Custom Manual - Mumbai Customs

1 For Departmental use onlyCUSTOMS MANUAL2012 Central Board of Excise & CustomsMinistry of FinanceDepartment of RevenueNew DelhiiiiPREFACEThis Customs Manual - 2012 has special significance since this year the Departmentcelebrates 50 years of the Customs Act, Manual is being issued to empower the Departmental officials by providingupdated information on recent legal changes and trade facilitation measures. One such legalchange is that of self assessment which was introduced vide Finance Act, 2011 as a paradigmshift in the mode of assessment of Customs duty by reposing trust on the importer / exporterto correctly declare the value, classification, description of goods, exemption notification self assess the duty, if assessment is supported by On Site Post Clearance Audit (OSPCA), again newlyintroduced in last year s Budget.

2 OSPCA is aimed at creating an environment of enhancedcompliance on the part of importers and exporters by providing for verification of thecorrectness of self assessment at their premises. Both self assessment and OSPCA wouldpave the way for greater trade facilitation and faster Customs clearance of import / trade facilitation measures include the Authorised Economic Operator (AEO)Programme whereby legally compliant and security cleared economic operators involved inthe global supply chain are given preferential treatment in terms of physical examination ofgoods and faster efforts have been made and due care has been taken to incorporate every importantarea of Customs functioning in this Manual . Of course, suggestions for further improvementwould be appreciated. I hope that this Customs Manual 2012 would be helpful in guidingDepartmental officials in the correct application of legal provisions and procedures.

3 ( Thakur)Member ( Customs ), CBEC2nd February, 2012 vCUSTOMS Manual (s)Chapter 1 Overview of Customs Functions1-81 Introduction12 Statutory provision for levy of Customs duty13 Control and regulatory provisions24 Role of Custodians35 Obligation of carriers46 Customs preventive control57 Customs clearance of cargo58 Smuggling and other violations and penal provisions69 Appellate remedies710 Passenger processing711 Import /Export by post/courier812 Citizen s Charter8 Chapter 2 Arrival of Conveyances and Related Procedures9-161 Introduction92 Conveyance to call only at notified Customs ports /airports93 Power to board conveyance, to question and to demand documents94 Delivery of Import Manifest95 Person filling the manifest t be registered96 Amendments of IGM127 Penal liability138 Exclusion form IGMs of items originally manifested139 Enclosures to Import General Manifest1410 Procedure for filing IGM at EDI Custom Houses1411 Filing of Stores List1512 Entry Inwards and unloading and loading of goods1513 Other liabilities of carriers15 Chapter 3 Procedure for Clearance of Imported and Export Goods17-371 Introduction172 Import procedure Bill of Entry173 Self-Assessment of imported and export goods19vi4 Examination of goods215 Execution of bonds226 Payment of duty237 Amendment of Bill of Entry238 Prior Entry Bill of Entry239 Bill of Entry for bond/ warehousing2410 Risk Management System2411 Risk

4 Management Division2512 National Risk Management (NRM)Committee2613 Local Risk Management (LRM) Committee2714 Accredited Clients Proqramme2715 Export procedure - Shipping Bill2916 Octroi certification for export goods2917 Waiver of GR form3018 Arrival of export goods at docks3019 Customs examination of export goods3020 Examination norms3021 Factory stuffing permission3322 Variation between Declaration and physical examination3423 Drawl of samples3424 Stuffing / loading of goods in containers3525 Amendments3526 Drawback claim3627 Generation of Shipping Bills3628 Export General Manifest3729 Electronic Declarations for Bills of Entry and Shipping Bills37 Chapter 4 Classification of Goods38-401 Introduction382 Methodology of classification38 Chapter 5 Classification /Assessment of Projects Import.

5 Baggage and41-44 Postal imports1 Introduction412 Project imports413 Registration of contracts424 Clearance of goods after registration435 Finalization of contract43vii6 Baggage447 Postal imports for personal use44 Chapter 6 Customs Valuation45-511 Introduction452 Tariff value453 Valuation of imported/export goods where no fixed454 Methods of valuation of imported goods465 Transaction value476 Valuation factors477 Cases where transaction value may be rejected498 Provisional clearance of imported goods509 Valuation of imported goods in case of transaction5010 Methods of valuation of export goods5011 Rights of appeal51 Chapter 7 Provisional Assessment52-531 Introduction522 Bond for provisional assessment523 Finalization of provisional assessment53 Chapter 8 Import/Export Restrictions and Prohibitions54-671 Introduction542 Legal provisions governing restrictions/prohibitions543 Prohibitions/restrictions under Foreign Trade Policy and other55 Allied Acts4 The Prevention of Food Adulteration Act, 1954 and Food Safety and55standards Authority Act, 20065 Labeling of the goods imported into India586 The Livestock Importation Act, 1898597 Destructive Insects & Pests Act, 1914, PFS Order,1989 and Plant59 Quarantine (Regulation of Import into India ) Order, 20038 Standards of Weights and Measures (Packaged Commodities)

6 61 Rule, 19779 Drugs and Cosmetics Act, 1940 and Drugs and Cosmetics61 Rules, 194510 Import of hazardous substances6211 Clearance of imported metal scrap6412 International Standards for Phytosanitary Measures (ISPM-1567viiiChapter 9 Warehousing68-841 Introduction682 Legal provisions683 Warehousing Stations684 Appointment of Public Warehouses695 Licensing of Private Warehouses706 Licences for storage of sensitive and non-sensitive goods717 Cancellation / suspension of licences for Private Bonded Warehouses718 Warehousing Bond729 Permission for deposit of goods in a warehouse7210 Period for which goods may remain warehoused7311 Extension of warehousing period7412 Interest for storage beyond permissible period7513 Waiver of interest7614 Control over warehoused goods7715 Payment of rent and warehouse charges7716 Owner s right to deal with warehoused goods7717)

7 Manufacture and other operations in a warehouse8018 Transfer of goods from one warehouse to another8119 Clearance of warehoused goods for home consumption8120 Clearance of warehoused goods for exportation8321 Allowance in case of volatile warehoused goods8322 Audit of Bonded Warehouses8323 Recovery of duty from bonded warehouses8424 Cancellation and return of warehousing bond84 Chapter 10 Transshipment of Cargo85-1031 Introduction852 Transshipment of imported containerized cargo from gateway port85to another port/ICD/CFS in India3 Duty free import of containers884 Transshipment of imported containerized cargo from gateway port to89a foreign port5 Transshipment form gateway port to SEZ916 Timely issuance of transshipment permit927 Automated movement of containerized cargo from gateway ports to92hinterland SMTPix8 Movement of export cargo from port/ICD/CFS to gateway port939 Movement of export cargo from one port to another by rail9410 Export of container cargo from ICDs/CFSs to Bangladesh and Nepal94through LCSs11 Transshipment of cargo by air9612 Bonded trucking facility9913 Carriage of domestic cargo on international flights10114 Movement of domestic courier bags on domestic segments of102international flightsChapter 11 Consolidation of Cargo104-1091 Introduction1042 Procedure for consolidation of import cargo1043 Procedure for consolidation of export cargo1054 International transshipment of LCL containers at Indian ports106 Chapter 12 Merchant Overtime Fee110-1111 Introduction1102 Levy of overtime fee1103 Procedure for posting of officers on overtime

8 Basis111 Chapter 13 Procedure for Less Charge Demand112-1151 Introduction1122 Legal provisions1123 Proper officer for the purposes of Sections 17 and 28 of the112 Customs Act, 19624 Adjudication proceedings113 Chapter 14 Customs Refunds1161 Introduction116-1212 Legal provisions1163 Relevant dates for submission of a refund application1164 Processing of refund claim1175 Unjust enrichment1186 Interest on delayed refund1187 Expeditious disposal of refund applications118 Chapter 15 Detention and Release/Storage of Imported/Export Goods122-1241 Introduction1222 Guidelines for expeditious Customs clearance/provisional release122xChapter 16 Import and Export through Courier125-1341 Introduction1252 Categories of goods allowed import through courier1253 Categories of goods allowed export through courier1264 Import and export of gems and jewellery1265 Procedure for clearance of import goods1266 Procedure for clearance of export goods1287 Examination

9 Norms for goods imported or exported by courier1288 CENVAT credit1299 Transshipment of goods12910 Disposal of uncleared goods12911 Registration of Authorized Courier13012 Obligation of Authorized Courier13013 Outsourcing/Sub-letting13114De -registration and forfeiture of security13215 Courier electronic clearance procedure132 Chapter 17 Import and Export through Post135-1421 Introduction1352 Legal provisions1353 Clearance of Letter Mail Articles1364 Importability of dutiable items through post1365 Import of gifts through post1366 Import of samples through post1377 Import of Indian and Foreign Currencies by post1378 Procedure in case of postal imports1389 Legal provisions and exemptions in case of postal exports14010 Procedure in case of postal exports14111 Procedure for claiming Drawback on exports through post14112 Drawback in respect of goods re-exported through post14213Re-export of partial consignment not allowed142 Chapter 18 Import of Samples143-1451 Introduction1432 Legal provisions1433 Machinery import1444 Failure to re-export144xi5 Import of samples under other scheme144 Chapter 19 Re-importation and Re-exportation of Goods146-1481 Introduction1462Re-importation of indigenously manufactured/imported goods1463Re-exportation of imported goods147 Chapter 20 Disposal of unclaimed/uncleared cargo149-1511 Introduction1492 Legal provisions1493 Procedure for sale of unclaimed/uncleared goods1494 Disposal of hazardous cargo1515 Compliance with restrictions/prohibitions under various laws1516 Mechanism for interaction between custodians and Customs151

10 Chapter 21 Intellectual Property Rights152-1541 Introduction1522 Legal provisions1523 Conditions for registration1534 Automation in monitoring imports involving IPR154 Chapter 22 Duty Drawback Scheme155-1581 Introduction1552 All Industry Rate (AIR) of Duty Drawback1553 Brand Rate of Duty Drawback1564 Section 74 Drawback1575 Supplementary claims of Duty Drawback1576 Procedure for claiming Duty Drawback1577 Limitations on admissibility of Duty Drawback158 Chapter 23 Export Promotion Schemes159-1701 Introduction1592 Advance Authorisation scheme1593 Duty Free Import Authorisation (DFIA)1614 Reward scheme - Served From India Scheme1615 Reward scheme - Vishesh Krishi and Gram Uduog Yojana162(VKGUY) or Special Agriculture and Village Industry Scheme6 Reward scheme - Focus Market Scheme (FMS)1637 Reward scheme - Focus Product Scheme (FPS)1648 Reward scheme-Market Linked Focus Products Scrip (MLFPS)164xii9 Reward scheme-Status Holders Incentive Scrip (SHIS)16410 Expired/abolished Export Promotion scheme16511 Special provision16612 Export Promotion Capital Goods (EPCG)16713 General provisions of Export Promotion schemes169 Chapter 24 Special Economic Zones171-1781 Introduction1712 Board of Approvals1723 Unit Approval Committee1724 Establishment of SEZs1735 Setting up of SEZ unit1736 Monitoring of activities of SEZ units1747 Net Foreign Exchange Earnings1748 Import and Procurement1749 Export17410 Sub-contracting17511 Sub-contracting for Domestic Tariff Area unit for ex