CUSTOMS HOUSE AGENTS LICENSING REGULATIONS, 2004

[Mr. M. GOVINDARAJAN]

INTRODUCTION:

In exercise of the powers conferred by Sec. 146(2) of the Customs Act, 1962 and in suppression of the Customs House Agents Licensing Regulations, 1984, except as respect things done or omitted to be done before such supersession, the Central Board of Excise and Customs made the 'Customs House Agents Licensing Regulations, 2004' ('Regulations' for short). Customs House Agent means a person licensed under these regulations to act as agent for the transaction of any business relating to the entry or departure of conveyances or the import or export of goods at any Customs Station.

LICENCE:

The Regulations requires that Customs House Agents are required to get licence. Regulation 3 provides that no person shall carry on business as a Customs House Agent 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 under these regulations.

PROCEDURE FOR GETTING LICENCE:

Notification:

Regulation 4 provides that the Commissioner of Customs may invite applications for the grant of such number of licencees as assessed by him, to act as Customs House Agents in the month of January every year by means of a notice affixed on the board of each Custom Station as well as through publication in at least two newspapers, one in English and the other in vernacular language having wide circulation in the area of his jurisdiction specifying therein the last date of receipt of application.

Application:

Regulation 5 provide that the application shall be made in the form of letter to the jurisdiction Commissioner of Customs, containing details as specified in Form A containing the name and the address of the person applying. If the applicant is a firm the name and address of every partner of the firm, the firm's name and the name of the party or the duly authorized employee, who will actually be engaged in the clearance of goods or conveyance through the customs shall be furnished. If the applicant is a company the name of each director, Managing Director, Manager and the names of Director, Managing Director, Manager or the duly authorized employee, who will actually be engaged in the clearance of goods or conveyances through the customs.

Conditions to be fulfilled:

Regulation 6 prescribes the conditions to be fulfilled by the applicant for getting licence which are as follows:

* The applicant has to pass the examination;

* The applicant shall prove to the satisfaction of the Commissioner of Customs that-

* the applicant or his authorized employee is a graduate from a recognized university and possess a professional degree viz., ACA/MBA/LLB/Diploma in Customs clearance work from any Institute or University recognized by the Government with a working knowledge of computers and customs procedures; or

* is a graduate having at least three years experience in transacting Customs House Agent work as a G-Card holder; or

* a person who has passed the examination; or

* is a retired Group A officer from the Indian Customs and Central Excise Service (IC&CES) having a minimum of ten years experience in Group 'A';

* the applicant has financial viability supported by a certificate issued by a Scheduled Bank or such other proof acceptable to the Commissioner of Customs evidencing possession of assets of value of not less than Rs.2 lakhs;

* the applicant is a citizen of India.

Scrutiny of applications:

Regulation 7 deals with the scrutiny of application for licence. On receipt of application the Commissioners of Customs may make enquiries for verification of the particulars set out in the application and also such other enquiry as he may deem necessary, including enquiries about the reliability and financial status of the applicant.

Examination:

Regulation 8 deals with the examination of the applicant. It provides that any applicant whose application is received with the last date specified in the notice or publication and who satisfies the requirements shall be required to appear for the written as well as oral examination conducted by the Director General of Inspection at specified centers and specified dates, twice every year, for which intimation shall be sent individually in advance before the date of examination. The applicants declared successful in written examination shall be called for oral examination. It shall be necessary for the applicant to clear written as well as oral examinations separately. An applicant who clears the written examination but fails in the oral examination linked to it, shall have to clear the oral examination within two years of the related written examination irrespective of the number of chances, and if he fails do so, he shall be treated as having failed in the examination.

An applicant shall be allowed a maximum period of seven years within which he shall pass both the written and oral examinations. No further extension of time shall be granted. The examination may include questions on the following:

* preparation of various kinds of bills of entry and shipping bills;

* arrival entry and clearance of vessels;

* tariff classification and rates of duty;

* determination of value for assessment;

* conversion of currency;

* nature and description of documents to be filed with various kinds of bills of entry and shipping bills;

* procedure for assessment and payment of duty;

* examination of merchandise at the Customs Stations;

* provisions of the Trade and Merchandise Marks Act, 1958 and the Copy Rights Act, 1957;

* prohibitions on import and export;

* bonding procedure and clearance from bond;

* re-importation and conditions for free re-entry;

* drawback and export promotion schemes;

* offences under the Act;

* the provisions of allied acts including-

* Foreign Trade (Development and Regulation) act, 1992;

* The Central Excise Act, 1944;

* Foreign Exchange Management Act, 1999;

* Indian Explosives Act,1884;

* Arms Act, 1959;

* Narcotics Drugs and Psychotropic Substances Act;

* The Drugs and Cosmetics Act, 1940;

* Destructive Inspects and Pests Act,1914;

* Dangerous Drugs Act, 1930;

In sofar as they are relevant to the clearance of goods through customs;

* provisions of the Prevention of the Corruption Act, 1988;

* provisions in the mater of refund of duty paid, appeals and revision petitions under the Act;

* on line filing of electronic shipping bills or bills or entry and Indian Customs and Central Excise Electronic Commerce/Electronic Data Interchange, Gateway (ICEGATE) and Indian Customs Electronic Data Interchange (ICES);

The holders of a licence may authorize any one or more of their employees or partners or directors to appear for the examination on behalf of such holders of licence, in addition to the person of their agency, who has passed the examination.

Grant of Licence:

The Commissioner of Customs shall on payment of a fee of Rs.5000/- grant a licence in Form B to an applicant who has passed the examination. The Customs House Agents who are granted licences shall be eligible to work in all Customs Stations within the country subject to intimation in Form C to the Commissioner of Customs of the concerned Customs Station where he intends to transact business. No separate licence shall be required in places where in addition to a Customs House handling imports by sea, there is also an international air port to handle imports by air, even if under the jurisdiction of a different Commissioner of Customs.

The Commissioner may reject an application to grant of licence if the applicant is convicted of fraud or forgery or any criminal proceedings are pending before any court of law against him or he has been convicted in any court of law. Any applicant aggrieved by the order of Commissioner may appeal to the Chief Commissioner of Customs or Chief Commissioner of Customs and Central Excise as the may be within a period of thirty days from the date of communication of such order.

The Chief Commissioner may on his own motion or otherwise call for and examine the records of any proceedings in which the Commissioner has passed the order for the purpose of satisfying himself to the legality, propriety or correctness of such order and may pass such other orders as he may deem fit. No order shall be made so as to prejudicially affect any person unless such person is given reasonable opportunity for making a representation and being heard in his defence, if he so desires. Any order should be passed within one year from the date of order passed by the Commissioner. Likewise an appeal filed by an applicant shall be decided by the Chief Commissioner within one year from the date on which such appeal is filed.

The Commissioner, before granting the licence, shall require the applicant to enter into a bond in Form D and if necessary a surety bond in Form E for due observance of these regulations and shall also require him to furnish a bank guarantee, postal security or National Savings Certificate in the name of Commissioner of Customs for an amount of Rs.75,000/- for carrying out of business as a Customs House Agent. If the applicant furnishes postal security or National Savings Certificate, the same shall be pledged in the name of the Commissioner of Customs and the applicant shall get the benefit of the interest accruing on it.

Period of validity of licence:

A licence granted under this Regulation shall be valid for a period ten years from the date of issue and shall be renewed from time to time in accordance with procedure. The Commissioner of Customs may, on the application made by the licensee before the expiry of the validity of the licence renew the licence for a further period of ten years from the date of expiration of the original licence granted or of the last renewal of such licence, as the case may be, if the performance of the licensee is found to be satisfactory with reference, inter alia, to the following:

* quantity or value of cargo cleared by such licensee conforming to norms as may be specified by the Commissioner;

* absence of instances of any complaints of misconduct including non compliance of any of the obligations specified;

* the fee for renewal of a license shall be Rs.5,000/-.

Suspension or revocation of licence:

The Commissioner of Customs may revoke the licence of a Customs House Agent and order for forfeiture of part or whole of security, or only order forfeiture of part or whole of security, on any of the following grounds:

* failure of the Customs House Agent to comply with any of the conditions of the bond executed by him;

* failure to comply with any of the provisions of these regulations, within the jurisdiction of the said Commissioner of Customs or anywhere else;

* any misconduct on his part, whether within the jurisdiction of the said Commissioner of Customs or anywhere else which in the opinion of the Commissioner renders him unfit to transact any business in the Customs Station;

The Commissioner of Customs may, in appropriate cases where immediate action is necessary, suspend the licence of a Customs House Agent where an enquiry against such agent is pending or contemplated.

The Commissioner shall issue a notice in writing to the Customs House Agent stating the grounds on which it is proposed to suspend or revoke the licence and requiring the said Customs House Agent to submit within such time as may be specified in the notice, not less than forty five days, to the Deputy Commissioner of Customs or Assistant Commissioner of Customs nominated by him, a written statement of defence and also to specify in the said statement whether the Customs Hosue Agent desires to be heard in person by the said Deputy Commissioner of Customs or Assistant Commissioner of Customs.

The Commissioner may, on receipt of the written statement from the Customs House Agent, or where no such statement has been received within the time limit specified in the notice direct the Deputy Commissioner of Customs or Assistant Commissioner of Customs to inquire into the grounds which are not admitted by the Customs House Agent.

The Deputy Commissioner or Asst. Commissioner shall, in the course of inquiry, consider such documentary evidence and take such oral evidence as may be relevant or material to the inquiry in regard to the grounds forming the basis for the proceedings and he may also put any question to any person tendering evidence for or against the Custom House Agent, for the purpose of ascertaining the correct position.

The Customs House Agent shall be entitled to cross examine the persons examined in support of the grounds forming the basis of the proceedings and where the Deputy Commissioner or Assistant Commissioner declines to examine any person on the grounds that his evidence is not relevant or material, he shall record his reasons in writing for so doing. At the end of the inquiry, the Deputy Commissioner or Assistant Commissioner shall prepare a report of the inquiry recording his findings. A copy of the report shall be furnished to the Customs House Agent who shall be required to submit within the specified period not being less than sixty days, and representation that he may wish to make against the findings. The Commissioner shall after considering the report of the inquiry and the representation thereon, if any, made by the Customs House Agent, pass such orders as he deem fit. The Customs House Agent aggrieved by any decision or order may prefer an appeal to the Tribunal.

OBLIGATIONS OF CUSTOMS HOUSE AGENT:

According to Regulation 13, a Customs House Agent shall-

* obtain an authorization from each of the companies, firms or individuals by whom he is for the time being employed as Customs House Agent and produce such authorization whenever is required by the Deputy Commissioner of Customs or Assistant Commissioner of Customs;

* transact business in the Customs Station either personally or through an employee duly approved by the Dy. Commissioner of Customs or Assistant Commissioner of Customs;

* not represent a client before an officer of Customs in any manner to which he, as an officer of Department of Customs gives personal consideration, or as to the facts of which he gained knowledge, while in Government service;

* advise his client to comply with the provisions of the Act and in case of non compliance, shall bring the matter to the notice of the Deputy Commissioner of Customs or Asst. Commissioner of Customs;

* exercise due diligence to ascertain the correctness of any information which he imparts to a client with reference to any work related to clearance of cargo or baggage;

* not withhold information contained in any order, instruction or public notice relating to clearance of cargo or baggage issued by the Commissioner of Customs, from a client who is entitled to such information;

* promptly pay over to the Government, when due, sums received for payment of any duty, tax or other debt or obligations owing to the Government and promptly account to his client for funds received for him from the Government or received from him in excess of Governmental or other charges payable in respect of the clearance of cargo or baggage on behalf of the client;

* not procure or attempt to procure directly or indirectly, information from the Government records or other Government sources of any kind to which access is not granted by the proper officer;

* not attempt to influence the conduct of any official of the Customs Station in any matter pending before such official or his subordinates by the use of threat, false accusation, duress or the offer of any special inducement or promise or advantage or by the bestowing of any gift or favor or other thing of value;

* not refuse access to, conceal, remove or destroy the whole or any part of any book, paper or other record, relating to his transactions as a Customs House Agent which is sought or may be sought by the Commissioner of Customs;

* maintain records and accounts in such form and manner as may be directed from time to time by a Deputy Commissioner of Customs or Assistant Commissioner of Customs and submit them for inspection to the said Deputy Commissioner of Customs or Assistant Commissioner of Customs or an officer authorized by him whenever required;

* ensure that all documents, such as bills of entry and shipping bills delivered in the Customs Station by him show the name of the importer or exporter, as the case may be, and the name of the Customs House Agent, prominently at the top of such documents;

* in the event of the licence granted to him being lost, immediately report the fact to the Commissioner of Customs;

* ensure that he discharges his duties as Customs House Agent with utmost speed and efficiency and without avoidable delay;

* enroll himself as a member of the Customs House Agents' Association, if there is one registered in the Customs Station and recognized by the Commissioner of Customs.

CHANGE IN CONSTITUTION:

Regulation 14 provides that in case any change in the directors or Managing Director such change shall be communicated to the Commissioner of Customs by the Company holding a licence within a period of sixty days of such change.

Any change in the constitution of firm the same shall be reported by such form to the Commissioner of Customs as early as possible and make a fresh application within a period of sixty days from the date of such change for the grant of a license.

In case of change in firms or company then such firms or company may be allowed to carry on the business of Customs House Agent with the approval of the Commissioner of Customs till such a time as a decision taken on the fresh application of such firm or company.

In case of death or retirement of the person the firm or company may apply for replacement of the name of the demised person by name of a partner, director or employee who has passed the examination. If there is no such person then the firm or company may authorize any other partner, director or employee who is a 'G' card holder, to pass the examination within a period two years from the date of demise or retirement of such person and the firm or company may be permitted to carry on the business of a Customs House Agent with the approval of the Commissioner of Customs till such time such partner, director or employee passes the said examination.

Where a licence is granted to an individual and changes the constitution of his concern to a firm or a company, such a new firm or new company may, pending the grant of a licence be permitted to act as Customs House Agent through an employee duly qualified with the approval of the Commissioner of Customs. If such person dies then his legal heir who is a major and a 'H' card holder, may be permitted to work as a Customs House Agent with the approval of the Commissioner of Customs and such legal heir shall be required to pass the examination within a period of two years from the date of demise of the original licensee.

Maintenance and Inspection of Accounts:

Regulation 18 requires that a Customs House Agent is required to maintain accounts in an orderly and itemized manner and keep them current and reflect all financial transactions as Customs House Agent. He is also to maintain on file a copy of each of the documents, such as bill of entry, shipping bill, transshipment application etc., and copies of all his correspondence and other papers relating to his business as Customs House Agent. All records and accounts that are required to be maintained under these regulations shall be preserved for at least five years and shall be made available at any time for inspection of officers authorized to inspect such records and accounts.