HANDLING OF CARGO IN CUSTOMS AREA

[Mr. M. GOVINDARAJAN]

Section 141 of the Customs Act, 1962 provides that all conveyances and goods in a customs area shall, for the purpose of the Customs Act, 1962 (‘Act’ for short) be subject to the control of officers of customs.  The imported or export goods may be received, stored, delivered, despatched 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 this purpose the Central Board of Excise and Customs framed the regulations called as ‘Handling of Cargo in Customs Area Regulations, 2009’ (‘Regulations’ for short), vide Notification No. GSR 174 (E), dated 17.03.2009.  These regulations came into effect from 17.03.2009.

The Regulations provide for a comprehensive mechanism for handling of goods in a customs area and set out the terms and conditions for all facilities where customs cargo is handled. It also provides for the conditions and responsibilities of the persons handling import or export cargo in Inland Container Depot (ICD) or Container Freight Station (CFS) or seaport or airport or Land Customs Stations (LCS) and provide adequate control over the cargo handling entities to ensure that the adequate infrastructure is set up at such facilities for efficient handling of import or export goods.

Applicability

These regulations shall be applicable to the handling of imported and export goods in ports, airports, inland container depots, land customs stations and in customs areas approved.  Section 8 of the Act gives powers to the Principal Commissioner/Commissioner of Customs to approve proper places in any customs port or customs airport or coastal port for the unloading and loading of goods or for any class of goods and to specify the limits of the Customs area.

Customs Cargo Service Provider

Regulation 2(1)(b) 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 (Restriction of Custody and removal of the imported goods) of the Act and persons as referred to in sub-section (2) of section 141 of the said Act.

Approval

Any person to act as a Customs Cargo Service Provide, for the custody of import/export of the goods, is to apply to the Principal Commissioner/Commissioner of Customs in Form A.  The said application shall be disposed within 45 days from the date of receipt of the form.

The Proper Officer (Principal Commissioner/Commissioner of Customs) is satisfied that the applicant fulfils all the requirements under the provisions of the Act and the Regulations, he may approve for a period of 2 years.  The Proper Officer can review the approval granted before its expiry and may extend the approval for a further period of 5 years. The Proper Officer shall record the reasons for the review of the approval before the completion of the approval period.

In case of Customs Cargo Service provider authorised under Authorised Economic Operator Programme’, the approval granted may be extended for a further period of 10 years at a time.  After 07.11.2024 the same has been changed.  In case of Customs Cargo Service Provider authorised under Authorised Economic Operator Programme, the approval of appointment shall deem to be extended and remain valid till such time the Authorised Economic Operator authorisation is valid and not suspended or revoked. 

Suspension of revocation of approval

The Proper Officer may suspend or revoke the approval granted to the Customs Cargo Services Provider after observing the due formalities.  The Proper Officer may order for forfeiture of security for any failure to comply with the provisions of the Act or under the Regulations.  The Proper Officer may, in appropriate cases where immediate action is required may suspend the approval when the enquiry is pending or contemplated.

The procedure involved in the suspension of the approval is as below-

• The Proper Officer may issue a show cause notice to the Customs Cargo Service Provider in which the grounds for suspension shall be given.
• The show cause notice may require the service provider to submit reply within 30 days to the Assistant/Deputy Commissioner of Customs as nominated by the Proper Officer.
• In the reply the Customs Cargo Service Provider is to express his desire for the personal hearing before the Authority.
• The Assistant/Deputy Commissioner on receipt of the reply from the Customs Cargo Service Provider may enquire into the case and may call for documents and evidence to ascertain the correct position.
• The Customs Cargo Service Provider may be allowed to cross examine the witnesses enquired by the Department.
• If the Department refuses the cross examination the reasons for the same to be recorded by the Officer concerned.
• On completion of the inquiry the Assistant/Deputy Commissioner shall prepare a report of his findings and submit the same to the Principal Commissioner/Commissioner of Customs.
• The Principal Commissioner/Commissioner of Customs shall send a copy of the said report to the Customs Cargo Service Provider with the directions to submit his representation within 30 days from the date of receipt of the said report.
• The Principal Commissioner/Commissioner of Customs shall consider the inquiry report/representation of the Customs Cargo Service Provider and pass such order as he deem fit.
• If the Customs Cargo Service Provider contravenes any of the provisions of the Act or regulations or abets succontravention, he shall be liable for a penalty of Rs.50,000/-.

The Customs Cargo Service Provider, if aggrieved against the order of Principal Commissioner/Commissioner of Customs may file an appeal before the Appellate Tribunal under Section 129A of the Act.

Renewal of the approval

The Principal Commissioner/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, as the case may be, 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 thereunder.

Conditions

The Customs Cargo Service Provider shall fulfil the following conditions-

•  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 (EDI) 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;

•  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/Commissioner of Customs may specify having regard to the goods which have already been insured by the importers or exporters.

Besides the above the Customs Cargo Service Provider shall-

• undertake to bear the cost of customs officers posted;
• 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  5 days and furnish a bank guarantee or cash deposit equivalent to 10% of such duty;
• 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;
• undertake to indemnify the Principal Commissioner/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.

Responsibilities

The Regulations also provider the Customs Cargo Service Provider also shall have the following responsibilities-

• to keep a record of imported goods, goods brought for export or transshipment and produce the same to the authorities concerned for examination;
• to provide information about the arrival and departure of the goods;
• 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 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;
• responsible for the safety and security of imported and export goods under its custody;
• liable to pay duty on goods pilfered after entry thereof in the customs area;
• responsible for the secure transit of the goods from the said customs area to any other customs area;
• shall not charge any rent or demurrage on the goods seized or detained or confiscated;
• dispose off in the manner specified and within a time limit of ninety days, the imported or export goods lying unclaimed, uncleared or abandoned;
• shall publish and display ¹[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.