The CBEC, In exercise of the powers conferred by clause (d) of section 157, read with clause (ii) of sub-section (2) of section 158, of the Customs Act, 1962 (52 of 1962) made the ‘On-site Post Clearance Audit at the Premises of Importers and Exporters Regulations, 2011’ which came into effect from 04th October, 2011. Regulation 3 provides obligations on the part of the importers and exporters to make available relevant documents as required by the Superintendent or appraiser. Regulation 4 provides the procedure for conducting the audit by the Superintendent or appraiser. Regulation 5 provides for penalty who contravenes the provisions of these regulations or abets such contravention or fails to comply with any of these provisions. The penalty is up to ? 50,000/-.
Now the CBEC, in exercise of the powers conferred by clause (k) of section 157, read with section 99Aand clause (ii) of sub-section (2) of section 158, of the Customs Act, 1962 (52 of 1962) and in supersession of the On-site Post Clearance Audit at the Premises of Importers and Exporters Regulation, 2011, except as respect things done or omitted to be done before such supersession, made the Customs Audit Regulations, 2018.which came into effect from 24th May, 2018.
Section 99A of the Customs Act (inserted vide Finance Act, 2018) provides that The proper officer may carry out the audit of assessment of imported goods or export goods or of an auditee under this Act either in his office or in the premises of the auditee in such manner as may be prescribed.
Regulation 2(b) defines the term ‘audit’ as including examination or verification of declaration, record, entry, document, import or export licence, authorization, scrip, certificate, permission etc., books of account, test or analysis reports, and any other document relating to imported goods or export goods or dutiable goods, and may include inspection of sample and goods, if such sample or goods are available and where necessary, drawl of samples.
Regulation 2(c) defines the term ‘auditee’ as a person who is subject to an audit under section 99A of the Act and includes an importer or exporter or custodian approved under section 45 or licensee of a warehouse and any other person concerned directly or indirectly in clearing, forwarding, stocking, carrying, selling or purchasing of imported goods or export goods or dutiable goods.
Regulation 2(g) defines the term ‘premises’ as including the registered office, branch office, warehouse, factory, or any other premises at which, imported goods or export goods or dutiable goods or books of account or records of transaction or other related documents, in relation to the said goods are ordinarily kept, for any purpose by an auditee.
Conduct of audit
The following is the procedure for the conduct of audit under these regulations-
The selection of auditee or the selection of import declarations or export declarations, as the case may be, for the purposes of audit shall primarily be based on risk evaluation through appropriate selectivity criteria. The proper officer may conduct audit either in his office or in certain cases at the premises of an auditee.
The proper officer shall give not less than fifteen days advance notice to the auditee to conduct audit at the premises of the auditee.
The proper officer may, where considered necessary, inspect the imported goods or export goods or dutiable goods at the premises of the auditee or request the auditee to produce sample, if available, with him.
The auditee shall preserve and on request by the proper officer make available in a timely manner, for the purposes of audit, true and correct information, records including electronic records, documents or accounts maintained in compliance of the provisions of the Act, rule or regulations, made there under or any other law for the time being in force, maintained for a minimum period of five years in relation to imported goods or export goods or dutiable goods.
The auditee shall render assistance to the proper officer and his team of officers in the discharge of their official duty and shall in no case refuse or obstruct the proper officer or his team of officers in discharge of their official duty.
The proper officer may, where considered necessary, inspect the imported goods or export goods or dutiable goods at the premises of the auditee or request the auditee to produce sample, if available, with him. If the proper officer, having regard to the nature and complexity of the audit, is of the opinion that the audit has to be done with the assistance of a professional like Chartered Accountant, Cost Accountant, an expert in the field of computer sciences or information technology etc., may do so, with the previous approval of the Principal Commissioner/Commissioner of Customs.
The proper officer shall inform the auditee of the objections, if any, before preparing the audit report to provide him an opportunity to offer clarifications with supporting documents.
Where the proper office has asked the auditee to furnish information, document, record or sample for the purposes of audit, it shall be mandatory for the proper officer to inform outcome of such audit to the auditee.
Where the auditee is in agreement with the audit findings, he may make voluntary payments of duty, interest or other sums, due, if any, in part or in full and the proper officer shall record the same in the audit report.
The proper officer shall complete audit in cases where it is conducted at the premises of the auditee within thirty days from the date of starting of the audit. The jurisdictional Commissioner of Customs may extend the period of completion of audit from thirty days to sixty days, by an order in writing. Penalty
Regulation 7 provides that any auditee, who contravenes any provision of these regulations or abets such contravention or fails to comply with any provision of these regulations with which it was his duty to comply, shall be liable to a penalty which may extend to fifty thousand Indian rupees.