AMENDMENTS TO CUSTOMS ACT BY FINANCE BILL, 2021

[Mr. M. GOVINDARAJAN]

Chapter IV of Finance Bill, 2021 (‘Bill’ for short) provides the amendments that are to be brought in Customs Act. 

Definition of ‘common portal’

Section 80 of the Bill inserted section 2(7B) defining the expression ‘common portal’ as the Common Customs Electronic Portal referred to in section 154C.

Powers of Officers of customs

Section 5 of the Customs Act gives powers to the officers of customs to exercise the powers and discharge the duties conferred or imposed on him under this Act.

Section 5(3) provides that  a Commissioner (Appeals) shall not exercise the powers and discharge the duties conferred or imposed on an officer of customs other than those specified in Chapter XV and section 108.

Section 81 of the Bill substitutes the words ‘Chapter XV, section 108 and sub-section (1D) of section 110’ for the words ‘Chapter XV and section 108’.

Exemption

Section 25 of Customs Act gives powers to the Central Government to grant exemption either absolutely or subject to conditions to the goods of any description by means of Notification. 

Section 82 of the Bill inserts a new section 25(4A) which provides that Where any exemption is granted subject to any condition, such exemption shall, unless otherwise specified or varied or rescinded, be valid up to 31stday of March falling immediately after two years from the date of such grant or variation.   In respect of any such exemption in force as on the date on which the Finance Bill, 2021 receives the assent of the President, the said period of two years shall be reckoned from the 1st day February, 2021.

Time limit for completion of certain actions

Section 83 of the bill inserts a new section 28BB.  The newly inserted section 28BB fixes time limit for completion of certain actions. 

Section 28BB (1) provides that any inquiry or investigation under this Act, culminating in the issuance of a notice under sub-section (1) or sub-section (4) of section 28 shall be completed by issuing such notice, within a period of two years from the date of initiation of audit, search, seizure or summons, as the case may be.  The Principal Commissioner of Customs or the Commissioner of Customs may, on sufficient cause being shown and for reasons to be recorded in writing, extend the said period to a further period of one year.

Section 28BB (2) provides that  for computing the period under sub-section (1), the period during which stay was granted by an order of a court or tribunal, or the period for seeking information from an overseas authority through a legal process, shall be excluded.

The explanation to this section clarifies that nothing contained in this section shall apply to any such proceeding initiated before the date on which the Finance Bill, 2021 receives the assent of the President.

Entry of goods on importation

Section 46(3) of the Customs Act provides that the importer shall present the bill of entry under sub-section (1) before the end of the next day following the day (excluding holidays) on which the aircraft or vessel or vehicle carrying the goods arrives at a customs station at which such goods are to be cleared for home consumption or warehousing.

Section 84(i) of the Bill  substitutes the words ‘before the end of the day (including holidays) preceding the day’ for the words ‘before the end of the next day following the day (excluding holidays).

There are two provisos to section 46(3).  The first proviso provides that a bill of entry may be presented at any time not exceeding thirty days prior to] the expected arrival of the aircraft or vessel or vehicle by which the goods have been shipped for importation into India.  Section 84 (ii) of the Bill substitutes a new provisio for the above said proviso.  The newly substituted proviso provides that the Board may, in such cases as it may deem fit, prescribe different time limits for presentation of the bill of entry, which shall not be later than the end of the day of such arrival.

Seizure of goods, documents and things

Section 110 of the Customs Act provides the procedure to seize the goods, documents and things.  The Bill inserts a new sub section 110(1D).  The newly inserted section provides that where the goods seized is gold in any form as notified under sub-section (1A), then, the proper officer shall, instead of making an application under sub-section (1B) to the Magistrate, make such application to the Commissioner (Appeals) having jurisdiction, who shall, as soon as may be, allow the application and thereafter, the proper officer shall dispose of such goods in such manner as the Central Government may determine.

Confiscation of goods

Section 113 of the Customs Act describes the goods which are liable to confiscation.  Section 86 of the Bill inserts a new section 113(ja).  The newly inserted section 113(ja) provides that any goods entered for exportation under claim of remission or refund of any duty or tax or levy to make a wrongful claim in contravention of the provisions of this Act or any other law for the time being in force, are liable to confiscation.

Penalty for fraudulent utilization of input tax credit for claiming refund

Section 87 of the Bill introduces a new section 114AC.  The newly inserted section 114AC provides that where any person has obtained any invoice by fraud, collusion, willful misstatement or suppression of facts to utilize input tax credit on the basis of such invoice for discharging any duty or tax on goods that are entered for exportation under claim of refund of such duty or tax, such person shall be liable for penalty not exceeding five times the refund claimed.

Presumption as to documents in certain cases

The explanation to section 139 of the Customs Act defines the term  "document" as including  inventories, photographs and lists certified by a Magistrate under sub-section (1C) of section 110. 

Section 88 of the Bill substitutes the words ‘a Magistrate under sub-section (1C), or Commissioner (Appeals) under sub-section (1D), of section 110’ for the words ‘a Magistrate under sub-section (1C) of section 110’.

Amendment of documents

Section 149 of the Act provides the procedure for amendment of documents.  Section 89 of the Bill inserted second and third provisos, after first proviso to section 149.  The newly inserted second proviso provides that such authorization or amendment may also be done electronically through the customs automated system on the basis of risk evaluation through appropriate selection criteria.  The third proviso provide that  such amendments, as may be specified by the Board, may be done by the importer or exporter on the common portal.

Service of order, decision etc.

Section 153 of the Customs Act provides the procedure for service of order, decision etc.  Section 90 of the Bill inserts one another mode of delivery of order, decision etc.  For that purpose Section 90 inserts a new sub clause (ca).  According to this new section the mode of delivery may be ‘by making it available on the common portal’.

Common Customs Electronic Portal

Section 91 of the Bill inserts a new section 154C.  The newly inserted section 154C provides that the Board may notify a common portal, to be called the Common Customs Electronic Portal, for facilitating registration, filing of bills of entry, shipping bills, other documents and forms prescribed under this Act or under any other law for the time being in force or the rules or regulations made there under, payment of duty and for such other purposes, as the Board may, by notification, specify.