Question

List five important sections of the custom act that your importer should be aware and to be diligent

Answer 1

The LEARNING OBJECTIVES of Custom Act
The Custom duty derived its value from the word
―custom‖ under which whenever a merchant entered
a Kingdom with his merchandise, he had to give
some gift to the king. Subsequently, this custom
formalized into the levy of custom duty or tax on
goods imported into and exported from the country
was organized through various laws during the
British period. After Independence the Sea Customs
Act 1878, the Land Customs Act, 1924 and other
allied enactments were repealed by a consolidating
and amending legislation entitled the Customs Act,
1962. Similarly the Indian Customs Act, 1934 was
repealed by the Customs Tariff Act, 1975(CTA).
At the end of this lesson, the students will
 Have the understanding of the basic
and practical aspects of customs law
 Be able to value the imported and
export goods for payment of duty
 Understand clearance procedures
involved in importation and exportation
of goods
As per the Customs Act, 1962 the Central Board of Excise and Customs (the Board) has been given the powers to
appoint Customs Ports, Airports and Inland Container Depots (ICD), where the imported goods can be brought in for
unloading or loading of export goods. Similarly, powers have been given to the Board to notify places as Land  Customs Stations (LCS) for clearance of goods imported or exported by land or by inland water.

Custom Duty is an indirect tax, imposed under the Customs Act formulated in 1962. The power to enact the
law is provided under the Constitution of India under the Article 265, which states that ―no tax shall be levied
or collected except by authority of law‖. Entry No. 83 of List I to Schedule VII of the Constitution empowers
the Union Government to legislate and collect duties on import and exports. The Customs Act, 1962 is the
basic statute which governs entry or exit of different categories of vessels, aircrafts, goods, passengers etc.,
into or outside the country. The Act extends to the whole of the India.
Customs Act, 1962 just like any other tax law is primarily for the levy and collection of duties but at the same
time it has the other and equally important purposes such as:
(i) regulation of imports and exports;
(ii) protection of domestic industry;
(iii) prevention of smuggling;
(iv) conservation and augmentation of foreign exchange and so on.
Section 12 of the Custom Act provides that duties of customs shall be levied at such rates as may be
specified under the Customs Tariff Act, 1975 or other applicable Acts on goods imported into or exported from india.

CHAPTER VII

CLEARANCE OF IMPORTED GOODS AND EXPORT GOODS

Section 44. Chapter not to apply to baggage and postal articles.

Clearance of imported goods

SECTIONS

45. Restrictions on custody and removal of imported goods.

46. Entry of goods on importation.

47. Clearance of goods for home consumption.

48. Procedure in case of goods not cleared, warehoused, or transhipped within thirty days after

unloading.

49. Storage of imported goods in warehouse pending clearance.

Clearance of export goods

50. Entry of goods for exportation.

51. Clearance of goods for exportation

Illustrations of sections

CHAPTER VII

CLEARANCE OF IMPORTED GOODS AND EXPORT GOODS

44. Chapter not to apply to baggage and postal articles.—The provisions of this Chapter shall not

apply to (a) baggage, and (b) goods imported or to be exported by post.

Clearance of Imported goods

45. Restrictions on custody and removal of imported goods.—(1) Save as otherwise provided in

any law for the time being in force, all imported goods unloaded in a customs area shall remain in the

custody of such person as may be approved by the 2

[Principal Commissioner of Customs or

Commissioner of Customs] until they are cleared for home consumption or are warehoused or are

transhipped in accordance with the provisions of Chapter VIII.

(2) The person having custody of any imported goods in a customs area, whether under the provisions

of sub-section (1) or under any law for the time being in force,—

(a) shall keep a record of such goods and send a copy thereof to the proper officer;

(b) shall not permit such goods to be removed from the customs area or otherwise dealt with,

except under and in accordance with the permission in writing of the proper officer 1

[or in such

manner as may be prescribed].

2

[(3) Notwithstanding anything contained in any law for the time being in force, if any imported

goods are pilferred after unloading thereof in a customs area while in the custody of a person referred to

in sub-section (1), that person shall be liable to pay duty on such goods at the rate prevailing on the date

of delivery of an 3

[arrival manifest or import manifest] or, as the case may be, an import report to the

proper officer under section 30 for the arrival of the conveyance in which the said goods were carried.]

46. Entry of goods on importation.—(1) The importer of any goods, other than goods intended for

transit or transhipment, shall make entry thereof by presenting

4

[electronically] 5

[on the customs

automated system] to the proper officer a bill of entry for home consumption or warehousing 6

[in such

form and manner as may be prescribed]:

7

[Provided that the 8

[Principal Commissioner of Customs or Commissioner of Customs] may, in cases

cases where it is not feasible to make entry by presenting electronically 5

[on the customs automated

system], allow an entry to be presented in any other manner:

Provided further that] if the importer makes and subscribes to a declaration before the proper officer,

to the effect that he is unable for want of full information to furnish all the particulars of the goods

required under this sub-section, the proper officer may, pending the production of such information,

permit him, previous to the entry thereof (a) to examine the goods in the presence of an officer of

customs, or (b) to deposit the goods in a public warehouse appointed under section 57 without

warehousing the same.

(2) Save as otherwise permitted by the proper officer, a bill of entry shall include all the goods

mentioned in the bill of lading or other receipt given by the carrier to the consignor.

9

[(3) 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:

Provided that a bill of entry may be presented 10[at any time not exceeding thirty days prior to] the

expected arrival of the aircraft or vessel or vehicle by which the goods have been shipped for importation

into India:

Provided further that 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 late presentation of the bill of entry as may be prescribed.]

(4) The importer while presenting a bill of entry shall 11*** make and subscribe to a declaration as to

the truth of the contents of such bill of entry and shall, in support of such declaration, produce to the proper officer the invoice, if any, 1

[and such other documents relating to the imported goods as may be

prescribed].

2

[(4A) The importer who presents a bill of entry shall ensure the following, namely:—

(a) the accuracy and completeness of the information given therein;

(b) the authenticity and validity of any document supporting it; and

(c) compliance with the restriction or prohibition, if any, relating to the goods under this Act or

under any other law for the time being in force.]

(5) If the proper officer is satisfied that the interests of revenue are not prejudicially affected and that

there was no fraudulent intention, he may permit substitution of a bill of entry for home consumption for

a bill of entry for warehousing or vice versa.

47. Clearance of goods for home consumption.—3

[(1)] Where the proper officer is satisfied that

any goods entered for home consumption are not prohibited goods and the importer has paid the import

duty, if any, assessed thereon and any charges payable under this Act in respect of the same, the proper

officer may make an order permitting clearance of the goods for home consumption:

4

[

5

[Provided that such order may also be made electronically through the customs automated system

system on the basis or risk evaluation through appropriate selection criteria:

Provided further that] the Central Government may, by notification in the Official Gazette, permit

certain class of importers to make deferred payment of said duty or any charges in such manner as may be

provided by rules.]

6

[(2)

7

[The importer shall pay the import duty—

(a) on the date of presentation of the bill of entry in the case of self assessment; or

(b) 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

(c) 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 ten per cent. but not exceeding thirty-six

per cent. per annum, as may be fixed by the Central Government, by notification in the Official Gazette.]

8

[Provided that the Central Government may, by notification in the Official Gazette, specify the class

or classes of importers who shall pay such duty electronically.

Provided further that] where the bill of entry is returned for payment of duty before the

commencement of the Customs (Amendment) Act, 1991 (55 of 1991) and the importer has not paid such

duty before such commencement, the date of return of such bill of entry to him shall be deemed to be the

date of such commencement for the purpose of this section:]

1

[

2

[Provided also that] if the Board is satisfied that it is necessary in the public interest so to do, it

may, by order for reasons to be recorded, waive the whole or part of any interest payable under this

section.]

48. Procedure in case of goods not cleared, warehoused, or transhipped within 3

[thirty days]

after unloading.—If any goods brought into India from a place outside India are not cleared for home

consumption or warehoused or transhipped 4

[within 5

[thirty days]] from the date of the unloading thereof

thereof at a customs station or within such further time as the proper officer may allow or if the title to

any imported goods is relinquished, such goods may, after notice to the importer and with the permission

of the proper officer be sold by the person having the custody thereof:

Provided that —

(a) animals, perishable goods and hazardous goods, may, with the permission of the proper

officer, be sold at any time;

(b) arms and ammunition may be sold at such time and place and in such manner as the Central

Government may direct.

Explanation.— In this section, ―arms‖ and ―ammunition‖ have the meanings respectively assigned to

them in the Arms Act, 1959 (54 of 1959).

6

[49. Storage of imported goods in warehouse pending clearance or removal.—Where,––

(a) in the case of any imported goods, 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;

(b) 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 or removal, as the case may be, be permitted to be stored in a public

warehouse for a period not exceeding thirty days:

Provided that the provisions of Chapter IX shall not apply to goods permitted to be stored in a public warehouse under this section.

Provided further that the Principal Commissioner of Customs or Commissioner of Customs may

extend the period of storage for a further period not exceeding thirty days at a time.]

Clearance of export goods

50. Entry of goods for exportation.—(1) The exporter of any goods shall make entry thereof by

presenting 1

[electronically] 2

[on the customs automated system] to the proper officer in the case of goods

to be exported in a vessel or aircraft, a shipping bill, and in the case of goods to be exported by land, a bill

of export 3

[in such form and manner as may be prescribed].

1

[Provided that the 4

[Principal Commissioner of Customs or Commissioner of Customs] may, in cases

cases where it is not feasible to make entry by presenting electronically 2

[on the customs automated

system] , allow an entry to be presented in any other manner.]

(2) The exporter of any goods, while presenting a shipping bill or bill of export, shall 5

*** make and

subscribe to a declaration as to the truth of its contents.

2

[(3) The exporter who presents a shipping bill or bill of export under this section shall ensure the

following, namely:—

(a) the accuracy and completeness of the information given therein;

(b) the authenticity and validity of any document supporting it; and

(c) compliance with the restriction or prohibition, if any, relating to the goods under this Act or

under any other law for the time being in force.]

51. Clearance of goods for exportation.—6

[(1)] Where the proper officer is satisfied that any goods

goods entered for export are not prohibited goods and the exporter has paid the duty, if any, assessed

thereon and any charges payable under this Act in respect of the same, the proper officer may make an

order permitting clearance and loading of the goods for exportation:

7

[

8

[Provided that such order may also be made electronically through the customs automated system

system on the basis of risk evaluation through appropriate selection criteria:

Provided further that] the Central Government may, by notification in the Official Gazette, permit

certain class of exporters to make deferred payment of said duty or any charges in such manner as may be

provided by rules.]

7

[(2) Where the exporter fails to pay the export duty, either in full or in part, under the proviso to

sub-section (1) by such due date as may be specified by rules, he shall pay interest on said duty not paid or short-paid till the date of its payment at such rate, not below five per cent and not exceeding thirty-six

per cent per annum, as may be fixed by the Central Government, by notification in the Official Gazette.]