AMENDMENTS TO CUSTOMS ACT BY FINANCE BILL, 2021

February 3, 2021

Contents

Chapter IV of Finance Bill, 2021 (‘Bill’ for short) provides the amendments that are to be
brought in Customs Act.

Definition of ‘common portal’

Section 80 of the Bill inserted section 2(7B) defining the expression ‘common portal’ as the Common
Customs Electronic Portal referred to in section 154C.

Powers of Officers of customs

Section 5 of the Customs Act gives powers to the officers of customs to exercise the powers and
discharge the duties conferred or imposed on him under this Act.

Section 5(3) provides that a Commissioner (Appeals) shall not exercise the powers and discharge the
duties conferred or imposed on an officer of customs other than those specified in Chapter XV and
section 108.

Section 81 of the Bill substitutes the words ‘Chapter XV, section 108 and sub-section (1D) of section
110’ for the words ‘Chapter XV and section 108’.

Exemption

Section 25 of Customs Act gives powers to the Central Government to grant exemption either
absolutely or subject to conditions to the goods of any description by means of Notification.

Section 82 of the Bill inserts a new section 25(4A) which provides that Where any exemption is
granted subject to any condition, such exemption shall, unless otherwise specified or varied or
rescinded, be valid up to 31stday of March falling immediately after two years from the date of such
grant or variation. In respect of any such exemption in force as on the date on which the Finance
Bill, 2021 receives the assent of the President, the said period of two years shall be reckoned from the
1st day February, 2021.

Time limit for completion of certain actions

Section 83 of the bill inserts a new section 28BB. The newly inserted section 28BB fixes time limit
for completion of certain actions.

Section 28BB (1) provides that any inquiry or investigation under this Act, culminating in the
issuance of a notice under sub-section (1) or sub-section (4) of section 28 shall be completed by
issuing such notice, within a period of two years from the date of initiation of audit, search, seizure or
summons, as the case may be. The Principal Commissioner of Customs or the Commissioner of
Customs may, on sufficient cause being shown and for reasons to be recorded in writing, extend the
said period to a further period of one year.

Section 28BB (2) provides that for computing the period under sub-section (1), the period during
which stay was granted by an order of a court or tribunal, or the period for seeking information from
an overseas authority through a legal process, shall be excluded.

The explanation to this section clarifies that nothing contained in this section shall apply to any such
proceeding initiated before the date on which the Finance Bill, 2021 receives the assent of the
President.

Entry of goods on importation

Section 46(3) of the Customs Act provides that the importer shall present the bill of entry under sub-
section (1) before the end of the next day following the day (excluding holidays) on which the aircraft
or vessel or vehicle carrying the goods arrives at a customs station at which such goods are to be
cleared for home consumption or warehousing.

Section 84(i) of the Bill substitutes the words ‘before the end of the day (including holidays)
preceding the day’ for the words ‘before the end of the next day following the day (excluding
holidays).

There are two provisos to section 46(3). The first proviso provides that a bill of entry may be
presented at any time not exceeding thirty days prior to] the expected arrival of the aircraft or vessel
or vehicle by which the goods have been shipped for importation into India. Section 84 (ii) of the Bill
substitutes a new provisio for the above said proviso. The newly substituted proviso provides that the
Board may, in such cases as it may deem fit, prescribe different time limits for presentation of the bill
of entry, which shall not be later than the end of the day of such arrival.

Seizure of goods, documents and things

Section 110 of the Customs Act provides the procedure to seize the goods, documents and things.
The Bill inserts a new sub section 110(1D). The newly inserted section provides that where the goods
seized is gold in any form as notified under sub-section (1A), then, the proper officer shall, instead of
making an application under sub-section (1B) to the Magistrate, make such application to the
Commissioner (Appeals) having jurisdiction, who shall, as soon as may be, allow the application and
thereafter, the proper officer shall dispose of such goods in such manner as the Central Government
may determine.

Confiscation of goods

Section 113 of the Customs Act describes the goods which are liable to confiscation. Section 86 of
the Bill inserts a new section 113(ja). The newly inserted section 113(ja) provides that any goods
entered for exportation under claim of remission or refund of any duty or tax or levy to make a
wrongful claim in contravention of the provisions of this Act or any other law for the time being in
force, are liable to confiscation.

Penalty for fraudulent utilization of input tax credit for claiming refund

Section 87 of the Bill introduces a new section 114AC. The newly inserted section 114AC provides
that where any person has obtained any invoice by fraud, collusion, willful misstatement or
suppression of facts to utilize input tax credit on the basis of such invoice for discharging any duty or
tax on goods that are entered for exportation under claim of refund of such duty or tax, such person
shall be liable for penalty not exceeding five times the refund claimed.

Presumption as to documents in certain cases

The explanation to section 139 of the Customs Act defines the term "document" as including
inventories, photographs and lists certified by a Magistrate under sub-section (1C) of section 110.

Section 88 of the Bill substitutes the words ‘a Magistrate under sub-section (1C), or Commissioner
(Appeals) under sub-section (1D), of section 110’ for the words ‘a Magistrate under sub-section (1C)
of section 110’.

Amendment of documents

Section 149 of the Act provides the procedure for amendment of documents. Section 89 of the Bill
inserted second and third provisos, after first proviso to section 149. The newly inserted second
proviso provides that such authorization or amendment may also be done electronically through the
customs automated system on the basis of risk evaluation through appropriate selection criteria. The
third proviso provides that such amendments, as may be specified by the Board, may be done by the
importer or exporter on the common portal.

Service of order, decision etc.

Section 153 of the Customs Act provides the procedure for service of order, decision etc. Section 90
of the Bill inserts one another mode of delivery of order, decision etc. For that purpose Section 90
inserts a new sub clause (ca). According to this new section the mode of delivery may be ‘by making
it available on the common portal’.

Common Customs Electronic Portal

Section 91 of the Bill inserts a new section 154C. The newly inserted section 154C provides that the
Board may notify a common portal, to be called the Common Customs Electronic Portal, for
facilitating registration, filing of bills of entry, shipping bills, other documents and forms prescribed
under this Act or under any other law for the time being in force or the rules or regulations made there
under, payment of duty and for such other purposes, as the Board may, by notification, specify.