duty on Pilfered
or deposit in a warehouse, the importer shall not be liable to pay the duty
goods (Section 13)
leviable on such goods. However, where such goods are restored to the
importer after pilferage, the importer becomes liable to duty.
Where it is shown to the satisfaction of the AC / DC of Customs -
(a) that any imported goods had been damaged or had deteriorated at
any time before or during the unloading of the goods in India; or
(b) at any time after the unloading thereof in India but before their
examination u/s 17
(c) that any warehoused goods had been damaged at any time before
Abatement Of Duty
clearance for home consumption on account of any accident not due to
On Damaged Or
any wilful act, negligence or default of the owner, his employee or agent,
Deteriorated Goods
Duty in such cases shall be calculated in following manner:
(Section 22)
Duty leviable on such damaged or deteriorated goods =
Duty chargeable on the goods before

the damage or deterioration Value of the damaged
goods
Value of goods before damage
Without prejudice to the provisions of section 13, where it is shown to the

Remission Of Duty On
satisfaction of the AC or DC of Customs that any imported goods have
Goods Lost, Destroyed
been lost (otherwise than as a result of pilferage) or destroyed, at any
Or Abandoned
time before clearance for home consumption, the AC or DC shall remit
[Section 23]
the duty on such goods. [Sub-section (1)].
Provides that an importer can request Central Government to make rules

for permitting to denature/mutilate the imported goods, which are
ordinarily used for more than one purpose, so as to render them unfit for
one or more of such purpose.
Denaturing Or
If any imported goods can be used for more than one purpose and duty is
Mutilation Of Goods
leviable on the basis of its purpose of utilisation, than denaturing or
[Section 24]
mutilation of such goods is useful. By denaturing, goods are made unfit
for other purposes. After denaturing process, goods can be used only for
one purpose and accordingly duty can be levied.
Denaturing of Spirit Rules, 1972 specify procedure for denaturing spirit.

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⇒ Goods derelict, wreck etc. [Section 21]

All goods, derelict, jetsam, flotsam and wreck brought or coming into India, shall be dealt
with as if they were imported into India, unless it be shown to the satisfaction of the
proper officer that they are entitled to be admitted duty-free under this Act.
⇒ Exemption from Custom Duty [Section 25]
CG has Power to grant Exemption
General Special
Exemption Exemption
it may, by special order in each case,

exempt generally either exempt from payment of duty, any goods
absolutely or subject to on which duty is leviable only under
such conditions as may be circumstances of an exceptional nature
specified in the notification to be stated in such order

CHAPTER 2 Types of duty and Classification of Goods in Tariff
SEC 2 BCD levied under section 1 are specified in the (1) and (II) schedules
SEC 3
Additional customs duty
Determination of Rate for ACD 3(1) Determination of Rate for ACD 3(5)
It like article If, like good not actually

produced or If rate is
is produced or
If imported notified by If not rate is
manufactured manufactured in India
article is Central Govt. notified by
in India on but if likewise produced
alcohol which does not Central Govt.
which excise or manufactured then
excise duty would have exceed 4%
duty is leviable
been leviable in India
CVD is CVD is CVD is payable @ ACD 3(1) is

applicable to goods of ACD 3(5) is
payable at the payable as payable at the
same class or payable at
rate as mentioned in rate as notified
description to which 4%
notified by CG CETA 1985 by CG
imported article belong
DETERMINATION VALUE FOR ACD 3(1)

If excise duty on like article is leviable on Advoleram basis[i.e transaction value or tariff value]
1. Transaction value : Value for CVD = AV u/s 14(1) (+) BCD (+) NCCD (+) Protective duty
2. Tariff value : Value for CVD = Tariff value of like goods u/s 14(2) of Customs act., 1962
Note : BCD is not includable
Where excise duty on like article is leviable on the basis of retail sale price under LMA, 2009
1. Value for CVD = MRP of imported Goods (-) abatement
Note : BCD is not includable
DETERMINATION OF VALUE FOR ACD 3(5)
Assessable value u/s 14(1)
(+)BCD, (+)CVD, (+)NCCD, (+)Protective duty,

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(+)social welfare surcharge @ 10%

SEC 4 PREFERENTIAL RATE
1. C.G. has power to notify preferential area
2.Duty is payable at preferential rate of imported goods being produce or manufacture in
preferential area
3.C.G. notify the rules for determination of goods produce or manufacture in preferential area
4. In the interest of trade C.G. may reduce or increased or discontinue preferential rate
5. If preferential rate increased then it should not exceeds normal Rate
SEC 5 LOWER RATE OD DUTY UNDER TRADE AGREEMENT
1) C.G. may notify lower agreement between Govt. of India & Foreign Country
2) C.G. notify rules for determination of goods produce or manufacture in foreign country.
Anti-Dumpting Duty:
DETERMINATION OF MARGIN OF DUMPING
It is difference between
Normal value Export Price
If available If not available
If like goods are In case no or low If imported articles If imported articles

ordinarily Sold in the sales in domestic are resold to an are not resold to
country of market of exporting independent buyer an independent
exportation country buyer
“Normal value”, Comparable The cost of Export price”, The export The export
in relation to an representative production of in relation to price may be price may be
article, means the price of the the said article an article, constructed on constructed on
comparable price, like article in the country means the the basis of such
in the ordinary when exported of origin along price of the the price at reasonable
course of trade, for from the with reasonable article exported which the basis as may
the like article exporting addition for from the imported be determined
when sold in the country or administrative, exporting articles are in accordance
exporting country territory to an selling and country or first resold to with the rules
or territory appropriate general costs, territory an independent made
third country. and for profits, buyer

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Duty Protective Duty Safeguard Duty CVD on Anti Dumping Duty

(SGD) (any Subsidised
County) Article
Section 6 8B 9 9A
Authority to levy It is levied by It is levied by It is levied by It is levied by C.G.
C.G. on C.G. C.G.
recommendation
of tariff
commission
Condition/ purpose Tariff To avoid import Import from Where an article
of Levy Commission of increased any country / exported from any
Recommendation quantities and in territory, which country or territory,
to protect the conditions to pays any to India at less than
interest of any cause serious subsidy on its Normal Value.
industry injury to domestic manufacture,
established in industry. production,
India. exportation or
transportation
of article.
Rate of Duty On the basis of SGD = Injury CVD = subsidy Anti Dumping Duty =
recommendation margin (market on imported Margin of Dumping
by Tariff price in India - goods (Refer earlier page)
Commission landed cost)
Landed cost =
FOB + BCD
Provisional Levy Not Relevant Valid for 200 Provisional levy Provisional levy is
days from date of is possible. possible. Time limit
imposition. Time limit not not specified.
specified.
Maximum duration Not Relevant 4 years, 5 years, 5 years, extendable
of Levy extendable upto extendable another 5 years from
10 years. another 5 years date of such
from date of extension
such extension
Retrospective Levy Not Possible Not Possible Upto 90 days Upto 90 days before
before the date the date of
of notification. notification.

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Rules ---- Customs Tariff Customs Tariff (Identification,

(Identification Assessment and Collection of CVD on
and Assessment subsidized articles and for
of SGD) Rules, determination of injury) Rules, 1995.
1997.
Exemption to be No specified No SGD u/s 8B f No specified No ADD u/s 9A for
EOU / SEZ or 100 % EOU 100% EOU & unit in
& unit in FTZ / FTZ / SEZ
SEZ
Effects of Levy Such duties shall be in addition to any other duty imposed under this Act or
under any other law for the time being in force.
Customs Act Not Specified Customs Act, Rules & Regulations, for
date for rate of duty, non-levy, short-
levy, refunds, interest, appeals, offences
& penalties shall, apply to such duties
also.
ACD 3(7) to countervail levy of GST

(7) Any article which is imported into India shall, in addition,
• be liable to integrated tax
• at such rate, not exceeding forty per cent.
• as is leviable under section 5 of the Integrated Goods and Services Tax Act, 2017
on a like article on its supply in India,
• on the value of the imported article as determined under sub-section (8). or Sub
Section (8A), as the case may be
(8) Valuation for ACD 3(7)
For the purposes of calculating the integrated tax under sub-section (7) on any imported
article where such tax is leviable at any percentage of its value,
the value of the imported article shall, notwithstanding anything contained in section 14 of
the Customs Act, 1962,
be the aggregate of—
(a) the value of the imported article determined under sub-section (1) of section 14 of the
Customs Act, 1962 or the tariff value of such article fixed under sub-section (2) of that
section, as the case may be;
and
(b) any duty of customs chargeable on that article under section 12 of the Customs Act,
1962 (BCD),
and
any sum chargeable on that article under any law for the time being in force as an

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addition to, and in the same manner as, a duty of customs,

but does not include
• the tax referred to in sub-section (7) or
• the cess referred to in sub-section (9).
(8A) ACD on Warehouse Sale before clearance
Where the goods deposited in a warehouse are sold to any person before clearance for home
consumption or export the value of such goods under subsection (7) shall be,—
(a) where the whole of the goods are sold-,
the value determined under sub-section (8) or
the transaction value of such goods, whichever is higher;
OR
(b) where any part of the goods is sold,
the proportionate value of such goods as determined under sub-section (8) or
the transaction value of such goods, whichever is higher:
Provided that where the whole of the warehoused goods or any part thereof are sold more
than once before such clearance for home consumption or export, the transaction value of the
last such transaction shall be the transaction value for the purposes of clause (a) or clause
(b):
Provided further that in respect of warehoused goods which remain unsold, the value or the
proportionate value, as the case may be, of such goods shall be determined in accordance
with the provisions of sub-section (8).
Explanation.— For the purposes of this sub-section, the expression “transaction value”, in
relation to warehoused goods, means the amount paid or payable as consideration for the
sale of such goods.
ACD 3(7) = IGST
1) ACD 3(7) = IGST

2) It is leviable to counter balance that effects of GST payable on supply of like goods in
India. It is payable as IGST as per section 5 of IGST Act.
3) It is leviable on all goods except the goods as mentioned in ACD3(1)
4) Determination of duty IGST is payable @0%, 5%, 12%, 18%, 23%or any other rate
notified by CG on recommendation by council which should not exceeds 40%
5) Transaction value
Assessable value u/s 14(1) XX
(+)BCD XX
(+)Social welfare surcharge @10% XX
(+)NCCD XX
(+)protective duty/safeguard duty/ CVD on subside Article/anti dumping duty XX
Value for IGST (i.eACD3(7)) XXX

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ACD 3(9) to countervail levy of GST Compensation Cess

(9) Any article which is imported into India shall, in addition,
• be liable to the goods and services tax compensation cess
• at such rate, as is leviable under section 8 of the Goods and Services Tax
(Compensation to States) Cess Act, 2017
• on a like article on its supply in India,
• on the value of the imported article as determined under sub-section (10) or sub-
section (10A), as the case may be
(10) Valuation for ACD 3(7)
For the purposes of calculating the goods and services tax compensation cess under
subsection
(9) on any imported article where such cess is leviable at any percentage of its value,
the value of the imported article shall, notwithstanding anything contained in section 14
of the Customs Act, 1962,
be the aggregate of
(a) the value of the imported article determined under sub-section (1) of section 14 of the
Customs Act, 1962 or
the tariff value of such article fixed under sub-section (2) of that section, as the case may
be; and
(b) any duty of customs chargeable on that article under section 12 of the Customs Act,
1962,(BCD) and
any sum chargeable on that article under any law for the time being in force as an addition
to, and in the same manner as, a duty of customs,
but does not include
• The tax referred to in sub-section (7) or
• The cess referred to in sub-section (9).
(10A) ACD on Warehouse Sale before clearance
Where the goods deposited in a warehouse under the provisions of the Customs Act, 1962 are
sold to any person before clearance for home consumption or export under the said Act, the
value of such goods for the purpose of calculating the goods and services tax compensation
cess under sub-section (9) shall be,—
(a) where the whole of the goods are sold,
the value determined under sub-section (10) or
the transaction value of such goods, whichever is higher;
OR
(b) where any part of the goods is sold,
the proportionate value of such goods as determined under sub-section (10) or
the transaction value of such goods, whichever is higher:

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Provided that where the whole of the warehoused goods or any part thereof are sold more
than once before such clearance for home consumption or export, the transaction value of the
last of such transaction shall be the transaction value for the purposes of clause (a) or
clause (b):
Provided further that in respect of warehoused goods which remain unsold, the value or the
proportionate value, as the case may be, of such goods shall be determined in accordance
with the provisions of sub-section (10).
Explanation.—For the purposes of this sub-section, the expression “transaction value”,
in relation to warehoused goods, means the amount paid or payable as consideration for
the sale of such goods.
⇒ Tariff Based on Harmonised system of Nomenclature (HSN)
Customs tariff
Act, 1975
Schedule I for Schedule II for

imported goods Export Goods
21 Sections 99 Chapters
At the beginning of the

At the beginning of the sections,
chapters, chapter notes are
sections notes are given
given
Statutory Provisions Non Statutory Provisions
It is also called general interpretative It is also called as trade partance

rules (GIR) or rules for theory
interpretation of Tariff

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⇒ Important Points
Classification of Determination of headings or sub headings of the CTA, 1975 under which the said
Goods goods are covered
(a) Determination of rate of duty
Need of (b) Determination of eligibility of exemption
Classification (c) Determination of deemed manufacture
Columns in Customs Tariff Act, 1985 (CTA) = 4
1 Tariff Eight Digit Description
2 Description of Goods Names and Classifications
Kilograms, Metres, Units, Litres
3 Units
Etc.
4 Rate of Duty 10%, 4%, Nil Etc
Dash System
Indicates sub classification of
- Single dash
article-covered in heading
Indicates sub classification of
-- double dash
article preceded by 'Single dash'
Features of Indicates sub-sub classification

--- & ---- Triple & Quadruplicate of article preceded by 'Single or
Tariff
double dash'
Eights Digit System [17011310]
First 2 digit
17 Chapter No.
indicates
Next 2 digits
1 Heading No.
indicates
Next 2 digits
13 Subheading No.
indicates
Next 2 digits
10 Specific Product ID
indicates
Std. Unit of it is a unit and used to facilitate the collection, comparison
quantity and analysis of trade statistics. Example :CC,Cm,Mt
Elaborate explanation regarding to scope of respective
Section notes &
section or chapter. It is part of the status & legally used for
Chapter Notes
classification
Abbreviation % It Indicates that duty is on the basis of value of goods

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General rules of interpretation
Purpose 1. To help in appropriate classification of goods

2. To give clear direction as to how the nomenclature in the Schedule is to be interpreted
and
3. To give salutary force to the interpretation Rules and the general explanatory notes.
Rule 1 Titles of section or chapters do not decide classification, Terms of heading, section of notes and
Chapter Notes are relevant.
Rule 2 a) Incomplete Goods/ Disassembled/ Unassembled Goods = Complete Goods
b) Main article – includes mixture or combination of that articles with others
Rule 3 If goods are prima facie classifiable under 2 or more heading due to Rule 2(b) or any other
reason, apply Rule 3(a) to Rule 3(c)
Specific Rule Product Available Headings Classification

(a) Prefer specific Name plate a) Accessories of Accessories
heading to General motor vehicle motor vehicle
Heading b) Article of plastic
VIP bag a) Plastic Article Suitcase
b) Suitcase
Characteristic Rule Product Available Headings Classification

(b) It mixture Book with CD 1) Book Classification as
consist of different 2) CD book
material classify in
that material which
gives them their Pen stand with 1) Pen Stand Classification as
essential character clock 2) Clock pen stand
Later the better Product Available Headings Classification

(c) If both are Meter Vehicle a) motor vehicle It shall be
equally specific use for design for transport classified as
prefer the latter transportation of of passenger (87 Motor vehicle
tariff head to earlier passenger and 03) design for
tariff head goods both b) Motor vehicle transport of
design for transport goods (Mahindra
of goods (87 04) & Mahindra
1999)
Rule 4 Akin Rule: Goods which cannot be classified in accordance with the above rules shall be classified
under the headings appropriate to the goods to which they are most akin

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HSN & other Rule Classification
HSN Harmonized 1. Meaning: internationally accepted product coding system for categorisation
system of and Classification of commodities and was conceived and devised by the
Nomenclature world Customs Organisation (WCD)
2. Features: 8 digit code suitable for multi-purpose nomenclature.
3. Reliance: HSN can be relied for classification under the Tariff Schedule, if
there is no conflict between Indian Tariff Schedule and HSN
4. Relevance of Notes: Only the section notes and chapter notes have legal
status. Explanatory Notes to HSN do not have any legal status
Burden to prove 1. Department: To established correct Tariff heading under which the
Classification product fails. Onus is on the department to established alternate
classification.
2. Assessee: When certain goods are prima facie covered by generic
description, the burden, to prove that they are not so covered would be on
the person claiming so.
Alternation of 1. Guidelines for altering classification- (a) Fresh facts arise (b) process
Classification changed (c) Tariff entry modified (d)HC/SC decision, (e)change in
status (f) Regular Tariff Entry- not disturbed, (g) Prior Notice
2. Judgement: where an assesses has not filed fresh classification list, at
the most, penalty can be levied. Issuance of Demand Notice is not
sustainable
Trade Parlance 1. Goods are not to be classified as they are known is trade and commerce,
Theory if it is neither defined in schedule to CETA nor in CEA
2. Conditions: (a) a particular product description under trade and parlance
occurs by itself in a Tariff entry and (b)there is no conflict between
Tariff entry and other entry requiring reconciliation
3. Exception: (a) Scientific and Technical Terms, and (b) conflict with
statutory context.

CHAPTER 3 Importation, Exportation And Transportation Of Goods
⇒ Procedure for Import of Goods

Section 29: Arrival Of Vessels And Aircrafts In India
Vessels or aircrafts entering India from outside India can only call or land at a customs port or a customs
airport. If CBIC can permit calling / landing of conveyance at any other place other than customs
station is permitted.
Exception: 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 or customs airport.
Section 30 : Delivery Of Arrival Manifest Or Import Manifest Or Import Report
After ensuring that the vessels are landed only in approved customs port or airports, further duty is cast
upon the person in charge of the vessel to deliver the arrival manifest or import manifest.
Import Manifest in case of Vessel or Aircraft and import report in case of vehicle
Particulars Import Document Time limit for Mode of

presentation of IM/IR Presentation
Where the imported Arrival manifest or Any time prior to the Electronic filing*
goods are brought in a import manifest arrival of the vessel
vessel
Where the imported Arrival manifest or Any time prior to the Electronic filing*
goods are brought in an import manifest arrival of the aircraft
aircraft
Where the imported Import Report Within twelve hours Manual filing
goods are brought in a after its arrival in the
vehicle customs station
Penalty : if Above section contravenes then the person-in- charge would be liable to a penalty up to
Rs. 50,000.
Belated filing of IGM: Arrival manifest or import manifest/Report filed belatedly may also be accepted by
the proper officer on valid justified grounds.
Amendment to IGM: If the proper officer is satisfied that the arrival manifest or import manifest or
import report is in any way incorrect or incomplete and there is no fraudulent intention, he may permit
it to be amended or supplemented

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Section 30A: Passenger and Crew Arrival Manifest and Passenger Name Record Information.
The person in-charge of conveyance that enters India, shall deliver to the Proper Officer.
(i) the passenger and crew arrival manifest before arrival in the case of an aircraft or a vessel and upon
arrival in the case of a vehicle; and
(ii) the passenger name record information* of arriving passengers, in such form, containing such
particulars, in such manner and within such time, as may be prescribed.
⇒ Other Provisions relating to conveyance carrying imported goods
Sections Particulars
Imported Goods Not To Be Unloaded Unless Mentioned In Arrival Manifest Or Import
Section 32
Manifest Or Import Report
Section 33 Loading And Unloading Of Goods At Approved Places Only
Section 34 Goods Not To Be Loaded Or Unloaded Except Under The Supervision Of Customs Officer
Section 36 Restrictions On Unloading And Loading Of Goods On Holidays Etc.
Section 37 The Proper Officer Has Power To Board Conveyance
Section 38 The Proper Officer Has Power To Require Production Of Documents And Ask Questions
⇒ Section 45: Restrictions On Custody And Removal Of Imported Goods

• Once the imported goods have entered the Customs area, there arises the question of who is
responsible for the safe custody of goods.
• Responsibility of Custodian of goods:
(i) Maintain a proper record of goods received from the carriers and send a copy of the record to the
proper officer.
(ii) Not to permit such goods to be removed from the customs area or allow them to be dealt with
otherwise except under the specific permission in writing of the proper officer or in accordance
with a general procedure that may be prescribed that avoid subjectivity of the officer as to the
manner of removal of such goods.
⇒ Section 46: Filing of Import bill of entry

Bill of Entry is a document of assessment and when assessed becomes an assessment order. With
this extent of automation, Customs expects that filing of bill of entry and payment of duty is on the
automated system of customs department or CAS.
The importer who presents a bill of entry shall ensure the following, namely:—
(a) the accuracy and completeness of the information given therein;

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(b) the authenticity and validity of any document supporting it; and
(c) compliance with the restriction or prohibition, if any, relating to the goods under this Act or under
any other law for the time being in force.
Bill of Lading: The Bill of Lading given by the carrier of the goods is the importer’s document of title to
the goods. The Bill of Lading covers all the goods imported with full description.
Time limit for filing: Before the end of following the day on which aircraft / vessel arrives but in any
case bill of entry may be presented at any time not exceeding thirty days prior to the expected arrival
of the aircraft/vessel.
⇒ Section 47: Clearance of Goods

Time limit for payment of import duty: The importer shall pay the import duty—
(a) on the date of presentation of the bill of entry in the case of self- assessment; or
(b) within one day (excluding holidays) from the date on which the bill of entry is returned to
him by the proper officer for payment of duty in the case of assessment, reassessment or provisional
assessment; or
(c) in the case of deferred payment, from such due date as may be specified by rules made in this
behalf, and if he fails to pay the duty either in full or in part within the time so specified, he shall pay
interest on the duty not paid or short-paid till the date of its payment.
The rate of interest shall be not below 10% and not exceeding 36% per annum and shall be
fixed by the central government. However, the interest may be waived by the CBIC in public
interest.

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⇒ Deferred Payment of Import Duty Rules, 2016 read with Circular No. 52/2016-Cus dated
15.11.2016:
Information about intent to avail benefit of Notification: An eligible importer intending to avail the
benefit of deferred payment shall intimate to the Principal Commissioner/Commissioner of Customs, having
jurisdiction over the port of clearance, his intention to avail the said benefit who on being satisfied with
the eligibility of the importer allow him to pay the duty by due dates.
Due dates for deferred payment of import duty—
Due date of payment of duty, inclusive of
Goods corresponding to Bill of Entry
Sr No. the period (excluding holidays) as mentioned
returned for payment from
in section 47(2)
1 1st day to 15th day of any month 16th day of that month
16th day till the last day of any month

2 1st day of the following month
other than March
3 16th day till the 31st day of March, 31st March
Electronic payment of duty: The eligible importer shall pay the duty electronically: However, the
Assistant/Deputy Commissioner of Customs may for reasons to be recorded in writing, allow payment of
duty by any mode other than electronic payment.
Deferred payment not to apply in certain cases: If there is default in payment of duty by due date
more than once in three consecutive months, this facility of deferred payment will not be allowed unless
the duty with interest has been paid in full.
Mandatory Electronic Payment Of Duty : The Central Government has notified the following classes
of importers who have to pay customs duty electronically, namely:-
(i) Importers registered under Accredited Clients Programme
(ii) Importers paying customs duty of Rs. 1 lakh or more per bill of entry
The importer desirous to make use of the e-payment facility first needs to have an internet
account with a designated bank.

Summary Book
⇒ Section 49: Storage Of Imported Goods In Warehouse Pending Clearance Or Removal
Where the Assistant Commissioner/Deputy Commissioner of Customs is satisfied on the application

of the importer that––
(a) the goods cannot be cleared within a reasonable time in the case of imported goods, whether
dutiable or not, entered for home consumption.
(b) the goods cannot be removed for deposit in a warehouse within a reasonable time in the case of
any imported dutiable goods, entered for warehousing.
then in such cases, goods can be stored in a public warehouse for a period not exceeding 30 days.
Such goods deposited under public warehouse will not be covered under Chapter IX of the Act. However,
the Principal Commissioner / Commissioner of Customs may extend such period of storage for
further 30 days at a time.
⇒ Procedure for Export of Goods
The first and foremost duty cast on the master of the vessel u/s 40 is that export goods are not to be
loaded unless duly passed by Proper Officer.
The person-in-charge of a conveyance shall not permit the loading at a customs station
(a) of export goods, other than baggage and mail bags, unless a shipping bill or bill of export or a
bill of transshipment, as the case may be, duly passed by the proper officer, has been handed over to
him by the exporter;
(b) of baggage and mail bags, unless their export has been duly permitted by the proper officer.
This is the most important responsibility cast on the person-in-charge of the conveyance has to
give to the Customs Authorities a complete list of the cargo exported from India and taken by the
conveyance under his charge.
Penalty : If the above mentioned clause is contravened by Person in charge then he shall be liable for
fine of Rs. 50000/-
⇒ Section 41A: Passenger And Crew Departure Manifest And Passenger Name Record Information
The person-in-charge of a conveyance that departs from India to a place outside India or any other
person as may be specified by the Central Government, shall deliver to the proper officer—
(i) the passenger and crew departure manifest; and
(ii) the passenger name record information of departing passengers, in such form, containing such
particulars, in such manner and within such time, as may be prescribed.

Summary Book
⇒ Flow of Export
(i) The exporter files an application for export of goods known as Shipping Bill.
(ii) After the appraising department, assesses the export duty on the shipping bill, export cess etc. are
collected.
(iii) Thereafter the Shipping Bill along with the export cargo is presented to the Customs officers in
charge of supervision of the loading of the Cargo. (These officers are generally called Preventive Officers
in the major Custom Houses.) The Preventive Officer after satisfying himself that all the customs
checks including Export Trade Control license and export duty payment have been completed, will
endorse the shipping bill with a “Let Ship” order.
(iv) On receipt of the cargo on board the ship, the master/mate/agent of the ship issues a receipt of
the quantity and particulars of the cargo loaded on the ship.
(v) If the ship is not berthed alongside the quay and the goods have to be taken to the ship by
boats/lighters the boat note procedure would be followed.
(vi) When the Shipping Bill is presented to the master/agent/mate of the vessel, the export cargo will
be permitted to be loaded.
(vii) The Customs Officer endorses on the Shipping Bill the quantity of the goods-loaded into the ship
under the Shipping Bill.
⇒ Difference between Transit and Transhipment
Transit Transhipment
(i) Section 53 of the Customs Act, 1962 (i) Section 54 of the Customs Act, 1962 provides
provides for transit of goods. for transhipment of goods.
(ii) In case of transshipment of goods, the

(ii) In case of transit of goods, goods are
conveyance changes i.e., the goods are unloaded from
allowed to remain on the same conveyance.
one conveyance and loaded in another conveyance.
(iii) In transshipment of goods, continuity in the

(iii) In case of transit of goods, there is
records is not maintained as the goods are transferred
continuity of records.
to another conveyance.

CHAPTER 4 Valuation under Customs
⇒ Valuation of customs Duty
Section 14(1) – Transaction Value of Imported or Exported Goods
- Price actually paid / payable for goods when sold for export to/from India
- for delivery at time & place of importation/ exportation
- buyer & seller not related
- price sole consideration for sale
- subject to conditions prescribed by rules.

Section 14 (2) – Tariff Value
CBEC may notify Tariff values for any class of imported/ export goods
Authors Note :
1) For Import = Assessable Value is CIF
2) For Exports = Assessable value is FOB
⇒ Relevant date for rate of duty and Tariff valuation of Imported Goods
Scenario Relevant Date

Import Goods
Entered for home Later of (i) date of filing B/E for home consumption or (ii) date of
consumption entry inwards to vessel/arrival of vehicle/aircraft
Cleared from Warehouse date on which Bill of Entry for home consumption is presented
Any other goods date of payment of duty

Export Goods
Entered for export date of the ‘let export’ order
Any other goods date of payment of duty
⇒ Relevant date for Rate of Exchange

Imported Goods – Date of filing of Bill of entry
Warehoused Goods – Date of presentation of into bond bill of entry
Export Goods – Date of filing shipping Bill / bill of export

Summary Book
⇒ Format for valuation of Goods For Imported Goods
Format for the purpose of Determination of Assessable Value and calculation of custom duty
Particulars Amount
Ex-Factory Cost XXX
Add: Transport Charges at Exporter's Country XXX
Add: Handling Charges and Loading Charges XXX
FOB (Free on Board) XXX
Add : Adjustment for 10(1) expenses i.e. Commission, Engineering, design work,royalties
XXX
and license fees and any other payment made as a condition of sale
Adjusted FOB XXX
Add : Adjustment for 10(2) Expenses i.e. Freight Cost XXX
Add : Adjustment for 10(2) Expenses i.e. Insurance cost XXX
CIF being Assessable Value - (A) XXX
BCD @ Applicable % on (A) - (B) XXX
Add: Social Welfare Surcharge (SWS) @ 10% on (A) - (C) XXX
Total value for the purpose of levy of IGST u/s 3 (7) of Customs Tariff Act (A+B+C) XXX
IGST @ Applicable Rate (D)

Total Custom Duty Payable (B+C+D) XXX
⇒ Value of Imported Goods

Value of Imported goods – to be applied sequencially
Customs Valuation (Determination of value of Imported Goods) Rules, 2007
• TV of imported goods [Rule 3]
• TV of identical goods [Rule 4]
• TV of similar goods [Rule 5]
• Deductive Value based on identical/similar imported goods [Rule 7]
• Computed Value [Rule 8]
• Residual method (Rule9)

Summary Book
⇒ Adjustment for Rule 10 (1) Expenses

(a) Commission, brokerage and Packing charges
If incurred by the buyer but are not included in the price actually paid or payable :
(i) commissions and brokerage, except buying commissions;
(ii) the cost of containers which are treated as being one for customs purposes with the goods in
question;
(iii) the cost of packing whether for labour or materials.
Note: “buying commissions” means fees paid by an importer to his agent for the service of
representing him abroad in the purchase of the goods being valued.
(b) Free assistance by Buyer
Apportioned value of goods or services: where supplied directly or indirectly by the buyer free of
charge or at reduced cost for use in connection with the production and sale for export of imported
goods to the extent that such value has not been included in the price actually paid or payable,
namely:-
(i) materials, components, parts and similar items incorporated in the imported goods;
(ii) tools, dies, moulds and similar items used in the production of the Imported goods;
(iii) materials consumed in the production of the imported goods;
(iv) engineering, development, art work, design work, and plans and sketches undertaken elsewhere
than in India and necessary for the production of the imported goods.
(c) Royalty and License Fees (If Includes patent, copy rights, )
(d) The value of any part of the proceeds of any subsequent resale, disposal or use of the
imported goods that accrues, directly or indirectly, to the seller;
(e) all other payments actually made or to be made
• as a condition of sale of the imported goods,
• by the buyer to the seller, or by the buyer to a third party to satisfy an obligation of the seller
• to the extent that such payments are not included in the price actually paid or payable.

Summary Book
⇒ Adjustment for Rule 10 (2) Expenses i.e. Cost of Transportation & Insurance
Cost of Insurance
If Cost Not Ascertainable If Cost Ascertainable
If FOB value is If FOB Value not ascertainable Actual cost to be

and Cost of Transport, loading,
ascertainable included for Valuation
unloading and handling
charges is ascertainable
1.125 % of
FOB
1.125 % of
Such sum
Cost of Transport, loading,

unloading and Handling Charges
By Air By Sea
Ascertainable Not Ascertainable Ascertainable
Actual cost but If FOB Value FOB value is not ascertainable Actual
restricted to 20% of is but the sum of FOB value Expenses to
Ascertainable and the cost of insurance is be added
FOB
ascertainable,
20 % of
FOB
20 % of Such Sum
⇒ Valuation Rules
Rule 3
• No restriction on buyer for disposal of goods
• Sale not subject to conditions for which value cannot be determined
• No further consideration to accrue to seller unless adjustable as per rule 10

Summary Book
• Buyer & seller are unrelated; if related TV is accepted when examination of circumstances of
sale indicate that relationship didn’t influence price & importer proves that price is close to
TV of identical/ similar goods, in sales to unrelated buyers; deductive/ computed value of
identical/similar goods
Rule 4
Value = TV of Identical Goods
• imported at/ about same time
• at same commercial level & in substantially same qty (or value is accordingly adjusted)
• as goods being valued
Rule 5
Value = TV of Similar Goods
• imported at/ about same time
• at same commercial level & in substantially same qty (or value accordingly adjusted)
• as goods being valued
Rule 7
Value = Deductive Value
• If goods being valued/ identical/ similar goods are sold in India, in the same condition as
imported, at/ about same time:
• AV = S.P – [Commission, sales expenses, profit, transport & insurance, customs duties & other
taxes payable], IN INDIA.
• S.P. is unit price at which imported/ identical/ similar imported goods sold in greatest aggregate
qty to unrelated persons in India
Rule 8
Value = Computed Value
• Computed Value = Sum of Cost of material, processing employed in producing imported goods,
profit & general Expenses reflected in sale of same class goods made in country of exportation
for export to India & expenses/ cost under rule 10(2).
⇒ Difference Between Identical Goods and Similar goods

Summary Book
“Identical Goods”
Same Physical Same Same producer

Imported Goods features, quality Country of (if not then
Etc. others allowed)
production
“Similar Goods”
Like feature and

component Same producer
material Same
(if not then
Imported Goods commercially Country of
interchangeably others
production
with imported allowed)
goods

Summary Book
⇒ Valuation of Exported Goods

Rule 3 : Determination of Method of Valuation
• Subject to rule 8, the value of export goods shall be the transaction value.
• The transaction value shall be accepted even where the buyer and seller are related, provided that
the relationship has not influenced the price.
• If the value cannot be determined under the provisions of sub-rule (1) and sub-rule (2), the value
shall be determined by proceeding sequentially through rules 4 to 6.
Rule 4 : Determination Of Export Value By Comparison
The value of the export goods shall be based on the Transaction value of the goods of the like kind
and quality, exported at or about the same time, to other buyers in the same destination country of
importation or in its absence another destination country of importation adjusted in accordance with
Rule 4(2).
Rule 5 : Computed Value Method
If the value cannot be determined under rule 4, it shall be based on a computed value, which shall
include the following:-
(a) cost of production, manufacture or processing of export goods;
(b) charges, if any, for the design or brand;
(c) an amount towards profit.
Rule 6 : Residual Method
Subject to the provisions of rule 3, where the value of the export goods cannot be determined under
the provisions of rules 4 and 5, the value shall be determined using reasonable means consistent with
the principles and general provisions of these rules provided that local market price of the export goods
may not be the only basis for determining the value of export goods.

CHAPTER 5 Stores, Baggage
⇒ Section 2(38) - Stores
Stores
Includes, fuels, spares parts and other

Means goods for used in Vessel or Aircraft articles of equipment whether or not for
immediate fittings
⇒ Foreign going vessel
foreign-going vessel or aircraft” means any vessel or aircraft for the time being engaged in the
carriage of goods or passengers between any port or airport in India and any port or airport outside
India, whether touching any intermediate port or airport in India or not, and includes—
• any naval vessel of a foreign Government taking part in any naval exercises;
• any vessel engaged in fishing or any other operations outside the territorial waters of India;
• any vessel or aircraft proceeding to a place outside India for any purpose whatsoever;
⇒ Provision of Stores
Section 85: Stores allowed to deposited in warehouse without warehousing provisions of warehousing
Section 86: Transit and transhipment of stores allowed without duty
Section 87: Imported stores may be consumed on board a foreign-going vessel or aircraft
Section 88: 1) Duty paid imported stores eligible for drawback as follows:
Aircraft Fuel and lubricant oil 100 % drawback
Other stores i.e. (e.g. food, 98 % drawback
drink etc.)
Vessels Fuel, Lubricant oil and other 98 % drawback
stores
Section 89: Goods manufactured in India and required as a stores on Foreign going vessel / Foreign
aircraft
Section 90: Imported Stores may be consumed on board a ship of the Indian Navy.

Summary Book
⇒ Baggage
Baggage
Include - but doesnot

Unaccompanied include Motor
baggage vehicle
⇒ Rate of Duty on baggage is 38.5% ( including social welfare surcharge of 10% )

⇒ Provision of Baggage
Section 77: For clearing the baggage, the owner shall make a declaration of its content to proper
officer
Section 78: Relevant date for custom duty : date on which declaration is made in respect of such
baggage.
Section 79: Bonafide Baggage is exempted from duty to the extent specified in rules.
Rule 3: Passengers arriving from countries other than Nepal, Bhutan or Myanmar
Situations Free Allowance
Class of passengers : Indian resident or Foreigner residing in India or Tourist of Indian origin
(i) Used personal effects and travel souvenirs; and Free
(ii) Articles other than mentioned in Annexure – I Rs. 50,000
Class of passengers : Tourist of foreign origin
(ii) Articles other than mentioned in Annexure – I Rs. 15,000
Class of passengers : Infant
(ii) Articles other than mentioned in Annexure – I No Benefit

Summary Book
Rule 4 : Passengers arriving from Nepal, Bhutan or Myanmar

Situations Free Allowance
Class of Passengers : Indian resident or Foreigner residing in India or Tourist, excluding an
infant
(ii) Articles other than mentioned in Annexure – I
(a) Passenger is arriving by Land Route No Benefit
(b) Passenger is arriving by other Route Rs. 15,000
Class of Passengers : Tourist of Foreign origin
(ii) Articles other than mentioned in Annexure – I
(a) Passenger is arriving by Land Route No Benefit
(b) Passenger is arriving by other Route Rs. 15,000
Class of Passengers : Infant
(ii) Articles other than mentioned in Annexure – I No Benefit
Annexure - I (See Rule 3, 4 and 6)
1. Fire arms.
2. Cartridges of fire arms exceeding 50.
3. Cigarettes exceeding 100 sticks or cigars exceeding 25 or tobacco exceeding 125 gms.
4. Alcoholic liquor or wines in excess of two litres.
5. Gold or silver in any form other than ornaments.
6. Flat Panel (Liquid Crystal Display/Light-Emitting Diode/Plasma) television.
Rule 5 : Jewellery
Class of Passengers : Passenger residing abroad for more than one year
Origin country from which the passenger is coming
Gentleman Passenger Jewellery up to a weight of 20 gms with a value cap of Rs. 50,000
Lady Passenger Jewellery up to a weight of 40 gms with a value cap of Rs. 1,00,000
Rule 6 : Transfer of Residence (Refer Main book for complete provision)
Rule 8 : Provision Regarding Unaccompanied Baggage
Unaccompanied baggage refers to Baggage that is not accompanied with passenger.
Unaccompanied baggage may arrive within a period of 1 month after passengers arrival or before
2 months arrival (condonation of earlier arrival by AC/DC)
These rules shall apply to unaccompanied baggage except where they have been specifically
excluded.

Summary Book
Rule 9 : Crew Baggage

These baggage rules are also applicable to the members of the crew engaged in foreign going
conveyance for importation of their baggage, when they are finally paid off on termination of
their engagement. However, other crew members of a vessel and aircraft will be allowed to
bring items like chocolates, cheese, cosmetics and other petty gift items for their personal
or family use for a value not exceeding 1500. Family, under these rules, includes all persons who
are residing in the same house and form part of the same domestic establishment.

CHAPTER 6 Duty Drawback
⇒ Meaning of Drawback
Section 74 - drawback”, in relation to any goods exported out of India, means the refund of duty or tax
or cess as referred to in the Customs Tariff Act, 1975 and paid on importation of such goods in terms of
section 74 of the Customs Act. Thus, IGST and GST compensation cess paid on imported goods is also
liable for drawback
Nature of Transaction: Amount Of Drawback Where Imported Goods Are Used Before Re- Exportation
Section 75 - drawback”, in relation to any goods exported out of India, means the refund of duty excluding
IGST leviable u/s 3(7) and compensation cess levaible u/s 3(9) of the customs Tariff Act, 1975 chargeable
on any imported material or excisable materials used in he manufacture of such goods. Thus, IGST and GST
compensation cess paid on imported goods is not eligible for drawback.
Nature of Transaction: Drawback On Imported Materials Used In The Manufacture Of Export Goods
⇒ Important Conditions for availing drawback u/s 74 and Section 75

• The goods must be capable of being identified • There is no criteria of such
• Duty drawback shall be allowed even if the imported identification since the inputs are
goods are taken into use and then exported. manufactured before their export
• The goods must be exported within 2 years from the • Drawback is available only in respect of
date of payment of duty or such extended time notified goods
allowed by board. • If the goods manufactured from imported
• Duty drawback is allowed 98% of the import duty, if material are used in India and
the goods are exported without use and in case if they subsequently exported, then no duty
are taken into use drawback is allowed at notified rate drawback shall be allowed.
depending upon the period of use • The goods exported may be manufactured
or processed from imported or indigenous
inputs.
• There is no time limit for such
exportation
• There should not be any negative value
addition and minimum value addition
must be achieved, if specified.

Summary Book
⇒ Reduced Drawback rates having regard to duration of use (for sec 74) :
Length of period between the date of clearance for home Percentage of import
*Sr
consumption and the date when the goods are placed under duty to be paid as
No.
Customs control for export Drawback
1 Not more than three months 95%
2 More than three months but not more than six months 85%
3 More than six months but not more than nine months 75%
4 More than nine months but not more than twelve months 70%
5 More than twelve months but not more than fifteen months 65%
6 More than fifteen months but not more than eighteen months 60%
7 More than eighteen months Nil
⇒ Special rate of drawback for motor vehicles

• If the car or specified goods are re-exported immediately: 98% of the duty paid is refundable.
• If the car or specified goods are re-exported after being used: Percentage of reduction of the
drawback is related to use of the motor vehicle per quarter as under:-
Drawback of duty shall be calculated by
Sr. No Year
reducing the import duty by
1 1St 4% per quarter or part thereof
2 2nd 3% per quarter or part thereof
3 3rd 2.5% per quarter or part thereof
4 4th 2 % per quarter or part thereof
Drawback u/s 75 is allowed as below :
All Industry Drawback Rates (AIDR) are fixed under rule 3 by considering average quantity and
value of each class of inputs imported or manufactured in India. Drawback is limited to incidence
of duties of Customs on inputs used and remnant Central Excise Duty on specified petroleum
products used for generation of captive power for manufacture or processing of export goods.
Brand Rate : Where no drawback is determined, the manufacturer/exporter has to apply

for drawback within 3 months seeking a brand rate from the Government giving all date
and information about use of inputs, manufacture etc.

Summary Book
Where amount or rate of drawback determined is low the drawback rate is low, a
SPECIAL BRAND RATE will be applicable. Where the rate is lower than 80% of the duties
paid, revised rate may be applied for within 3 months.
⇒ No Drawback in certain goods
i. Goods being used after importation

• Wearing apparels
• Tea Chests
• Photographic Films & X-ray
• Paper & Plates
ii. When the amount of drawback is less than Rs. 50

iii. in respect of any goods, the market price of which is less than the amount of drawback due
thereon
iv. If the Central Government is of the opinion that goods of any specified description in respect
of which drawback is claimed under this chapter are likely to be smuggled back into India
⇒ Interest on Drawback
Interest payable by Department Interest payable by Importer
• Drawback must be paid within 1 month If, drawback has been paid to the exporter
• If Not paid erroneously
• Interest @ 6% p.a. from the date of expiry of Interest @ 15 % p.a. shall be payable from
the said person of 1 month till the date of the date of erroneously refund to date of
payment of such drawback. payment

CHAPTER 7 Refunds
Procedure to Claim the Refund

PARTICULARS CUSTOMS PARTICULARS CUSTOMS
Presentation of claim by the Any person claiming refund of any duty and interest paid on such duty
applicant a) Paid by him in pursuance of an order of assessment, or
b) Borne by him
shall present a claim in proper (Form-R), along with
 All the relevant document supporting his claim and also
 The copies of documents/ records supporting his declaration
that he has not passed on the duty incidence.
Time Limit for claiming the 1 year from relevant date
refund Note: No time limit if duty paid under protest
Order for refund The AC/DC may make the refund order:
 The amount so determined shall be credited to Consumer
Welfare Fund.
 But appellant is entitled to refund only if he had not passed
on the incidence of duty.
RELEVANT DATE FOR REFUND
Normally, the relevant date is date of

payment of customs duty & interest if
any, but if
Duty is provisionally
If duty is paid by buyer
assessed.
Relevant date is date of final Relevant date is date of

assessment purchase of goods

Summary Book
Circumstances under which refund will be paid to the assessee or in which

Unjust Enrichment is not applicable.
1. The duty and interest, if any, paid on such duty paid by the importer, or the
exporter, as the case may be if he had not passed on the incidence of such
duty and interest to any other person.
2. The duty and interest, if any, paid on such duty on imports made by an
individual for his personal use.
3. The duty and interest, if any, paid on such duty borne by the buyer, if he
had not passed on the incidence of such duty and interest to any other
person.
4. The export duty as specified in Section 26 [see below]
5. Drawback of duty payable under Sections 74 and 75
6. The duty and interest, if any, paid on such duty borne by any other such
class of applicants as the Central Government may, by notification in the
Official Gazette, specify.
REFUND OF EXPORT DUTY [SEC 26 ]
Where on the exportation of any goods any duty has been paid, such duty shall be
refunded to the person by whom or on whose behalf it was paid, if -
a) The goods are returned to such person otherwise than by way of re-sale;
b) The goods are re-imported within one year from the date of exportation; and
c) An application for refund of such duty is made before the expiry of six
months from the date on which the proper officer makes an order for the
clearance of the goods.
BELATED DISBURSEMENT OF REFUND BY C.G. [CUSTOMS-SEC 27A]

a) If any duty ordered to be refunded to an applicant is not refunded within
three months from the date of receipt of application, there shall be paid to
that applicant interest.
b) Rate of interest : 6% p.a. by the C.G.
c) Duration of interest : Interest is payable from the date of expiry of 3 months
from the date of receipt of application till the date of refund of duty.
d)Interest shall be paid even where refund is granted by an Appellate Authority.

Chapter 8 Audit
CUSTOMS AUDIT [SECTION 99A]
In supersession of On-site Post Clearance Audit at Premises of Importer and Exporter Regulations,
2011, Government has notified Customs Audit Regulations, 2018. For this reason, a separate
section 99A is introduced authorizing the proper officer to audit of assessment that has
already been conducted at the time of customs clearance. Such audit is permitted to the
carried out swiftly either at the premises of the auditee or at the office of the proper officer.
It may be noted that ‘auditee’ is defined in this section to include not only the principal (importer
or exporter) but also persons concerning themselves with dealing with goods attracting section
12 of Customs Act.
Pursuant to these regulations, ‘auditee’ is defined in 2(c) to mean “a person who is subject to
an audit under section 99A of the Act and includes an importer or exporter or custodian approved
under section 45 or licensee of a warehouse and any other person concerned directly or indirectly
in clearing, forwarding, stocking, carrying, selling or purchasing of imported goods or export goods
or dutiable goods”
Salient feature of this audit procedure are as follows:
(i) Auditee is to preserve records for conduct of this audit for a period of five years
(ii) Risk based assessment will identify persons to be audited
(iii) Audit will be conducted at the premises of the auditee by the authorized officers
who will intimate fifteen days in advance of their schedule visit
(iv) Based on the findings, auditee may accept the liabilities and voluntarily discharge
the duty, interest and penalty, as applicable
(v) Assistance of experts can be availed for conducting this audit such as CA, CWA or
IT professionals with permission of Principal Commissioner/ Commissioner of
Customs
(vi) Contravention of these Regulations attracts penalty of ` 50,000

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SUMMARY BOOK

By CA Yachana Mutha Bhurat

GST and custom GST Revision

1. Introduction & Levy Of Customs Duty And Exemption

3. Importation, Exportation And Transportation Of Goods

4. Valuation Under Customs Act, 1962

5. Baggage Under Customs

⇒ Stages for Imposition of taxes and duties

Assessment is the The final stage is

⇒ What is India as per Customs Act, 1962

India includes the territorial waters of India.

CA Yachana Mutha Bhurat 09669357770 gst.yachana@gmail.com

Note: Sec. 2 (22) Goods include

Important case laws related to Import of Goods

CA Yachana Mutha Bhurat 09669357770 gst.yachana@gmail.com

Important Case laws for Export of Goods

Rajendra Dyeing & & Printing Mill ltd:

CA Yachana Mutha Bhurat 09669357770 gst.yachana@gmail.com

⇒ Remission / Abatement of duty

Duty chargeable on the goods before

Without prejudice to the provisions of section 13, where it is shown to the

Provides that an importer can request Central Government to make rules

CA Yachana Mutha Bhurat 09669357770 gst.yachana@gmail.com

⇒ Goods derelict, wreck etc. [Section 21]

⇒ Exemption from Custom Duty [Section 25]

CG has Power to grant Exemption

it may, by special order in each case,

CA Yachana Mutha Bhurat 09669357770 gst.yachana@gmail.com

It like article If, like good not actually

CVD is CVD is CVD is payable @ ACD 3(1) is

DETERMINATION VALUE FOR ACD 3(1)

CA Yachana Mutha Bhurat 09669357770 gst.yachana@gmail.com

(+)social welfare surcharge @ 10%

Normal value Export Price

If available If not available

If like goods are In case no or low If imported articles If imported articles

CA Yachana Mutha Bhurat 09669357770 gst.yachana@gmail.com

Duty Protective Duty Safeguard Duty CVD on Anti Dumping Duty

CA Yachana Mutha Bhurat 09669357770 gst.yachana@gmail.com

Rules ---- Customs Tariff Customs Tariff (Identiﬁcation,

ACD 3(7) to countervail levy of GST

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addition to, and in the same manner as, a duty of customs,

1) ACD 3(7) = IGST

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ACD 3(9) to countervail levy of GST Compensation Cess

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⇒ Tariff Based on Harmonised system of Nomenclature (HSN)

Schedule I for Schedule II for

At the beginning of the

Statutory Provisions Non Statutory Provisions

It is also called general interpretative It is also called as trade partance

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Features of Indicates sub-sub classification

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General rules of interpretation

Purpose 1. To help in appropriate classification of goods

Specific Rule Product Available Headings Classification

Characteristic Rule Product Available Headings Classification

Later the better Product Available Headings Classification

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HSN & other Rule Classification