BUDGETARY CHANGES IN CUSTOMS

[Mr. M. GOVINDARAJAN]

PROHIBITION

Section 11 of Customs Act, (‘Act’ for short) gives power to Central Government to prohibit either absolutely or subject to conditions import or export. Section 11(2) gives the list which is prohibited by the Central Government. Section 11(2)(n) which provides the protection of patents, trade marks and copy rights. Clause 54 of the Finance Bill, 2013 adds ‘designs’ and ‘geographical indications’.

CHANGE IN REFUND AND SHOW CAUSE NOTICE PROCEDURE

If the amount of refund is less than Rs.100/- the same will not be refunded by the Department as per the proviso inserted after the second proviso to Section 27 of the Customs Act vide Clause 55 of Finance Bill, 2013

Clause 56 of Finance Bill, 2013 inserted a proviso to Section 28(1) of the Act which provides that the proper officer shall not serve show cause notice where the amount involved is less than Rs.100/-

ACTIVITY

Clause 58 of Finance Bill, 2013 substituted the definition for the term ‘activity’ under Section 28E (a).   According to this new definition, ‘activity’ means import or export and includes any new business of import or export proposed to be undertaken by the existing importer or exporter, as the case may be.

ARRIVALS OF VESSELS AND AIRCRAFTS IN INDIA

Clause 59 of the Bill caused changes in Section 29(1). After this change Section 29(1) will be as follows:

(1) The person-in-charge of a vessel or an aircraft entering India from any place outside India shall not cause or permit the vessel or aircraft to call or land -

(a) for the first time after arrival in India; or

(b) at any time while it is carrying passengers or cargo brought in that vessel or aircraft;

at any place other than a customs port or a customs airport, unless permitted by the Board.

IMPORT/EXPORT MANIFEST

Clause 60 of the Bill brought changes in Section 30 and 41 provide that import manifest or export manifest shall be presented electronically.   The Commissioner of Customs may, in cases where it is not possible to deliver import/export manifest by presenting electronically, allow the same to be delivered in any other manner.

CLEARANCE OF GOODS FOR HOME CONSUMPTION

Section 47 deals with the clearance of goods for home consumption.   Section 47(2) provides that Where the importer fails to pay the import duty under sub-section (1) within five days excluding holidays from the date on which the bill of entry is returned to him for payment of duty, he shall pay interest at such rate, not below ten per cent and not exceeding thirty 6% per annum, as is for the time being fixed by the Central Government, by notification in the Official Gazette, on such duty till the date of payment of the said duty.

Clause 62 reduces ‘five days’ to ‘two days’ for this purpose.

CLEARANCE OF WAREHOUSED GOODS FOR EXPORTATION

Clause 64 of the Bill substituted the following for Section 69(1)(a):

(a) a shipping bill or a bill of export in the prescribed form or a label or declaration accompanying the goods as referred to in section 82 has been presented in respect of such goods.

STORAGE OF IMPORTED GOODS

Clause 63 of the bill brought changes in Section 43 which reads as follows as such changes:

Where in the case of any imported goods, whether dutiable or not, entered for home consumption, the Assistant Commissioner of Customs or Deputy Commissioner of Customs is satisfied on the application of the importer that the goods cannot be cleared within a reasonable time, the goods may, pending clearance, be permitted to be stored for a period not exceeding thirty days in a public warehouse, or in a private warehouse if facilities for deposit in a public warehouse are not available; but such goods shall not be deemed to be warehoused goods for the purposes of this Act, and accordingly the provisions of Chapter IX shall not apply to such goods.

Provided the Commissioner of Customs may extend the period of storage for a further period not exceeding 30 days at a time.

NON BAIALABLE OFFENCE

Section 104 of the Act deals with the power of arrest. Clause 64 of the bill substitutes sub section 104(6) which provides that all offences under this Act are bailable, as detailed below:

(6) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, an offence

punishable under section 135 relating to—

(a)   evasion or attempted evasion of duty exceeding fifty lakh rupees; or

(b) prohibited goods notified under section 11 which are also notified under sub-clause        (C) of clause (i) of sub-section (1) of section 135; or

(c) import or export of any goods which have not been declared in accordance with the

provisions of this Act and the market price of which exceeds one crore rupees; or

(d) fraudulently availing of or attempt to avail of drawback or any exemption from duty provided under this Act, if the amount of drawback or exemption from duty exceeds fifty lakh rupees, shall be non-bailable.

DURATION OF STAY EXTENDED

Section 129 B (2A) of the Act provides that the Appellate Tribunal shall, where it is possible to do so, hear and decide every appeal within a period of three years from the date on which such appeal is filed.   Where an order of stay is made in any proceeding relating to an appeal filed under sub-section (1) of section 129A, the Appellate Tribunal shall dispose of the appeal within a period of one hundred and eighty days from the date of such order. If such appeal is not disposed of within the period specified in the first proviso, the stay order shall, on the expiry of that period, stand vacated.

Clause 66 of the Bill inserted the third proviso which provides where such appeal is not disposed of within the period specified in the first proviso, the Appellate Tribunal may, on an application made in this behalf by a party and on being satisfied that the delay in disposing of the appeal is not attributable to such party, extend the period of stay to such further period, as it thinks fit, not exceeding one hundred and eighty-five days, and in case the appeal is not so disposed of within the total period of three hundred and sixty-five days from the date of order referred to in the first proviso, the stay order shall, on the expiry of the said period, stand vacated.

APPELLATE TRIBUNAL

Section 129C of the Act provides that the President or any other member of the Appellate Tribunal authorized in this behalf by the President may, sitting singly, dispose of any case which has been allotted to the Bench of which he is a member where the amount of fine or penalty involved, does not exceed ten lakhs rupees.

Clause 67 of the bill increases the amount from ten lakhs to fifty lakhs.

EVASION OF DUTY OR PROHIBITIONS

Section 135 (1) of the Act provides that without prejudice to any action that may be taken under this Act, if any person fraudulently avails of or attempts to avail of drawback or any exemption from duty provided under this Act in connection with export of goods, he shall be punishable, (i) in the case of an offence relating to the evasion or attempted evasion of duty exceeding thirty lakh of rupees with imprisonment for a term which may extend to seven years and with fine.

Clause 68 of the bill increases the amount thirty lakh to fifty lakh.

POWER TO TAKE SAMPLES

Section 144 deals with power to take samples.   The said section provides that the proper officer may, on the entry or clearance of any goods or at any time while such goods are being passed through the customs area, take samples of such goods in the presence of the owner thereof, for examination or testing, or for ascertaining the value thereof, or for any other purposes of this Act. After the purpose for which a sample was taken is carried out, such sample shall, if practicable, be restored to the owner, but if the owner fails to take delivery of the sample within three months of the date on which the sample was taken, it may be disposed of in such manner as the Commissioner of Customs may direct. No duty shall be chargeable on any sample of goods taken under this section which is consumed or destroyed during the course of any test or examination thereof, if such duty amounts to five rupees or more.

Clause 71 proposes to delete the words ‘if such duty amounts to five rupees or more’.

DEEMED DEFAULTER

Section 142 of the Act deals with the recovery of sums due to the Government by the Department.   In this Section after proviso to sub-section (1), vide Clause No. 69 of the Finance Bill, the following sub-clause is inserted:

(d) (i) the proper officer may, by a notice in writing, require any other person from whom money is due to such person or may become due to such person or who holds or may subsequently hold money for or on account of such person, to pay to the credit of the Central Government either forthwith upon the money becoming due or being held, or at or within the time specified in the notice not being before the money becomes due or is held, so much of the money as is sufficient to pay the amount due from such person or the whole of the money when it is equal to or less than that amount;

(ii) every person to whom the notice is issued under this section shall be bound to comply with such notice, and in particular, where any such notice is issued to a post office, banking company or an insurer, it shall not be necessary to produce any pass book, deposit receipt, policy or any other document for the purpose of any entry, endorsement or the like being made before the payment is made, notwithstanding any rule, practice or requirement to the contrary;

(iii) in case the person to whom a notice under this section has been issued, fails to make the payment in pursuance thereof to the Central Government, he shall be deemed to be a defaulter in

respect of the amount specified in the notice and all the consequences of this Chapter shall follow.

OMITTED SECTION

The following sections are to be omitted by the Finance Bill, 2013:

• Section 143A dealing with duty deferment;

 CUSTOMS HOUSE AGENTS

 The Finance Bill, 2013 changed the name of ‘Customs House Agents’ to ‘Customs broker’. Section 146 of the Act deals with Customs House Agents.   The existing section is to be substituted by the new one as detailed below, Vide Clause No. 72 of the Bill:

 146. (1) No person shall carry on business as a customs broker relating to the entry or departure of a conveyance or the import or export of goods at any customs station unless such person holds

a licence granted in this behalf in accordance with the regulations.

(2) The Board may make regulations for the purpose of carrying out the provisions of this section

and, in particular, such regulations may provide for—

(a) the authority by which a licence may be granted under this section and the period of validity of such licence;

(b) the form of the licence and the fees payable there for;

(c) the qualifications of persons who may apply for a licence and the qualifications of persons to be employed by a licensee to assist him in his work as a customs broker;

(d) the manner of conducting the examination;

(e) the restrictions and conditions (including the furnishing of security by the licensee) subject to which a licence may be granted;

(f) the circumstances in which a licence may be suspended or revoked; and

(g) the appeals, if any, against an order of suspension or revocation of a licence, and the period within which such appeal may be filed.

 AUTHORIZED REPRESENTATIVE

 Section 146A of the Act deals with appearance by authorized representatives. Section 146 A (4) provides that if a person is convicted of an offence connection with any proceedings under the Customs Act, the Central Excise Act, the Gold (Control) Act he cannot appear as authorized representative before the authorities.   Clause 73 of the Bill, in addition to the three Act, Finance Act, 1994 is also added.