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Customs and Excise »
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Budgetary Changes In Customs
February, 03rd 2017

Changes are more in Customs Act by Finance Bill, 2017 than in Central Excise and Service Tax.  The changes meant for customs are discussed in this article.

Changes in Section 2 – definitions

Clause 88 (a) of the Bill seeks to insert a new definition namely ‘beneficial owner’ by a new Section 2(3A).  The ‘beneficial owner’ means any person on whose behalf the goods are being imported or exported or who exercises effective control over the goods being imported or exported.

Clause 88 (b) of the Bill seeks to make changes in Section 2(13).  Section 2(13) defines ‘Customs Station’ as any customs port, customs airport or land customs station.  Clause 88(b) seeks to substitute the words ‘Customs airport, international courier terminal, foreign post office’ for the words ‘customs airport’.

Section 2(16) defines the term ‘entry’ in relation to goods as an entry made in a bill of entry, shipping bill or bill of export and includes in the case of goods imported or to be exported by post, the entry referred to in section 82 or the entry made under the regulations made under section 84.    Clause 88(c) of the Bill proposes to omit the words ‘in the case of goods imported or to be exported by post, the entry referred to in Section 82 or’.

Section 2(20) defines the term ‘exporter’ in relation to any goods at any time between their entry for export and the time when they are exported, includes any owner or any person holding himself out to be the exporter.  Clause 88 (d) of the Bill seeks to substitute the words ‘any owner, beneficial owner’ for the words ‘any owner’.

Clause 88 (e) seeks to insert a new sub clause (20A).  The new Section 2(20A) defines the term ‘foreign post office’ as any post office appointed under Section 7(1) to be a foreign post office.

Section 2(26) defines the term ‘importer’ in  relation to any goods at any time between their importation and the time when they are cleared for home consumption, includes any owner or any person holding himself out to be the importer.  Clause 88 (f) seeks to substitute the words ‘any owner, beneficial owner’ for the words ‘any owner’.

Clause 88 (f) seeks to insert a new sub-clause (28A).  The new Section 2(28A) defines the term ‘international courier terminal’ as any place appointed under Section 7 (1) to be an international courier terminal.

Clause 88(g) seeks to insert a new Section 2(30B) which defines ‘passenger name record information’ as the records prepared by the operator of any aircraft or vessel or vehicles or his authorized agent for each journey booked by or on behalf of any passenger.

Section 7(1) – Appointment of customs airports, airports etc.,

Clause 89 of the Bill proposes to insert 7(1) (e)  and (f) which read as follows-

Section 7(1)(e) – the post offices which alone shall be foreign post offices for the clearance of imported goods or export goods or any class of such goods;

Section 7(1) (f) – the places which alone shall be international courier terminals for the clearance of imported goods or export goods or any class of such goods.

Assessment of duty – Section 17

Clause 90 seeks to substitute the following section for existing Section 17(3) –

Section 17(3) – For verification of self assessment under Sub section (2), the proper officer may require the importer, exporter or any other person to produce any document or information, whereby the duty leviable on the imported goods or export goods, as the case may be, can be ascertained and thereupon, the importer, exporter or such other person shall produce such document or furnish such information.

Claim for refund of duty – Section 27

Clause 91 seeks to insert a new sub clause (g) after Section 27 (2) (f).  The new sub clause provides that the duty paid in excess by the importer before an order permitting clearance of goods for home consumption is made where-

  • such excess payment of duty is evident from the bill of entry in the case of self assessed bill of entry; or
  • the duty actually payable is reflected in the reassessment bill of entry in the case of reassessment.

Advance Ruling

Chapter VB of the Customs Act deals with the advance ruling.  Section 28E provides the definition for various terms.  Clause 92 of the Bill seeks to substitute Section 28E (e).  Accordingly the ‘Authority’ is defined as the Authority for Advance Rulings constituted under Section 245-O of the Income Tax Act, 1961.

Section 28F deals with the Authority for Advance Rulings.  Clause 93 seeks to replace the existing Section 28F by a new one.  The newly substituted Section 28F (1) provides that subject to the provisions of this Act, the Authority for Advance Ruling constituted under Section 245-O of the Income Tax Act, 1961 shall be the Authority for giving advance rulings for the purpose of this Act and the said Authority shall exercise the jurisdiction, powers and authority conferred on it by or under this Act.  The Member from the Indian Revenue Service (Customs and Central Excise), who is qualified to be a Member of the Board, shall be the revenue Member of the Authority for the purposes of the Act.

Section 28F(2) provides that on and from the date on which the Finance Bill, 2017 receives the assent of the President, every application and proceeding pending before the erstwhile Authority for Advance Rulings (Central Excise, Customs and Service Tax) shall stand transferred to the Authority from the stage at which such application or proceeding stood as on the date of such assent.

Section 28G of the Act provides that no proceeding before, or pronouncement of advance ruling by, the Authority under this Chapter shall be questioned or shall be invalid on the ground merely of the existence of any vacancy or defect in the constitution of the Authority.  Clause 94 seeks to omit Section 28G.

Section 28H (3) of the Act provides that the application shall be made in quadruplicate and be accompanied by a fee of two thousand five hundred rupees.  Clause 95 of the Bill seeks to raise the fees to 10,000/- instead of 2,500/-.

Section 28-I (6) of the Act provides the Authority shall pronounce its advance ruling in writing within ninety days of the receipt of application.  Clause 96 of the Bill seeks to increase the time limit to pronounce its ruling by six months instead of 90 days.

Section 30  - Delivery of import manifest or import report

Clause 97 seeks to insert Section 30A after Secion 30.  The new Section 30A(1) provides that the person in charge of a conveyance that enters India from any place outside India or any other person as may be specified by the Central Government by notification in the Official Gazette, shall deliver to the proper officer-

  • the passenger and crew arrival manifest before arrival in the case of an aircraft or a vessel and upon arrival in the case of a vehicle; and
  • the passenger name record information of arriving passengers

in such form, containing such particulars, in such manner and within such time, as may be prescribed.

Section 30A (2) provides that where the passenger and crew arrival manifest or the passenger name record information or any part thereof is not delivered to the proper officer within the prescribed time and if the proper officer is satisfied that there was no sufficient cause for such delay, the person-in-charge or the other person referred in sub section (1) shall be liable to pay such penalty, not exceeding 50,000/-, as may be prescribed.

Passenger and crew departure manifest and passenger name record information

Clause 98 seeks to insert Section 41A.  Section 41(1) provides that the person-in-charge of a conveyance that departs from India to a place outside India or any other person as may be specified by the Central Government by notification in the Official Gazette, shall deliver to the proper officer-

  • the passenger and crew departure manifest; and
  • the passenger name record information of departing passengers,

in such form, containing such particulars, in such manner and within such time, as may be prescribed.

Section 41A (2) provides that where the passenger and crew departure manifest or the passenger name record information or any part thereof is not delivered to the proper officer within the prescribed time and if the proper officer is satisfied that there was no sufficient cause for such delay, the person-in-charge or the other person referred to in sub-section (1) shall be liable to such penalty, not exceeding 50,000/- as may be prescribed.

Entry of goods on importation – Section 46

Section 46 of the Act deals with the entry of goods on importation.  Clause 99 of the Bill seeks to substitute the existing Section 46(3).  The new Section 46(3) provides that the importer shall present the bill of entry under sub-section (1) before the end of the next day following the day (excluding holidays) on which the aircraft or vessel or vehicle carrying the goods arrives at a customs station at which such goods are to be cleared for home consumption or warehousing.  A bill of entry may be presented within 30 days of the expected arrival of the aircraft or vessel or vehicle by which the goods have been shipped for importation into India.  Where the bill of entry is not presented within the time so specified and the proper officer is satisfied that there was no sufficient cause for such delay, the importer shall pay such charges for the late presentation of the bill of entry as may be prescribed.

Clearance of goods for home consumption – Section 47

Clause 100 of the Bill seeks to substitute Section 47(2) by the new section.  The newly substituted Section 47(2) provides that importer shall pay the import duty-

  • on the date of presentation of the bill of entry in the case of self assessment; or
  • within one day (excluding holidays) from the date on which the bill of entry is returned to him by the proper officer for payment of duty in the case of assessment, reassessment or provisional assessment; or
  • in the case of deferred payment under the proviso to sub-section (1) from such due date as may be specified by rules made in this behalf

and if he fails to pay the duty within the time  so specified, he shall pay interest on the duty not paid or short paid till the date of its payment, at such rate, not less than 10%, but not exceeding 36% per annum, as may be fixed by the Central Government, by notification in the Official Gazette.

Storage of imported goods in ware house pending clearance of removal – Section 49

Clause 101 of the Bill seeks to substitute Section 49 for the new section.  The new Section 49 provides that where-

  • in the case of any importedgoods, 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;
  • in the case of any imported dutiable goods, entered for warehousing, the Assistant Commissioner of Customs or Deputy Commissioner of Customs is satisfied on the application of the importer that the goods cannot be removed for deposit in a warehouse within a reasonable time,

the goods may pending clearance of removal, as the case may be, be permitted to be stored in a public warehouse for a period not exceeding 30 days.   The provisions of this Chapter IX shall not apply to goods permitted to be stored in a public warehouse under this section.  The Principal Commissioner of Customs or Commissioner of Customs may extend the period of storage for a further period not exceeding 30 days at a time.

Clearance of warehouse goods for exportation – Section 69

Clause 102 of the Bill seeks to substitute Section 69(1)(a)   by the new one which provides that a shipping bill or a bill of export or the form as prescribed under Section 84 has been presented in respect of such goods.

Omission of Section 82

Section 82 provides that in the case of goods imported or exported by post, any label or declaration accompanying the goods, which contains the description, quantity and value thereof, shall be deemed to be an entry for import or export, as the case may be, for the purposes of this Act.  Clause 103 seeks to omit this Section.

Regulation regarding goods imported or to be exported by post – Section 84

Clause 104 seeks to substitute the existing Section 84 (a) by the new one which is as follows-

Section 84(a) the form and manner in which an entry may be made in respect of goods imported to be exported by post.

Changes in procedure of Settlement of Cases

Clause 105 seeks to insert a new sub section (5)  in Section 127B.   The said new section 127 B (5) provides that any person, other than an application referred to in sub-section (1) may also make an application to the Settlement Commission in respect of a show cause notice issued to him in a case relating to the applicant which has been settled or is pending before the Settlement Commission and such notice is pending before an adjudicating authority, in such manner and subject to such conditions, as may be specified by the rules.

Section 127C provides the procedure on receipt of application under Section 127B.  Clause 106(i) of the Bill seeks to substitute the words ‘Commissioner of Customs or Principal Additional Director General of Revnue Intelligence or Additional Director General of Revenue Intelligence, as the case may be, having jurisdiction and such Commissioner or Additional Director General’ for the words ‘Commissioner of Customs having jurisdiction and the Commissioner’.

Clause 106(ii) seeks to insert sub section (5A) in Section 127C.  This section provides that the Settlement Commissioner may, at any time within 3 months from the date of passing of the order under sub-section (5), may amend such order to rectify any error apparent on the face of record, either suo-motu or when such error is brought to its notice by its jurisdictional Principal Commissioner of Customs or Commissioner of Customs or Principal Additional Director General of Revenue Intelligence or Additional Director General of Revenue Intelligence or the applicant.  No amendment which has the effect of enhancing the liability of the applicant shall be made under this sub-section, unless the Settlement Commission has given notice of such intention to the applicant and the jurisdictional Principal Commissioner of Customs or Commissioner of Customs or Principal Additional Director General of Revenue Intelligence or Additional Director General of Revenue Intelligence, as the case may be, and has given them a reasonable opportunity of being heard.

General Powers to make rules

Clause 107 of the Bill seeks to insert clause (ab) after Section 157(2)(aa) which reads as follows –

(ab) the form, the particulars, the manner and the time of delivering the passenger and crew manifest for arrival and departure and passenger name record information and the penalty for delay in delivering such information under Sections 30A and 41A.

 
 
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