CUSTOM HOUSE AGENT

Customs House Agent (CHA) is a person who is licensed to act as an agent for transaction of any business relating to the entry or departure of conveyances or the import or export of goods at any Customs station.

LIABILITIES ON CHA: Section 146 of the Customs Act is the enabling provision, which allows agents of importers and exporters to act on behalf of importers and exporters. This is necessitated by the highly involved and technical nature of the work to be done in connection with clearance of imports into and exports out of country. The importers and exporters themselves may have neither time nor the requisite knowledge on their own. Therefore, agents are allowed to act on their behalf. The work of the agents is governed by the Customs House Agents Licensing Regulations, 1984 framed under this section read with Section 157. There are certain liabilities fastened on the agent of the importer or exporter under Section 147. Some of these liabilities are in the nature of extension of and exceptions to the liability of an agent under the Indian Contracts Act, 1872. Sub-section (1) empowers the agent to do everything that an importer or an exporter can do. Filing a bill of entry, shipping bill, submitting supporting documents therewith, helping in examination of goods, payment of duty on behalf of the principal, warehousing of goods, removal from warehouse and the like. The common law principle that an agent’s actions bind the principal is given the status of a legal presumption. The consequences of all actions of a CHA will bind the importers and exporters on whose behalf they act. An agent who is authorized to act on behalf of the importer or exporter is treated as the owner of imported or exports goods. In respect of that particular transaction, a notice could be given to that agent. This does not normally extend to recovery of duty not paid or short paid by the owner, importer or exporter of goods. As an exception, this is permissible when the Deputy/Assistant Commissioner is of the opinion that such recovery from the owner, importer or exporter of goods is not possible. CHAs have to maintain detailed, itemized and up to date books of accounts. The accounts should reflect all financial transactions entered into as a CHA. A copy of all documents such as shipping bill, bill of entry, transhipment application etc. filed must be maintained by the CHA for at least five years. These records should be made available for inspection by the officers of the department.

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DUTIES AND OBLIGATIONS OF CHA’S Clearances only against authorization A CHA is required to clear goods for import or export only against specific authorization from the principal and must produce it whenever required by the Deputy/Assistant Commissioner. Method of transacting business The CHA has to either personally clear the goods or clear it through an employee who is approved by the Deputy/Assistant Commissioner who is designated for this purpose by the Commissioner. All the documents prepared by him should prominently bear the CHAs name at the top of the document. The CHA should not attempt to influence the conduct of Customs officers in matters pending before him or his subordinates. There should be no threats, false accusations or duress against such officers. No promise of advantage or benefit or gift should be made or bestowed on such officers. Duty of CHA should be discharged with utmost speed and avoid delays. He cannot charge for his services in excess of rates approved by the Commissioner. Personal interests of CHA If the CHA is a former officer of the department, he cannot represent any matter before a Customs officer, which he had personally considered as such officer. He cannot also use facts which came to his knowledge when he was an officer. Duty to tender correct advise The CHA is duty-bound to advise the client to comply with the provisions of the Act and the regulations. If there is non-compliance of provisions by any client, he is required to bring it to the knowledge of the Deputy/Assistant Commissioner. This regulation requires the CHAs to act as source of information to the department. The CHA has to exercise diligence and ensure that he passes on correct information to the client, ensure that all information relevant for clearance or cargo or baggage is passed on to the client if it is relevant for clearance of cargo or baggage. Accounting for money received The CHA has a duty to promptly pay to Government all money received from client for payment of duties and taxes. Similarly, any money received by him from the client or from the Government should be promptly and fully accounted to the client. Liability as to information CHA should not attempt to gather information from Government records if it is not granted by the proper officer. Access to record maintained by him should not be denied, nor removed or concealed when sought by the Commissioner. There is a duty to maintain records and accounts as directed by the Deputy/Assistant Commissioner and produce them before that officer for inspection. All documents have to be prepared strictly in accordance with the rules and orders. If the licence granted to a CHA is lost, it should be promptly reported to the Commissioner.
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If there is failure in complying with obligations under Regulation 14, the Commissioner may prohibit a person from acting as a CHA within his jurisdiction.

OCEAN SHIPPING Shipping has multiple meanings. It can be a physical process of transporting goods and cargo, by land, air, and sea. It also can describe the movement of objects by ship. Land or "ground" shipping can be by train or by truck. In air and sea shipments, ground transportation is often still required to take the product from its origin to the airport or seaport and then to its destination. Ground transportation is typically more affordable than air shipments, but more expensive than shipping by sea. Shipment of freight by trucks, directly from the shipper to the destination, is known as a door to door shipment. Vans and trucks make deliveries to sea ports and air ports where freight is moved in bulk. Much shipping is done aboard actual ships. An individual nation's fleet and the people that crew it are referred to its merchant navy or merchant marine. Merchant shipping is essential to the world economy, carrying 90% of international trade with 50,000 merchant ships worldwide. The term shipping in this context originated from the shipping trade of wind power ships, and has come to refer to the delivery of cargo and parcels of any size above the common mail of letters and postcards.

Common trading terms used in shipping goods internationally include:

Freight on board, or free on board (FOB) - the exporter delivers the goods at the specified location (and on board the vessel). Costs paid by the exporter include load and lash, including securing cargo not to move in the ships hold, protecting the cargo from contact with the double bottom to prevent slipping, and protection against damage from condensation. For example, "FOB Kunming Airport" means that the exporter delivers the goods to the airport, and pays for the cargo to be loaded and secured on the plane. The exporter is bound to deliver the goods at his cost and expense. In this case, the freight and other expenses for outbound traffic are borne by the importer.
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Cost and freight (C&F, CFR, CNF): Insurance is payable by the importer, and the exporter pays the ocean shipping/air freight costs to the specified location. For example, C&F Los Angeles (the exporter pays the ocean shipping/air freight costs to Los Angeles). Many of the shipping carriers (such asUPS, DHL, FedEx) offer guarantees on their delivery times. These are known as GSR guarantees or "guaranteed service refunds"; if the parcels are not delivered on time, the customer is entitled to a refund.

Cost, insurance, and freight (CIF): Insurance and freight are all paid by the exporter to the specified location. For example, at CIF Los Angeles, the exporter pays the ocean shipping/air freight costs to Los Angeles including the insurance.

The term "best way" generally implies that the shipper will choose the carrier who offers the lowest rate (to the shipper) for the shipment. In some cases, however, other factors, such as better insurance or faster transit time will cause the shipper to choose an option other than the lowest bidder.

Ships and other watercraft are used for ship transport. Types can be distinguished by propulsion, size or cargo type. Recreational or educational craft still use wind power, while some smaller craft useinternal combustion engines to drive one or more propellers, or in the case of jet boats, an inboard water jet. In shallow draft areas, such as the Everglades, some craft, such as the hovercraft, are propelled by large pusher-prop fans. Most modern merchant ships can be placed in one of a few categories, such as: Bulk carriers, such as the Sabrina I seen here, are cargo ships used to transport bulk cargo items such as ore or food staples (rice, grain, etc.) and similar cargo. It can be recognized by the large box-like hatches on its deck, designed to slide outboard for loading. A bulk carrier could be either dry or wet. Most lakes are too small to accommodate bulk ships, but a large fleet of lake freighters has been plying the Great Lakes and St. Lawrence Seaway of North America for over a century.

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Container ships are cargo ships that carry their entire load in truck-size containers, in a technique called containerization. They form a common means of commercial intermodal freight transport. Informally known as "box boats," they carry the majority of the world's dry cargo. Most container ships are propelled by diesel engines, and have crews of between 10 and 30 people. They generally have a large accommodation block at the stern, directly above the engine room. Tankers are cargo ships for the transport of fluids, such as crude oil, petroleum products, liquefied petroleum gas, liquefied natural gas and chemicals, also vegetable oils, wine and other food - the tanker sector comprises one third of the world tonnage. Reefer ships are cargo ships typically used to transport perishable commodities which require temperaturecontrolled transportation, mostly fruits, meat, fish, vegetables, dairy products and other foodstuffs. Roll-on/roll-off ships, such as the Chi-Cheemaun, are cargo ships designed to carry wheeled cargo such as automobiles, trailers or railway carriages. RORO (or ro/ro) vessels have built-in ramps which allow the cargo to be efficiently "rolled on" and "rolled off" the vessel when in port. While smaller ferries that operate across rivers and other short distances still often have built-in ramps, the term RORO is generally reserved for larger ocean-going vessels.

Coastal trading vessels, also known as coasters, are shallow-hulled ships used for trade between locations on the same island or continent. Their shallow hulls mean that they can get through reefs where sea-going ships usually cannot (sea-going ships have a very deep hull for supplies and trade etc.).

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Ferries are a form of transport, usually a boat or ship, but also other forms, carrying (or ferrying) passengers and sometimes their vehicles. Ferries are also used to transport freight (in lorries and sometimes unpowered freight containers) and even railroad cars. Most ferries operate on regular, frequent, return services. A footpassenger ferry with many stops, such as in Venice, is sometimes called a waterbus or water taxi. Ferries form a part of the public transport systems of many waterside cities and islands, allowing direct transit between points at a capital cost much lower than bridges or tunnels. Many of the ferries operating in Northern European waters are ro/ro ships. See the Herald of Free Enterprise and M/S Estonia disasters. Cruise ships are passenger ships used for pleasure voyages, where the voyage itself and the ship's amenities are considered an essential part of the experience. Cruising has become a major part of the tourism industry, with millions of passengers each year as of 2006. The industry's rapid growth has seen nine or more newly built ships catering to a North American clientele added every year since 2001, as well as others servicing European clientele. Smaller markets such as the Asia-Pacific region are generally serviced by older tonnage displaced by new ships introduced into the high growth areas. On the Baltic sea this market is served by cruise ferries.

Cable layer is a deep-sea vessel designed and used to lay underwater cables for telecommunications, electricity, and such. A large superstructure, and one or more spools that feed off the transom distinguish it.

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A tugboat is a boat used to manoeuvre, primarily by towing or pushing other vessels (see shipping) in harbours, over the open sea or through rivers andcanals. They are also used to tow barges, disabled ships, or other equipment like towboats.

A dredger (sometimes also called a dredge) is a ship used to excavate in shallow seas or fresh water areas with the purpose of gathering up bottomsediments and disposing of them at a different location.

A barge is a flat-bottomed boat, built mainly for river and canal transport of heavy goods. Most barges are not self-propelled and need to be moved bytugboats towing or towboats pushing them. Barges on canals (towed by draft animals on an adjacent towpath) contended with the railway in the earlyindustrial revolution but were outcompeted in the carriage of high value items due to the higher speed, falling costs, and route flexibility of rail transport. A Multi-purpose ship (sometimes called a general cargo ship) is used to transport a variety of goods from bulk commodities to break bulk and heavy cargoes. To provide maximum trading flexibility they are usually geared and modern examples are fitted for the carriage of containers and grains. Generally they will have large open holds and twin decks to facilitate the carriage of different cargoes on the same voyage. The crew will be highly competent in the securing of break bulk cargoes and the ship will be equipped with various lashings and other equipment for sea fastening.

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Incoterms or International Commercial terms are a series of international sales with terms, published by International Chamber of Commerce (ICC) and widely used in international commercial transactions. These are accepted by governments, legal authorities and practitioners worldwide for the interpretation of most commonly used terms in international trade. This reduces or removes altogether uncertainties arising from different interpretation of such terms in different countries. Scope of this is limited to matters relating to rights and obligations of the parties to the contract of sale with respect to the delivery of goods sold. They are used to divide transaction costs and responsibilities between buyer and seller and reflect state-of-the-art transportation practices. They closely correspond to the U.N. Convention on Contracts for the International Sale of Goods. The first version was introduced in 1936 and the present dates from 2000. As of January 1, 2011 the eighth edition, Incoterms 2010, have effect. The changes therein affect all of the five terms previously listed in section D, which are now obsolete and have been replaced with these three:    DAT (Delivered at Terminal) DAP (Delivered at Place) DDP (Delivered Duty Paid)

The new terms apply to all modes of transport. EXW – Ex Works (named place) The seller makes the goods available at his premises. The buyer is responsible for all charges. This trade term places the greatest responsibility on the buyer and minimum obligations on the seller. The Ex Works term is often used when making an initial quotation for the sale of goods without any costs included. EXW means that a seller has the goods ready for collection at his premises (Works, factory, warehouse, plant) on the date agreed upon. The buyer pays all transportation costs and also bears the risks for bringing the goods to their final destination. FCA – Free Carrier (named places) The seller hands over the goods, cleared for export, into the custody of the first carrier (named by the buyer) at the named place. This term is suitable for all modes of transport, including carriage by air, rail, road, and containerised / multi-modal sea transport. This is the correct "freight collect" term to use for sea shipments in containers, whether LCL (less than container load) or FCL (full container load).

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FAS – Free Alongside Ship (named loading port) The seller must place the goods alongside the ship at the named port. The seller must clear the goods for export. Suitable only for maritime transport only but NOT for multimodal sea transport in containers (see Incoterms 2010, ICC publication 715). This term is typically used for heavy-lift or bulk cargo. FOB – Free on board (named loading port) The seller must themself load the goods on board the ship nominated by the buyer, cost and risk being divided at ship's rail. The seller must clear the goods for export. Maritime transport only but NOT for multimodal sea transport in containers (see Incoterms 2010, ICC publication 715). The buyer must instruct the seller the details of the vessel and port where the goods are to be loaded, and there is no reference to, or provision for, the use of a carrier or forwarder. It does not include Air transport. This term has been greatly misused over the last three decades ever since Incoterms 1980 explained that FCA should be used for container shipments. CFR or CNF – Cost and Freight (named destination port) Seller must pay the costs and freight to bring the goods to the port of destination. However, risk is transferred to the buyer once the goods have crossed the ship's rail. Maritime transport only and Insurance for the goods is NOT included. Insurance is at the Cost of the Buyer. CIF – Cost, Insurance and Freight (named destination port) Exactly the same as CFR except that the seller must in addition procure and pay for insurance for the buyer. Maritime transport only. CPT – Carriage Paid To (named place of destination) The general/containerised/multimodal equivalent of CFR. The seller pays for carriage to the named point of destination, but risk passes when the goods are handed over to the first carrier. CIP – Carriage and Insurance Paid (To) (named place of destination) The containerised transport/multimodal equivalent of CIF. Seller pays for carriage and insurance to the named destination point, but risk passes when the goods are handed over to the first carrier. new arrival incoterms have been discussed in the Incoterms 2010 brought out by the ICC and DAT and DAP have replaced DAF,DES,DEQ and DDU Given here is a small explanation provided by the ICC Two new Incoterms rules – DAT and DAP – have replaced the Incoterms 2000 rules DAF, DES, DEQ and DDU

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The number of Incoterms® rules has been reduced from 13 to 11. This has been achieved by substituting two new rules that may be used irrespective of the agreed mode of transport – DAT, Delivered at Terminal, and DAP, Delivered at Place – for the Incoterms® 2000 rules DAF, DES, DEQ and DDU. Under both new rules, delivery occurs at a named destination: in DAT, at the buyer’s disposal unloaded from the arriving vehicle (as under the former DEQ rule); in DAP, likewise at the buyer’s disposal, but ready for unloading (as under the former DAF, DES and DDU rules). The new rules make the Incoterms® 2000 rules DES and DEQ superfluous. The named terminal in DAT may well be in a port, and DAT can therefore safely be used in cases where the Incoterms® 2000 rule DEQ once was. Likewise, the arriving “vehicle” under DAP may well be a ship and the named place of destination may well be a port: consequently, DAP can safely be used in cases where the Incoterms® 2000 rule DES once was. These new rules, like their predecessors, are “delivered”, with the seller bearing all the costs (other than those related to import clearance, where applicable) and risks involved in bringing the goods to the named place of destination. DAF – Delivered At Frontier (Delivery place) This term can be used when the goods are transported by rail and road. The seller pays for transportation to the named place of delivery at the frontier. The buyer arranges for customs clearance and pays for transportation from the frontier to his factory. The passing of risk occurs at the frontier. DES – Delivered Ex Ship (named port) Where goods are delivered ex ship, the passing of risk does not occur until the ship has arrived at the named port of destination and the goods made available for unloading to the buyer. The seller pays the same freight and insurance costs as he would under a CIF arrangement. Unlike CFR and CIF terms, the seller has agreed to bear not just cost, but also Risk and Title up to the arrival of the vessel at the named port. Costs for unloading the goods and any duties, taxes, etc… are for the Buyer. A commonly used term in shipping bulk commodities, such as coal, grain, dry chemicals - - - and where the seller either owns or has chartered, their own vessel. DEQ – Delivered Ex Quay (named port) This is similar to DES, but the passing of risk does not occur until the goods have been unloaded at the port of destination. DDU – Delivered Duty Unpaid (named destination place) This term means that the seller delivers the goods to the buyer to the named place of destination in the contract of sale. The goods are not cleared for import or unloaded from any form of transport at the place

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of destination. The buyer is responsible for the costs and risks for the unloading, duty and any subsequent delivery beyond the place of destination. However, if the buyer wishes the seller to bear cost and risks associated with the import clearance, duty, unloading and subsequent delivery beyond the place of destination, then this all needs to be explicitly agreed upon in the contract of sale. DAP - Delivered At Place (named destination place) This term means that the seller delivers when the goods are placed at the disposal of the buyer on the arriving means of transport ready for unloading at the named place of destination. This is exactly what the old Incoterm DDU stipulated. DDP – Delivered Duty Paid (named destination place) This term means that the seller pays for all transportation costs and bears all risk until the goods have been delivered and pays the duty. Also used interchangeably with the term "Free Domicile". The most comprehensive term for the buyer. In most of the importing countries, taxes such as (but not limited to) VAT and excises should not be considered prepaid being handled as a "refundable" tax. Therefore VAT and excises usually are not representing a direct cost for the importer since they will be recovered against the sales on the local (domestic) market.

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