CUSTOMS CARGO SERVICE PROVIDER

[Mr. M. GOVINDARAJAN]

Conveyances and goods in Customs Area

Section 141 of the Customs Act, 1962 (‘Act’ for short) provides that all conveyances and goods in a customs area shall, for the purpose of enforcing the provisions of this Act, be subject to the control of officers of customs.   The imported or export goods may be received, stored, delivered, dispatched or otherwise handled in a customs area in such manner as may be prescribed and the responsibilities of persons engaged in the aforesaid activities shall be such as may be prescribed.

Regulations

For the purposes of section 141 of the Act the Central Board of Excise and Customs made the Regulation called as ‘Handling of Cargo in Customs Areas Regulations, 2009 and notified the same vide No. G.S.R. 174(E), dated 17.03.2009.  These regulations came into effect from 17.03.2009.

Customs Cargo Service Provider

Regulation 2(b) of the Act defines the expression ‘Customs Cargo Service Provider’ as any person responsible for receipt, storage, delivery, dispatch or otherwise handling of imported goods and export goods and includes a custodian as referred to in section 45 of the Act and persons as referred to in sub-section (2) of section 141 of the said Act.

Approval

An application to act as a Customs Cargo Service provider for custody of imported or export goods and for handling of such goods in a customs area shall be made in the Form A  to the jurisdictional Principal Commissioner of Customs/Commissioner of Customs.  The said application shall be disposed within 45 days from the date of receipt of the application if the application fulfilled the following conditions-

• To provide infrastructure, equipment and adequate manpower for loading, unloading, stacking, handling, stuffing and de-stuffing of containers, storage, dispatch and delivery of containers and cargo etc., including-

• standard pavement for heavy duty equipment for use in the operational and stacking area;
• free of cost or rent fully furnished office accommodation for Customs, Customs Electronic Data Interchange Service Centre, with required amenities and facilities and residential accommodation and transportation facilities for customs staff;
• premises for user agencies with basic amenities and facilities;
• storage facility, separately for imported, export and transshipment goods;
• gate complex with separate entry and exit;
• adequate parking space for vehicles;
• boundary wall;
•  internal service roads;
• electronic weigh-bridge and other weighing and measuring devices;
• computerized system for location and accountal of goods, and processing of documents;
• adequate air-conditioned space and power back up, hardware, networking and other equipment for secure connectivity with the Customs Automated system; and for exchange of information between Customs Community partners;
•  facilities for auction, including by e-auction, for disposal of uncleared, unclaimed or abandoned cargo;
• facilities for installation of scanning equipment;
• security and access control to prohibit unauthorized access into the premises, and
• such other equipment or facilities as the Board or Principal Commissioner of Customs or Commissioner of Customs, as the case may be, may specify having regard to the screening, examination, custody and handling of imported or export goods in a customs area.

• To provide safe, secure and spacious premises for loading, unloading, handling and storing of the cargo for the projected capacity and for the examination and other operations as may be required in compliance with any law for the time being in force;
• insurance for an amount equal to the average value of goods likely to be stored in the customs area based on the projected capacity, and for an amount as the Principal Commissioner of Customs/Commissioner of Customs may specify having regard to the goods which have already been insured by the importers or exporters;
• To undertake to bear the cost of the Customs officers posted and shall make payments at such rates and in the manner prescribed, unless specifically exempted by an order of the Government of India in the Ministry of Finance;
• To execute a bond equal to the average amount of duty involved on the imported goods and 10% of value of export goods likely to be stored in the customs area during a period of  10 days and furnish a bank guarantee or cash deposit equivalent to 10% of such duty.
• To execute a separate bond for an amount equal to 10% of value of export goods with a bank guarantee for an amount equal to 10% of the value of the bond, towards the export goods transported from the customs area to any other customs area for export or transshipment, as the case may be;
• To undertake to comply with the provisions and abide by all the provisions of the Act and the rules, regulations, notifications and orders issued there under;
• To undertake to indemnify the Principal Commissioner of Customs/Commissioner of Customs from any liability arising on account of damages caused or loss suffered on imported or export goods, due to accident, damage, deterioration, destruction or any other unnatural cause during their receipt, storage, delivery, dispatch or otherwise handling.

If the Principal Commissioner of Customs/Commissioner of Customs is satisfied that in relation to the custody and handling of imported or export goods in a customs area, the Customs Cargo Service provider, for reasons beyond his control, is unable to comply with any of the above conditions, he may for reasons to be recorded in writing, exempt such Customs Cargo Service provider from any of the conditions of regulation.  No exemption shall be granted in respect of any of the conditions where the overall safety and security of the premises are likely to be affected thereby.

Tenure

On satisfaction that the applicant has fulfilled all the conditions mentioned above the Principal Commissioner of Customs/Commissioner of Customs may approve such an applicant as a Customs Cargo Service provider, for a period of 2 years from the date of issue of such approval.  A Customs Cargo Service provider already approved on or before the date of coming into force of these regulations shall be deemed to be approved as a Customs Cargo Service provider under these regulations for a period of 5 years from the date of compliance with the conditions of these regulations.

Relaxation

If the Principal Commissioner of Customs/Commissioner of Customs is satisfied that in relation to the custody and handling of imported or export goods in a customs area, the Customs Cargo Service provider, for reasons beyond his control, is unable to comply with any of the conditions for approval, he may for reasons to be recorded in writing, exempt such Customs Cargo Service provider from any of the conditions.  No exemption shall be granted in respect of any of the conditions where the overall safety and security of the premises are likely to be affected thereby.

Commencement of operations

The Customs Cargo Service provider approved for custody of imported or export goods and for handling of such goods shall not commence any operations in a customs area for the first time unless the Principal Commissioner of Customs/ Commissioner of Customs is satisfied that all the requirements of the Act have been fulfilled and grants permission to commence the operations by an order in writing.

Responsibilities

The following are the responsibilities of Cargo Service Provider-

• To keep a record of imported goods, goods brought for export or transshipment, as the case may be, and produce the same to the Inspector of Customs or Preventive Officer or Examining Officer as and when required;
• To provide information regarding arrival of the imported goods to the Deputy Commissioner or Assistant Commissioner of Customs immediately on arrival of said goods in the customs area and also information about their departure after the clearance thereof;
• To keep a record of each activity or action taken in relation to the movement or handling of imported or export goods and goods brought for transhipment;
• To display or make available in any other manner, information of process or movement or handling of imported or export goods and goods brought for transhipment;
• To demarcate separate areas for unloading of imported goods for their storage with respect to the category of importers, nature of goods, place of destination, mode of transportation or any other criterion as the Principal Commissioner of Customs/Commissioner of Customs may specify having regard to the custody and handling of imported goods in a customs area;
• To demarcate separate areas for loading of export goods for their storage with respect to categories of exporters, nature of goods, examined and sealed containers or other criterion as the Principal Commissioner of Customs/Commissioner of Customs may specify having regard to the custody and handling of export goods in a customs area;
• Not to permit goods to be removed from the customs area, or otherwise dealt with, except under and in accordance with the permission in writing of the Superintendent of Customs or Appraiser;
• Not to permit any export cargo to enter the customs area without a shipping bill or a bill of export having been filed with the Deputy Commissioner or Assistant Commissioner of Customs;
•  Not to  permit any import cargo to enter the customs area or be unloaded therein without the import report or the import manifest having been filed with the Deputy Commissioner or Assistant Commissioner of Customs;
• To be responsible for the safety and security of imported and export goods under its custody;
• To be liable to pay duty on goods pilfered after entry thereof in the customs area;
•  To be responsible for the secure transit of the goods from the said customs area to any other customs area at the same or any other customs station in accordance with the permission granted by the Deputy Commissioner or Assistant Commissioner of Customs;
• Subject to any other law for the time being in force, shall not charge any rent or demurrage on the goods seized or detained or confiscated by the Superintendent of Customs or Appraiser or Inspector of Customs or Preventive officer or examining officer, as the case may be;
• To dispose off in the manner specified and within a time limit of 90 days, the imported or export goods lying unclaimed, uncleared or abandoned; the period of 90 days may be extended by the Principal Commissioner of Customs/Commissioner of Customs by such further period as may be allowed, on sufficient cause being shown for delay in the disposal;
•  Not to make any alteration in the entry or exit points or boundary wall without the permission of the Principal Commissioner of Customs/Commissioner of Customs;
• To bear the cost of the customs officers posted by the Principal Commissioner of Customs/Commissioner of Customs on cost recovery basis and shall make payments at such rates and in the manner specified by the Government of India in the Ministry of Finance unless specifically exempted by an order of the said Ministry;
• To abide by all the provisions of the Act and the rules, regulations, notifications and orders issued there under.

 The Customs Cargo Service provider shall publish and display   at prominent places including website or webpage of the Customs Cargo Service provider the schedule of charges for the various services provided by him in relation to the imported goods or export goods in the customs area.

Review

The Principal Commissioner of Customs/Commissioner of Customs shall review the approval granted before the expiry of the initial period of approval of 2 years or 5 years, as the case may be, and may extend such approval to a further period of 5 years at a time.  The Principal Commissioner of Customs/Commissioner of Customs, for reasons to be recorded in writing, may order for review of the approval granted to any Customs Cargo Service provider before the completion of the period of approval.   In case of Customs Cargo Service provider authorized under Authorized Economic Operator Programme’, the approval granted under sub-regulation (1) may be extended for a further period of 10 years at a time.

Suspension of approval

The Principal Commissioner of Customs/Commissioner of Customs may, subject to the provisions of these regulations, suspend or revoke the approval granted to the Customs Cargo Service provider subject to the observance of procedure prescribed under regulation 12 and also order for forfeiture of security, if any, for failure to comply with any of the provisions of the Act and the rules, regulations, notifications and orders made there under.  The Principal Commissioner of Customs/Commissioner of Customs may, in appropriate cases where immediate action is necessary, suspend the approval granted to a Customs Cargo Service provider where an enquiry against such Customs Cargo Service provider is pending or contemplated.

Revocation

The Principal Commissioner of Customs/Commissioner of Customs shall issue a notice  in writing to the Customs Cargo Service provider stating the grounds on which it is proposed to suspend or revoke the approval and requiring the said Customs Cargo Service provider to submit within such time as may be specified in the notice not being less than 30 days, to the Assistant Commissioner or Deputy Commissioner of Customs nominated by him, a written statement of defence and also to specify in the said statement whether the Customs Cargo Service provider desires to be heard in person by the said Assistant Commissioner or Deputy Commissioner of Customs.

On receipt of the application the Assistant Commissioner or Deputy Commissioner of Customs may inquire into such of the grounds as are not admitted by the Customs Cargo Service provider.  In the course of inquiry, consider such documentary evidence and take such oral evidence as may be relevant or material to the inquiry in regard to the grounds forming the basis of the proceedings and he may also put any question to any person tendering evidence, for or against the Customs Cargo Service provider, for the purpose of ascertaining the correct position.  The Assistant Commissioner of Customs or Deputy Commissioner of Customs shall prepare a report of the inquiry recording his findings. The Principal Commissioner/Commissioner shall, after considering the report of the inquiry, and the representation thereon, if any, made by the Customs Cargo Service provider, pass such orders as he deems fit.

Renewal

The Principal Commissioner of Customs/Commissioner of Customs may on application made by the Customs Cargo Service provider before the expiry of the validity of the appointment, renew the approval for a further period of 5 years from the date of expiration of the original approval granted or of the last renewal of such approval if the performance of the approved Customs Cargo Service provider is found to be satisfactory with reference to his obligations under any of the provisions of the Act and the rules, regulations, notifications and orders made there under.

Penalty

If any Customs Cargo Service provider contravenes any of the provisions of these regulations, or abets such contravention or who fails to comply with any provision of the regulation with which it was his duty to comply, then, he shall be liable to a penalty which may extend to Rs.50000/-.

Appeal

Any Customs Cargo Service provider aggrieved by any decision or order passed under this regulation, may appeal under section 129A of the Act to the Customs Central Excise and Service Tax Appellate Tribunal established under section 129(1) of the Act.