BUDGETARY CHANGES IN CUSTOMS – PART II

[Mr. M. GOVINDARAJAN]

Amendment to Section 30

Section 30 deals with the delivery of import manifest or import report.  Clause 71 of the Bill proposes to amend to-

•  include export goods in addition to imported goods as part of the information provided in the manifest;
• provide for prescribing the manner of delivery of manifest through regulations.

Amendment to Section 41

Section 41 deals with the delivery of export manifest or export report.  Clause 72(i) of the Bill proposes to amend to include the imported goods in addition to the exported goods as part of the information provided in the manifest and also to provide for prescribing the manner of delivery of manifest through regulations.

Clause 72(ii) of the Bill proposes penalty.  After amendment section 41(1) will provide that the person-in-charge of a conveyance carrying export goods or imported goods  shall, before departure of the conveyance from a customs station, deliver to the proper officer in the case of a vessel or aircraft, an export manifest by presenting electronically, and in the case of a vehicle, an export report, in such form and manner as may be prescribed and in case, the person in charge fails to deliver the departure manifest or export manifest or the export report or any part thereof within such time, and the proper officer is satisfied that there is no sufficient cause for such delay, such person-in-charge shall be liable to pay penalty not exceeding ₹ 50,000/-.

Amendment to section 45

Section 45 deals with the restrictions on custody and removal of imported goods.  Section 45 is being amended so as to provide for clearance of goods by other ways as may be prescribed in addition to existing system of clearance by the proper officer.

Amendment to section 46

Section 46 deals with the entry of goods on importation.  By virtue of clause 74 of the Bill Section 46 is amended so as to provide-

• amend sub-section (1) to insert a reference to Customs Automated System and the manner of presentation of bill of entry;
• amend the proviso to sub-section (1) to insert a reference to Customs Automated System; and
• clarify the time limit for the prior presentation of bill of entry, by substituting the words, ‘within thirty days of’ with the words, ‘at any time not exceeding thirty days prior to’ in first proviso to sub-section (3);
• provide for such other documents, as may be prescribed in addition to invoice, by necessary insertion to that effect in sub­section (4);
•  insert a new sub-section (4A) so as to provide for observance of the accuracy, authenticity, validity of the declarations made by the importer under this section and compliance to the prohibitions or restrictions under this act or any other law for the time being in force.

Amendment to section 47

Section 47 deals with the clearance of goods for home consumption.  Section 47 is being amended by clause 75 of the Bill so as to have a provision for clearance of goods by Customs Automated System in addition to existing clearance by the proper officer.

Amendment to section 50

Section 50 deals with the entry of goods for exportation.  Section 50 is being amended by Clause 76 of the Bill so as to:

(a) amend sub-section (1) to insert a reference to Customs Automated System and the manner of presentation of shipping bill or bill of export;

(b) amend the proviso to sub-section (1) to insert a reference to Customs Automated System; 

Clause 76(ii) of the Bill provides for section of sub-section (3) after sub-section (2) which provides that the exporter who presents a shipping bill or bill of export under this section shall ensure the following-

• the accuracy and completeness of the information given therein;
• the authenticity and validity of any document supporting it; and
• compliance with the restriction or prohibition, if any, relating to the goods under this Act or under any other law for the time being in force.

Amendment to section 51

Section 51 deals with the clearance of goods for exportation.  Clause 77 of the Bill proposes to amend section 51 so as to have a provision for clearance of goods by Customs Automated System in addition to existing clearance by the proper officer.

Insertion of new Chapter VIIA

Clause 78 of the Bill proposes to insert a new Chapter VIIA to deal with the payments through electronic cash ledger, containing section 51A.  Section 51A(1) provides that every deposit made towards duty, interest, penalty, fee or any other sum payable by a person under the provisions of the Act or under the Customs Tariff Act, 1975 or under any other law for the time being in force or the rules and regulations made there under, using authorized mode of payment shall, subject to such conditions and restrictions, be credited to the electronic cash ledger of such person, to be maintained in such manner, as may be prescribed.

Section 51A (2) provides that the amount payable in the electronic cash ledger may be used for making any payment towards duty, interest, penalty, fees or any other sum payable under the provisions of this Act or under the Customs Tariff Act, 1975 or under any other law for the time being in force or the rules and regulations made there under in such manner and subject to such conditions and within such time as may be prescribed.

Section 51A(3) provides that the balance in the electronic cash ledger, after payment of duty, interest, penalty, fee or any other amount payable, may be refunded in such manner as may be prescribed.

Section 51A (4) provides that notwithstanding anything contained in this section, if the Board is satisfied that it is necessary or expedient so to do, it may, by notification, exempt the deposits made by such class of persons or with respect to such categories of goods, as may be specified in the notification, from all or any of the provisions of this section.

Amendment to section 54

Section 54 deals with transshipment of certain goods without payment of duty.   Clause 79 of the Bill proposes to amend Section 54 so as to empower the Board to make Regulations provide manner of presenting a bill of transshipment and declaration for transshipment.

Amendment to section 60

Section 60 deals with permission for removal of goods for deposit in warehouse.  Clause 80 of the Bill proposes to amend section 60 so as to have a provision for clearance of goods by Customs Automated System in addition to existing clearance by the proper officer.

Amendment to section 68

Section 68 deals with clearance of warehoused goods for home consumption.  Clause 81 of the Bill proposes to amend section 68 so as to have a provision for clearance of goods by Customs Automated System in addition to existing clearance by the proper officer.

Amendment to section 69

Section 69 deals with clearance of warehoused goods for export.  Clause 82 of the Bill proposes to amend section 69 so as to have a provision for clearance of goods by Customs Automated System in addition to existing clearance by the proper officer.

Amendment to section 74

Section 74 deals with drawback allowable on re-export of duty paid goods.  Clause 83 of the Bill proposes to amend section 74 so as to substitute the reference to section 82 with the reference to clause (a) of section 84, as section 82 stands omitted vide section 104 of Finance Act, 2017.

Amendment to section 75

Section 75 deals with drawback on imported materials used in the manufacture of goods which are exported.  Sub-section (1) of Section 75 is being amended  by clause 84 of the Bill so as to substitute the reference to section 82 with the reference to clause (a) of section 84, as section 82 stands omitted vide section 104 of Finance Act, 2017.

Change in heading of Chapter XI

Clause 85 of the Bill proposes to change the heading of Chapter XI as SPECIAL PROVISIONS REGARDING BAGGAGE, GOODS IMPORTED OR EXPORTED BY POST, COURIER AND STORES.

Amendment to section 83

Section 83 is being amended by clause 86 of the Bill so as to include reference to goods imported or exported by courier through the authorized courier. The extant provisions in the section relate to goods imported or exported by post only.

Amendment to section 84

Section 84 is being amended by clause 87 of the Bill so as to empower the Board to make regulations in relation to goods imported or exported by courier. The extant provisions in the section relate to goods imported or exported by post only.

Insertion of new Chapter XIIA

The bill proposes to insert Chapter XII A dealing with Audit, containing section 99 A.   Section 99A provides that the proper officer may carry out the audit of assessment of imported goods or exported goods or of an auditee under this Act either in his office or in the premises of the auditee in such manner as may be prescribed.

The explanation to this section defines the term ‘auditee’ as a person who is subject to an audit under this section and includes an importer or exporter or custodian approved under section 45 or licensee of a warehouse and any other person concerned directly or indirectly in clearing, forwarding, stocking, carrying, selling or purchasing of imported goods or export goods or dutiable goods.

Power to undertake controlled delivery

Clause 89 of the Bill proposes to insert section 109A.  The newly inserted section 109A provides that notwithstanding anything contained in this Act, the proper officer or any other officer authorized by him in this behalf, may undertake controlled delivery of any consignment of such goods in such manner as may be prescribed, to-

• any destination to India; or
• a foreign country, in consultation with the competent authority or such country to which such consignment is destined.

The explanation to this section defines the expression ‘controlled delivery’ as the procedure of allowing consignment of such goods to pass out of, or into, the territory of India with the knowledge and under the supervision of proper officer for identifying the persons involved in the commission of an offence or contravention under this Act.

Extension of time for return of seized goods, documents and things

Section 110 deals with the seizure of goods, documents and things and also to return the same within the time stipulated.

Clause 90 of the Bill proposes to amend the section 110 so as to-

• substitute the existing proviso to sub-section (2) to provide that the Principal Commissioner of Customs or Commissioner of Customs may, for reasons to be recorded in writing, extend the six months period by a period not exceeding six months and inform the person from whom such goods have been seized before the expiry of the time mentioned in the said sub-section;
• insert second proviso to sub-section (2) providing that where any order for provisional release of the seized goods has been passed under Section 110A, the aforesaid period of six months, mentioned in sub-section (2), shall not apply.

Amendment to section 122

Section 122 deals with the adjudication of confiscation and penalties.  Clause 91 of the Bill proposes to amend section 122 so as to substitute the existing clauses (b) and (c) to empower the Board to fix monetary limits for adjudication of cases by officers below the rank of Joint Commissioner by way of notification.    

Issue of supplementary notice for confiscation

Section 124 deals with the issue of show cause notice before confiscation of goods.  Clause 92 of the Bill proposes to amend section 124 so as to insert a second proviso to provide for issuance of supplementary show cause notice under such circumstances and in such manner as may be prescribed through regulations.

Amendment to section 125

Section 125 deals with the option to pay fine in lieu of confiscation.  Clause 93 of the Bill proposes to amend section 125 so as to-

•  insert a proviso to sub-section (1) to provide that where the demand proceedings against a noticee / co-noticees have been closed on grounds of having paid the dues mentioned in section 28, then the provisions of this section shall not be applicable if the goods are not prohibited or restricted;
• insert sub-section (3) to provide that where redemption fine has not been paid within a period of one hundred and twenty days from the date of option given under sub-section (1), then such option shall become void, except in cases where any appeal against such order is pending;
• insert an explanation that for an order passed under sub-section (1) before the date on which the Finance Bill, 2018 receives the assent of the President, and no appeal against such order is pending, such option may be exercised within one hundred and twenty days from the date on which such assent is received.

Remanding the case by Appellate Authority        

Section 128A deals with the procedure for disposal of appeal by the Commissioner (Appeals).  Clause 94 of the Bill proposes to amend the section 128A so as to enable to allow the Commissioner (Appeals) to remand back the matters to original adjudicating authority in specified categories of cases-

• where an order or decision has been passed without following the principles of natural justice; or
• where no order or decision has been passed after re-assessment under section 17; or
• where an order of refund under section 27 has been issued crediting the amount to the Fund without recording any finding on the evidence produced by the applicant.

Power to simplify or provide different procedure to facilitate trade

Clause 95 of the Bill   proposes to insert a new section 143AA which provides the power to simplify or provide different procedure etc., to facilitate trade.  The said section provides that notwithstanding anything contained in any other provisions of this Act, the Board may, for the purposes of facilitation of trade, take such measures or prescribe separate procedure or documentation for a class of importers or exporters or for categories of goods or on the basis of the modes of transport of goods, in order to-

• maintain transparency in the import and export documents;
• expedite clearance or release of goods entered for import or export; or
• reduce the transaction cost of clearance of importing or exporting goods; or
• maintain balance between customs control and facilitation of legitimate trade.

Reciprocal arrangements for exchange of information

Clause 96 of the Bill proposes to insert a new section 151B which gives powers to the Central Government to make reciprocal arrangement for exchange of information facilitating trade. 

Section 151B(1) provides that the Central Government may enter into an agreement or any other arrangement with the Government of any country outside India or with such competent authorities of that country, as it deems fit, for facilitation of trade, enforcing the provisions of this Act and exchange of information for trade facilitation, effective risk analysis, verification of compliance and prevention, combating and investigation of offences under the provisions of this Act or under the corresponding laws in force in that country.

Section 151B (2) provides that the Central Government may, by notification, direct that the provisions of this section shall apply to the contracting State with which reciprocal agreement or arrangements has been made, subject to such conditions, exceptions or qualifications as may be specified in that notification.

Section 151B (3) provides that subject to the provisions of sub-section (2), the information received may also be used as evidence in investigations and proceedings under this Act.

Section 151B (4) provides that where the Central Government has entered into a multilateral agreement for exchange of information or documents for the purpose of verification of compliance in identified cases, the Board shall specify the procedure for such exchange, the conditions subject to which such exchange shall be made and designation of the person through whom such information shall be exchanged.

Section 151 B (5) provides that notwithstanding anything contained in sub-section (1) or sub-section (2) or sub-section (3), anything done or any action taken or purported to have been done or taken, in pursuance to any agreement entered into  or any other arrangement made by the Central Government prior to the date on which the Finance Bill, 2018 receives the assent of the President, shall be deemed to have been done or taken under the provisions of this section.

Mode of service of notice, order etc.,

Clause 97 of the Bill proposes to substitute section 153, which deals with the service of order, decision etc.,  The newly substituted section 153 provides that an order, decision, summons, notice or any communication under this Act or the rules made there under may be served in any of the following modes-

• by giving or tendering it directly to the addressee or importer or exporter or his customs broker or his authorized representative including employee, advocate or any other person or to any adult member of his family residing with him;
• by a registered post or speed post or courier with acknowledgement due, delivered to the person for whom it is issued or to his authorized representative, if any, at his last known place of business or residence;
• by sending it to the email address as provided by the person to whom it is issued, or to the email address available in the official correspondence of such person;
• by publishing it in a newspaper widely circulated in the locality in which the person to whom it is issued is last know to have resided or earned on business; or
• by affixing it in some conspicuous place at the last known place of business or residence of the person to whom it is issued and if such mode is not practicable for any reason, then, by affixing a copy thereof on the notice board of the office or uploading on the official website, if any.

Every order, decision, summons, notice or any communication shall be deemed to have been served on the date on which it is tendered or published or a copy thereof is affixed or uploaded in the manner as provided above.  When such order, decision, summons, notice or any communication is sent by registered post or speed post, it shall be deemed to have been received by the addressee at the expiry of the period normally taken by such post in transit unless otherwise the contrary is proved.

Amendment to section 157

Section 157 deals with the power of Board to make regulations.  Clause 98 of the Bill proposes to amend so as to empower to Board to make regulations-

• manner to deliver or present, a bill of entry, shipping bill, bill of export, import manifest, import report, export manifest, export report, bill of transshipment, declaration for transshipment, boat note and bill of coastal goods;
•  time and manner of finalization of provisional assessment;
• manner of conducting pre-notice consultation;
• circumstances under which, and the manner of issuing supplementary notice;
• form and manner in which an application for advance ruling or appeal shall be made, and the procedure for the authority, under Chapter VB;
• manner of clearance or removal of imported or export goods;
• documents to be furnished in relation to imported goods;
• conditions, restrictions and the manner for deposits in electronic cash ledgers, the utilization and refund there from and the manner of maintaining such ledger;
• manner of conducting audit;
• goods for controlled delivery and the manner thereof;
• measures and the simplified or different procedures or documentation for a class of importers or exporters or categories of goods or on the basis of the modes of transport of goods.