CUSTOMS MANUAL Ist September, 2001 (First Edition) Prepared by MINISTRY OF FINANCE DEPARTMENT OF REVENUE CENTRAL BOARD OF EXCISE & CUSTOMSCUSTOMS MANUAL 1st September, 2001 (First Edition)PREFACE As part of our economic reforms, in recent years the Government has taken several measures to simplify and modernize Customs procedures. The implementation of EDI at Customs stations has revolutionized the functioning of Customs. The opening up of a large number of ICDs/CFSs in the hinterland has enabled the importers and exporters to import/export goods at their door steps. The changes in Customs laws and procedures coupled with automation have reduced the dwell time for imports and exports drastically. The passenger clearance has now become smoother than ever before. However, much more needs to be done, and the Government is committed to further simplify the Customs laws and procedures. The Customs has also committed in its Citizens’ Charter to provide time-bound clearance of cargo, and quick redressal of grievance with stress on courtesy, understanding, integrity, objectivity and transparency. 2. For a long time now, there was a demand from the various quarters that the Customs circulars and instructions on various subjects should be put together in one place for the benefit of trade and industry as also for the departmental officers. In his Budget Speech for the year 2001-2002, the Hon’ble Finance Minister had announced that a Manual of Customs procedures and instructions would be brought out before 1* September,2001. The present Manual is being published in pursuance of this direction. 3. It is difficult to bring out a Manual which could cover all aspects of Customs laws and procedures in one place. However, an attempt has been made to explain, in simple language, the more important aspects of Customs work. It is hoped that the information would be found useful. Taking into account the demands/suggestions from the trade and industry and general public and even departmental officers, areas which are not covered by this first edition of the Manual word be taken up for coverage in the next edition. 4. [ would request the readers to kindly forward their comments on this Manual, including their suggestions for improvement. hs (P.K.MOHANTY) Director(Customs) Central Board of Excise & Customs.NO. SUBJECT PAGE NO. 1. Introductory 1-9 2. Arrival of goods and procedure prior to 10- 14 lodgment of goods declaration 3 Procedure for clearance of imported & 15-27 export goods 4, System of classification of goods 28 - 30 5. Special classification schemes for imported goods; 31-34 for a Project, baggage and postal articles 6. Customs valuation 35-39 7. Provisional assessment 40- 41 8. Import/export restrictions/prohibitions under 42-43 Customs law 9. Customs clearance procedure for food items, 44-49 livestock products, plant and plant materials 10. Warehousing 50- 56 11, Transhipment of cargo 57- 65 12. Consolidation of cargo 66- 68 13, Merchant Overtime fee 69-71 14, Procedure for less charge demand 2-73 15, Refunds 14-76 16. Detention of imported and export cargo - release/ 1-79 storage options in disputed cases 17, Import and Export through courier 80-83 18. Clearance by post 84-88 19. Import of samples 89-9120. 2. 22. 23. 24, 25. 26. 21. Re-importation and Re-exportation of goods Disposal of unclaimed/uncleared cargo Export Promotion Schemes - (a) Duty Drawback/DEEC/DEPB/EPCG (b) 100% EOU scheme (c) Export Processing Zone (EPZ) scheme (d) STP/EHTP scheme (e) Special Economic Zone scheme Setting up of ICDS/CFSs Passenger clearance system - facilitation-cum- enforcement Offences and penal provisions Appeal and review _/ Settlement of cases System of grievance redressal in the field formations of Customs 92-93 94-95 96 - 104 105 - 118 119 - 120 121 - 122 123-131 132 - 135 136 - 142 143 - 150 151-154 155 - 157Introductory Indian Customs are assigned a number of tasks more important of which are :- (i) collection of customs duties on imports and exports as per basic Customs laws (Customs Act, 1962 and Customs Tariff Act, 1975); (ii) enforcement of the various provisions of the Customs Act governing imports and exports of cargo, baggage, postal articles and arrival & departure of vessels, air crafts etc.; (iii) discharge of various agency functions and enforcing various prohibitions and restrictions on imports and exports under Customs Act and other allied enactments; Gv) prevention of smuggling including interdiction of narcotics drug trafficking; and (v) _ international passenger processing. « 2, The Constitutional provisions have given to Union the right to legislate and collect duties on imports and exports as per the entry at SI.No.83 of list 1 to Schedule VII of our Constitution. The Customs Act, 1962 is the basic Statute, effective from 1.2.1963 which empowers, under Section 12, duties to be levied on goods imported into or exported from India. The categories of items and the rates of duties which are Jeviable have been specified in two schedules to the Customs Tariff Act, 1975. The first Schedule to the said [Act specifies the various categories of import items in a systematic and well considered manner, in accordance with an international scheme of classification of internationally traded goods - termed ‘harmonized system of commodity classification’. Different rates of duties are prescribed by the legislature on different commodities/group of commodities mentioned in the first Schedule. The duties are levied both on specific and ad-valorem basis, while there are few cases where at times specific-cum-ad valorem duties are also collected on imported items. Second Schedule to Customs Tariff Act, 1975 incorporates items subject to exports duties and rates thereof. 3, Where ad-valorem duties (ie., duties with reference to value) are collected, which are the predominant mode of levy, the value of the goods has to be determined for customs duty purposes as per provisions laid down under Section 14 of the Customs Act and the Customs Valuation (determination of prices of imports goods) Rules, 1988 issued thereunder. These provisions are essentially adoption of GATT based valuation system and followed internationally (now termed WTO Valuation Agreement) and were incorporated in our law in 1988. The importer as well as the assessing officer has to carefully study and apply these provisions so that the duties as due after proper valuation as per law get discharged before the goods get out of customs control.Control and regulatory provisions under Customs Act: 4 inno, handle: growing international traffic properly and effectively and to make it administratively possible that all the cargo/goodypassengers etc., imported/coming into India or exported/going out of the country by sea, air, land or rail routes are checked by the Customs (for ensuring that they are complying with all the related laws befon entry/exit into/from India) unrestricted freedom of access into the country or exit out of the country is not permitted. In tune with international practice the entry/exit of Tome bassengers etc, is therefore regulated in this county by law and the Customs Act, 1962 is the basic statute which govems/regulates this entry/exit of different catepories of vessels/erafts/goods/passengers etc, into or outside the country >. _glinder the Customs Act, Government is given the powers to appoint Customs ports and airports where alone the imported goods can be brought in for unloading or export Boods loaded on ships or aircrafts. Similar powers have been given to the Govemreent {0 notify the places which alone shall be the Land Customs Stations for clearance of imported goods or goods to be exported by land or by inland water. Even the routes of Passage by land and inland water into or out of the country can’be regulated and these Provisions have been made use of specially for regulating traffic for our neighboring countries like Nepal ©. Suitable powers have also been vested to further approve at a Customs port/airport, Specific places where only loading and unloading can take place as also specify the limite of customs area (which essentially is the area of a Customs Port/Airport/Land Customs Station) where the imported goods or the export goods are ordinarily kept before clearance by the Customs authorities, Role of Custodians: 7. Both in regard to sea cargo as well as air imports, the Customs authorize and ‘appoint “custodians” and all imported goods unloaded in a Customs area remains in their Gustody & till these are cleared for home consumption, or are warehoused or trdnshipped as provided in the law. With the growth of containerized traffic the facility of customs clearances at the interior centres in the country has been provided by opening various Inland Container Depots(ICDs) which act like Dry Ports. The goods also move to these internal Dry ports where they remain with the appointed custodian till these are customs cleared. The custodian after taking over the goods from the carrier, arranges its proper Storage and safety and allows clearance to the importers only after they fulfill all the customs formalities, pay up requisite duties and other charges/fees and discharge various ther obligations before their goods are allowed entry into the country and the customs have given clear permission for clearance out of customs area &. Various port trusts and other authorities in the public and private sectors handle the import and export cargo when kept in their custody at various ports, international eporisiCDs. The cargo handling and custody at the international aisports is generally paused 10 International airport authority of India. A number of cargo complexes have been set up at most international aisports with appropriate storage facilities for imported cargo pending customs clearance. New ICDs are being opened at various industrial acentres as a facilitation measure, as per detailed guidelines laid down by the Government, ‘and Customs Cargo clearances — both for impotted and export cargo, from interior centres has expanded substantially in recent years. 9. Maximum import and export cargo is handled at different sea ports; increasing part of import cargo from some ports like Nhava Sheva also moves by transhipments co interior ICDs for final clearance by various importers almost at their door steps. dn the ports which have vast Dock area and which are appropriately walled, “security rrangements are provided to ensure that there is no pilferage/theft or carrying away of the cargo without proper customs clearance. Requisite arrangements of loading and unloading of cargo at different berths in various docks, their movement to different places including container yards/storage godowns etc., are arranged by the port authorities They deploy a large work force and different & modern material handling equipments for movement of cargo which now is increasingly becoming containerized: As per the provisions of the Customs Act, the custodians are under obligation to ensure safe custody Of the goods till delivery and in fact for unaccounted imported cargo duties are also recoverable by Customs from the custodians 10. The customs authorities are given appropriate office place and requisite facilities in the dock area as well as intemational cargo complexes/ICDs etc., to discharge their functions in relation to imports and exports such as supervision on loading/unloading from vessels/orafts etc,, supervisions on stuffing or de-stuffing of containers, inspection and suitable examination of the goods which are imported/presented for exportation before customs clearance formalities ete. Customs law and Obligations of Carrier: 11, To regulate and have a proper and effective control on imports and exports the Customs Act enjoins certain liabilities on the carrier. Thus, they have to bring in the cargo imported into the country for unloading only at notified ports/airports/land custom Stations - as mentioned earlier. Further obligation has been cast on the carrier for giving Getailed information to customs about goods in their vessels/air crafts which have beet brought in at any portiairport for unloading at that particular port/international airport &s also that which would be carried further for other ports/airports. Declarations of such cargo has to be made in a prescribed form (which is teffmed “Import General Manifest) ‘This declaration/filing of IGM has to be made within 24 hours of entry of the vessel at the customs station. In the case of imports through Land Custom Stations the person in Charge of the vehicle has to give similar import report. Since the cargo clearance formalities are linked generally with the availability of this information about cargo being trought by a vessel for unloading at any port, provisions have also been made in law for prior filing of IGMs if all details of relevant cargo for any port are available even before the vessel arrives, The final manifest can be filed again after arrival of the vessel 12. Unless, the aforesaid details and IGM have been furnished in the prescribed form, no unloading of cargo can be undertaken from any vessels/air crafts/vehicles in normal Tircumstances, After the manifest is duly delivered the unloading takes place under the supervision of the preventive staff of customs. The law prohibits unloading of any goods ava customs station which is not mentioned in the manifest/import report. Similarly, 3there are restrictions on loading for export. No vessel/air craft can start loading goods for export unless an intimation has been given to customs and customs have given permission for loading ~ what is also called ‘entry outward of the vessel’. All loading, as mentioned, of cargo on such vessels (and even air crafts) has to be checked and supervised by preventive customs staff and they have to essentially ensure that cargo loaded has discharged the prescribed customs formalities such as payment of duties or cess where leviable, and any other formalities enjoined by the law before the exports are permissible, and authorization for exports has been duly given by the proper appraising Staff posted in the docks/cargd complexes/ICDs as @ part of customs clearance formalities 13. |The persons in charge of the vessels/air crafts are also required to furnish details of all the goods loaded on a vessel or air craft in a prescribed form which is termed ‘Export General Manifest’. This EGM can be furnished before the vessel/air craft departs or within 7 days of departure of the vésseV/air craft and is essentially taken as the final proof of shipment/export once the ship/aircraft leaves the country. Similar provisions exist for export by land route where the export manifest is called export report. Preventive Control: 14. It is worth noting that no conveyance can leave a customs station unless a written order for port clearance for the vessel has been given by the proper officer of customs. The permission for departure of any vessel is given subject to the satisfaction of the proper officer that all the prescribed formalities have been fulfilled, duties/penalties etc., have been paid or secured. The preventive officers are also authorized to go on board the vessels/air crafts to take suitable declarations, Crew property list etc., and to check whether there are any goods which are not declared for unloading at a particular station in the manifest with an intention to smuggle them without following the prescribed formalities and payment of duties. A thorough examination and checking of the vessels/air crafts is also undertaken ~ by what is known as rummaging staff generally on selective basis taking due note of the past history of the vessel, the area/country from which the vessels are arriving, the intelligence report etc. The preventive staff of the customs also keep a very careful vigil in the port areas for checking any illegal activities and develdp intelligence to guard against any possible attempts of unauthorized removals from the docks and unloading of unmanifested cargo etc. Customs Clearance of cargo: 16. Before any goods imported and kept with the custodians as mentioned earlier can be cleared for home consumption in the country immediately — or for warehousing and customs “clearances as and when needed etc., the importers have to comply with prescribed custyms clearance formalities. Essentially, these involve presentation of certain docunede along with a prescribed application (normally termed ‘bill of entry’, which gives essential particulars in relation to imported goods, its country of origin, Particulars of vessel/aircraft etc.) seeking clearance of goods for home consumption/warehousing etc. The importer either himself handles the import clearancedocuments vis--vis Customs or appoints an authorized agent in the Custom House. Major part of Customs clearance work is handled on behalf of importers/exporters by CHAs or Custom Houses Agents — who are trained and experienced in Customs clearance work and are licensed by Customs for such work subject to certain conditions as laid down in CHA Regulations. 17, The clearance documentation presentation and processing is handled in the main Custom Houses where staff trained in assessment matters (termed appraising staff) handles this import clearance work. After a tally has been made with related IGM to ensure that the goods sought for clearance have arrived and declared in the particular manifest of the vesseV/air craft mentioned in the Entry (or even where the prior manifest is filed, that they are expected to be landed by particular vessel) the scrutiny of documents — manually or through EDI system is taken up. One of the main function of the appraising staff in the Custom Houses is careful scrutiny of the entry and the related particulars, and information on various documents with a view to checking the import permissibility in terms of the EXIM policy and any other laws regulating imports/exports The more important job specially after the liberalization of import regime, is determining classification and duties leviable on the goods on import ~ (Basic, Additional, Anti- dumping, Safeguards etc.) and value of the goods (where the duties are assessable on value basis), to assess the duty liability which is required to be paid by the importer Permissibility of various benefits of duty free clearances under different schemes or applicability of any exemption notification benefits ~ where claimed is also checked and decided. a 18. For determining this duty liability and even permissibility of import it may become necessary to examine the goods in advance. Normally, however, the declarations made are scrutinized without prior examination with reference to documents made available fand the other information about the values/classification available with Customs and duties chargeable on the goods are assessed and paid up by the importer or his authorized representative. It is only at the time of clearance from the custody of the port trusts/international airport authority or other custodians that the examination of the goods oon percentage basis is carried out. For expediting assessment and clearance formalities, separate staff for checking assessment related work is posted in the custom houses as well as in the premises where the goods are stored pending customs clearance; the later said officers yndertake checking of nature of goods, valuation and other part of declaration, oF diaw samples as may be ordered by the scrutinizing officers of the Custom House/Cargo Complexes/ICDs: 19, In majority of the cases the assessment is completed and duties also paid without prior examination, If no discrepancies in relation to the nature of goods, quantity, value fic., are observed at the time of examination of the cargo by the appraising officers in the dock/cargo complex etc., out of Customs control orders are issued, and thereafter goods can be cleared after discharging any other fees/charges etc., of the custodians, 20. Where prior examination, at times becomes necessary before assessment is finalized or permissibility of import determined, goods are got examined first after filing of Bill of entry and other documents. Based upon the report of the examining staff, duties etc, areassessed and if there is no prohibition etc., on payment of duty the goods are taken clearance from the custodian without the need for further examination. 21. Where disputes arise in the matter of classification/valuation or any violations of any laid down provisions of law are observed, where the goods cannot be allowed clearance finally without further investigations and following adjudication proceedings - where necessary, the law and instructions provide for even provisional clearances subject {0 suitable bond/security. Only where the goods are of prohibited nature or in certain ther exceptional cases, where release on provisional basis is not considered advisable, the final decision may be taken after results of enquiries etc., are known & where necessary adjudication proceedings completed. 22. Similar customs clearance formalities for goods meant for export have to be fulfilled by presenting what are termed as ‘shipping bills’ and other related documents to the export wing of the custom houses or EDI service Centres. The appraising staff in the Custom House/Air Cargo Complex checks the declarations to assess the duties/cess if leviable, propriety of export incentives where claimed under different schemes like duty drawback or duty free exemption schemes etc. Appropriate orders for examination before shipments are allowed are given on the Shipping Bill. ‘The staff in the docks/cargo complexes/ICDs examines the goods meant for export on percentage basis, and allow shipment if there are no discrepancies mis-declarations etc, and. no Prohibitions/violations come to light. Appropriate penal action as per law is initiated Where any fraudulent practices get detected during initial stage of scrutiny or at the time of examination etc. 23. ‘Thus, aforesaid provisions in the law and the various functions assigned to the Customs are essentially provided to ensure that all cargo which is brought into the country Passes throfigh authorized points, is reported to customs and the concerned importers fulfil the prescribed legal and procedural requirements laid down under Customs Act and allied laws, paying up the duties leviable if any before the goods enter into the country These provisions similarly help customs to regulate the outflow of the goods out of the country and enable them to subject the goods to proper checks before allowing final exit out of the country by sea/ait/land/rail routes. They also help detect any attempts of smuggling or commercial frauds by unscrupulous parties. ‘Smuggling & Other Violations and Penal Provisions: 24. Unscrupulous parties do attempt to evade the duties leviable and bypass various prohibitions/restrictions in relation to imports by attempting to bring the goods into the country from places other than the notified ports/airports/Land Custom Stations without Teporting or presenting the goods to customs. Similar attempts are made to take out Boods out of the country unauthorizedly. This is essentially what is termed ‘smuggling’ and customs officers have very important role to play in ensuring that they detect any such attempts of smuggling into or out of the country and take appropriate action both against the goods as well as against the persons involved in smuggling or violation of Various restrictions/prohibitions for personal gains at the cost of exchequer unmindful of Various other harmful effects which the prohibited and sensitive goods may have, if these are allowed entry into the country. Strict penalties in relation to the goods/persons — 6involving seizure/absolute confiscation of the prohibited goods, fines and penalties on the persons involved in the offence as well as those abetting the offence are provided. The law also empowers Customs for carrying out searches, arrests and prosecution of persons involved in smuggling and serious commercial frauds and evasion of duties or misuse of export incentives by fraudulent practices (mis-declaration of nature, and value of the goods or suppression of quantities etc.) 25. The customs law provides deterrent penal provisions for all such violations but due processes of law have to be followed before any action is taken against the offending goods or persons/conveyance etc. involved. ‘The customs officers have to act as quasi- judicial authorities and the liabilities for duty evaded or sought tobe evaded, fines and penalties etc., are adjudged by adjudication action wherein the persons concerned are duly given notice of the contemplated action against the goods/persons/conveyance etc including the gist of the charges and their basis, and they are provided opportunity for representation as well as personal hearing. . The adjudication powers are vested in the customs officers of different specified ranks. 26. In grave offence cases prosecution action with imprisonment upto 7 years is also permissible under the Customs Act, but this action is to be taken following the usual criminal proceedings in a court of law, after prosecution sanction has been given by the competent Customs officer. Appellate Remedies: 27. The parties aggrieved with the’ departmental adjudication action are also given the right to appeal — at the departmental higher level [Commissioner (Appeal)] as well as at independent tribunal level. On questions of law, the orders of tribunal could also be considered for reference to the High Court and certain categories of decisions involving matters relating to classification or valuation can be appealed even before the Supreme Court Passenger Processing: 28, Apart from the aforesaid functions in relation to control/regulation/ clearance of imporvexport of goods international passenger processing is another important area of work handled by the Indian customs authorities. All incoming passengers after immigration clearance have to pass through Customs who have the onerous duty to ensure that there is maximum facilitation and quick passenger clearance, but at the same time the passengers do not try to smuggle goods into the country which are sensitive and otherwise prohibited/restricted or where substantial duties may be involved which are sought to be evaded by non-declaration/mis-declaration to Customs. Similarly, though duties are not very relevant for outgoing passengers, Customs have to ensure that outgoing passengers do not smuggle out foreign currency, antiques or other wildlife & prohibited items or narcotics drugs or psychotropic substances ~ and this later part, i. checking of drug smuggling is becoming of considerable importance in recent years. The customs have also to ensure enforcement of various other allied laws before any goods 7carried by the passengers on person, in hand bag or accompanied baggage enter into the country or get out of the country Import/Export by Post/Courier: 29, Another important role performed by Customs, though not very visible, is necessary Coordination with Postal authorities and giving customs clearanees. after appropriate checking on selective basis of various goods coming by post parcels, ete They have to ensure that these postal mail/packets/parcels enter into the country following the eeemcrere ret customs Act. The goods brought by parcels unless these are withrs Rermissible free gift limits or free sample limits have to be assessed to duties by customs & indicated to postal authorities. The duties are collected before the postal authorities deliver the goods to the addressees. Lastly, it may also be mentioned thet small item importslexports through couriers is fast catching up in this country and easter have made appropriate provisions by Regulations for ensuring that goods brought in by courier are hans cleared quickly ~ discharging duties where leviable on import before theca are forwarded for delivery to the consignees. The regulations framed. ne reviewed to ‘meet the changing needs of trade & industry/general public. 30. These are some of the basic areas of work which are handled by the Indian Customs. As could be seen it covers substantial areas of activities affecting trade and industry and general public. Customs officials come in contact with international pissengers and general public, importers and exporters, traders and manufacturers, the Gout {ne port. and airport authorities, postal authorities and. various other Governmentsemi-Government agencies, Banks etc. The importers and exporters have to realize that various agencies get involved in any customs clearance work in relanos t, Caigo. _ Even international passenger processing and faster clearances: depend upon the van cBencies working at Air Ports. Indian Customs authorities are very conscious of the various onerous tasks assigned to it and is attempting, consciously in recent years, to rationalize and modernize its Customs procedures for customs clearance "cr India is an active member of the World Customs started from 1995 and is the Coeuutive at 23 custoins stations/ports/ICDs (covering almost 90% of cargo), With the Customs Gateway Praject, under serious & advance stage of implementation, it should be possible to have connectivity of sll Customs stations by the or of the year or January, 2002 and there may be substantia! further speeding up of the custome clearance work in not distant future 31. Customs in this couniry ate committed in its Citizen Charter, to provide to trade & industry time bound and speedy cargo clearance facility, quick redreseat of grievance, and jneulcating in its officers’ sense of seivice with stress on courtesy. understanding, integrity. objectivity and trans)parenc Steps are afoot to furth: ,zviessionalize Customs to be able to render eflicient and prompt service to our clients almost at par with those rendered by other customs services in developed countries32, It is difficult to havé a manual which could cover all aspects of the customs functions in one place or to explain the changes contemplated taking due note of demand of trade & industry and in tune with international practices. But an attempt is made in the following chapters, briefly to further explain some of the more important aspects and areas of work of Customs for the benefit of all concerned - with focus on .the importers/exporters and the concerned agencies including the international passengers and general public. Considering the importance the country attaches to the export promotion, the various export promotion schemes have been elaborated somewhat at length. It is hoped that the information would be found useful. Taking into account the demands/suggestions from the trade and industry and general public and even departmental officials, areas which are not covered by this first edition of the manual, would be taken up for coverage in the next edition. seenArrival of Goods and Procedures Prior to Lodgement of Goods Declaration Conveyances to call only at Notified Customs Ports / Airports: Customs Act, 1962, envisages that only places notified by the Government fhall be Customs ports or Customs. aisports for the unloading of imported goods and loading of export goods. At each such customs ports, the Commissioner of Customs 1s empowered to approve proper places for the unloading and loading of goods and he also Specifies the limits of any Customs area. The law further provides that the person in charge of the vessel or an aircraft shall not call or land at any place other than the Customs port/airport, except in cases of emergencies, Power to board conveyance, to question and to demand documents 2. Section 37 empowers the proper officer to board any conveyance carrying imported goods or export goods. He may remain on board as long as he decides to remain. The proper officer may question the person in charge of the vessel or aircraft. He may demand production of documents and also ask questions, to be answered by such Person. The person in charge of the conveyance is bound to comply with these requirements [Section 38]. Delivery of Import Manifest: The Master / Agent of the vessel or an aircraft has to deliver an import manifest (an import report in case of a vehicle), within 24 hours after arrival in the case of a vessel and 12 hours after arrival in the case of an aircraft or a vehicle in the prescribed form The time limit for filing the manifest is extendable on showing sufficient cause. In the case of a vessel or an aircraft, a manifest may also be filed even before arrival of the vessel or aircraft (known as Prior Entry Manifest). In the case of vessels, for administrative convenience, such advance manifests are accepted on any day within 14 days before the expected arrival of the vessel. 4, _ If the vessel does not arrive within the stipulated time of 14 days or such extended time as may be granted by the Assistant Commissioner (Imports), the manifest accepted provisionally is cancelled and the fact circulated through public notices. All the Bills of Entry filed against the cancelled manifest, become void. The importers have to return those Bills of Entry to the Import Department and to claim refund of duty, if paid on any such Bills of Entry. If the same vessel enters the port after the cancellation of the original manifests, it will be treated as a fresh entry and a fresh manifest is insisted upon. General conditions: 5, A person filing declarations under this section has to declare the truthfulness of contents. This declaration has legal consequences, which bind the carrier. [Section 30(2)].Amendments: 6. If for any reason, the carrier desires to amend or supplement the IGM, it will be permitted by the proper officer on payment of prescribed fees, if he is satisfied that there is no fraudulent intention behind the move. (Section 30(3)] Penal liability. 1 Any mis-declaration in this document will attract the penal provisions of Section 111(f) and Section 112. Excision from IGMs of items originally manifested: (a) Excision from 1.G.Ms of items originally manifested are permitted only (a) On application in writing from the ship’s Agents; __ Gi) On production of the documentary evidence of short shipment of goods; Gii) On payment of a fee as prescribed. (b) (i) Excisions or amendments of items in the Import Manifest involving reduction in number of Package 8 ‘An application from the steamer agents for excisions or amendments in the Import Manifest involving reduction in the number of packages or quantity or weight thereof, should be submitted with the connected documentary evidence. Such excisions or amendrnents will only be allowed; if after due investigation, it is proved that the excess quantity was originally shown in the import manifest as a result of an error. In the absence of such proof, the application will be kept over for being dealt with by the Manifest Clearance Section at the time of closure of the ship's file. (ii) Applications for the excision or amendments of items for which Bills of Entry have been noted will be dealt with by the Manifest Clearance Section if made two months after the arrival of the vessel Mattess such as the number of copies of manifests to be filed, nature of forms, manner of declaring cargo etc. are governed by the following Regulations: (i) Import Report (Form) Regulation, 1976; ii) Import Manifest (Aircraft) Regulation, 1976; and (iii) Import Manifest (Vessels) Regulation, 1971; Generally speaking, the above Regulations stipulate declaring separately cargo to be landed, unaccompanied Baggage, goods to be transported and same bottom or retention cargo. Separate declarations are also to be filed in respect of dangerous/prohibited/ sensitive goods such as Arms and Ammunitions, Narcotics, Gold etc. The prime condition in the Regulations is that the manifest shall cover all the goods carried in the conveyance.In respect of a vessel, an import manifest shall, in addition, consist of an application for entry inwards, Entry Inwards: 9. The Master of the vessel is not to permit the unloading of any imported goods until an order has been given by the proper officer granting Entry Inwards of such vessel Normally, Entry Inwards is granted only after the import manifest has been delivered. This entry inward date is crucial for determining the rate of duty, as provided in section 15 of the Customs Act, 1962. Unloading of certain items like accompanied baggage, mail bags, animals, perishables and hazardous goods are exempted from this stipulation Enclosures to Import General Manifest: 10, The amendment made in 1995 (w.e.f. 1-7-1995) introduces a new form for obtaining entry inwards. ‘The forms are designed according to IMO-FAL Convention, The forms have to be filed in prescribed sizes only. Host of enclosures are sought along with these forms. This practice has its origin in other statutes such as Merchant Shipping Act, 1880, However, keeping the said convention in view, Board has issued instructions dispensing with submission of various documents. The following declarations have, however, to be filed along-with IGM: (a) Deck Cargo Declaration / Certificate, (b) Last port clearance copy. (©) Amendment application (when relevant). (d)_Iicome Tax Certificate in case of Export Cargo. {e)_ Nil export cargo certificate (8. Port Trust “No Demand” certificate. (g)_ Immigration certificate (h) Application for sign on/sign off of crew (when relevant). (i) Application for crew baggage chceking when they sign on (When relevant) (C.B.E & C. Circular No.36/95-Cus., dated 10-4-1995, 1995 (77) E.L.T. TS1. Refers. ] Procedure for filing IGM at Custom Houses operating EDI service centres: (i) IGM by Shipping lines: Wl The shipping line/steamer agent needs to submit the manifest in prescribed form at the Service Centre. The shipping lines ate required to submit the electronic version of the Import General manifest in floppies, containing all the details and particulars. It is to be ensured by the Shipping Lines that all the particulars and details of the Import general manifest’submitted either manually or through floppies are correct. The shipping agents who do not have arrangement for data in floppy, may approach the Service Center of Customs and get the data of IGM submitted in system. They are also toensure that details of House Bill of Lading are also incorporated in the IGM in case of consol cargo, 12, On arrival of the vessel, the shipping line needs to approach the Preventive officer for granting entry inwards. Before making the application, the shipping line has to make payment of the Light House dues. 13 In case the shipping line is filing an IGM after arrival of the vessel, the procedure as mentioned above for prior IGM, is to be followed except that the date of arrival of vessel is also indicated. After submission, the shipping line has to approach the proper officer for grant of entry inwards in the system, (ii) IGM by Air: 14, The airlines are required to file IGM in prescribed format. In case of Air Cargo Complexes having EDI, the IGMs may be filed through electronic mode. The IGMs to be submitted need to contain all details and particulars. In other words, the airlines would not only be furnishing the details of the Master Airway Bills but also the House Airway bills in the case of console cargo. The airlines are also to furnish the additional information, namely, the ULD Nos. for use by the custodians. Filing of Stores List: 15 When entering any port, all ships are required to furnish to the Commissioner of Cus toms, a list (or nil return) of ships stores intended for landing (excluding any consumable stores issued from any dutified shops in India). Retention on board of imported stores is governed by Import Store (Retention on board) Regulations, 1963. The consumable stores can remain on board without payment of import duties during the period the vessel/Aircraft remains foreign going. Otherwise, such consumable stores are to be kept under Customs seal. Even in respect of foreign going vessels, only the stores required for immediate use of the personnel may be left unsealed. Excessive stocks of stores such as liquor, tobacco, cigarettes, ete are kept under Customs seal Unloading and Loading of Goods: 16 Imported goods are not to be unloaded from the vessel until Entry Inwards is granted. No imported goods are to be unloaded unless they are specified in the import manifestreport for being unloaded at that Customs station. No imported goods shall be unloaded at any place other than the places provided for such unloading. Further, imported goods shall not be unloaded from any conveyance except under the supervision of the proper officer. Similarly, for unloading imported goods on any Sunday or on any holiday, prior notice shall be given and fees prescribed in this regard shall be paid. Other liabilities of carriers: 7 Under Section 115 and 116, the persons in charge of vessel or aircraft have other liabilities, which are important and noteworthy. Section 115 provides for confiscation of vessel or other conveyance under the following circumstances 3(@) A conveyance within Indian waters or port or customs area which is adopted, fitted, modified or altered for concealing goods (b) A conveyance from which goods are thrown overboard, s as to prevent seizure by customs officers ved or destroyed so (c) A conveyance which disobeys any order under Section 106 to stop or land, without sufficient cause (d) A conveyance from which goods under drawback claim are unloaded without proper officer’s permission. (©) A conveyance which has entered India with goods, from which substantial portion of goods are missing and failure of the master to account therefor. Any vessel when used as means of transport for smuggling of any goods or in the carriage of any smuggled goods, is liable to confiscation, unless the owner establishes that it was used without the knowledge or connivance of the owner, his agent and the person in-charge of the vessel. When any such conveyance is confiscated, an option to Pay redemption fine has to be given to the owner of the conveyance. The upper limit for imposing the redemption fine is the market value of impugned goods 18. __ Under Section 116, penalty may be imposed on the person incharge of vessel if there is failure to account for all goods loaded in the vessel for importation into India or transhipped under the provisions of Customs Act and these are not unloaded at the place Of destination in India or if the quantity unloaded is short of the quantity to be unloaded at particular destination. Penalty may be waived if failure to unload or deficiency in unloading is Zecounted for to the satisfaction of competent officer. ‘Thus, if there is any shortage which is not satisfactorily accounted for, the person incharge of the vessel will be liable to penalty, which may be twice the duty: payable on the import goods not accounted for.Procedure for Clearance of Imported and Export Goods 1. Import: Bill of Entry ~ Cargo Declaration: Goods imported in a vessel/aircraft attract customs duty and unless these are not meant for customs clearance at the porvVairport of arrival by particular vessel/aircraft and are intended for transit by the same vessel/aircraft or transhipment to another customs station or to any place outside India, detailed customs clearance formalities of the landed goods have to be followed by the importers. In regard to the transit goods, so long as these are mentioned in import reporVIGM for transit to any place outside India, Customs allows transit without payment of duty. Similarly for goods brought in by particular vesseV/aircraft for transhipment to another customs station detailed customs clearance formalities at the porvairport of landing are not prescribed and simple transhipment procedure has to be followed by the carrier and the concerned agencies. The customs clearance formalities have to be complied with by the importer after arrival of the goods athe other customs station, There could also be cases of transhipment of the goods after unloading to a port outside India. Here also simpler procedure for transhipment has been prescribed by regulations, and no duty is required to be paid. (Sections 52 to 56 of the Customs are relevant in this regard) 2. For other goods which are offloaded importers have the option to clear the goods for home consumption after payment of the duties leviable or to clear them for warehousing without immediate discharge of the duties leviable in terms of the warehousing provisions built in the Customs Act. Every importer is required to file in terms of the Section 46 an entry (which is called Bill of entry) for home consumption or warehousing in the form, as prescribed by regulations 3, If the goods are cleared through the EDI system no formal Bill of Entry is filed as it is generated in the computer system, -but the importer is required to file a cargo declaration having prescribed particulars required for processing of the entry for customs clearance. 4, The Bill of entry, where filed, is to be submitted in a set, different copies meant for different purposes and also given different colour scheme, and on the body of the bill of entry the purpose for which it will be used is generally mentioned in the non-EDI declaration. 5. The importer clearing the goods for domestic consumption has to file bill of entry in four copies; original and duplicate aré meant for customs, third copy for the importer and the fourth copy is meant for the bank for making remittances. 6. In the non-EDI system alongwith the bill of entry filed by the importer or his representative the following documents are also generally required:- # Signed invoicePacking list Bill of Lading or Delivery Order/Airway Bill GATT declaration form duly filled in Importers/CHA’s declaration License wherever necessary Letter of CredivBank Draft/wherever necessary Insurance document Import license Industrial License, if required Test report in case of chemicals Adhoc exemption order DEEC Book/DEPB in original * Catalogue, Technical write up, Literature in case of machineries, spares or chemicals as may be applicable * Separately split up value of spares, components machineries * Certificate of Origin, if preferential rate of duty is claimed * No Commission declaration 7, While filing the bill of entry and giving various particulars as prescribed therein the correctness of the information given has also to be certified by the importer in the form a declaration at the foot of the bill of entry and any mis-declaration/incorrect declaration has legal consequences, and due precautions should be taken by importer while signing these declarations. 8. Under the EDI system, the importer does not submit documents as such for assessment but submits declarations in electronic format containing all the relevant information fo the Service Centre. A signed paper copy of the declaration is taken by the service centre operator for non-repudiability of the declaration. A checklist is generated for verification of data by the importer/CHA. After verification, the data is submitted to the system by the Service Centre Operator and system then generates a B/E Number, which is endorsed qn the printed checklist and returned to the importer/CHA. No original documents are taken at this stage. Original documents are taken al the time of examination. The importer/CHA also need to sign on the final document after Customs clearance. 9. The first stage for processing a bill of entry is what is termed the noting of the bill of entry, vis-a-vis, the IGM filed by the carrier. In the non-EDI system the importer has to get the bill of entry noted in the concerned unit which checks the consignment sought to be cleared having been manifested in the particular vessel and a bill of entry number is generated and indicated on all copies. After noting the bill of entry gets sent to the appraising section of the Custom House for assessment functions, payment of duty ete In the EDI system, the Steamer Agents get the manifest filed through EDI or by using the service centre of the Custom House and the noting aspect is checked by the system itself ~ which also generates bill of entry number. 1610. After noting/registration of the Bill of entry, it is forwarded manually or electronically to the concerned Appraising Group in the Custom House dealing with the commodity Sought to be cleared. Appraising Wing of the Custom House has a number of Groups dealing with earmarked commodities falling under different Chapter Headings of the Customs Tariff and they take up further scrutiny for assessment, import permissibility etc. angle. Assessment: 11. The basic function of the assessing officer in the appraising groups is to determine the duty liability taking due note of any exemptions or benefits claimed under different export promotion schemes. They have also to check whether there are any restrictions or prohibitions on the goods imported and if they require any permission/license/permit etc., and if so whether these are forthcoming. Assessment of duty essentially involves proper sification of the goods imported in the customs tariff having due regard to the rules of interpretations, chapter and sections notes etc., and determining the duty liability. It also involves correct determination of value where the goods are assessable on ad valorem basis. The assessing officer has to take ,note of the invoice and other declarations submitted alongwith the bill of entry to support the valuation claim, and adjudge whether the transaction value method and the invoice value claimed for the basis of assessment is acceptable, or value needs to be redetermined having due regard to the provisions of Section 14 and the valuation rules issued thereunder, the case law and various instructions on the subject. He also takes note of the contemporaneous values and other information on valuation available with the Custom House 12. Where the appraising officer is not very clear about the description of the goods fiom the document or as some doubts about the proper classification which may be possible only to determine after detailed examination of the nature of the goods or testing of its samples, he may give an examination order in advance of finalisation of assessment including order for drawing of representative sample. This is done generally on the reverse of the original copy of the bill of entry which is presented by the authorized agent of the importer to the appraising staff posted in the Docks/Air Cargo Complexes where the goods are got examined in the presence of the importer’s representative. 13, On receipt of the examination report the appraising officers in the group assesses the bill of entry. He indicates the final classification and valuation in the bill of entry indicating separately the various duties such as basic, countervailing, anti-dumping, safeguard duties etc., that may be leviable, Thereafter the bill of entry goes to Assistant Commissioner/Deputy Commissioner for confirmation depending upon certain value limits and sent to comptist who calculates the duty amount taking into account the rate of exchange at the relevant date as provided under Section ]+4 of the Customs Act. 14, After the assessment and calculation of the duty liability the importer’s representative has to deposit the duty calculated with the treasury or the nominated banks, whereafter he can go and seek delivery of the goods from the custodians.15. Where the goods have already been examined for finalization of classification or valuation no further examination/checking by the dock appraising staff is required at the time of giving delivery and the goods can be taken delivery after taking appropriate orders and payment of dues to the custodians, if any. 16, In most cases, the appraising officer assesses the goods on the basis of information and details furnished to the importer in the bill of entry, invoice and other related documents including catalogue, write-up etc. He also determines whether the goods are permissible for import or there are any restriction/prohibition. He may allow Payment of duty and delivery of the goods on what is called second check/appraising basis in case there are no restriction/prohibition. In this method, the duties as determined and calculated are paid in the Custom House and appropriate order is given on the reverse OF the duplicate copy of the bill of entry and the importer or his agent after paying the duty submits the goods for examination in the import sheds in the docks ete. to the cxarnining staff. If the goods are found to be as declared and no other discrepancies/mis. declarations etc., are detected, the importer or his agent can clear the goods after the shed appraiser gives out of charge order UT ei Nt Me importer is not satisfied with the classification, rate of duty or valuation as may be determined by the appraising officer, he can seek an assessment order, An appeal against the assessment order can be made to appropriate appellate authority within the time limits and in the manner prescribed. EDI Assessment: 18. In the EDI system of handling of the documents/declarations for taking import clearances. as mentioned earlier the cargo declaration is transferred to the assessing officer in the groups electronically. 12 _the assessing officer processes the cargo declaration on screen with regard to all the parameters as given above for manual process, However in EDI system, all the calculations are done by the system itself. In addition, the system also supplies useful information for calculation of duty, for example, when a particular exemption notification is accepted, the system itself gives the extent of exemption under that notification and calculates the duty accordingly. Similarly, it automatically applies relevant rate of exchange in force while calculating. ‘Thus no comptist is required in EDI system, If assessing officer needs any clarification from the importer, he may raise a query. ‘The query Is printed at the service centre and the party replies to the query through the service centre. 20. After assessment, a copy of the assessed bill of entry is printed in the service centre. Under EDI, documents are normally examined at the time of examination of the goods. Final bill of entry is printed after ‘out of charge’ is given by the Custom Officer. 21. _In EDI system, in certain cases, the facility of system appraisal is available Under this process, the declaration of importer is taken as correct and the system tvell calculates duty which is paid by the importer. In such case, no assessing offices is involved. - 1822. Also, a facility of tele-enquiry is provided in certain major Customs stations through which the status of documents filed through EDI systems could be ascertained through the telephone. If nay query is raised, the same may be got printed through fax in the office of importer/exporter/CHA, Examination of Goods: 23 All imported goods are required to be examined for verification of correctness of description given in the bill of entry. However, a part of the consignment is selected on random selection basis and is examined, In case the importer does not have complete information with him at the time of import, he may request for examination of the goods before assessing the duty liability or, if the Customs Appraiser/Assistant Commissioner feels the goods are required to be examined before assessment, the goods are examined prior to assessment. This is called First Appraisement. The importer has to request for first check examination at the time of filing the bill of entry or at data entry stage. The reason for seeking First Appraisement is also required to be given. On original copy of the bill of entry, the Customs Appraiser records the examination order and returns the bill of entry to the importer/CHA with the difection for examination, who is to take it to the import shed for examination of the goods’in the shed. Shed Appraiser/Dock examiner examines the goods as per examination order and records his findings. In case group has called for samples, he forwards sealed samples to the group. The importer is to bring back the said bill of entry to the assessing officer for assessing the duty. Appraiser assesses the bill of entry. It is countersigned by Assistan/Deputy Commissioner if the value is more than Rs, | lakh. 24, The goods can also be examined subsequent to assessment and payment of duty. ‘This is called Second Appraisement. Most of the consignments are cleared on second appraisement basis, It is to be noted that whole of the consignment is not examined. Only those packages which are selected on random selection basis are examined in the shed. 25 Under the EDI system, the bill of entry, after assessment by the group or first appraisement, as the case may be, need to be presented at the counter for registration for examination in the import shed. A declaration for correctness of entries and ‘genuineness of the original documents needs to be made at this stage. After registration, the B/E is passed on to the shed Appraiser for examination of the goods. Along-with the B/E, the CHA is to present all the necessary documents. After completing examination of the goods, the Shed Appraiser enters the report in System and transfers first appraisement B/E to the group and gives ‘out of charge’ in case of already assessed Bs/E. Thereupon, the system prints Bill of Entry and order of clearance (in triplicate). All these copies carry the examination report, order of clearance number and’ name of Shed Appraiser. The two copies each of B/E and the order are to be returned to the CHA/Imporeer, after the Appraiser signs them. One copy of the order is attached to the Customs copy of B/E and retained by the Shed Appraiser.