Closer monitoring of bonded goods and action for recovery of duties - Customs - F. No. 473/184/88-Cus. VII

Closer monitoring of bonded goods and action for recovery of duties F. No. 473/184/88-Cus. VII Dated 28-7-1988 Government of India Ministry of Finance (Department of Revenue) New Delhi Subject : Closer monitoring of bonded goods and action for recovery of duties - Regarding. As you may be aware, in terms of the provisions made under Customs Act, goods imported are allowed to be warehoused for a stipulated period so as to allow the importers the facility to pay duty as and when he clears it for home consumption. The warehousing period was considerably brought down in 1985 and now normal warehousing period is one year for non-consumable stores, and only 3 months for all other goods. The period can, however, be extended in individual cases on merits by the Board (which powers have recently been delegated to the Principal Collectors). The goods are allowed for warehousing not only at the port towns but even at various inland bonded warehouses. This facility has been allowed by the Government considering the demand of the Trade and Industry from time to time. 2. As you are aware, on the goods which are lying in warehouses at any point of time, very substantial amount of import duties are locked up. In order, therefore, to ensure that these duties are realised in time it is absolutely essential that a constant monitoring of the warehoused goods is undertaken by the Department so that action for recovery of duties is initiated as soon as the warehousing period (including extended period) expires. In a recent study of the functioning of inland bonded warehouses, the Public Accounts Committee has in its 124th Audit Report, on Para 1.41 of the Report of the C. A.G., for 85-86, highlighted various omissions/lapses in individual Collectorates. It has, inter alia, pointed out that the present system of monitoring is totally inadequate and ineffective and noted that substantial amount of goods involving large revenues due to Government were lying uncleared beyond the warehousing period for want of effective departmental action. The Committee has recommended for effective measures to improve the system of monitoring of the warehousing bonds, to ensure that a continuous watch and prompt action is taken on expiry of warehousing period in respect of every consignment so that Government revenues are protected. 3. Minister of State for Revenue has also recently specifically looked into the system of warehousing and action required to be taken by the Department on expiry of warehousing period and directed that there is a need for special monitoring by the field officers on the warehoused goods from revenue and other considerations. He has instructed that certain measures be taken immediately; some of these, which Board desires should be straightway implemented are reproduced below for your information and further necessary action :- (i) An immediate stock taking of all the warehoused goods which are lying in the jurisdiction of each Collectorate/Custom Houses be made to find out the goods where bonding period (including period of extension) has expired. Necessary action for assessment of duties on these goods (and interest wherever due), and their recovery from the concerned importers, should be immediately initiated if this has not already been done, in each case; (ii) Determined efforts should be made for recovery of duties (and interest - where due ) in all cases referred to at (i) , and if the importers fail to make payments, the goods could be detained and put to auction as provided in Section 72(2) of the Customs Act, 1962, and action should not be deferred indefinitely; (iii) The frequency of auctions for such goods should be substantially increased. Wherever required, one Assistant Collector should be put exclusive incharge of such auctions; (iv) A quarterly statement of the time expired bonded goods, in terms of number if consignments, value of goods and the duty involved thereon should be submitted by all Collectors to Board by the 20th day, following the close of quarter, as per proforma in Annexure-I; (v) Proper and regular supervision must be done at Collector's level, and a monthly report on improvements made and results achieved in the matter of recovery of duties on time expired goods, should be specifically sent as a part of your monthly administration report to Board. It has also been felt that Department finds it often difficult to recover duties in case of time expired warehoused machinery consignments. Board would like to have a report by 25th August about the number of cases where items of machinery and parts (with brief indication of their nature) are pending clearance in your jurisdiction as on 1.7.88 after warehousing period has expired, together with the amount of revenue involved, so that the need for any change in the warehousing policy for such items may be considered. ANNEXURE I Quarterly Report on Progress of recovery of Duties on Time expired warehoused goods Collectorate : Quater ending ____________ No. of warehouses Public _________ Private _________ Opening Balance at the beginning of Quarter. Fresh cases where Duties become due because of expiry of warehousing period Cases where Duties recovered during the quarter on time expired warehoused goods. No. of Bonds. Value of goods involved. Duty interest involved. No. of Bonds. Value of goods Duty interest involved No. of Bonds. Value of goods involved Duties interest payable Duties and interest recovered By way Auction on payments by importer. Closing balance at the end of the quarter. No. of Bonds. Value of goods lying uncleared. Duties interest involved. Remarks Note :- (1) Information should be only for warehoused goods whose warehousing period has expired. (2) Number of Auctions conducted during the quarter to recover duties in terms of Section 72(2) of Customs Act, 1962 along with the results achieved may please be indicated in Remarks Column. Also mention plan of auctions in the coming quarter.