Denotification of ICDs/CFSs/AFSs - CBEC's Customs Manual 2023 - Customs

10. Denotification of ICDs/CFSs/AFSs 10.1. ICDs and CFS play a vital role in the exim trade as they store and clear import and export goods. These facilities are notified under the Customs Act, 1962 and are administered by the Customs authorities. However, at times a custodian may like to close (de-notify) the facility. The disposal of un-cleared, seized and confiscated goods import/export are prerequisites for the de-notification. Noting that this process was taking a long time which caused difficulties for the custodians, a Circular No. 20/2021-Customs dated 16.08.2021 has been issued to streamline the procedure of closure of these facilities. 10.2. Circular No. 20/2021-Customs dated 16.08.2021 requires a custodian intending to wind up the operation to submit an application to jurisdictional Principal Commissioner/Commissioner of Customs for de-notifying the ICD/CFS. A Nodal Officer at the level of Deputy/Assistant Commissioner of Customs would then facilitate the de-notification by coordinating the disposal of the goods lying at the facility in a time bound manner. 10.3. In case of ICD/AFS, the Board is the competent authority for de-notification of ICDs/AFSs and the jurisdictional Principal Commissioner/Commissioner of Customs can revoke the approvals granted under Sections 8 and 45 of the said Act for these facilities. 10.4. In the case of CFSs, the Inter-Ministerial Committee (IMC) gives the approval for setting up of the facility. Thereafter, the jurisdictional Principal Commissioner/Commissioner of Customs grants approvals under Sections 8 and 45 of the said Act. Therefore, these approvals which would be akin to de-notification can be revoked by the jurisdictional Principal Commissioner/Commissioner of Customs without referring to the Board. However, post revocation of these approvals, an intimation shall be sent to the Board in this regard within a week of such revocation. 10.5. There can be two situations where de-notification of an ICD/AFS can be initiated namely, (a) on application from the custodian and (b) on the report of the jurisdictional Principal Commissioner/Commissioner of Customs in terms of the para no. 7.3 of Circular No. 50/2020-Customs dated 05.11.2020. Likewise, the custodian of a CFS can seek de-notification or the jurisdictional Principal Commissioner/Commissioner of Customs can de-notify such facility Customs in terms of the said para no. 7.3. 10.6. A custodian intending to wind up the operation shall submit an application to jurisdictional Principal Commissioner/Commissioner of Customs in the format prescribed in the Annexure-I of Circular No. 20/2021-Customs dated 16.08.2021. Where a facility has not been exempted from payment of Cost Recovery Charges in terms of Circular No. 02/2021-Customs dated 19.01.2021, all pending payments, if any, of Cost Recovery Charges shall be paid upto the date of de-notification. Also, in terms of relevant guidelines prescribed vide Circular No. 02/2021-Customs dated 19.01.2021 jurisdictional Principal Commissioner/ Commissioner of Customs are required to assess the workload and accordingly deploy the required number of officers/staff and the payment of Cost Recovery Charges shall be for such number of officers/staff only. This guideline may be especially relevant to facilities to be de-notified due to the reduction in the work load. The application for de-notification should clearly mention that the payment of Cost Recovery Charges is up-to-date as on the date of application as well as for the subsequent period till the date of de-notification, as it is prescribed in general that such payment must be made in advance. 10.7. On the date of de-notification, there shall be no pending consignment of un-cleared cargo in the facility beyond the time stipulated under the said Act. Thus, the custodian should have taken all the efforts to dispose of the un-cleared cargo by following the procedure prescribed vide Circular No. 49/2018 Customs, dated 03.12.2018. However, it may so happen that the un-cleared cargo could not be disposed for want of no-objection certificates (NOC) from Customs or for any other reasons including impending auctions as per the extant guidelines. Further, there may be goods detained, seized or confiscated by various agencies lying in the facility. Even Customs office equipment, records etc. may be present in the facility. Thus, the application for de-notification shall be accompanied by three lists of goods that may be present in the facility, as per the format in Annexure-II of Circular No. 20/2021-Customs dated 16.08.2021. i. List 1: Uncleared goods pending disposal for want of Customs NOCs; ii. List 2: Uncleared goods pending disposal for completion of required number of auctions; and iii. List 3: Goods detained, seized or confiscated by various agencies and pending disposal. 10.8. Upon receipt of an application for de-notification, which shall be duly acknowledged, the jurisdictional Principal Commissioner/Commissioner of Customs would nominate a nodal officer of the rank of a Deputy/Assistant Commissioner of Customs to facilitate the de-notification exercise. Such nodal officer shall act as single point of contact for the custodian during the entire process of de-notification. 10.9. The nodal officer, who could also be the officer in-charge of the facility, shall tally the lists of goods aforementioned with the records maintained in the facility in terms of Handling of Cargo in Customs Areas Regulations, 2009 (HCCAR). S/he shall also actively coordinate with all the agencies concerned for speedy disposal of the uncleared, detained, seized or confiscated goods, if any. S/he shall also ensure, to the extent possible, that all the goods that are ripe for disposal are disposed of by following due procedure within four months from receipt of the application. S/he shall immediately bring any difficulty or lack of response from any agency to the notice of the jurisdictional Principal Commissioner/Commissioner of Customs for taking remedial action. 10.10. The nodal officer shall take stock of other goods such as goods detained, seized or confiscated by any agency of CBIC, samples, office equipment, furniture, office records etc. that are to be removed from the premises to be de-notified. The jurisdictional Principal Commissioner/Commissioner of Customs shall make necessary arrangements for disposal/removal of these items expeditiously. 10.11. The custodian shall, take all steps to speedily dispose all uncleared goods as per law. The facility shall not be de-notified till the disposal is completed in terms of the Circular No. 49/2018-Customs dated 03.12.2018. However, if for any substantive reason the goods are not disposed even by the end of third month of application for de-notification, the custodian would have the option to apply to the Principal Commissioner/Commissioner of Customs to allow the shifting of these uncleared goods to its own or some other facility (ICD/CFS/AFS) within the same jurisdiction. This option would be available only in exceptional cases as ordinarily the goods should be disposed after maximum four auctions. This option would be available subject to the conditions that the custodian shall get a no objection in this regard from the custodian receiving the consignments; the receipt of goods by the receiving facility shall be acknowledged and accounted properly; the safe transfer and receipt of goods shall be the sole responsibility of the custodian of the facility being de-notified; and the legal responsibility of disposal of the said uncleared goods shall remain with the custodian of the facility being de-notified unless it is legally and wholly transferred to the custodian of the transferee facility with the latter s explicit acceptance to the satisfaction of the jurisdictional Principal Commissioner/Commissioner of Customs. 10.12. The jurisdictional Principal Commissioner/Commissioner of Customs shall make best efforts to ensure removal/disposal of goods detained, seized or confiscated by any agency of CBIC, samples, office equipment, furniture, office records etc. If for some reason the disposal is not possible, steps would be taken to transfer these goods to some other secure location. Such transfer of location shall be carried out by taking all the precautions to ensure that all the relevant laws are complied with, interest of revenue is safeguarded and prosecution cases, if any are not jeopardized. The disposal/transfer shall be timed such that the facility is vacated before the end of four months from the receipt of the application. It is emphasized that the de-notification of a facility shall not be held up on account of delay on the part of the Customs to dispose/remove the goods for which it is responsible including goods detained, seized or confiscated by any agency of the CBIC. 10.13. Thus, to sum up, a facility will become ripe for de-notification if the following conditions are met, namely, i. The application for de-notification is complete in all respects, ii. There are no dues, including the duties on the uncleared goods that are eventually sold, pending to be recovered from the custodian, iii. All the uncleared goods lying at the facility have been cleared from the facility by disposal and/or shifting to any other facility in the jurisdiction of the Commissionerate, iv. All the detained/seized/confiscated goods lying at the facility are disposed and/or shifted out of the facility to another location for safe custody, and v. All the other items belonging to Customs such as office records, furniture etc. are removed from the facility. 10.14. In order to ensure undue cost overruns are avoided and the custodian intending to get the facility de-notified is not put to hardship, the jurisdictional Principal Commissioner/Commissioner of Customs, shall facilitate the de-notification of a facility within maximum of four months from the date of receipt of application or from the date of de-notification requested by the custodian, whichever is later. Also, it shall be ensured that there shall be no disruption in the Exim operations, if any, at the facility while the while the formalities of de-notification are being completed. 10.15. The jurisdictional Principal Commissioner/Commissioner of Customs shall, after satisfying herself/himself that the facility is ripe for de-notification shall: i. revoke the approvals granted under Sections 8 and 45 of the said Act; ii. forward a proposal to Director General of Human Resource Development (DGHRD), CBIC so that the sanctioned/regularized posts are surrendered in time; and iii. forward (in the case of ICD and AFS) a proposal to the Board for de-notification of the facility at least two weeks before the expiry of four months from the date of application. 10.16. The custodian s bond and security (such as bank guarantee), if any, shall be kept live by the Customs till the resolution of disputes (show cause notice, adjudication, appeal or court case or any other liability), if any, against the custodian. Further, before cancellation of the bond and return of the security, it must be ensured that all the goods for which the custodian has taken responsibility to dispose are duly disposed as per law. [Refer Circular No. 20/2021-Customs dated 16.08.2021] Refer Annexure -I of CBIC Circular No. 50/2020-Customs for Appendix -I Format of Application for Setting up of an Inland Container Depot/Container Freight Station/Air Freight Station Refer Annexure -II of CBIC Circular No. 50/2020-Customs for Appendix -II Instruction for submission of the Detailed Project Report for setting up of ICD/CFS/AFS Refer Annexure -III of CBIC Circular No. 50/2020-Customs for Appendix -III Checklist for the infrastructural requirements and regulations compliance. Refer Circular No. 44/2020 dated 08.10.2020 for Appendix -IV PROFORMA FOR INSPECTION OF ICD/CFS/AFS