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Overview of Customs Functions

Customs - CBEC s Customs Manual 2015 - 01 - Chapter 1 1. Introduction 1.1 Central Board of Excise and Customs (CBEC or the Board), Department of Revenue, Ministry of Finance, Government of India deals with the formulation of policy concerning levy and collection of Customs and Central Excise duties and Service Tax, prevention of smuggling and administration of matters relating to Customs, Central Excise, Service Tax and Narcotics to the extent under CBEC's purview. The Board is the administr .....

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ival and departure of vessels, aircraft setc.; (c) Discharge of agency functions and enforcing prohibitions and restrictions on imports and exports under various legal enactments; (d) Prevention of smuggling including interdiction of narcotics drug trafficking; and (e)International passenger rclearance. 1.3 Customs functions cover substantial areas of activities involving international passengers, general public, importers, exporters, traders, custodians, manufacturers, carriers, port and airpor .....

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of Customs duty: 2.1 Entry No. 83 of List 1 to Schedule VII of the Constitution empowers the Union Government to legislate and collect duties on imports and exports. Accordingly, the Customs Act, 1962, effective from 1-2-1963 provides vide its Section 12 for the levy of duties on goods imported into or exported from India. The items the rates of duties leviable thereon are specified in two Schedules to the Customs Tariff Act, 1975. The First Schedule specifies the various import items in system .....

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ies and the rates of dutiesthereof. 2.2 The predominant mode of levy of duties is on ad-valorem basis i.e., with reference to value. For this purpose the value of the imported goods is required to be determined as per Section 14 of the Customs Act, 1962 read with the Customs Valuation (Determination of Prices of Imported Goods) Rules, 2007. These provisions are essentially the adoption of GATT based valuation system (now termed WTO Valuation Agreement) that is followed globally. Likewise, the va .....

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businesses. Some of these measures are presently works in progress and their present importance is in the fact that these highlight the approach of the Board towards ensuring the ease of doingbusiness. 3.2 Single Window: An Indian Customs Single Window Project has begun with the establishment of an appropriate administrative structure in the form of an inter-ministerial Steering Group that is chaired by Member (Customs), CBEC, a Project Management Group in CBEC and Project Management Units in t .....

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with these agencies and Release Order (RO) from both the agencies will be received by the Customs in electronic message format. The salient features of this online message exchange system are as under: (i) Indian Customs EDI (ICES) would transmit BE message to the FSSAI and PQIS on completion of assessment of the relevant Bills of Entry (Bs/E) by the Customs ICES application after entry-inward of the consignment. The BE message would be provided to FSSAI/PQIS for all Bs/E falling under the iden .....

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ally transmit an RO, concerning each item of the Bs/E. From the Customs side, Out of Charge (OOC) will not be allowed in the system till the RO is received from the agency concerned for all the items. There are 6 types of ROs which may be provided by the FSSAI/PQIS to the ICES, as follows: (a) Release - goods can be released by the Customs. (b) Detruction - goods to be destructed by the Customs. (c) Deportation - goods to be exported back to the Country of Origin. (d) No Objection Certificate (N .....

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ll integrate the data in the ICES database, which shall be available to the Customs officers concerned. (vii) The other formalities under the Customs Act, 1962 such as duty payment, goods registration, examination would continue during the time interval between transmission of Bs/E message from ICES to the receipt of ( RO message from FSSAI/PQIS. During this period the samples of the goods under consideration may also be taken for testing purposes. (ix) In terms of Board s Circular No.3/2011-Cus .....

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acilitation Committee (CCFC) at every major Customs seaport and airport, which is chaired by the Chief Commissioner of Customs/Commissioner of Customs concerned. Its membership includes the senior-most functionary of the departments/agencies/stakeholder at the particular seaport/airport namely, (i) Food Safety Standards Authority of India/Port Health Officer (PHO), (ii) Plant Quarantine Authorities, (iii) Animal Quarantine Authorities, (iv) Drug Controller of India (CDSO), (v) Textile Committee, .....

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ntifying and resolving bottlenecks, if any, in the clearance procedure of imported and export goods; (iii) Initiating Time Release Studies for improvement in the clearance time of imported and export goods; (iv) Having internal consultations to speed up the clearance process of imported and export goods and recommending best practices thereto for consideration of CBEC / (v) Departments / Agencies concerned; and (vi) Resolving grievances of members of the trade and industry in regard to clearance .....

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tinuity bond, which would reduce the number of required documents to 1 (one) only and the periodicity (of submission) would also get reduced drastically. Also, it is decided that only 1 (one) copy of SMTP would be sufficient for the Customs at ICDs. Finally, no separate permission is required from jurisdictional Customs in case of change of mode of transshipment under the Goods Imported (Conditions of Transshipment) Regulations, 1995. However, the carrier is required to intimate the change to th .....

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er. As a result, the documents ordinarily required by the Customs stand reduced to only 3 viz. Bill or Entry or Shipping Bill, commercial invoice cum packing list and Bill of Lading or Airway Bill. [Refer Circular No 1/2015-Cus., dated 12-1-2015] 3.6 Dispensing with SDF: The Board has issued Notification No 46/2015-Cus(N.T.), dated 18.05.2015 to incorporate the following declaration in lieu of SDF form in the Shipping Bill. I/We undertake to abide by provisions of Foreign Exchange Management Act .....

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Signature Certificate for filing Customs process documents viz. Bills of Entry, Shipping Bills, IGM (General Declaration and Cargo Declaration), EGM (General Declaration), CGM through Remote EDI System (RES). For the present, the facility of using digital signatures is optional for all users but the ACP importers are required to mandatorily file Bills of Entry with digital signature w.e.f. 1-5-2015. [Refer Circular No.10/2015-Cus., dated 31-3-2015] 3.8 Re-export permission: With a view to expedi .....

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ic statute which regulates the entry/exit of different categories of vessels/crafts/goods/passengers etc., into or outside the country. Various allied laws and regulations also apply. It is the responsibility of Customs to handle international traffic speedily and effectively while ensuring that all the goods/passengers etc., imported/coming into the country or exported/going out of the country by sea, air, land or rail routes are in conformity with the laws of the land. 4.2 In terms of the Cust .....

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hbouring countries like Nepal. 4.3 Once a particular Customs port or airport is notified, the Customs Act, 1962 empowers the jurisdictional Commissioner of Customs to approve specific places therein where only loading and unloading can take place and also to specify the limits of the Customs area where the imported goods or the export goods are ordinarily to be kept before clearance by Customsauthorities. 4.4 Essentially all goods brought into the country or meant for export must pass through au .....

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tempts of smuggling or commercial frauds by unscrupulous parties. 5. Role of Custodians: 5.1 In regard to all imported goods unloaded in a Customs area, the Commissioner of Customs is required to appoint a custodian under whose custody the imported goods shall remain till these are cleared for home consumption, or are warehoused or transhipped as provided in the law. With the growth of containerized traffic the facility of Customs clearances in the interiors of the country has also been provided .....

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its proper storage and safety and allow clearance to the importers only after they fulfill all Customs formalities, pay requisite duties and other charges/fees and discharge various other obligations. No goods can be cleared from a Customs area without the express permission of Customs. Moreover, since the Customs Act, 1962 obliges the custodians to ensure safe custody of the imported goods till delivery, in case these goods are pilfered while in custody, the custodian is required to pay duty o .....

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eing opened at various places in the interior of the country as a facilitation measure with the result that Customs clearances of both imported and export cargo from these places has expanded substantially in recentyears. 5.3 Maximum import and export cargo is handled at different sea ports and there is a trend towards containerized cargo movement; increasing part of import cargo landed at some ports like Nhava Sheva is also transhipped to interior ICDs for final clearance by importers at their .....

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s and exports such as supervision of loading/unloading of goods from vessels/crafts etc., supervision of stuffing or de-stuffing of containers, inspection and examination of goods which are imported/presented for exportation before Customs clearance formalities etc. For this purpose and in order to provide comprehensive guidelines for custodians / Cargo Service Providers (CCSP) for handling, receipt, storage and transportation of cargo in a Customs area, the Board has framed the Handling of Carg .....

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o other ports/airports. Declaration of such cargo has to be made in an Import General Manifest‟ (IGM) prior to arrival of the vessel/aircraft at the Customs station. In the case of imports through Land Customs Stations the person in charge of the vehicle has to give similar import report within 12 hours of its arrival. Since the cargo clearance formalities are linked generally with the availability of information about cargo being brought by a vessel for unloading at any port, provisions i .....

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Customs station, which are not mentioned in the IGM/import report. Similarly, there are restrictions on loading for export such that no vessel/aircraft can begin loading goods for export unless intimation is given to Customs and its permission for loading obtained - what is also called Entry Outward‟ of the vessel. Loading of cargo on vessels, aircrafts etc. is checked and supervised by Preventive Customs Officers who ensure that cargo loaded has discharged the prescribed Customs formalit .....

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he EGM/Export Report is to be furnished before the vessel/aircraft/ vehicle departs and is essentially taken as the proof of shipment/export. 7. Customs preventive control: 7.1 No vessel/aircraft can leave a Customs station unless a written order for port clearance is given by the proper officer of Customs. This permission for departure is given subject to the satisfaction of the proper officer that all the prescribed formalities have been fulfilled, duties/penalties etc., have been paid orsecur .....

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f the past history of the vessels, the port/airport from which these are arriving, the intelligence reportetc. 7. 3The Preventive Officers of Customs also keep a very careful vigil for checking any illegal activities and develop intelligence to guard against any possible attempts of unauthorized removals from the docks, unloading of un-manifested cargo etc. 8. Customs clearance of cargo: 8.1 Before any imported goods can be cleared for home consumption in the country or for warehousing for subse .....

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ce documents or appoints Customs Brokers,)who are trained and experienced in Customs clearance work and are licensed by Customs for such work in terms of the Customs Broker Licensing Regulations, 2013. 8.2 The import clearance documentation, presentation, and processing is handled in the Custom Houses by Appraising staff trained in assessment matters. After a tally has been made with related to ensure the goods sought for clearance have arrived and declared in the particular of the vessel/aircra .....

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t - (Basic, Additional, Anti-dumping, Safeguards etc.). Permissibility of various benefits of duty free clearances under different schemes or applicability of any exemption notification benefits is also checked anddecided. 8.3 Normally, the import declarations made are scrutinized without prior examination of the goods with reference to documents made available and other information about the values/classification available with Customs and duties chargeable on the goods are assessed and paid up .....

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se/Air Cargo Complexes/ICDs. If no discrepancies in relation to the nature of goods, quantity, value etc., are observed at the time of examination of the cargo, 'Out of Customs Charge' orders are issued, and thereafter goods can be cleared after discharging any other fees/charges etc., of the custodians. 8.4 At times, for determining the duty liability and permissibility of import it may become necessary to examine the goods. Such goods are examined after filing of Bill of Entry and othe .....

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nces subject to suitable bond/security. Only where the goods are of prohibited nature or in certain other exceptional cases, where provisional release is not considered advisable, the final decision may be taken after results of enquiries etc. are known and adjudication proceedings completed, wherenecessary. 8.6 Customs clearance formalities for goods meant for export have to be fulfilled by presenting a Shipping Bill‟ and other related documents to the Export Section of the Custom Houses .....

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is-declarations etc., and no prohibitions/violations come to light. Appropriate penal action as per law is initiated where any fraudulent practices get detected during initial stage of scrutiny or at the time of examination etc. 9. Smuggling and other violations and penal provisions: 9.1 Unscrupulous elements do attempt to evade the duties leviable and bypass various prohibitions/restrictions in relation to imports by attempting to bring the goods into the country from places other than the noti .....

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n relation to the goods/persons involved in smuggling and other violations of the legal provisions. These include seizure/ confiscation (including absolute confiscation) of the offending goods and fines and penalties on the persons involved in the offence as well as those abetting the offence. The law also empowers Customs officers to carry out searches, arrests and prosecution of persons involved in smuggling and serious commercial frauds and evasion of duties or misuse of export incentives by .....

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ed due notice (or Show Cause Notice) of contemplated action against including the gist of the charges and their basis, and providing opportunity for representation as well as personal hearing. 9.4 In grave offence cases, the Customs Act, 1962 provides for prosecution with imprisonment upto maximum of 7 years. This involves criminal proceedings in a Court of law, after sanction for prosecution is given by the competent Customs officer. 10. Appellate remedies: 10.1 Any concerned person aggrieved w .....

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tion can be appealed even before the Supreme Court. 11. Passenger processing: 11.1 All incoming international passengers after immigration clearance have to pass through Customs who ensure their facilitation and speedy clearance. However, at time unscrupulous passengers may try to smuggle goods into the country which are sensitive and otherwise prohibited/restricted or evade duties by non-declaration/mis-declaration to Customs. Similarly, the Customs have to ensure that these passengers do not s .....

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