3 Customs Act

8/3/2019 3 Customs Act

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The Customs Act, 1962

It is a duty or tariff imposed by law on

imports or exports

It is levied and collected by the CentralGovernment

It is levied under the Customs Act 1962

It is charged at rates specified in theCustoms Tariff Act 1975

It extends to the whole of India

The Act was introduced in the year 1962and it came into force on 1.02.1963


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The Customs Tariff Act, 1975

Customs duty is imposed under The

Customs Act 1962, but levied underCustoms Tariff Act 1975

The Customs Act 1962 stops with

charging duty The rates of duty are left to the Customs

Tariff Act 1975 and the Customs Tariff Act

1975 came into force on 2.8.1976


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Features of Customs Duty

The levy is on import & export only

Customs duty is levied on goodsbelonging to and not belonging toGovernment

The transaction need not be a sale orpurchase

Customs duty is attracted even in the case

of baggage brought by the passenger

The Customs Act consist of 161 sectionsand 17 chapters


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Objectives of Customs Duties To safeguard domestic trade by imposing duty

on imported goods To discourage imports

To levy and collect adequate revenue resources

for the economic development of India To protect Indian industries in the interest of

Trade, commerce and economy

To provide for necessary powers to the Central

Government to prevent smuggling activities

To ensure that the home markets do not becomea dumping ground for foreign goods

To raise revenue


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Objectives of Imposing Export Duties

Export duties

For Revenue purposes

For anti-inflationary condition

To stabilize price of essentialcommodities

To protect home industries To control of export of raw

materials


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Types of Customs Tariff

Import Tariff

I schedule of Customs Tariff Act 1975

21 sections, 91 chapters

Export Tariff II schedule of Customs Tariff Act 1975

Duty is charged on advalorem and

specific rate basis


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Types of Import Duties

Basic Customs Duty

Standard rates of duty Preferential rates of duty

Countervailing duty or AdditionalCustoms Duty

Special additional duty

Protective duty Anti Dumping duty

Safeguard duty


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Levy of Customs Duty

Dutiable goods- Sec 12

Duty on pilfered goods- Sec 13 Duty on damaged or deteriorated

goods

Remission of duty on lost, destroyedor abandoned goods


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Assessment of Duty Sec 17

Assessment means quantification of

the amount of duty payable Assessment includes provisional

assessment, reassessment and any

order of assessment in which theduty assessed is nil


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Procedure for Assessment The importer files a Bill of Entry u/s 46

(or) The exporter files a Shipping Bill u/s50

The imported or exported goods may be

examined and tested by proper officerfor the purpose of levying duties on such

goods

The exporter/importer must furnish allinformation and produce all documents

like Bill of Lading, Insurance Document,

Contract, Shipping Bill etc


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Valuation of goods for the purpose of Assessment

Customs duty is imposed on the basis of

value of goods Value- Sec 14 (1)

The price at which such or like goods

ordinarily sold or offered for sale Such price should be for the delivery at the

time and place of import or export

Such price in the course of InternationalTrade

The price should be sole consideration ofsale


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Value Value includes

Commission & Brokerage

Packing costs

Royalties

Licence fees

Transport cost up to port

Insurance

Landing cost

Value excludes

Transport Charges After Importation Payment to seller not connected with imported goods

Taxes paid in India

Art work, Design work expenses incurred in India


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Methods of Determining Value Transaction value of same goods based method- Rule 3

Transaction value of identical goods based method- Rule

5 Transaction value of similar goods based method- Rule 6

Deductive value method- Rule 7

Assessable value = Selling Price (-) Post Importation

Cost

Computed Value Method- Rule 7A

Assessable Value = Cost of Production + Profit &General Expenses + Transportation cost, Landing &

Insurance

Residual Method- Rule 8

When the value cannot be assessed as per the abovemethods


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Exemption from Customs Duty Sec 25 Exemption by General Notification- Sec 25 (1)

Published in Official Gazette

Issued in public interest Exemption may be absolute or conditional

Exempted Exports

Coffee, Tea, Cardamom, Turmeric etc

Exempted Imports Life saving drugs, trophies received by specified Indian

reputed players

Exemption by Special Order- Sec 25 (2)

Ad Hoc Exemptions

Issued in public interest

100% exemption

Goods of strategic nature

Goods of secret nature

Goods of charitable purpose


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Transportation of Imported/Exported Goods-Sec 29-43

Landing at approved places- Sec 29 Port/Air

port etc

Delivery Document- Sec 30

Vessel Import Manifest- 24 hours

Air Craft Import Manifest- 12 hours

Vehicle Import Report- 12 hours

Getting Entry Inward- Sec 31

Loading & unloading at approved places-Sec33

Loading & unloading under the supervision of

customs- Sec 34


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Transportation of Imported/Exported Goods-Sec 29-43- Contd

Accompanying Boat Note- Sec 35

Avoiding loading & unloading on holidays

Answering questions and producingdocuments

Getting entry outwards- Sec 39

Getting departure permission- Sec 42

Searches, Seizure & Arrest

Power to search suspected persons enteringor leaving India- Sec 100

Power to search suspected persons in certain

other cases- Sec 101


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Transportation of Imported/Exported Goods-Sec 29-43- Contd

Power to screen or X-Ray bodies of suspected

persons for detecting secret goods- Sec 103 Power to arrest- Sec 104

Power to search premises- Sec 105

Power to stop & search conveyances- Sec 106 Power to examine person

Power to summon persons to give evidence &

produce documents Seizure of goods, documents and things- Sec

110

(Ayyan & Nayagan)


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Warehousing of Imported Goods- Sec 57-73

When the goods arrive in the port, an importer

may not immediately require the goods onaccount of surplus stock on hand

There is also a possibility that the importer may

not be having adequate cash for payment ofcustoms duty

Importers may prefer to warehouse the goodsand clear the same subsequently on payment of

duty The basic condition is that the goods must be

dutiable


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Appointment of Warehouses Public Warehouse Sec 57

Private Warehouse Sec 58 Warehousing Bond Sec 59

Control over warehoused goods Sec 62

Payment of rent & warehouse charges Sec 63

Owners right to deal with warehoused goods 64

Removal of goods from one warehouse to another67

Clearance of warehoused goods for homeconsumption 68

Clearance of warehoused goods for exportation 69

Goods improperly removed from warehouse 72


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Customs Duty Drawback

Drawback means the refund of duty of Customs

& duty of Central Excise that are chargeable onimported and indigenous materials used inmanufacture of exported goods

Drawback is equal to

Customs duty paid on imported inputs

Excise duty paid on indigenous inputs


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Drawback allowable on re-export of dutypaid goods Sec 74

The goods must have been originally importedinto India and import duty must have been paidthereon

The goods must be capable of being easily

identified The proper officer must make on order permitting

clearance of the goods for exportation

98% of duty be repaid as drawback Goods imported by a person for his persoanl and

private use


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Drawback on imported materials used in themanufacture of goods which are exported u/s 75

Such goods have to be notified by the Central

Government in the official Gazette

Goods must be either be manufactured,processed or any operation on them must have

been carried out of India If the export value of goods is less than the value

of the imported materials used in themanufacturing, processing, no drawback shall be

allowed


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Prohibition and Regulation ofDrawback in certain cases Sec 76

No duty drawback will be allowed

In respect of any goods the market price ofwhich is less than the amount of drawbackdue thereon

Where the drawback due in respect of anygoods is less than fifty rupees


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Clearance of Goods

Restrictions on custody and removal of importedgoods- Sec 45

All imported goods unloaded in a customsarea, will remain in the custody of a person

approved by the Commissioner of Customs He will keep a record of such goods and send

a copy thereof to the proper officer

He will not permit the goods to be removedfrom customs area except with the permissionin writing of the proper officer


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Offences & Penalties

Imprisonment & Fine

False declarations/ documents Obstruction of Officer of Customs

Refusal to be X-rayed

Evasion of duty or prohibitions Illegal export of goods

Offences by Officers of Customs

Offences by Companies


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Appellate Machinery- Revision & Appeal

Power of Board of Commissioner of Customs to

pass orders- 129D Revision by Central Government 129DD

Appeals to Commissioner 128

Appeals to Customs, Excise and Service TaxAppellate Tribunal (CESAT) 129A

Appeal to High Court 130

Appeal to Supreme Court 130E

3 Customs Act

Documents

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