customs act 1962

CUSTOMS ACT 1962

1878 Sea Customs Act was the earlier one.

1962 Customs Act replaced it.

17 chapters marked I to XVII

Sections 1 to 161

Chapter - I Preliminary

• Section 01• Title– Customs Act 1962• Extent: Whole of India

• Section 2 • Definitions: 50 definitions with numbers 1 to 45

– Important definitions:– “import”, with its grammatical variations and cognate

expressions, means bringing into India from a place outside India;

– “export”, with its grammatical variations and cognate expressions, means taking out of India to a place outside India;

http://www.cbec.gov.in/customs/cs-act/cs-act-ch1-sept11.htm

Section 2 contd

• goods” includes -• (a) vessels, aircrafts and vehicles; (b) stores;

(c) baggage;(d) currency and negotiable instruments; and (e) any other kind of movable property;

• prohibited goods” means any goods the import or export of which is subject to any prohibition under this Act or any other law for the time being in force but does not include any such goods in respect of which the conditions subject to which the goods are permitted to be imported or exported have been complied with;

• “smuggling”, in relation to any goods, means any act or omission which will render such goods liable to confiscation under section 111 or section 113;

• “customs airport” means any airport appointed under clause (a) of section 7 to be a customs airport;

• (11) “customs area” means the area of a customs station and includes any area in which imported goods or export goods are ordinarily kept before clearance by Customs Authorities;

• (12) “customs port” means any port appointed under clause (a) of section 7 to be a customs port and includes a place appointed under clause (aa) of that section to be an inland container depot;

Section 2 contd

Chapter - II Officers of Customs

• Officers of Customs—CC AC and others as may be appointed.

• Officers can exercise powers given by act

• Senior can exercise junior’s power

• Govt has power to authorise other Cen/state govt officers to exercise Customs officers’ powers.

http://www.cbec.gov.in/customs/cs-act/cs-act-ch2.htm

Chapter - III Appointment of Customs Ports, Airports, Warehousing Stations etc. (sec 7 to 10)

• Board can notify above places and also land , rail and river routes, LCSs , ICDs, CFSs for Customs purposes


Chapter - IV Prohibitions on importation and exportation of goods (sec 11)

• security,

• morality,

• Law & order,

• antismuggling,

• forex consrvn

• Protection of life, patent, trademarks, industry

• Fulfiling international obligation

• Prevention of contravention of law

• Conserve resource

etc

Board can prohibit specific goods for reason of


Chapter - IVA /IVB Detection of illegally imported /Exported goods and prevention of

the disposal thereof• govt can notify

smuggling prone goods to strictly monitor their import.

• people handling them need to intimate place of storage, maintain accounts properly and sell against proper vouchers.

• Notified goods imported for personal use are not affected by these sections.

• Also certain classofgoods may be exempted from this if govt thinks fit (Chapter IVC)

Sec 11A—11G and 11H-11M and 11N

http://www.cbec.gov.in/customs/cs-act/cs-act-ch4a.htm

Chapter - V Levy of, and Exemption from, Customs Duties

• SECTION 12. Dutiable goods. –(1) Except as otherwise provided in this Act, or any other law for the time being in force, duties of customs shall be levied at such rates as may be specified under the Customs Tariff Act, 1975 (51 of 1975)], or any other law for the time being in force, on goods imported into, or exported from, India.

• Charging sec. Most imp

• SECTION 14. Valuation of goods• Transaction value, the price

actually paid or payable for the goods when sold for export to India for delivery at the time and place of importation, or as the case may be, for export from India for delivery at the time and place of exportation, where the buyer and seller of the goods are not related and price is the sole consideration for the sale subject to such other conditions as may be specified in the rules made in this behalf :

We shall treat them in greater detail in our session on Valuation.

End session 1


• Sec 17: Assessment• Imp/exp self assessment• Assessing officer may call

for documents, test, verify• If self assmt found wrong—

AO can Reassess after following Natural justice and pass speaking order.

• If no re assessment , AO may audit such transactions afterwards.

• Sec18 Prov. Assmt• Importer unable to assess and

requests for assessment by AO or

• AO feels test necessary• Or AO deems necessary to

make further inquiry in case all documents produced or not produced

• PA is ordered with security to cover prov and final assmt


Sec 18(2): When PA is finalised, for Home consumption clearance-difference is paid or refunded. For Wh goods, importer executes bond covering twice the difference


Sec 18 contd• 18(3,4)• Interest to be paid by

either party if amount not settled within month of finalisation.

• 18(5)• Refund amount goes to

Welfare fund if difference passed on,/goods for personal use, /diff. relates to DBK,

• Sec 25• By notification (absolutely

of subject to conditions to be flfilled) from whole of part of duty leviable as per tariff.

• By spl order , casewise• NO duty if liability upto Rs

100.• Clarification can be

inserted within one yr of notificn.

Power to exempt



Refund• Of export duty if paid

(sec 26)

• If goods returned to exporter except re sale.

• If goods re imported within one yr

• Application within six months of clearance order.

• Of import duty (SEC 26A)

• Defective goods not worked upon, identified by AC as imported one and exported or title relinquished or destroyed or declared of NCV within 30days of clearance



• Application to be made within 6 month of relevant date

• No refund for perishable goods beyond shelf life.

• Sec 27• Refund claim(duty or

interest): to AC within 1 yr of payment

• Refund amount goes to Welfare fund if difference passed on,/goods for personal use, /DBK is permissible for the case

• 28D: incidence presumed to be passed on unless proved OW

Refund(contd)

Sec 27AInterest payable on refund delayed beyond 3 months



SECTION 28. Recovery of duties not levied or short-levied or erroneously refunded

• Non/short levy/erroneous refund (not for any offence)

• Demand notice within a year of relevant date(duty and interest).

• If dues paid before demand and informed-- no notice if appropriate officer finds it alright. If found short again , notice for difference to be issued..

• Non/short levy/erroneous refund for fraud,collusion,wilfulmisstatement/suppression-

• Demand within 5 yrs with interest (28AA) and penalty demand.

• If everything is paid(with 25% of duty demanded as penalty), matter concludes after the officer checks and finds all satisfactory. OW demand for the differential.

• Interest payable even if not expressly demanded.



Chapter VI—conveyance carrying impex goods

• Section 29: no incoming craft or vessel to land anywhere except customs port/airport

• Proviso—excepting accident or other unavoidables , in which case nearest Customs/police auth to be informed and no goods shifted WO their permission.

• Section 30• Incoming

vessel/craft/vehicle carrying import goods to submit detailed import manifest within 12 hrs of arrival or beforehand.

• Disobedience 50000 Rs penalty for person in charge.

• Amendment allowed if cause is found genuine and unavoidable

• Unloading of import goods not permitted without

• Entry inward

• Approved places

• Customs Supervision

• Working days except prior notice and payment of fees.

• Loading export goods not permitted without

• Entry outward

• Being passed by Customs Officer

• Export manifest

Chapter VI—conveyance carrying impex goods(sec 31 to 42)

Officers empowered to board vessel and ask for documentsNO conveyance to leave WO

written order

Chapter VII Clearance of IMPEX goods

• Sec 46:

• Bill of Entry to be submitted (for WH or Home consumpn) electronically after IGM or within 30 days prior to arrival of vessel

• Electronic submission can be waived by Commissioner in suitable cases.

• Sec 47

• Proper officer satisfied about no malafide and full payment of duty—order for clearance for home consumption.

• Interest chargeable(10 to 36% as fixed) if not paid within 5 days of return of BE for payment.

• Sec 48: If goods not cleared within 30 days of unloading or such time as allowed by proper officer, or relinquished, custodian can sell them off under permission of proper officer with intimation to importer.

Chapter VII Clearance of IMPEX goods

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• Transit goods• Goods mentioned as transit goods in Import manifest donot

attract duty(S 52)

• Transhipment goods• To another country after touching Indian soil- bill of transit to

be filed (prescribed form)• To another country under an international treaty—A

Transhipment declaration and no duty (prescribed form) No duty

• To another Indian Customs Destination: Allowed WO duty against Bill of Transhipment.

• Transitted or transhipped to another Indian destination: formalities and duty liability at destination.

Chapter VIII (S 52-56)Transit/transshipment

Chapter IX: WAREHOUSING(Sections 57-73)

• Public warehouses or private WHs can be appointed/licensed for deposit of dutiable goods at any Customs stn

• For WH of goods assessed U/S 17/18, bond for double the @ assessed for observance of all conditions, payment of dues and rents and penalties.

• WH period

• Capital goods for 100%EOU-5yrs (extendible as deemed fit by Commr)

• Other goods for 100% EOU-3 yrs and all others1 yr. (extension not exceeding 6 mnths by Commr or any other period)

• WH license cancellation:clear or relocate to another WH within 7 days or such time as deemed fit by proper officer.

• Manufacturing can be done in WH

• If exported, no import duty. If cleared in DTA, import duty of portion of WH goods included in product.(S65)

• WH goods can be cleared for Home consumption on presentation of a HC B/E and payment of all duties and WH rents

• WH goods can be exported on presentation of proper SB on payment of all dues like Export duty applicable, penalties rent etc.

Chapter IX: WAREHOUSING(Sections 57-73)

Illegitimate clearance, clearance as sample, overstay at WH forthwith payment of all dues and penalties on demand.

Chapter X-Drawback(S 74-76)

• S-74• Re-export within 2 yrs of duty

paid import thru• Normal

channel/port/baggage• Goods identifiable as such

duty paid imports– 98% of import duty payable as

DBK– (Time extendible by proper

officer)

• S-75• On export of goods

manufactured out of imported material with a value addition.

• Tobe given on imported material part

• Unnecessarily large value addition not allowed.

• If sale proceeds not received within stipulated period, dbk is to be reversed or adjusted.S-76

If market price is less than DBk or DBk is less than 50 Rs—no DBk.

Chapter XIII Search Seizure arrest(100 to 110A)

• If proper officer has reason to believe that a person landing from or boarding in a foreign origin or foreign bound vessel/craft/vehicle or any person in a Customs area has secreted about his person, any goods liable to confiscation or any documents relating thereto, he may search that person (S-100)

• 102-to take person to be searched to gazetted officer of Customs or a magistrate if so desired.

• 104: power to arrest– general or special order of the

Commissioner of Customs– reason to believe that any person

in India or within the Indian customs waters has committed an offence punishable under any of section 132 133 135 ,135A or 136.

– Arrested person to be taken to a magistrate.

– Customs officer has powers of a police officer WRt release on bail or OW as under CrPC.

• SECTION 107. Power to examine persons. – Any officer of customs empowered in this behalf by general or special order of the Commissioner of Customs may, during the course of any enquiry in connection with the smuggling of any goods, -

•

• (a) require any person to produce or deliver any document or thing relevant to the enquiry;

• (b) examine any person acquainted with the facts and circumstances of the case.

• SECTION 108. Power to summon persons to give evidence and produce documents.

• SECTION 105. Power to search premises. – Also been made applicable to Central

excise with suitable modification

• SECTION 106. Power to stop and search conveyances.

• SECTION 106A. Power to inspect. –Any proper officer authorised in this behalf by the Commissioner of Customs may, for the purpose of ascertaining whether or not the requirements of this Act have been complied with, at any reasonable time, enter any place and inspect the goods kept or stored therein


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• SECTION 110. Seizure of goods, documents and things.

• If the proper officer has reason to believe that any goods are liable to confiscation under this Act, he may seize such goods:

• where it is not practicable to seize any such goods—Supurdnamah

• Also been made applicable to Central excise with suitable modification

• Perishable goods seizure (as notified by Govt)

• Can be disposed of during seizure

• During seizure:– Inventory,– photographs, – Sample drawal.– Witnesses.

– No notice U/S 124 within 6 months of seizure= seizure to be lifted (Time extendible by Commissioner upto 6 months..


110A Provisional release of seized goods before adjudication on permission by adjudicating authority with conditions, bonds etc as fixed by adjudicating auth.

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Chapter XIV-confiscation and penalty (S 111-127) highlights

• (dutiable or prohibited goods) Unauthorised

– Import/exports,

– Routes,

– landing place,

– Clearance from WH/Cusarea

– Concealment

– Contrary to baggage rules

– Undervalued/less duty paid by wrong notification/classification.

– Etc.

Import:S 111 Confiscation and Section 112 Penalty-Export S113 Confiscation, section 114 Penalty

• S 114A

• Penalty for short levy/non levy in fraud collusion suppression wilfulmisstatement-Equal to duty and interest.

• If duty_interest+penaltyvoluntarily paid within 30 days of determination-25% of duty and/or interest

• No penalty U/s 112,114 if 114A clause invoked.

• 114AA: False /misleading document submission—upto 5 times value of goods.


End session 3

• S 115: Conveyance confiscation

1. Altered for concealment

2. Thrown goods overboard

3. Asked to stop but disobeyed.

4. Conveyance entering India has

substantial goods missiong

5. Conveyance from which WHd

goods or drawback export goods

unauthorisedly unloaded.

6. Conveyance used for smuggling

goods.

Also been made applicable to

Central excise with suitable

modification excepting points 1

and 4

• SECTION 117. Penalties for contravention, etc., not expressly mentioned.

• SECTION 118. Confiscation of packages and their contents.– 118(a) import situation Also been

made applicable to Central excise with suitable modification

– 118(b)-export situation.

• SECTION 119. Confiscation of goods used for concealing

• SECTION 120. Confiscation of smuggled goods notwithstanding any change in form, etc. smuggled goods

• SECTION 121. Confiscation of sale-proceeds of smuggled goods.


Also been made applicable to Central excise with suitable modification

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• SECTION 122. Adjudication of confiscations and penalties

• SECTION 124. Issue of show cause notice before confiscation of goods, etc– Notice in writing with the

prior approval of the officer of Customs not below the rank of an Assistant Commissioner

– Natural justice principals observed

• SECTION 125. Option to pay fine in lieu of confiscation.

• SECTION 126. On confiscation, property to vest in Central Government.

• SECTION 127. Award of confiscation or penalty by customs officers not to interfere with other punishments.



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CHAPTER XIV – A Settlement of cases

• Application before adjudication

• Admits offence

• Pays additional duty and interest.

• On receipt The commission asks applicant by a notice why its application should be entertained

• On hearing explanation commission admits or rejects application.

• If admitted , adjudicating authority asked for records and report.

• On receipt if necessary Commr(investigation at Settlement Comm asked to further investigate

• Then hearing of both sides and settlement. Settlement amount cannot be less than duty+interest together. (Party’s benefit is Benefit is probable reduced penalty)

CHAPTER XV Appeals and Revision

• SECTION 128. Appeals to Commissioner (Appeals)

• SECTION 128A. Procedure in appeal to C(Appeal)(against this: RA to Central GovtU/S129DD)

• SECTION 129. Appellate Tribunal(judicial member, Technical member and a high court judge or other member as president.

• SECTION 129D. Powers of Committee of Chief Commissioners of Customs or Commissioner of Customs to pass certain orders (commissioner’s adjudn reviewd and if necessary appeal to CESTAT ordered.

• Appeal against CESTAT order lies with High court(S 130)

130E (RA)High court of its own or being appealed for and finding fit may certify a case to be fit for appealing to the Supreme Court These are Civil appeals under Code of Civil procedure

CHAPTER XVI Offences and prosecutions

• SECTION 132. False declaration, false documents, etc

• SECTION 133. Obstruction of officer of customs

• ECTION 134. Refusal to be X-rayed.

• SECTION 135. Evasion of duty or prohibitions

• SECTION 135A. Preparation for illegalexport

• SECTION 136. Offences by officers of customs for acts resulting in fraudulent export or duty evasion.

• SECTION 137. Cognizance of offences. – (1) No court shall take cognizance of any offence under section 132, section 133, section 134 or section 135 or section 135A, except with the previous sanction of the Commissioner of Customs.

138C micro films, facsimile copies of documents and computer print outs admissible as documents and as evidence.

Recovery• 142.Recovery of sums due to Government. (1) 3[

Where any sum payable by any person] under this Act is not paid,-(a) amount deductible from other payables by Customs

• (b) recovery by detaining and selling any goods belonging to such person which are under the control of Department© if above fails, Certificate specifying @ due to be sent to District Collector where the person’s property exists for recovery

• (2) Same method applies in case of dues arising out of bonds or other instrument executed under this Act or

(b), (c)Also been made applicable to Central excise with suitable modification

CHAPTER XVII Misc

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CHAPTER XVII Misc

• 150. Procedure for sale of goods and application of saleproceeds.

• (1) Godds not confiscated but sold (overstay in WH or perishable goods seized) –to be sold after intimation to owner.

(2) The proceeds of any such sale shall be applied-

(a) to meet sale expenses• (b) freight and other charges• (c) payment of duty if any• (d) Custodian dues• (e) any other govt dues from owner• Balance will be paid to owner of goods.


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Customs provisions applicable to Central Excise

• Section 12 in the Central Excise Act, 1944

• The Central Government may, by notification in the Official Gazette, declare that any of the provisions of the 1[Customs Act, 1962 (52 of 1962)] relating to

• levy of and exemption

• drawback

• warehousing,

• offences and penalties,

• confiscation, and

• procedure relating to offences and appeals

• with such modifications and alterations as it may consider necessary or desirable to adapt them to the circumstances, be applicable in regard to like matters in respect of the duties imposed by section 3.

Customs provisions applicable to Central Excise

Sub-section (1) of Section 105 See slide 24

Section 110 See slide 25

Section 115 [excluding clauses (a) and (e) of sub-section (1)]

See slide 28

(clause (a) of Section 118, Sections 119, 120, 121

(See slide 28

Section 124 See slide 29

Clause (b) clause (c) of sub-section (1) of Section 142

see slide 33

Section 150 see slide 34

End session 4

customs act 1962

Law

india section

export goods

exported goods

specific goods

notified goods

goods liable

dutiable goods

e of subsection