INTRODUCTION AND BREIF HISTORY: Customs duty is a tax which the State collects on goods imported into or exported out of the boundaries of a country. As per ancient custom a merchant entering a kingdom with his goods had to make a suitable gift to the king. When the European Traders sta rted visiting India with their merchandise during the later of Mughal reign, the Subhedars of Mughals and other rulers of coastal States started collecting protection money which gradually got transformed into customs duty. The concept of levying duty on the basis of value of goods (ad valorem), was subsequently brought in the first formal agreement that British entered into with the Mughal governor of Surat (subject to Firman of the emperor of Delhi) in 1612, wherein the levy of Customs duty on the imported British commodities on the basis of value was mentioned as one of the conditions for allowing British commercial activity in Surat and other territories.
Customs as we understand today has its origin in British period. British established its first Board of Revenue in 1786 at Calcutta. New Board of trade was established in 1808. A uniform Tariff Act was introduced in 1859 all over India. Customs duty in India is linked with history of textile industry. British manufacturers wanted to export their products to India due to their pressure, duty on coarser varieties of cotton goods abolished in 1877. In the meanwhile, Sea Customs Act was passed in 1878. In 1882 all import duties were abolished, but reintroduced in 1894. Indian Tariff act was passed in 1894. At the same time, excise duty on Indian cotton goods was imposed, which was bitterly resented in India and it was finally abolished in 1925. Land Customs Act was passed in 1924. Air Customs was covered by making some rules under the Indian Aircraft Act, 1911. After independence, manufacturing industry grew and trade expanded. So, Customs Act 1962 was passed to consolidate Sea Customs Act, Land Customs Act and provisions for air Customs. Indian Tariff Act, 1934 was found to be inadequate to meet the needs of expansion of trade and industry. Tariff Revision Committee was formed, which recommended adoption of Brussels Trade Nomenclature of Customs Cooperation Council, with modifications to suit Indian conditions. Accordingly, Customs Tariff Act, 1975 was passed, which came into effect in 1976. On 28th February, 1986, Import Schedule to Customs tariff Act, 1975, was replaced with a new schedule, based on Harmonised System of Nomenclature.

Customs duties now form a significant source of revenue for all countries, more so in the case of developing countries like India. In India, customs duties are levied on the goods and at the rates specified in the Schedules to the Customs Tariff Act, 1975. The taxable event is import into export from India. Export duties are practically non-existent at present. They are levied occasionally to mop up excess profitability in international price of goods in respect of which domestic prices may be low at given time. But sweep of import duties is very wide, almost universal, barring a few goods like food grains, fertilizer, life saving drugs and equipment etc. Import duties generally consist of the following:

4. Objectives of Custom Duties: y y y Restricting Imports for conserving foreign exchange Protecting Indian Industry from undue competition Prohibiting imports and exports of goods for achieving the policy objectives of the Government. This is often the transaction value unless the Customs officers determine assessable value in accordance with Brussels definition.per liter on imported motor spirit (petrol) and high speed diesel oil. Regulating exports y . Additional duty of Customs at the rate of Re. a duty is a kind of tax. at the preferential rate. for certain items like petroleum and alcohol. in the case of import from some countries. This duty is to computed on the aggregate of:o o o o assessable value. Calculation of Customs duty depends on the determination of what is called assessable value in case of items for which the duty is levied ad valorem. but not of income tax as being levied on a person in proportion to his income. Basic duty: It may be at the standard rate or.). However. Special additional duty of Customs at the rate of 4% in order to provide a level playing field to indigenous goods which have to bear sales tax. excise duties. a payment due to the revenue of a state.D. Additional customs duty equal to central excise duty leviable on like goods produced or manufactured in India. a duty differs from a tax in being levied on specific commodities. estates. 1/. Customs duty is realized at a specific rate applied to the volume of the import or export consignments. 2.V. thus it is right to talk of import duties. It is commonly referred to as countervailing duty or C.1. levied by force of law. 3. 5. and not on individuals. surcharge. etc. etc.d. 1975 (c. financial transactions. additional duty of Customs leviable under section 3 of the Customs Tariff Act. death or succession duties. It is a tax on certain items purchased abroad. often associated with customs.. Properly. In economics.. Anti-dumping duty/Safeguard duty for import to specified goods with a view to protecting domestic industry from unfair injury. basic duty of Customs.v.

the routes by which above goods may pass by land or inland water into or out of Indian and the ports which alone shall be coastal ports. Foreign Exchange Regulation Act. In order to give a broad guide as to classification of goods for the purpose of duty liability. It can be charged on all goods by the central government to counter balance excise duty leviable to raw materials. If the customs value of goods is Rs. Duties of customs are levied on goods imported or exported from India at the rate specified under the customs Tariff Act. the excise duty that would be leviable on that product had it been manufactured or produced in India is the duty payable. For the purpose of exercising proper surveillance over imports and exports. The rate varies for different items from 5% to 40%. the highest rate among those rates is the rate applicable. the places for clearance of goods imported or to be exported. Under the custom laws. If the product is leviable at different rates. Eg. Such duty is leviable on the value of goods plus basic custom duty payable. The Act also contains detailed provisions for warehousing of the imported goods and manufacture of goods is alsopossible in the warehouses. CVD will be Rs. the central Board of Excises Customs (CBEC) bring out periodically a book called the "Indian Customs Tariff Guide" which contains various tariff rulings issued by the CBEC.1100/-. Besides. 5000 and rate of basic customs duty is 10% and excise duty on similar goods produced in India is 20%. If a like product is not manufactured or produced in India. Additional Duty to compensate duty on inputs used by Indian manufacturers. This Additional Duty is levied under section 3(3) of the Customs Act. etc. Basic Duty: This is the basic duty levied under the Customs Act. The Customs Act was formulated in 1962 to prevent illegal imports and exports of goods.y Co-ordinating legal provisions with other laws dealing with foreign exchange such as Foreign Trade Act. components and other inputs . all imports are sought to be subject to a duty with a view to affording protection to indigenous industries as well as to keep the imports to the minimum in the interests of securing the exchange rate of Indian currency. the following are the various types of duties which are leviable. Additional Duty (Countervailing Duty) (CVD): This additional duty is levied under section 3 (1) of the Custom Tariff Act and is equal to excise duty levied on a like product manufactured or produced in India. Conservation of Foreign Exchange and Prevention of Smuggling Act. the Central Government has the power to notify the ports and airports for the unloading of the imported goods and loading of the exported goods. 1975 as amended from time to time or any other law for the time being in force. For a person who do not actually import or export goods customs has relevance in so far as they bring any baggage from abroad.

This is known as dumping. Protective Duty: If the Tariff Commission set up by law recommends that in order to protect the interests of Indian industry. Import Procedures Procedures have to be followed by person-in-charge of conveyance as well as the importer.similar to those used in the production of such good. Protective duty may be cancelled or varied by notification. the Central government may vary the provisional rate of dumping duty. Such notification must also be placed before Parliament for approval as above. Duty on Bounty Fed Articles: In case a foreign country subsidises its exporters for exporting goods to India. Dumping duty can be imposed even when goods are imported indirectly or after changing the condition of goods. Anti-dumping Duty: Sometimes. . as the case may be. At present very few articles such as skins and leather are subject to export duty. The notification for levy of such duties must be introduced in the Parliament in the next session by way of a bill or in the same session if Parliament is in session. The Central Government has been granted emergency powers to increase import or export duties if the need so arises. if the goods have been sold at less than normal value. Pending determination of margin of dumping. the Central Government may import additional import duty equal to the amount of such subsidy or bounty. it should be placed within seven days when the next session starts. Such duty will be payable upto the date specified in the notification. Such increase in duty must be by way of notification which is to be placed in the Parliament within the session and if it is not in session. In order to prevent dumping. There are however certain restrictions on imposing dumping duties in case of countries which are signatories to the GATT or on countries given "Most Favoured Nation Status" under agreement. foreign sellers abroad may export into India goods at prices below the amounts charged by them in their domestic markets in order to capture Indian markets to the detriment of Indian industry. difference may be collected or refunded. such duty may be provisionally imposed. After the exact rate of dumping duty is finally determined. the notification ceases to have force but the action already undertaken under the notification remains valid. If the bill is not passed within six months of introduction in Parliament. additional duty may be collected on a provisional basis and after final determination. Export Duty: Such duty is levied on export of goods. the Central Government may levy protective anti-dumping duties at the rate recommended on specified goods. the Central Government may levy additional duty equal to the margin of dumping on such articles. If the amount of subsidy or bounty cannot be clearly determined immediately. Notification should be approved within 15 days. The main purpose of this duty is to restrict exports of certain goods. Dumping duty can be levied on imports on such countries only if the Central Government proves that import of such goods in India at such low prices causes material injury to Indian industry.

he should report to nearest police station or Customs Officer. [Section 30(1)].) The import manifest in case of vessel or aircraft is required to be submitted prior to arrival of a vessel or aircraft. Import Manifest / Report. it is called import manifest. Grant of Entry Inwards by Customs Officer .Person-in-charge of vessel. Loading also has to be only after permission. Arrival at customs port/airport only . Import report (in case of vehicle) has to be submitted within 12 hours of arrival at the customs station. If there is heavy congestion at port. Such penalty will not be imposed if the excise officer is satisfied that there was sufficient cause for the delay. It can land at other place only if compelled by accident.Import General Manifest].Section 29 provides that person-in-charge of a vessel or an aircraft entering India shall call or land at customs port or customs airport only.WHO IS 'PERSON IN CHARGE' .its conductor or guard and (d) In case of vehicle or other conveyance .its commander or pilot-in-charge (c) In case of train . The significance of this definition is He is responsible for submitting Import Manifest and Export Manifest He is responsible to ensure that the conveyance comes through approved route and lands at approved place only. [Also termed as IGM . stress of weather or other unavoidable cause. while in case of vehicle.Unloading of cargo can start only after Customs Officer grant Entry Inwards . person-in-charge or any person specified as responsible by a notification is liable to penalty upto Rs 50.its driver or other person in charge. IGM can be submitted electronically through floppy where EDI facility is available. 'person in charge' means (a) In case of vessel its master (b) In case of aircraft . Such entry inwards can be granted only when berthing accommodation is granted to a vessel. the Agents submit the Import Manifest before arrival. He can be penalised for (a) Giving false declaration and statement (b) shortages or nonaccounting of goods in conveyance Procedure to be followed by the Carrier The 'person in charge of conveyance' (carrier of goods) has to follow prescribed procedure. the vehicle should come by approved route to land customs station only. This also enables importers to file Bill of Entry in advance. If the report / manifest could not be submitted within prescribed time. shipping berth may not be available and in . aircraft or vehicle has to submit Import Manifest / Report. He has to ensure that goods are unloaded after written order. so that maximum possible formalities are completed before vessel or aircraft arrives. Normally. it is called import report. (In case of a vessel or aircraft. IMPORT MANIFEST IS REQUIRED TO BE SUBMITTED BEFORE ARRIVAL OF AIRCRAFT OR VESSEL Section 30(1) of Customs Act provides that Import Manifest should be filed before arrival of ship or aircraft.As per section 2(31). While arriving by land route. He has to ensure that conveyance does not leave without written order of Customs authorities. In such case.000. at proper place.

Under EDI system. for computerisation purposes. This date is highly relevant for determining rate of customs duty applicable. The goods are classified and value is assessed at the time of clearance from customs port. triplicate for the importer and fourth copy is meant for bank for making remittances. Thus.such case. is used when the imported goods are to be cleared on payment of full duty. Ltd. Procedure by Importer The importer importing the goods has to follow prescribed procedures for import by ship/air/road. Entry Inwards cannot be granted. CC . Out of these. It is white coloured and hence often called white bill of entry . However.Scindia Steam Navigation v. This is used for clearance from the warehouse on payment of duty and is printed on green paper.If the imported goods are not required immediately. value and . It has been held that tally sheet prepared by Port Trust authorities on unloading of goods is a statutory document and should be accepted in preference to steamer survey .1992 (57) ELT 510 (GOI). BILL OF ENTRY FOR HOME CONSUMPTION . . BILL OF ENTRY FOR WAREHOUSING .This form. This Bill of Entry is printed on yellow paper and often called Yellow Bill of Entry .) BILL OF ENTRYThis is a very vital and important document which every importer has to submit under section 46. Home consumption means use within India. Bill of Entry is actually printed on computer in triplicate only after out of charge order is given. 142/93 dated 3-11-93). importer may like to store the goods in a warehouse without payment of duty under a bond and then clear from warehouse when required on payment of duty. (There is separate procedure for goods imported as a baggage or by post. two types are for clearance from customs while third is for clearance from warehouse.The third type is for Ex-Bond clearance. Duplicate copy is given to importer. This will enable him to defer payment of customs duty till goods are actually required by him. (Mumbai Customs Public Notice No. The Bill of Entry should be in prescribed form. 15" × 12" size is permitted. The standard size of Bill of Entry is 16" × 13". Types of Bill of Entry . BILL OF ENTRY FOR EX-BOND CLEARANCE . called Bill of Entry for Home Consumption . the carrier is liable to pay penalty upto twice the amount of duty payable on such short landed goods. It is also called Into Bond Bill of Entry as bond is executed for transfer of goods in warehouse without payment of duty. Carrier responsible for shortages during unloading .Bills of Entry should be of one of three types. Bill of Entry should be submitted in quadruplicate original and duplicate for customs.If the goods are short landed.1988 (33) ELT (CEGAT) followed in re India Steamship Co.

the Bill of Entry has to be filed electronically. In that case. if preferential rate is claimed. while it is done manually in small ports.Normally. customs duty as assessed on yellow bill of entry and as paid on green bill of entry will not be same. Assessment of Duty and Clearance The documents submitted by importer are checked and assessed by Customs authorities and then goods are cleared.4. declaration by importer is not required as the goods are already assessed. Electronic submission under EDI system Where EDI system is implemented. Chapter 3 Para 6 and 7 of CBE&C s Customs Manual. Filing of Bill of Entry . However. i.classification is not required to be determined in this bill of entry. The columns in this bill of entry are similar to other bills of entry. The Noting is now done electronically in large ports. 1995. Thoka Number (Serial Number) is given while noting the Bill of Entry.f. A declaration in prescribed form about correctness of information should be submitted. Customs work at some ports has been computerised. [Earlier an EC (Import Export code) number issued by DGFT was required to be mentioned on Bill of Entry]. Procedure for the same has been prescribed vide Bill of Entry (Electronic Declaration) Regulations. (x) Technical literature.e. Thus. It is a 15 digit code based on PAN of Income Tax (PAN is a 10 digit code). formal submission of Bill of Entry is not required. Documents to be submitted by Importer .Documents required by customs authorities are required to be submitted to enable them to (a) check the goods (b) decide value and classification of goods and (c) to ensure that the import is legally permitted. (xi) Test report in case of chemicals (xii) Advance License / DEPB in original. components and machinery (xiv) No commission declaration. Section 2(2) defines assessment as follows Assessment includes provisional . A signed paper copy of declaration for nonrepudiability should be submitted. as it is generated in computer system. Bill of Entry number is generated by system which is endorsed on printed check list. Bill of Entry is filed by CHA on behalf of the importer. if rate has changed after goods are cleared from customs port. through Customs EDI system through computerisation of work. 2001. Importer should submit declaration in electronic format to Service Centre . Original documents are to be submitted only at the stage of examination. 1.2001. where applicable (xiii) Split up of value of spares. Mention of BIN on Bill of Entry A BIN (Business Identification Number) is allotted to each importer and exporter w. RATE OF DUTY FOR CLEARANCE FROM WAREHOUSE It may be noted that rate of duty applicable is as prevalent on date of removal from warehouse.e. The documents that are essentially required are : (i) Invoice (ii) Packing List (iii) Bill of Lading / Del ivery Order (iv) GATT declaration form duly filled in (v) Importers / CHAs declaration duly signed (vi) Import Licence or attested photocopy when clearance is under licence (vii) Letter of Credit / Bank Draft wherever necessary (vii) Insurance memo or insurance policy (viii) Industrial License if required (ix) Certificate of country of origin.

importer wants to complete as many formalities as possible before ship arrives. where the goods are examined in presence of importer s representative.Bill of Entry submitted by importer or Customs House Agent is cross-checked with Import Manifest submitted by person in charge of vessel / carrier. which is very high.assessment. New Delhi circular No 64/96 dated 10. Each group is under an Assistant/Deputy Commissioner. Otherwise.12. he will issue an examination order.1996 and CBE&C circular No 22/97-Cus dated 4.Appraiser has to (a) correctly classify the goods (b) decide the Value for purpose of Customs duty (c) find out rate of duty applicable as per any exemption notification and (d) verify that goods are not imported in violation of any law.Section 17 provides that assessment of goods will be made after Bill of Entry is filed. but rate of exchange will be as prevalent on date of submission of bill of entry. APPRAISING THE GOODS . Proviso to Section 46(3) of Customs Act allows importer to present bill of entry upto 30 days before expected date of arrival of vessel. He can call for any further documents that may be required for assessment. 2001. Noting of Bill of Entry .7. CC . This date is relevant for determining rate of customs duty.1997.1993 (63) ELT 248 (CEGAT). It is noted if the description tallies. assessment includes Nil assessment.confirmed in CC. Hence. duty will be payable at the rate applicable on the date on which Entry Inward is granted to vessel and not the date of presentation of Bill of Entry. noting is done by the system itself which also generates bill of entry number. Chapter 3 Para 11 and 12 of CBE&C s Customs Manual. reassessment and any order of assessment in which the duty assessed is Nil. demurrage is charged by port trust/airport authorities. Date stamp of receipt is put on the Bill of Entry and then it is sent to appraising department either manually or electronically There are various Appraising groups for different Chapter headings. Noting means taking on record by customs officer. the authorities can refuse to accept the Bill of Entry.After the goods are unloaded. If he is of the opinion that goods have to be examined for appraisal. Serial number is given in the import section. these have to be cleared within stipulated time . VALUATION OF GOODS .As per rule 10 of Customs Valuation Rules. Thus. bill of lading etc. Date of presentation of bill of entry is highly relevant and the rate of duty as applicable on this date will be considered for calculating the duty payable. Prior Entry of Bill of Entry . the Bill of Entry is presented to appraising staff at docks / air cargo complexes. If these are not so removed. usually on the reverse of Bill of Entry. the importer has to file declaration about full 'value' of goods. Assessment is finalised after getting the report of examination. Assessment of Customs duty . Bill of Entry is accepted only after proper scrutiny vis-a-vis import manifest and various declarations given in bill of entry and attached documents like invoice. . In such case. Group consists of Examiners and Appraisers . In case of EDI system. If such documents are not attached. and hence submission of such incomplete Bill of Entry cannot be taken as date of presentation of Bill of Entry .usually three working days. it is returned for clarifications. If such order is issued. If the assessing officer has doubts about the truth and .Simla Agencies v.

. as provided in Customs Valuation Rules. as per WTO agreement. First and second system of assessment . the assessing officer can reject the value declared by importer. if goods were already examined. the assessing officer has to give reasons for doubting the value declared by importer. value of similar goods etc. [This amendment has been made w.. necessary duty is paid. duty payable is typed by a pin-point typewriter so that it cannot be tampered with. he can ask importer to submit further information. He should follow due process of law and issue appealable order. If the value declared by importer is rejected. Final Bill of Entry is printed only after Out of Charge order is given by customs officer. documents are inspected only after assessment. EDI ASSESSMENT In the EDI system. All calculations are done by the system itself. The duty can be debited to such current account. the cargo declaration is transferred to assessing officer in the groups electronically.98. copy of Bill of Entry is printed at service centre. Regular importers and Custom House Agents keep current account with Customs department. these have to be submitted for examination in import shed to the examining staff. As per CBE&C circular No. . preferably by rubber stamp.e. if the value is more than Rs one lakh. Processing is done on the screen itself.The assessment has to be approved by Assistant Commissioner. Goods are examined first and then these are assessed. the assessing officer can value imported goods on other basis e. If assessing officer needs clarification. If the doubt persists. After assessment. (In cases covered under fast track clearance for imports . If goods were not examined before assessment. or it can be paid in cash/DD through TR-6 challan in designated banks.g. 2001.After assessment of duty. details and documents. 19. Chapter 3 Para 18 to 22 of CBE&C s Customs Manual.Assessing Officer should not arbitrarily reject the declared value and increase the assessable value. After shed appraiser gives out of charge order. Under EDI.The importer himself may also request 'first check procedure'. Section 17(2) provides for assessment after examination of goods and section 17(4) provides for assessment on basis of documents. MF (DR) circular No. After payment of duty. If the importer requests. delivery of goods can be taken from custodians (port trust) after paying their dues. delivery of goods can be taken from custodian. appraiser is also authorised to approve valuation). PAYMENT OF CUSTOMS DUTY . value of identical goods. First appraisement system or 'first check procedure' is followed if the appraiser is not able to make assessment on the basis of documents submitted and deems that inspection is necessary.f.2. [rule 10A(2)]. Assessing Officer should sign in full in Bill of Entry followed by his name. Facility of tele-enquiry about status of documents is provided in major customs stations.There are two systems of assessment. followed by inspection and testing of goods. 16/2003-Cus dated 17-3-2003. [Rule 10 A (1) of Customs Valuation Rules]. normally. . The query is printed at service centre and importer replies through service centre. He has to make request for . it has been held that burden of proof of under valuation is on department]. However. After the approval. 10/98-Cus dated 11-21998. he can raise a query. APPROVAL OF ASSESSMENT . if he cannot give all required details regarding description / value of goods.accuracy of 'value' as declared. This method is followed only if assessment is not possible on basis of documents.

Such examination is not mandatory. It is then presented to import shed for examination.Examiners carry out physical examination and quantitative checking like weighing. which is normally followed. . Goods are damaged or deteriorated and abatement is claimed 5. The scheme is announced through administrative instructions. Goods are abandoned and remission of duty is applied for 6. re-assessment can be done after examination or testing of goods or otherwise. 30/2003-Cus dated 4-4-2003. The shed appraiser / Dock examiner examines the goods as per examination order and records his findings. Audit of import documents will not be by existing system of concurrent audit but will be done by post-clearance audit. Hence.Chapter 3 Para 23 of CBE&C s Customs Manual. assessment is done on basis of documents and then goods are examined. Physical inspection of imported goods will be done by risk-assessment and management techniques on a computer based system and not on the orders of customs examining staff. 2001. It is done on selective basis on the basis of risk assessment or specific intelligence report. as prevalent in developed countries. the scheme is introduced on trial basis at Air Customs. Goods are re-imported 4. had announced a self assessment scheme for importers and exporters. without making any change in statutory provisions. As per the scheme. Subsequently. Section 17(4) of Customs Act specifically provides that if initially assessment is done on basis of documents. measuring etc. The examination order is recorded on Bill of Entry and then returned to importer / CHA. the scheme is not same as self removal under Central Excise. Goods are to be tested for correct classification 3. Selected packages are opened and examined on sample basis in Customs Examination Yard . that any statement made on Bill of Entry or any information supplied is not true in respect of matter relevant to assessment of duty. Sahar (Mumbai). Computer System will calculate the duty based on his declaration. importer will himself determine classification of goods including claim for exemption benefits. He has to give reason for seeking first appraisement. .first check examination at the time of filing of Bill of Entry or at data entry stage in case of EDI. Examination report is prepared by the examiner. If samples are required. they are taken out. When goods are provisionally assessed 7. if it is found subsequent to examination or testing or otherwise. Accelerated Clearance of Imports and Exports Scheme (ACS) Finance Minister. ICD. Presently. in his budget speech on 28-2-2003. First appraisement is generally carried out in following cases 1. New Delhi and Chennai Sea Customs. If complete documents are not submitted 2. a Accelerated Clearance of Import and Export Scheme (ACS) has been announced vid e MF (DR) circular No. The goods are then assessed to duty by appraiser. In Second Appraisement System or 'second check procedure'. When importer himself requests for examination of goods before payment of duty. In case of EDI system. the report of examination is given in the computer itself. EXAMINATION OF GOODS .

However. duty drawback etc. account. if duty finally assessed is higher [section 18(2)(a)]. CHA or the importer can take it for payment of customs duty. Importer/exporter intending to avail this facility has to make application to Commissioner. Duty can be paid either in cash or through P. within five days excluding holidays) after the Bill of Entry is returned to the importer for payment of duty. the scheme will be open to all status holders under EXIM policy. will be checked. . He can pay customs duty by debiting the amount in P. duty payment is not required. manufacturer-exporters who have been exporting for at least two years and have filed at least 25 Shipping Bills in preceding year and bulk exporters.In case of imports. assessment is done on provisional basis. the Customs Officer may require importer to execute a bond for twice the difference in duty. Large importers and CHA have P. The clearances will be subject to post clearance audit. The duty should be paid within five working days (i. D. This is a current account. similar to PLA in central excise. accounts with customs.If goods are to be removed to a warehouse.e. The bond is called as 'P D Bond' (Provisional Duty Bond). payment through PD account is very convenient and quick. The goods can be taken to a warehouse under bond.D. Provisional Assessment . advance license. the scheme will be open to all status holders under EXIM policy.Documents in respect of Duty Entitlement Pass Book (DEPB). Goods can be cleared after payment of duty provisionally assessed and after providing the security. If the imported goods were warehoused after provisional assessment. payment of customs duty is required. Bank guarantee can also be given as a security. In such cases. the bill of entry is returned to importer. if goods are to be removed for home consumption.Section 18 of Customs Act. Certain sensitive items have been excluded from the provisions. difference is paid by importer or refunded to him as the case may be. Of course. The Bill of Entry should be presented to computist for calculation and pinpointing of the duty. (Till 11-5-2002. The importer/exporter has to furnish guarantee/security as required by Customs Officer for payment of difference if any. If bond has to be executed. The importer or CHA pays lumpsum amount in the account and gets credit on the amount paid. the period allowed was only 2 days). Central and State Government PSUs and other importers who have been importing for at least two years and have filed at least 25 Bills of Entry in preceding year. 1962 provide that provisional assessment can be done in following cases (a) when Customs Officer is satisfied that importer or exporter is unable to produce document or furnish information required for assessment (b) it is deemed necessary to carry out chemical or other tests of goods (c) when importer/exporter has produced all documents. (Provisional Duty) account. account means provisional duty account. Central and State Government PSUs. [Section 47(2)]. After final assessment. Payment of duty . The bond is with security or surety. without payment of duty. it will be taken in bond section.D. P.D. Execution of bond and payment of duty . Checking of duty drawback / license documents . but Customs Officer still deems it necessary to make further enquiry. he can pay duty by cash using TR-6 challan. EOU/STP/EHTP units whose goods have been sealed in presence of customs/excise officers. If the importer does not have an account.Once the duty is assessed. In case of exports.

34/2000Cus(NT)]. interest rate was 24% p. written information should be submitted to Director of STP / Development Commissioner of EOU and importer shall get a certificate. 1962. Out of Customs Charge Order . of course.If duty is not paid within 5 working days as aforesaid. goods must be cleared within 30 days after unloading. date of payment of duty. Relevant Date for Rate and Valuation of Customs Duty . 13-5-2002.Import of software through data communication / tele-communication is permitted. interest is payable.Section 15 of Customs Act prescribes that rate of duty and tariff valuation applicable to imported goods shall be the rate and valuation in force at one of the following dates. Customs Officer will issue Out of Customs Charge order under section 47.As per section 48 of Customs Act.f. 58/2000-Cus dated 10-7-2000. Unit intending to import software through datalink is required to inform estimated annual requirement to Development Commissioner of EOU / Director of STP.e. Goods can be cleared from customs area only on receipt of such order.e. the date on which bill of entry is presented (b) in case of warehoused goods. This is an adjudicating order within the meaning of Customs Act. Arms & ammunition can be sold only with permission of Central Government. . will be routed through bank. After import of software through internet. when Bill of Entry for home consumption is presented u/s 68 for clearance from warehouse and (c) in other cases.a. along with Bill of Entry and certificate from Development Commissioner of EOU / Director of STP.Interest rate is 15% w.. However. in reverse direction.It may be noted that concept of date of entering into territorial waters is not relevant for purposes of determination of rate of customs duty. (a) if the goods are entered for home consumption.even before 30 days. . animals. Otherwise. Export Procedures Procedures have to be followed by (a) person-in-charge of conveyance and (b) the exporter. even if it is passed by Appraiser and not by Assistant Commissioner. This should be approved by him. MF (DR) circular No. [Section 47(2) of Customs Act. CONCEPT OF TERRITORIAL WATERS NOT RELEVANT . [Notification No. 1-3-2000. [what for ?]. w. The procedures are similar to procedures for import. it is verified that import is not prohibited and after customs duty is paid. Customs Officer can grant extension. proper accountal in books should be maintained. Disposal if goods are not cleared within 30 days . This certificate should be submitted to Assistant / Dy Commissioner of Customs within 48 hours.]. Such interest can be between 10% to 36% as may be notified by Central Government. Since such imports are not available for physical verification. as per notification No.After goods are examined.Interest for late payment .f. He will issue 'out of charge' order.Heavy demurrage is payable if goods are not cleared from port within three days. goods can be sold after giving notice to importer. The documents such as invoice etc. 28/2002-Cus(NT) dated 13-5-2002] Earlier. Import of software through data communication . Demurrage if goods not cleared . perishable goods and hazardous goods can be sold any time .

[The report is popularly called as Export General Manifest . This ensures that formalities are completed as quickly as possible and loading in ship starts quickly. Open current account with designated bank for credit of duty drawback claims 3. customs authorities may ask for an undertaking that the export is on sole responsibility of the exporter. If drawback claim is to be made. one additional copy should be submitted. In case of any doubt. duly passed by Customs Officer is handed over by Exporter to the person-in-charge of conveyance. Such manifest/report can be amended or supplemented with permission.Exports are vital for our economy. There are five forms : (a) Shipping Bill for export of goods . (section 39 of Customs Act). Procedures by person in charge of conveyance Any new airline. Any stoppage in export consignment means loss of export orders to the exporter and loss of foreign exchange to the country. if there was no fraudulent intention. Obtain BIN (Business Identification Number) from DGFT. Entry Outward . Shipping Bill to be submitted by Exporter . Register licenses / advance license / DEPB etc. Procedures to be followed by Exporter Export procedures have been summarised in Chapter 3 Part II of CBE&C s Customs Manual. if exports are under Export Promotion Schemes Exporter has to submit shipping bill for export by sea or air and bill of export for export by road.The vessel should be granted Entry Outward . steamer agent should be registered in Customs Systems for electronic processing of shipping bills etc. Steamer Agents can file application for entry outwards 14 days in advance so that intending exporters can start submitting Shipping Bills . Loading can start only after entry outward is granted.1998]. an Export Manifest/Export Report in prescribed form should be submitted before departure. LOADING WITH PERMISSION . It is a PAN based number 2. as Nil Duty assessment is also an assessment. [Highlights of EXIM policy 1997-2002 as amended on 13.EGM]. The person in charge of conveyance has to follow prescribed procedures. at the customs station. Export Manifest . shipping bill is not necessary. 2001. it has been provided that movement of export consignment will not be interrupted and no export consignment shall be withheld for any reason whatsoever.Shipping Bill and Bill of Export Regulations prescribe form of shipping bills. but permission of Customs Officer is required (section 40). This report is not required if the conveyance is carrying only luggage of occupants. even if no duty is payable for most of exports.NO STOPPAGE OF EXPORT CONSIGNMENT . In case of baggage and mail bags. Goods have to be assessed for duty. Such report should be declared as true by the person-in-charge signing the export manifest. The details required are similar to import manifest.4. Every exporter should take following initial steps 1.As per section 41. shipping line.Export goods can be loaded only after Shipping Bill or Bill of Export. It should be submitted in quadruplicate. Hence.

are also to be submitted. In case of excisable goods. consignee. The Customs Officer certifies that the goods under this form have indeed been exported. from bonded store room . etc. while GR form is used when shipping bills are processed manually in customs house. Engineering Export Promotion Council.) Exporter has to become member of the concerned Export Promotion Council and obtain RCMC . quantity. description of goods. from ARE-1 prepared at the time of clearance from factory should also be submitted.g. SDF form is to be used where shipping bills are processed electronically in customs house. RCMC certificate from Export Promotion Council .If the goods are cleared by manufacturer for export. the goods are accompanied by ARE-1 (earlier AR-4). export contract. Apparel Export Promotion Council.these should be in Green colour (b) Shipping Bill for export of dutiable goods . where bond was executed. Duty drawback formalities . G R / SDF / SOFTEX Form under FEMA . Other documents required for export .Reserve Bank of India has prescribed GR / SDF form under FEMA.e. while SDF stands for 'Statutory Declaration Form ). Appropriate form of shipping bill should be used. details of packing.Blue colour. This form has then to be submitted to Maritime Commissioner for obtaining proof of export . G R stands for Guaranteed Receipt form.Registration cum membership Certificate. FOB Value etc. Excise formalities at the time of Export .it should be white colour (d) shipping bill for export of duty free goods ex-bond . when it is presented.e. The bond executed by Manufacturer-exporter with excise authorities is released only when proof of export is accepted by Maritime Commissioner or Assistant Commissioner.Exporter also has to prepare other documents like (a) Four copies of Commercial Invoice (b) Four copies of Packing List (c) Certificate of Origin or pre-shipment inspection where required (d) Insurance policy.If the exporter intends to claim duty drawback on his exports. He has to make endorsement of shipping bill that claim for duty drawback is being made. copies of packing list. Invoice Number. invoices. Customs authorities give serial number to shipping bill. [proviso to rule 12(1)(a) of Duty Drawback Rules]. (e) Letter of Credit (f) Declaration of Value (g) Excise ARE-1/ARE-2 form as applicable (h) GR / SDF form prescribed by RBI in duplicate (i) Letter showing BIN Number.this should be yellow colour (c) shipping bill for export of duty free goods . This form should be submitted to customs authorities. The shipping bill form requires details like name of exporter.i.under claim for duty drawback . letter of credit etc. Relevant documents should be pink colour (e) Shipping Bill for export under DEPB scheme . . If he fails to do so due to genuine reasons. he has to follow prescribed procedures and submit necessary papers. The procedures are discussed in the chapter on Export Incentives'. (e. Commissioner of Customs can grant exemption from this provision.Various Export Promotion Councils have been set up to promote and develop exports.

Goods are inspected at docks on the basis of printed check list.Customs Officer will verify the contents and after he is satisfied that goods are not prohibited for exports and that export duty. ARE-1 etc. ARE-1. . . Arms. is correctly claimed. art treasures. Some items like tea. the goods are presented to shed appraiser (exports) in dock for examination. Exporter s copy of shipping Bill. quota certification for export etc. are submitted (c) duties on stores consumed are paid or payment of the same is secured (d) no penalty is leviable (e) export duty. . declarations in prescribed form are to be filed through Service Centre of customs.Such permission is not required if the conveyance is carrying only luggage of occupants. GR-1. narcotics etc. bills of transhipment etc. If goods and documents are found in order.g. Then two copies of Shipping Bill are generated one customs and other exporter s copy. 2001. SDF. Exporter s copy of Shipping Bill. if applicable is paid. quota certification for export etc. ARE-1. is paid. are also signed. duly certified are handed over to exporter or CHA. All documents are submitted to Customs Officer along with checklist. if applicable. will permit clearance. Examination of goods before export . shipping bill number is generated by the system. octroi papers.After shipping bill is passed by export department. Let Export Order by Customs Authorities . Value and classification of goods under drawback schedule in case of drawback shipping bills Export duty / cess if applicable Advance License shipping bills are checked to ensure that description in invoice and final product specified in Advance License matches. After verification. GR-1. items restricted or prohibited under Foreign Trade (Regulation) Act. octroi papers. Drawback claims papers are also processed. are also signed. This inspection is necessary (a) to ensure that prohibited goods are not exported (b) goods tally with description and invoice (c) duty drawback. Goods will be examined by examiner. SDF. .The vessel or aircraft which has brought imported goods or which carry export goods cannot leave that customs station unless a written order is given by Customs Officer.Chapter 3 Para 43 and 60 of CBE&C s Customs Manual. coffee and coir products can be exported only against authorisation/licence under respective Acts. Exporter s copy is generated only after EGM (Export General Manifest) is submitted by shipping agent. where applicable. and following are checked . These are signed by CHA and customs officer and then by Appraiser. If necessary. (section 51) by giving let ship or let export order. samples may be drawn and assessment may be done after visual inspection or testing Exportability of goods under EXIM policy and other laws . ARE-1 etc.Chapter 3 Para 39 of CBE&C s Customs Manual. let export order is issued. which is endorsed on printed checklist generated for verification of data. antiques.Chapter 3 Paras 42 to 60 of CBE&C s Customs Manual.Some exports are totally prohibited under various Acts e. 2001. Conveyance to leave on written order .Check in customs Document submitted is processed by customs authorities. Processing under EDI system Under EDI system. duly signed are handed over to exporter or CHA. 2001. Such order is given only after (a) export manifest is submitted (b) shipping bills or bills of export.

Such goods should not be prohibited goods under section 11 of Customs Act.If the vessel has to unload only a small cargo. Transhipment means transfer from one conveyance to another.e. Transit Goods . no Boat Note is required if the cargo is accompanied by the Shipping Bill . Such goods should not be prohibited goods under section 11 of Customs Act. 1995]. In case of export. Boat Note should be in prescribed form. It will be maintained in duplicate and should be serially numbered. On arrival at customs station. ship or aircraft]. Boat Notes . Boat Note is required. ship or aircraft].Other Customs Procedures Besides the aforesaid procedures. [Section 54(1)]. . 50/95-Cus (NT) dated 6-9-95]. the goods will be liable to customs duty as if it is first importation in India. [Goods Imported (Conditions of Transhipment) Regulations. [India has such bilateral agreement with Nepal]. Goods to be transhipped must be specified in Import Manifest or Import report and a Bill of Transhipment should be submitted to Customs Officer. a Declaration of Transhipment shall be submitted instead of Bill of Transhipment. u/s 54 of Customs Act. Boat Notes Regulations provide that such Boat Notes will be issued by Customs Officer. it may be loaded in a small boat and sent to shore. In case of goods being transhipped under an international treaty or bilateral agreement between Government of India and Government of a foreign country. otherwise. the goods may go to another customs station. The goods shouldbe sealed during transhipment by customs officer.Section 55. various other procedures have been prescribed. a certificate from customs officer has to be submitted within one month that goods have been properly transferred. Boat Note is also required for transhipment of cargo. transfer from one ship to another or for reshipment. [The conveyance may be vehicle. if small export cargo is to be loaded in ship through small boat. . As per section 35. After transit. to any place out of India or any customs station. i. If the small cargo is to be sent to shore.Goods imported in any customs station can be transhipped without payment of duty. [The conveyance may be vehicle. they will be liable to customs duty as if it is first importation in India. Such transhipment may be to any major port or airport in India. The facility is available at all customs ports and Inland Container Depots (ICDs). such small boat must be accompanied by a Boat Note . all these goods must be mentioned in import manifest or import report submitted by person in charge of conveyance. it may not spend time in having berth in the port. A bond has to be executed for the purpose.-Section 55. After execution of bond. [Notification No. However. The goods can be transhipped to any other customs station in India if customs officer is satisfied that the goods are bonafide intended for transhipment to any customs station. These are mainly to be followed by the person in charge of conveyance.Section 53 provide that any goods imported in any conveyance will be allowed to remain on the conveyance and to be transited without payment of customs duty. On arrival at customs station. Transhipment of Goods .

Goods will be unloaded at approved place under supervision of Customs Officer. These will be loaded by master of vessel only after bill of coastal goods is passed (section 93). under the Customs Act. Seizure An officer of Customs can seize any goods. However. the vessel can leave only after obtaining written order from Customs Officer. The proper officer may also seize any document or things that may be relevant to any proceedings under the Custom Act. This Advice Book has to be presented for inspection of Customs Officers.1998. coastal goods means goods taken by ship from one Indian port to another.TRANSIT AND TRANSHIP .Distinction between transit and transhipment is that in 'transit' goods continue to be on same vessel. On arrival. Customs Officer can inspect goods and ask for questions and documents relating to goods. Coastal goods . the person from whom these documents are seized is entitled to make copies of the same. procedures are also different. and imposition of penalties by adjudication. LOADING OF COASTAL GOODS . confiscation of goods. but control is necessary to ensure that coastal goods are not diverted illegally for export. but does not include imported goods. Thus.The Consignor should submit bill of coastal goods to Customs Officer (section 93). As per notification No 15/98-NT dated 27. when called for. arms and ammunition. if called for. No export or import is involved. Unloading can be done only after obtaining permission from Customs Officer. goods are transferred to another vessel / vehicle. Hence. exemption has been granted for delivery of 'Advice Book' at each port of call. Master of Vessel will carry an Advice Book where entries will be made by Customs Officer. After loading.Unloading of coastal goods should be done only at Customs Port or coastal port appointed by CBEC under section 7 of Customs Act. UNLOADING OF COASTAL GOODS . There are also provisions for arrests and prosecution to deter them from smuggling and commercial frauds-which seriously affect the economy and even society at large when it comes to sensitive goods like drugs. the 'Advice Book' will have to be submitted for inspection on board of vessel.2. Offences & Penal Provisions Persons involved in smuggling and other modus operandi of imports and exports.Coastal goods means goods transported from one port in India to another port in India. while in transhipment. all bills relating to goods which are to be unloaded will be delivered to Customs Officer. in violation of prohibitions/ restrictions in vogue or with intent to evade duties or fraudulently claim export incentives are liable to serious penal action under the Customs Act. The following briefly indicates the provisions in law for seizure. Form of the bill has been prescribed. . The offending goods can be confiscated and heavy fines and penalties imposed. if he has reason to believe that the same are liable to confiscation. However.

in Customs Act has vast connotations and it means " any act or omission which will render such goods liable for confiscation under section 111 or 113 of the Customs Act. etc. Confiscation of goods used for concealing smuggled goods The goods used for concealing smuggled goods are also liable to confiscation as per specific provisions in section 119 of the Customs Act. on sufficient cause being shown.The person from whom the goods are seized is issued a show cause notice. by route other than land routes or is attempted to be cleared by way of mis-declaration in quantity. i. (It is worth noting that the term Smuggling". However. In case the smuggled goods with other goods in such a manner that the goods cannot be separated then the whole of goo are ds liable to be confiscated as per specific provisions in section 120 of the Customs Act. Confiscation of Conveyances/ Packages & Their Contents In addition to confiscation of Goods. vessels. DEPB. 100% EOU etc. can extend the time period for issue of Show cause notice. are enumerated in Section 111 and 113 of the Customs Act. are also liable to confiscation as per specific provisions in section 118 of the Customs Act. Liquors. Smuggled goods may be confiscated even if its form has been changed. Gold. the Commissioner of Customs. The import or exported goods are also liable to confiscation if there is an intention to evade Customs duty or to fraudulently avail the benefits available under various export promotion schemes.e. the conveyances.) In case the goods liable to confiscation are imported in a package. Confiscation The word confiscation implies appropriation consequential to seizure. the package and its other contents. such as duty drawback. The adjudicating authority makes the decision regarding confiscation of goods. usually within six months. Currency. In general. The specific/different categories of violations under which the import or export goods are liable to confiscation. All electronic goods. Confiscation of smuggled goods notwithstanding any change in form. the government can notify these goods and these goods can be disposed off before the conclusion of the proceedings eg. Confiscation of sale proceeds of smuggled goods . The essence and the concept of confiscation is that after confiscation. if any. by a further six months. Silver etc.. description or value etc are liable to be confiscated. aircrafts or vehicles. the property of the confiscated goods vests with the Central Government. P&P medicine. or animals those are used in the smuggling activities or in connection with fraudulent availment of drawback are liable to confiscation as per specific provisions in section 115 of the Customs Act. In case the seized goods are perishable or hazardous in nature or is prone to depreciate in value over time or for reasons of constraints in space. the goods that are attempted to be smuggled into or out of the country.

concealing. shall be liable to penalties as follows:1. Penal Provisions under the Customs Act: The word penalty means punishment under the law. to a penalty not exceeding the value of the goods or five thousand rupees. in relation to any goods. whichever is the greater. i. selling or purchasing. other than prohibited goods. or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under section 111. removing.e. in relation to any goods which renders such goods liable to confiscation under section 111. in the case of goods or baggage in respect of which mis-declaration of value has been done. or abets the same. or abets the same. to a penalty not exceeding the difference between the declared value and the value thereof or five thousand rupees. whichever is the greater. depositing. to a penalty not exceeding the value of the goods or the difference between the declared value and the value thereof or five thousand rupees. 5. the person shall be liable to a penalty not exceeding the duty sought to be evaded on such goods or five thousand rupees. Penalties in respect of improper exportation of goods The person involved in commission or omission. It also means the sum payable as a punishment for a default. in the case of goods falling both under clauses (ii) and (iii). 2.There may be situations when the smuggled goods are sold off. to a penalty not exceeding the duty sought to be evaded on such goods or the difference between the declared value and the value thereof or five thousand rupees. in the case of goods in respect of which any prohibition is in force under the Customs Act or any other law for the time being in force. 3. keeping. whichever is the highest. whichever is the highest. in the case of dutiable goods. which renders such goods liable to confiscation under section 113. in the case of goods falling both under clauses (i) and (iii). Penalties in respect of improper importation of goods: The person involved in omission or commission under the Customs Act. the sale-proceeds thereof are also liable to confiscation as per specific provisions in section 121 of the Customs Act. such punishment as is provided in penal laws. shall be liable to penalties in different types of cases as follows:- . In such a situation.. harbouring. whichever is the greater. or acquires possession of or is in any way concerned in carrying. 4.

other than prohibited goods. in the case of dutiable goods. 3. then. 2. no penalty shall be levied under section 112 or section 114. as the case may be. as the case may be. the benefit of reduced penalty shall be available if the amount of the duty or the interest so increased. Mandatory Penalty for Short-levy or Non-levy of duty in certain cases ( Section 114 A) In cases of non-levy or short levy of duty or where the interest has not been charged or paid or has been part paid or the duty or interest has been erroneously refunded by reason of collusion or any wilful mis-statement or suppression of facts. shall be taken into account.1. in the case of goods loaded in a conveyance for importation into India or goods transhipped under the provisions of this Act. as the case may be. Also. had such goods been imported. the Court. and if the failure to unload or the deficiency is not accounted for to the satisfaction of the Assistant Commissioner of Customs or Deputy Commissioner of Customs. If the duty or interest determined to be payable is reduced or increased by the Commissioner (Appeals). where such duty or interest. in the case of coastal goods. the Court. whichever is the greater. Penalty for not Accounting for Goods ( Section 116) If any goods loaded in a conveyance for importation into India. the Appellate Tribunal or. the amount of penalty to be paid shall be reduced to 25% of the duty or interest. then. in a case where the duty or interest determined to be payable is increased by the Commissioner (Appeals). the person who is liable to pay the duty or interest. to a penalty not exceeding * the value of the goods or five thousand rupees. in the case of goods under claim for drawback. as determined under sub-section (2) of section 28 shall also be liable to pay a penalty equal to the duty or interest so determined. the duty or interest as reduced or increased. as the case may be. or if the quantity unloaded is short of the quantity to be unloaded at that destination. or any goods transhipped under the provisions of this Act or coastal goods carried in a conveyance. as the case may be. to a penalty not exceeding the duty sought to be evaded on such goods or five thousand rupees. along with the interest payable thereon. However. to a penalty not exceeding twice the amount of duty that would have been chargeable on the goods not unloaded or the deficient goods. the Appellate Tribunal or. whichever is the greater. in the case of goods in respect of which any prohibition is in force under this Act or any other law for the time being in force. is paid within thirty days from the date of the communication of the order. and the interest payable thereon. 2. and 25% of the consequential increase in penalty have also been paid within thirty days of the communication of the order. to a penalty not exceeding twice the amount of export . to a penalty not exceeding the amount of drawback claimed or five thousand rupees. Where any penalty has been levied under this section. are not unloaded at their place of destination in India. the person-in-charge of the conveyance shall be liable to: 1. whichever is the greater. as the case may be.

without limit. initiated against any offending goods. the Customs Act. adjudication powers have been given to different class of officers as follows:1. the person being arrested is entitled to be informed about the grounds for such arrest under the law. as the case may be. also provides for criminal prosecution action. Under the law. by a Gazetted Officer of Customs lower in rank than an Assistant Commissioner of Customs or Deputy Commissioner of Customs. The amount of penalty depends on the gravity of the offence and is to act as the deterrent for future. in lieu of the confiscation. The proper adjudication authority is then to pass final order taking due note of all evidences brought on record. The said section also enjoins that provides that every . 3. Apart from issuing proper show cause notice under section 124. Any person guilty of serious offence under Customs Act. Whenever the goods are confiscated by an adjudicating authority. where the value of the goods liable to confiscation does not exceed fifty thousand rupees. 2. shall be liable to a penalty not exceeding ten thousand rupees. Penalties for contravention. Prohibited goods can be confiscated absolutely. an option is to be given to the party as per Section 125 of the Customs Act. Prosecution action can also be taken for providing false documents/declarations to Customs and for obstructing Customs officers working intentionally. which is punishable under section 135 of the said Act. mens rea is not required to be proof for the imposition of penalty under the provisions of the Customs Act.duty that would have been chargeable on the goods not unloaded or the deficient goods. where no express penalty is elsewhere provided for such contravention or failure. As per Section 122 of the Customs Act. Adjudication of confiscations and penalties The Customs Act enjoins quasi-judicial proceedings to be followed before any penalties are imposed and any confiscation action etc. by an Assistant Commissioner of Customs or Deputy Commissioner of Customs. the persons concerned are also required to be given opportunity of representation in writing and personal hearing in the matter. if these are not prohibited goods. not expressly mentioned Any person who contravenes any provision of this Act or abets any such contravention or who fails to comply with any provision of this Act with which it was his duty to comply.. Generally. The persons involved can be arrested and prosecuted in a Court of Law. etc. as provided under section 104 (1) of the Act. Arrest: To tackle the menace of smuggling and other serious economic offences including commercial frauds effectively. can be arrested by a customs officer authorised in this behalf. to pay a fine known as redemption fine of quantum as the adjudicating authority deems fit. apart from penal action in departmental adjudication. by a Commissioner of Customs or a Joint Commissioner of Customs. where the value of the goods liable to confiscation does not exceed two thousand five hundred rupees. had such goods been exported.

then. depositing. shall be punishable. or causes to be made. keeping.P. in any way knowingly concerned in any fraudulent evasion or attempt at evasion of any duty chargeable thereon or of a prohibition ny for the time being imposed under this Act or any other law for the time being in force with respect to such goods. in the case of an offence relating to any of the goods to which section 123 applies and the market price whereof exceeds one lakh of rupees. he shall be punishable for the second and for every subsequent offence with imprisonment for a term which may extend to seven years and with fine. statement or document is false in any material particular. The power to remand to judicial custody vests in the Magistrate by virtue of section 165 of the Cr. removing.person arrested under the Act has to be taken without unnecessary delay to the nearest Magistrate. concealing. with imprisonment for a term which may extend to seven years and with fine. signs or uses. Bailable or non-cognisable offences The offences punishable with imprisonment for a term of less than 3 years or only fine are covered in this category . or with fine. 2. Offences & Prosecution The offences under the Customs Act can be broadly categorised in two categories non-bailable or cognizable offences & bailable or non-cognizable offences Non-bailable or cognizable offences Customs Act if any person is involved. Department has issued several instructions to ensure that powers of arrest by Customs officers are exercised with care at senior level and arrest should be resorted in sufficient grave nature of officers as per laid down guidelines. or acquires possession of or is in any way concerned in carrying. If any person intentionally obstructs any officer of customs in the exercise of any powers . statement or document in the transaction of any business relating to the customs. he shall be punishable with imprisonment for a term which may extend to six months.C. knowing or having reason to believe that such declaration. any declaration. selling or purchasing or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under section 111. signed or used. Since the Customs Act doesn t contain any provision regulating the manner in which a person arrested is to be dealt with by the Magistrate. the provisions of the Criminal Procedure Code which regulate this aspect would be applicable to the person arrested under theprovisions of the Customs Act. or with both (section 132). If any person convicted of an offence under section 135(1) or of section 136 (1) (applicable to customs officers) of the Act is again convicted of an offence under the same sections. in relation to any goods. therefore. If a person makes.The offences under this category are as follows:- 1. harbouring.

or any prohibition for the time being in force under this Act or any other law for the time being in force with respect to any goods is or may be evaded. or with fine. or with fine. such imprisonment shall not be for less than one year {section 135 (i)}. In cases of connivance in the act or thing whereby any duty of customs leviable on any goods. without having reason to believe that he has such goods or document secreted about his person. If any person resists or refuses to allow a radiologist to screen or to take X-ray picture of his body in accordance with an order made by a Magistrate under section 103. or resists or refuses to allow suitable action being taken on the advice and under the supervision of a registered medical practitioner for bringing out goods liable to confiscation secreted inside his body. The officers of Customs also cannot escape serious action including prosecution action. or with both (section 134). or with both. i. and from the circumstances of the case it may be reasonably inferred that if not prevented by circumstances independent of his will. the punishment for imprisonment may extend to a term of three years. or with fine which may extend to one thousand rupees. or with fine. prosecution proceeding against a customs officer may be initiated under section 136 of the Customs Act:1. 2. If a customs officer arrests any person without having reason to believe that he has been guilty of an offence punishable under section 135. as provided in section 103. If a person makes preparation to export any goods in contravention of the provisions of this Act. he shall be punishable with imprisonment for a term which may extend to three years. In cases of vexatious search. or with both (section 133). a customs officer shall be punishable with imprisonment for a term which may extend to three years. he is determined to carry out his intention to commit the offence. if they are found abusing their powers or are shown to be colluding/conniving with tax evaders. 6. or with fine.e. such person shall be punishable with imprisonment for a term. he may be punishable with imprisonment for a term which may extend to six months. he shall be punishable with imprisonment for a term which may extend to six months. or with both. If a customs officer searches or authorises any other officer of customs to search any place without having reason to believe that . which may extend to six months.. In all offences under the Customs Act other than those mentioned under non-bailable or cognisable offences above. However. where any person is searched for goods liable to confiscation or any document relating thereto. 4. in the absence of special and adequate reasons to the contrary to be recorded in the judgment of the court. 5. or with both (section 135A). or with both. or with fine. a customs officer may be punishable with imprisonment for a term which may extend to six months. or 3. conferred under this Act. or with both. or with fine which may extend to one thousand rupees. or 4.3. In the following cases.

Counterfeiting causes serious economic and social damage to countries. Manufacturers. The presumption could be deemed as rebutted only if the proof is beyond reasonable doubt not merely when its existence is established by a preponderance of probability. are all falling victim to attacks which are becoming increasingly difficult to detect. or with fine which may extend to one thousand rupees. that presumption includes intention. If any officer of customs. the counterfeiting of trademarked goods. except with the previous sanction of concerned Commissioner of Customs. the culpable (guilty conscience or mens rea) on the part of the accused person shall be presumed and it will be for the accused to proof that he had no deliberation with respect of alleged offence. The impact of the counterfeit goods traffic on the global economy is becoming greater every year. and is affecting all those involved in international trade. in prosecution proceedings under the said Act for an offence under the said Act. he may be punishable with imprisonment for a term which may extend to six months. motive. in particular by discouraging inward investment. Presumption of culpable mental state As per section 138A of the Customs Act. or with both.any goods. documents or things of the nature referred to in section 105 are secreted in that place. distributors and entrepreneurs are looking for a fair trading environment in which their products or trademarks will receive adequate protection against unfair competition. or with both. knowledge. or with fine which may extend to one thousand rupees. except in the discharge in good faith of his duty as such officer or in compliance with any requisition made under any law for the time being in force. as well as copyright. 1962 can be taken by any Court. he may be punishable with imprisonment for a term which may extend to six months. and no cognizance of any offence under sections 132 to 135 of the Customs Act. CUSTOMS AND PROTECTION OF IPR: And finally. belief as well as reason to belief. Criminal complaint is thereafter filed in appropriate Court of law and followed up with a view to get expeditious orders / conviction. designs and models. where all kinds of rights are targeted as also in Patents. Commissioners of Customs apply their mind before sanctioning prosecution. When the presumption of culpable mental state is drawn under this provision.after being satisfied that there are sufficient reasons justifying prosecution. . discloses any particulars learnt by him in his official capacity in respect of any goods. Based upon the results of investigations and evidence brought on record.\ 5. Prosecution: No prosecution proceedings can be launched in a Court of Law against any person under Customs Act.

. JAIN. and goods whose importation. illicit drugs. WEBLIOGRAPY: 1. 4.International companies are tending to reduce the number of their manufacturing and distribution sites. and its role in achieving a fair and equitable international market. The Customs officers of today have to deal with a very wide range of offences and frauds in relation to. 2008.. 2. This places Customs in the front line of the battle against counterfeiting.tinxsys. and more than 70% worldwide. endangered species.S. SNOWWHITE. 9 TH EDITION. CUSTOMS LAW PROCEDURES. http://www..K. The amount of trouble States go to in order to create a fair trading environment for these markets is therefore a crucial factor. INDIRECT TAXES MADE EASY. with the result that they are extremely selective about which countries they eventually invest 2009. LTD. BIBLIOGRAPHY: 1.tax4india. N. exportation and carriage contravene intellectual property rights (IPR) legislation. which are so often dangerous. www.S. cultural heritage items. Customs is the public service which is best placed to protect the external borders.ieport. as the figures show: Customs makes 90% of all seizures of counterfeit goods in Europe. CBEC s CUSTOM MANUAL. 2010. sea and air borders. By promoting licit trade. they will contribute to the prosperity of their countries economies and protect the public against goods of inferior quality. R. 2.2001. As a result of its position at land. in particular. PVT. by providing an effective line of defence against the risk of intellectual property rights violations. LAW PRACTICE AND PROCEDURES. Customs carries out an essential function in the fiscal area. DATEY. 3. 3. V. . SAFEGUARD AND ANTIDUMPING DUTIES. Customs administrations play an important and legitimate role. SITARAM & CO.html http://www. 7TH EDITON. but as import duties fall its mission of protecting society and ensuring compliance with trade rules. 4. nuclear materials and hazardous goods. are assuming increasing significance. TAXMANN http://www.

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