Issues relating to shipment and goods under Customs Act with special Reference to Territorial waters
PROJECT REPORTSubmitted in partial fulfillment of theRequirements for the degree ofLLB 3 YEARSTo theAMITY UNIVERSITYByNAME: ANUJ RANAENROLMENT NO. : A3256113123CLASS: SEMESTER 5TOMr. ALOK VERMAAMITY LAW SCHOOLAMITY UNIVERSITYNOIDA2015
I owe a great many thanks to great many people who helped me and supported me during the making of this project.
My deepest thanks to my lecturer Mr. Alok Verma , the guide of the project for guiding and correcting various documents of mine with attention and care. He has taken pain to go through the project and make necessary corrections as and when needed.
I express my thanks to the director of Amity Law School, Major Gen N Kumar for extending his support.I would also like to thank my institution and my faculty members without whom this project would have been a distant reality.
1.Indian Customs are assigned a number of tasks more important of which are:-i) collection of customs duties on imports and exports as per basic Customs laws ( Customs Act , 1962 and Customs Tariff Act, 1975);ii) enforcement of the various provisions of the Customs Act governing imports and exports ofcargo, baggage, postal articles and arrival & departure of vessels, air crafts etc.;iii) discharge of various agencyfunctions and enforcing various prohibitions andrestrictions on imports and exports under Customs Act and other allied enactments;iv) prevention of smuggling including interdiction of narcotics drug trafficking; andv)International passenger processing.2.The Constitutional provisions have given to Union the right to legislate and collect duties on imports and exports as per the entry at Sl.No.83 of list 1 to Schedule VII of our Constitution. The Customs Act, 1962 is the basic Statute, effective from 1.2.1963 which empowers, underSection 12, duties to be levied on goodsimported into or exported from India. The categories ofitems and the rates of duties which are leviable have beenspecified in two schedules to the Customs Tariff Act, 1975. The first Schedule to the said Act specifies the various categories ofimport items in a systematic andwell considered manner, in accordancewith an international scheme of classification of internationally traded goods termed harmonized system ofcommodity classification. Different rates ofduties are prescribed by thelegislature on different commodities/group of commodities mentioned in the first Schedule. Theduties are levied bothon specific and ad-valorem basis, while thereare few cases whereat times specific-cum-ad valorem duties are also collectedon imported items. Second Schedule toCustoms Tariff Act, 1975incorporates items subject to exports duties and rates thereof.3.Where ad-valorem duties (i.e., duties with reference tovalue) are collected, which are the predominant mode of levy, the value of the goods has to be determined for customs duty purposes as per provisions laid down under Section 14 ofthe Customs Act and the Customs Valuation (determination of prices of imports goods) Rules,1988 issued there under.These provisions are essentially adoption of GATTbased valuation system andfollowed internationally(now termed WTO Valuation Agreement) and were incorporated in our law in 1988. The importeras well as the assessing officer has to carefully study and applythese provisions so that the duties as due after proper valuation as per law getdischarged before the goods get out ofcustoms control.Control and regulatory provisions under Customs ActTo handle growing international traffic properly andeffectively and to make it administratively possible that all the cargo/goods/passengers etc., imported/coming into India orexported/going out of the country by sea, air, land or railroutes are checked by the Customs (forensuring that they arecomplying with all the related laws beforeentry/exit into/from India)unrestricted freedom of access into the country or exit out of the country isnot permitted. In tune with international practice the entry/exit of carriers/passengers etc., is therefore regulated inthis county by law and the Customs Act, 1962 is thebasic statute which governs/regulates this entry/exit of different categories of vessels/crafts/goods/passengers etc., into or outside the country.5.Under the Customs Act, Government is given the powers to appoint Customs ports and airports where alone the imported goods can be brought infor unloading or export goods loaded on ships or air crafts. Similar powers have been given to the Government to notify theplaces which alone shall be the Land Customs Stations for clearance of imported goods or goodsto be exported by land or by inland water. Even the routesof passage by land and inland water into orout of the country can beregulated and these provisions have been made use ofspecially forregulating traffic for our neighboring countries like Nepal.6.Suitable powers have also been vested to further approve at aCustoms port/airport, specific places where only loading and unloading can take place asalso specify the limits ofcustoms area (which essentially is thearea of aCustoms Port/Airport/Land Customs Station)where the imported goods or the export goods areordinarily kept before clearance by the Customs authorities.7.Role of CustodiansBoth in regard to sea cargo as well asair imports, the Customs authorize and appoint "custodians" and all imported goods unloaded in a Customs area remains intheir custody & till these are cleared for home consumption, or are warehoused or transshipped asprovided in the law. With the growth ofcontainerized traffic the facility of customs clearances at theinteriorcenters in the country has been provided byopening various Inland Container Depots (ICDs)which act like Dry Ports. The goods also move to theseinternal Dry ports where they remain with the appointed custodian till these are customs cleared. The custodian after taking over the goods from the carrier, arranges its proper storage and safety and allows clearance to the importers only after they fulfill all the customsformalities, pay up requisite duties andother charges/fees and discharge various other obligations before their goods are allowed entry into the country and the customs have given clear permission for clearance out of customs area.8.Various port trusts and other authorities in the public and private sectors handle the import and export cargowhen kept in their custody at various ports, international airports/ICDs. The cargo handling and custody at the international airports is generallyentrusted to International airport authority of India. A number of cargo complexes have been set upat most international airports with appropriate storage facilities for imported cargo pendingcustoms clearance. New ICDs are being opened at various industrial centers as a facilitation measure, as per detailed guidelines laid down by the Government, and Customs Cargo clearances both for imported and export cargo, from interior centers has expanded substantially in recent years.9.Maximum import and export cargo is handled at different sea ports; increasing part ofimport cargo from some ports like Nhava Sheva also moves by transhipments to interior ICDs forfinal clearance by various importers almost at their door steps. In the ports which have vast Dock area and which are appropriately walled, security arrangements are provided to ensure that thereis no pilferage/theft or carrying away of the cargowithout proper customs clearance. Requisite arrangements of loading and unloading of cargo at different berths in various docks, theirmovement to different places including container yards/storage godownsetc., are arranged by the port authorities. They deploy a large work force and different & modern material handling equipments for movement of cargo which now is increasingly becoming containerized. As per the provisions of the Customs Act, the custodians are under obligation to ensure safe custody of the goods till delivery and in fact for unaccounted imported cargo duties are also recoverable by Customs from the custodians.10.The customs authorities are givenappropriate office place and requisite facilities in the dock area aswell as international cargo complexes/ICDs etc., to discharge their functionsin relation to imports and exportssuch as supervision onloading/unloading from vessels/crafts etc., supervisions on stuffing or de-stuffing ofcontainers, inspection and suitable examination of the goods which areimported/presented for exportation before customs clearance formalities etc.
1.2Procedure for Clearance of Imported and Export GoodsI. Import:Bill of Entry Cargo Declaration:Goods imported in a vessel/aircraft attract customs duty and unless these are not meant for customs clearance at the port/airport of arrival by particular vessel/aircraft and are intended for transit by the same vessel/aircraft or transshipment to another customs station or to any place outside India, detailed customs clearance formalities of the landed goods have to be followed by the importers. In regard to the transit goods, so long as these are mentioned in import report/IGM for transit to any place outside India, Customs allows transit without payment of duty. Similarly for goods brought in by particular vessel/aircraft for transshipment to another customs station detailed customs clearance formalities at the port/airport of landing are not prescribed and simple transshipment procedure has to be followed by the carrier and the concerned agencies. The customs clearance formalities have to be complied with by the importer after arrival of the goods at the other customs station. There could also be cases of transshipment of the goods after unloading to a port outside India. Here also simpler procedure for transshipment h