GLOSSARY (ACRONYMS)

ACC :Assistant Commissioner of CustomACU :Asian Clearing UnionAEZ :Agri Export ZoneANF :Aayaat Niryaat FormARO :Advance Release OrderBG :Bank GuaranteeBOA :Board of ApprovalBOT :Board of TradeBRC :Bank Realization CertificateBTP :Bio Technology ParkCBEC :Central Board of Excise and CustomCCP :Custom Clearance PermitCEA :Central Excise AuthorityCEC :Chartered Engineer CertificateCIF :Cost Insurance & FreightCOD :Cash on DeliveryCoO :Certificate of OriginCVD :Countervailing DutyDA :Document against AcceptanceDoBT :Department of Bio TechnologyDC :Development CommissionerDEPB :Duty Entitlement Pass Book SchemeDFRC :Duty Free Replenishment CertificateDGFT :Director General of Foreign TradeDoC :Department of CommerceDoE :Department of ElectronicsDoIT :Department of Information TechnologyDoR :Department of RevenueDoT :Department of TourismDTA :Domestic Tariff AreaEDI :Electronic Data InterchangeEFT :Electronic Fund TransferEH :Export HouseEHIP :Electronic Hardware Technology ParkEIC :Export Inspection CouncilEO :Export ObligationEOU :Export Oriented UnitEPC :Export Promotion Council

EPCG :Export Promotion Capital GoodsFDI :Foreign Direct InvestmentFIEO :Federation of Indian Export OrganisationFIRC :Foreign Exchange Inward Remittance CertificateFOB :Free of BoardFT :Foreign TradeFTP :Foreign Trade PolicyGATS :General Agreement on Trade in ServicesICD :Inland Container DepotIEC :Import Export CodeITC(HS) :Indian Trade Classification (Harmonised System)

Classification for Export & Import ItemsMDA :Market Development AssistanceMoD :Ministry of DefenceMoF :Ministry of FinanceNOC :No objection CertificatePRC :Policy Relaxation CertificateR&D :Research and DevelopmentRA :Regional AuthorityRBI :Reserve Bank of IndiaRCMC :Registration-cum-Membership CertificateS/B :Shipping BillSEH :Star Export HouseSEZ :Special Economic ZoneSION :Standard Input Output NormsSSI :Small Scale IndustrySTH :Star Trading HouseSTP :Software Technology ParkTH :Trading HouseTRQ :Tariff Rate QuotaVA :Value AdditionVKGUY :Vishesh Krishi And Gram Udyog Yojana

OFFICERS OF CUSTOMS :-

Classes of officers of customs: There shall be the following classes of officers of customs, namely:-

Chief Commissioner of Customs Commissioner of Customs Commissioner of Customs (Appeals) Joint Commissioner of Customs Deputy Commissioners of Customs Assistant Commissioners of Customs Such other class of officers of customs as may be appointed for the purposes of

this act.

IMPORT PRICING AND INCOTERMS :-

While finalizing the terms of import contract, the importer should be fully conversant with the mode of pricing and the manner of payment for the imports.

As regards mode of pricing, the overseas supplier should quote the terms prevailing in international trade. The importer for his benefit should also know the meaning of these terms to avoid ambiguity in interpretation of the same.

International Chamber of Commerce, Paris, has given detailed definition of few standard terms popularly known as “INCOTERMS” and these terms have universal acceptance.

Ex- Works (EXW):-

“Ex-Works” means that the seller’s responsibility is to make the goods available to the buyer at works or factory. The full cost and risk involved in bringing the goods from this place to the desired destination will be born by the buyer. This term thus represents the minimum obligation for the seller. It is mostly used for sale of plantation commodities such as tea, coffee and cocoa.

Free Carrier (FCA):-

“Free Carrier” means the seller’s obligations are fulfilled when the goods are delivered to the carrier named by the buyer at the named place. The term may be used for all modes of transport including multi- modal transport.

Free Alongside Ship (FAS):-

Once the goods have been placed alongside the ship, the seller’s obligations are fulfilled and the buyer notified. The buyer has to contract with the sea carrier for the carriage of the goods to the destination and ay the freight. The buyer has to bear all costs and risks of loss or damage to the goods hereafter.

Free on Board (FOB):-

The seller’s responsibility ends the moment the contracted goods pass the ship’s rail at the port of shipment named in the sales contract. This means that the buyer has to bear all costs and risk of loss of or damage to the goods from that point. The seller is required to clear the goods for export.

Cost and freight (CFR) :-

“Cost and Freight” means that the seller delivers, when the goods pass the ship’s, rail in the port of shipment. The seller must on his own risk contract for the carriage of the goods to the port of destination named in the sale contract and pay the freight. This being a shipment contract, the point of delivery is fixed to the ship’s rail and the risk of loss or of damage to the goods is transferred from the seller to the buyer at that very point. As will be seen though the seller bears the cost of carriage to the named destination, the risk is already transferred to the buyer at the port of shipment itself.

Cost Insurance Freight (CIF) :-

The term is basically the same as CFR, but with the addition that the seller has to obtain insurance at his cost against the risks of loss or damage to the goods during the carriage.

Carriage Paid to (CPT) :-

“CPT” means that the seller delivers the goods to the carrier nominated by him but the seller must in addition pay the cost of carriage necessary to bring the goods to the named destination. The buyer bears all risks and any other costs after the point of delivery. The seller is required to clear the goods for export.

Carriage and Insurance Paid to (CIP) :-

“CIP” is the same as CPT, with the addition that the seller is also required to procure insurance against the buyer’s risk of loss of or damage to the goods during the carriage.

Delivered at Frontier (DAF):-

The term is used when the goods are to be carried by rail or road. The seller’s obligations are fulfilled when the goods have arrived at the frontier, but before the “Custom Border” of the country named in the sales contract

Delivered Ex-Ship (DES):- .

This is an arrival contract and means that the seller makes the goods available to the buyer in the ship at the name port of destination as per sales contract. The seller has to bear the full cost and risk involved in bringing the goods there. The seller’s obligations fulfilled before the Custom border of the foreign country and it is for the buyer to obtain necessary import licence at his own risk and expense.

Delivered Ex-Quay (DEQ):-

Ex-Quay means that the seller makes the goods available to the buyer at a named quay. As in the term ‘Ex-Ship’ the points of division of costs and risks coincide, but they have now been moved one step further from the ship into the quay or wharf i.e. after crossing the customs border at destination. Therefore, in addition to arranging for carriage and paying freight and insurance the seller has to bear the cost of discharging the goods on the quay. The buyer is required to clear the goods for import and to pay for all formalities, duties, taxes and other charges upon import.

Delivered Duty unpaid (DDU):-

“DDU” means that the seller delivers the goods to the buyer’s at the port of destination. The seller has to bear the costs and risks involved in bringing the goods thereto. The buyer has get the goods unloaded and cleared for import, by paying the applicable duty.

Delivered Duty Paid (DDP):-

This term may be used irrespective of the type of transport involved an denotes the seller’s maximum obligations as opposed to “Ex-Works”. The seller has not fulfilled his obligation till such time that the goods are mad available at his risk and cost to the buyer at his premises or any other named destination. In the latter case necessary documents (e.g, transport documents or Warehouse Warrant )will have to be made available to the buyer to enable to take delivery of the goods.

BILL OF LADING AND TYPES:-

Bill of lading is a document issued by the shipping company for shipment of goods. It is a contract between the shipper & shipping company for carriage of goods in good condition from port of origin to port of destination.

It is a document required by consignee (Importer) to clear the goods at the port of destination. Shipping company also issue non-negotiable i.e.(Unsign) copies which are not document title to the goods but are normally use for record purpose.

Legal Importance:-

It helps the shipping co to collect the freight from the shipper or the importer. It acts as a safeguard in the interest of shipping co. against wrong trends & disputes in court of law by the exporter / Importer.

If the goods have been damage prior to loading of goods on ship such things, will be reflected in bill of lading.

Functions of Bill of Lading:-

It is the trial receipt for the goods received ( On the Board ) if ship. It confirm that goods are transferred in the ship.

It is negotiable document to the bank. It is a document of exporter title. It is an evidence of contract between shipping company and exporter / Importer.

TYPES OF BILL OF LADING:-

Clean Bill of Lading:- It confirm that the goods are in good condition i.e. without any defect and damage. Importer always stipulate for a clean Bill of Lading. As he want goods and cargo in good condition.

Clause Bill of Lading: - This shows some adverse remark regarding the cargo or package. The clause Bill of Lading will not be accepted by bank if L/C (Letter of Credit) stipulate clean Bill of Lading. In actual practice ship owner will help the shipper allowing him to omit or cancel the adverse remark n the B/L & make the bill of lading clean by accepting a letter.

State Bill of Lading:- According to the documentary rules shipper have to submit B/L & other documents with 27 days from the date of shipment. If the shipper goes to bank after 21 days for negotiating B/L bank may refuse out by given saying that B/L has become state B/L.

Through Bill of Lading :- This B\L issued to the exporter by the first carrier after receiving the cargo on the board of ship to the destination which involves transshipment of cargo at intermediate port eg. Bombay to Jakarta. Transshipment port is “Singapore” first shipping company will take the cargo to Singapore & will arrange 2nd shipping company to carry the cargo from Singapore to Jakarta. (The first carrier collect the true freight ie from Bombay to Singapore & Singapore to Jakarta. (If terms or CIF & for FOB it will collect carrier)

Received for Shipment B/L:- This practice is available 0nly in U.S.A. when shipper deliver the cargo into the custody of shipping company on a particular date, day, time, etc. But as a ship is going to arrive & load on later date shipping company receipt of shipment for B/L which will be accepted by bank in U.S.A. by negotiating on certain condition. Where ship arrive later cargo will be loaded. Then the date of shipment will be subscribed on the B\L having ship the goods.

Short Bill of Lading:- This B/L does not mention all clauses & convention governor sea transport. The B/L under front side bill mention necessary information or transaction such as exporter’s name, shipper name, Voyage no, purchase order,P.O.D, gross weight, net weight, freight paid etc. which has same validity as of regular B/L

Sea Way Bill of Lading:- In recent time shipping companies issues seaway bill of lading of old B/L. The differences between tow B/L are original B/L – Negotiable, sea way bill of lading- Non negotiable. Sea way bill can not endorse in favor of another party, Sea way bill is consignee to only one party who can take delivery of goods on proper identification. Sea way bill of lading are normally used by multimodal company by shipment of cargo among the branches as it facilitates speedy delivery of goods and no need of payment to be made to the bank.

Switch Bill of Lading:- This is usually used in cross trade for trangle shipment. This is use for only in ocean shipment. Cross trade includes more shippers & Single consignee. Since there are more than 2 parties involved in transaction the shipping company in order to protect the interest of shipper issue switch Bill of Lading.

IGM:- (IMPORT GENERAL MANIFEST)

 Import General Manifest (IGM) is the declaration to be filed by the shipping lines with the designated officer of Customs. Every ship which enters Indian waters with the intention of discharging cargo is statutorily bound to deliver this document under section 30 of the Customs Act 1962. Person in charge of the vessel is required to file this document declaring the truthfulness of contents within 24 hours of the arrival of the vessel. IGM contains the application for entry inward along with the general declaration, cargo declaration and ship stores declaration of particular goods to be unloaded from the cargo.

The IGM is a list of goods to be unloaded in a port or few ports in India from a vessel/Aircraft. It contains description, quantity, Line No. B/L No. / AWB No. name of the vessel/aircraft, importer address, sellers address etc. After registration, the customs allot import general manifest number. The IGM has to be filed with in 24 hours after arrival of the ship/aircraft. However in the case of vessel (Ship) the manifest my be delivered even before the arrival of the vessel. This system enables the importers to file bills of entry and get them assessed and pay duty so that the goods can be taken delivery soon after the unloading.

IEC ( IMPORT EXPORT CODE) :-

IEC code is unique 10 digit code issued by DGFT- Director General of Foreign Trade Ministry of Commerce, Government of India to Indian Company. Full from of IEC is “Importer Exporter Code”, to import or export in India, IEC Code is mandatory. No person or entity shall make any import or export without IEC Code no.

The customs authorities will not allow import of goods into India to the persons who are not in possession of IEC number allotted for this purpose by the import trade control authorities. This number has to be obtained even by an exporter who is required to interact with the import control authorities.

Mandatory Requirements to apply for IEC Code Number: -

Pan Number Current Bank Account

Bankers Certificate

IEC Code no Application Fee Rs.250/-(Expert TIP :Pay via EFT (Electronic Fund Transfer), and submit IEC online Application form, if you wish to receive IEC Number instantly)

The physical application containing required documents should reach DGFT RLA concerned within 15 days of its online submission.

E-mail is not mandatory. If it is provided it will facilitate faster communication.

Check List of Documents to apply for IEC Code Covering Letter on your company's letter head for issue of new IEC Code

Number. Two copies of the application in prescribed format ( Aayaat Niryaat Form ANF

2A ) must be submitted to your regional Jt.DGFT Office. Each individual page of the application has to be signed by the applicant. Part 1 & Part 4 has to be filled in by all applicants. In case of applications

submitted electronically. No hard copies of Part 1 may be submitted. However in cases where applications

are submitted otherwise, hard copy of Part 1has to be submitted. Only relevant portions of Part 2 need to be filled in.

Rs 250.00 Bank Receipt (in duplicate)/Demand Draft/EFT details evidencing payment of application fee in terms of Appendix 21B.

Certificate from the Banker of the applicant firm in the format given in Appendix 18A.

Self certified copy of PAN issuing letter or PAN (Permanent Account Number) Card issued by Income Tax Authority.

Two copies of passport size photographs of the applicant duly attested by the Banker of the applicant.

Self addresses envelope with Rs.25/- postal stamp for delivery of IEC certificate by registered post or challan/DD of Rs.100/- for speed post

CATEGORIES OF IMPORTERS:

1. Actual Users:-

A).Actual Users( Industrial):-

As per the definition given in the Exim policy, actual users (Industrial) means persons who utilize the imported goods for manufacturing in their own industrial units or manufacturing for their own use in another unit including a jobbing unit.

B). Actual Users (Non-Industrial):-

Actual users (Non-Industrial) means persons who utilize the imported goods for their own use in:

Any commercial establishment carrying on any business, trade or profession or Any laboratory, Scientific or Research and Development (R&D) institution,

university or other educational institution or hospital or any service industry.

2. Non-Actual Users:-

Which include:

Importers for stock and sales Personal Importer

Imports of Gifts Etc.

CUSTOM CLEARANCE PROCEDURE IN GENERAL

INTRODUCTION:-

All goods imported into India have to pass through the procedure of customs clearance after they cross the Indian Border. The goods are examined, appraised, assessed, evaluated the then allowed to take out of customs charge for use by the importer.

The entire process of customs clearance is complex and to carry out this procedure smoothly, the importer should be aware of the clearance procedure and have resources to clear the consignment by him (Self Clearance) or he should appoint and accredited custom clearing agents for doing the job efficiently. These agent are licensed by the Commissioner of Customs and are experienced and capable of handling the documents/goods.

Customs administration plays and important role in appraising, assessing and clearing the goods and they are the sloe and final authority to take decision in this respect. The scope of work of customs administration has become more important technology and thus the brains of customs administration are taxed more and more to identify, ascertain and classify the goods in 99 chapters of custom Tariff classification code. Although the basic duty of custom administration is to collect revenue but they have a bigger job of ideally classifying the goods.

IMPORT PROCEDURE:-

Inquiry (By Importer)

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Information as per Inquiry / Quotation (By Exporter)Conformation / Purchase Order ( By Importer)

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Exporter prepares documents and send Bill of Lading Through bank to the Importer

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Importer makes payment to the Exporter through Bank

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Delivery Order & Documents is obtained by the Bank Or the agent of the Exporter

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Importer handover the documents to CHA

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On the basis of documents CHA files the, same for obtaining the Bill of Lading

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Meanwhile goods reach to the port of destination

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Bill of Entry No. is received from the Custom House

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Documents is forwarded to the appraising unit

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Documents are forwarded to auditing department By the auditor

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Documents is forwarded to Deputy Commissioner for final Assessment

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TR6 Challan has to be collected

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Goods to be produced for the Examination along with the Duty paid Challan

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Out of charges has to be taken from the docks

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N-Form is obtained if goods are to be take out without paying octroiIf not, then octroi is to be paid And paid CFS Charges / Warehouse charges

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Relevant documents shown to preventive officer & The Cargo is taken out

CUSTOM CLEARANCE PROCEDURE IN GENERAL

As soon s the importers receive the advice of arrival of the vessel, he is required to present a document known as Bill of Entry in terms of section 46 of the Customs Act, either for Home Consumption or for warehousing the goods.

The Bill of Entry is noted in Import Department. The date of noting is indicated on the Bill of Entry under corresponding endorsement made against the consignment entry in the IGM. The date of noting is an important date, for the reason that the rate for duty applicable to the goods imported would be that which is in force on the date of noting. In case of warehoused goods, the rate of Custom duty applicable would be that in force on the date of payment of Custom duty.

Under the Second Check Clearance procedure,, The bill of Entry will be presented in the Appraising Department at Custom House, with the relevant documents like Invoice, Bill of Landing, Import licence, catalogue / Literature & other relevant documents. Where the documents produced are adequate for determining the classification, value & rate of Custom Duty, the Bill of Entry is then “Passed” by the concerned Appraiser and the Assistant Commissioner countersigns the same.

The passed Bill of Entry is then forwarded to the license Department for licensing debit and audit and then returned back to the importers for payments of duty in the Accounts / Cash department. After recovery of duty the original Bill of Entry is retained in the Accounts Department and the duplicate and other copies returned to the importers for getting the goods examined in the docks.

In the docks, Shed Appraiser / Examiner the goods and if is in order then will give the out of charge for taking delivery form the custodian of the goods viz. Port Trust, after payment of the Port Trust charges. This procedure under which 80 to 90% of the consignments are being cleared is known as the “Second Check Procedure”.

Under the First Check Clearance Procedure, the concerned Custom Appraiser at Custom Hose prior to passing of the Bill of Entry gives the order to the port Supervisor to examine the imported goods. The goods are then remarks on examination of goods to the Appraiser for passing & charging the appropriate custom duty on the goods imported. In this case the customs gives “out of Charge” only after payment of Custom duty by the importer.

No person shall, except with the permission of the proper officer of Custom, is allowed to open any package of goods imported into India and lying in a Custom Area. The Examination of cargo for assessment purposes is chiefly the function of the Appraising Department or their representative posted at the docks / Air cargo shed.

The importer pays charges to freight forwarder for this work of documentation, destuffing, and freight charges and stamp duty to shipping line and collect the final delivery order.

Bill of Entry:- Section 46 of the Custom Act 1962:-

The bill of entry is the document on the strength of which clearance of imported goods can be done. The form of the bill of entry has been standardized by the Central Board of Excise and Custom. As soon s the importer receives the advice of arrival of the vessel the importer are required to present a document known as Bill of Entry, either for Home Consumption or for warehousing the goods. The Bill of Entry is noted in the Import Department.

The Bill of Entry should be type written.

Types of Bill of Entry:-

Goods Entered for Home Consumption are cleared on White Bill of Entry (Form No.22)

Goods entered for warehousing are removed “into bond on Yellow colour In-Bond Bill of Entry. (Firm No.23)

Goods cleared Ex-Bond for Home Consumption on payment of duty on Green Colour Ex-Bond Bill of Entry. (FormNo.24)

For preparing the Bill of Entry the documents that are required are as follows:-

Bill of Entry for Home Consumption in the prescribed firm duly filled. Invoice Packing list Bill of Lading / Airway Bill Insurance Freight Bill (In Case Invoice shows F.O.B value) Do (Delivery order) Purchase order Certificate of origin License copy, Bond certificate (If Required) IEC Copy Declaration in the prescribed format signed by the importer regarding the

correctness of the contents and the value of the goods in connection with the relevant documents. The Appraiser of Customs may call for any other information / documents if found necessary, to determine the exact value and exact rate of duty(Section 46 Custom Act, 1962

CHA Declaration.

PROCEDURE FOR THE CLEARANCE OF IMPORTED GOODS:-

Procedure to clear imported goods for home Consumption:-

A Bill of Entry for home consumption in quadruplicate duly filled and signed by the importer / CHA and the same to be filed in the import department of customs. The noting clerk in the import department assigns a serial number and affixes the date stamp and initials on the bill of entry after verifying the details with reference to the import general manifest. Than the Bill of Entry is forwarded to the Appraiser/ Superintendent for Assessment. After verifying the documents and bill of entry the appraiser may assess the Bill of Entry under any one of the two different systems called as

First Appraisement Second appraisement depending upon the circumstances. The Assistant

Commissioner of Customs countersigns on the Bill of Entry. After examination of the goods and on payment of duty the goods are cleared out of Customs charge for home Consumption.

Procedure followed under first appraisement / Original open order:-

The Bill of entry is forwarded to the appraiser / Superintendent after noting is done by the import department if the appraiser for assessment feels that the goods should be subjected for examination in the first stage itself to decide the weight measurement / country of origin / correctness of value / marks and numbers / classification of the goods under the Customs and Central Excise Tariffs, he passes an examination order on the reverse of original copy of the bill of entry. This is called original open order / first appraisement subsequently the bill of entry with the original open order is presented to the A.C.(Dock) for examination of the goods Examination is carried out and a report is written by the proper officer as per the direction specified in the original open order.

Then the bill of entry is forwarded to the assessing officer who verifies the examination report with reference to he relevant documents and bill of entry. After verifying the correctness of value and classification of goods the assessing officer writes the rate of basic custom duty. Additional duty etc, to be leviable by customs and signs the bill of entry. Than the Assistant Commissioner places his counter signature on the bill of entry. The value / quantity or both of the bill of entry is debited in the import license / customs clearance permit wherever required. The comptist / computer operator pinpoints

the amount of duty on the bill of entry. The internal audit department pre-audits the bill of entry.

The amount of duty shall be paid by the importer / CHA in the customs treasury / authorize bank. The original copy of the bill of entry is detached in the custom treasury. Clearance of goods for home consumption are permitted by the proper officer of customs with his signature and stamp on the revere of the duplicate copy of the bill of entry. This order is called as “passed out of custom charge” The importer / CHA presents the duplicate bill of entry to the custodian (Port / Airport / ICD ) who releases the goods after collection necessary dues.

Procedure followed under second appraisement / Duplicate open order:-

The bill of entry is forwarded to the appraiser / superintendent after noting is done by the import department. If the appraiser for assessment feels that all the documents / information are available to determine the correctness of value and classification under the Tariff, the assessing officer makes assessment in the first stage itself and passes an examination order on the reverse of the duplicate copy of the bill of entry. This may be called as second appraisement duplicate open order. Than the Assistant Commissioner place his counter signature on the bill of entry. The value quantity or both of the bill of entry is debited in the import license / customs clearance permit wherever required. The comptist / computer operator pinpoints the amount of duty on the bill on entry. The internal audit department pre-audits the bill of entry. The amount of duty shall be paid by the importer / CHA in the custom treasury / authorized bank.

The original copy of bill of entry is detached in the customs treasury, and the remaining copies are returned to the importer / CHA. Subsequently the bill of entry with the duplicate open order and other documents are presented to the proper officer for examination. Examination is carried out and a report is written by the proper officer as per the directions specified in the duplicate open order. If the examination officer satisfies that the goods so imported are in par with the declaration in the documents, he gives and order permitting clearance of goods for home consumption on the reverse of the duplicate copy of the bill of entry. This order is called as passed out of customs charges.

Procedure followed Examination of import cargo at Dock:-

Once Bill of Entry final assessment paid duty custom appointed Authorized bank. Made shipping line payment and collect final Do, without Bill of entry and TR6

challan Shipping line unable to issue the Delivery order. Paid stamp duty Get cargo / container receiving from CFS on bill of entry back side. Check container no and seal number as per shipping documents Do the Bill of Entry registration from custom officer in custom system(Before Bill

of Entry registration Custom officer check all document like B/L, Invoice, packing list, TR6 challan, certificate of origin, Importer declaration along with Signature, CHA declaration.

Than after get seal cutting form CFS authority. Check import cargo as per the invoice and packing list and tally with Bill of entry

before present to custom officer. Custom officer do the examination as per declared in Bill of Entry Custom officer fill the examination report in custom system and than after issue

out of charge. After out of charge made the CFS payment, and get allow for empty vehicles for

container / cargo loading purpose. Submit the Original Delivery order, CFS payment duplicate copy, Bill of entry

Xerox copy, Original Custodian out of charge copy to CFS and get “Gate Pass” from CFS.

Done the Container / Cargo survey from surveyor, which is appointed by shipping line.

Present the “Gate pass and Original Gate Copy of out of charge” to Custom Preventive officer. Original Gate copy of out of charge surrender to custom Preventive officer and get allow to move the container / Cargo from CFS.

After out of charge getting below bill of entry copies:-

Original Duplicate Bill of Entry :- Consignee purpose Original Triplicate Bill of Entry :- Consignee purpose

Custom Copy :- Handover original copy along with import documents to custom at

Dock. Custodian copy :- Handover original copy along with

Do, CFS Charges copy, Bill of Entry, B/L.

Gate Copy :- Handover original Gate copy to Custom Preventive officer at

CFS Gate.

IMPORT DUTIES:-

The following are the Import duties, which are presently levied on import goods.

1. Basic Import Duty:- Which is specified against each Heading or Sub- heading in the first Schedule to the CTA. This is popularly called Basic Customs Duty. There are different rates of duty for different commodities. There are also different rates of duty for goods imported from certain countries in terms of bilateral or other agreements with such countries, which are called preferential rates of duties. The duty may be a percentage f the value of the goods (when it is called ad valoerm duty) or at a specific rate

2. Additional duty:- This duty is collected by customs on the landed cost (Value + Custom duty) of the imported goods at the rate equal to ventral excise duty in order to protect / safe guard the indigenous / local industries. The authority for collection of this duty is section 3 of customs Tariff Act 1975. This duty is also called C.V.Duty (Counterveling duty).

3. Special Additional Duty: - 4%

4. Anti – Dumping duty:- On specified goods imported from specified countries to protect indigenous industry from injury resulting from dumping of goods.

DUTY STRUCTURE:-

Full duty Structure :-

 Cumalative Total Duty Amount Calculations

On the Basis -Basic Customs Duty 10% with Revised CVD 8% wef 24.02.09

S No Code Particulars Amount       

1 A Customs Assessable Value (CIF +Landing Charges)-CAV 100       

2 B BCD -Basic Custom Duty 10.000       3 C CVD 8% on BCD+CAV 8.800       4 D Education Cess duty on CVD -2% 0.176       5 E Secondary & Hr Edu Cess 1% (Excise) 0.088       6 F Education Cess 2% on B+C+D+E 0.381       7 G Secondary & Hr Edu Cess 1% (Customs) 0.191       

8 HAs per Customs Notification 19/2006, Addl

Duty 4% on A+B+C+D+E+F+G 4.785           TOTAL 24.421

Benefit duty structure :-

 Cumalative Total Duty Amount Calculations

On the Basis -Basic Customs Duty 7.5% with Revised CVD @ 8% wef 24.02.2009

S No Code Particulars Amount       

1 A Customs Assessable Value (CIF +Landing Charges)-CAV 100       

2 B BCD -Basic Custom Duty 7.50       3 C CVD 8% on BCD+CAV 8.600       4 D Education Cess duty on CVD -2% 0.172       5 E Secondary & Hr Edu Cess 1% (Excise) 0.086       6 F Education Cess 2% on B+C+D+E 0.327       7 G Secondary & Hr Edu Cess 1% (Customs) 0.164       

8 HAs per Customs Notification 19/2006, Addl

Duty 4% on A+B+C+D+E+F+G 4.674           TOTAL 21.523

HOW TO CALCULATE IMPORT DUTY:-

For Example:-

Invoice CIF Value :493.50 Euro 1% Landing Charges on CIF 1% SVB Loading On CIF 1 Euro = 71.80 Unit = 35 kgs Unit price = 14.10 Duty Rate = 10%, 8%, 2%, 1%, 2%, 1%, 4%,

Calculation of duty :-

Assessable value=Unit 37 kgs x 14.10 unit price x 1% (Landing charges) x 1% (SVB Loading if applicable) x 71.80 (Exchange Rate). = 36141.966

A. Basic Duty 10% AV :- 3614.19 INRB. CVD 8% on (AV + Basic Duty) :- 3180.49INRC. Education Cess 2% on CVD :- 63.61INRD. Secondary Customs Education Cess on1% on CVD :- 31.80 INRE. Custom Education Cess 2% on (A+B+C+D) :- 137.80 INRF. Secondary Customs Education Cess 1% on(A+B+C+D) :- 68.90 INRG. Additional Duty (Import) 4% on (AV + A+B+C+D+F) :- 1729.55 INR

===========Total Duty :- 8826.34

INR

Short cut to duty calculation: -

Duty = Assessable value x 1% landing charges x 1 % SVB loading x Exchange Rate x duty rate

Duty =493.50Euro x1% x 1% x 71.80 x 24.421%

Duty = 503.37 x 71.80 x 24.421%

Duty = 8826.34 INR

BILL OF ENTRY FOR BOND / WAREHOUSING:-

Import goods may be stored in a warehouse under section 49 or goods may be Bonded in a warehouse under section 59 of the Custom Act, 1962.

Warehoused means a public warehouse appointed under section 57 or Private warehouse licenced under section 58 of the Custom Act, 1962. Warehouse goods means goods deposited in a warehouse. Warehousing station mention a place declared as a warehousing station under section 9. The goods may remain in the warehouse for a period of one year from the date of passing order by the proper officer of customs. The period of one year may however, be reduced by the Commissioner of Custom if the goods likely to deteriorate. The period of one year may be extended by the Commissioner of Custom / Chief Commissioner / the Central Board of Excise and Custom if the goods are not likely to deteriorate and on sufficient cause being shown for such extension. The importer, however has to pay interest on the amount of appropriate duty payable at the time of clearance of the goods for home consumption from the warehouse for the extended period, i.e. from the date of expiry of the initial period till the date of actual removal of the goods from the warehouse.

There are two type of warehouse.

Public Warehouse Privet Warehouse

Public Warehouse: - Under section 57

At any warehousing station the Assistant Commissioner of Customs may appoint public warehouses. Where in dutiable goods may be deposited without payment of duty. Any imported dutiable goods may be deposited in a Public Warehouse. For this purpose the importer has to execute a double duty bond which means twice the amount of duty payable on such goods deposited in the warehouse.

For warehousing the goods there is a Into-Bond Bill of Bill of yellow colour to be filed long with a double duty bond as stated above together with documents such as invoice, bill of lading / Air way bill, freight and insurance certificate, contract, L/C, import licence etc. and importers declaration related to correctness of value and contents in the consignment and other documents if any to be filed in Custom house. The same procedure to be followed as in the case of Bill of Entry for home consumption. After assessment is done, the proper officer examines the goods and issues an order permitting to deposit the goods in the warehouse without payment of duty.

Private Warehouse:- Under section 58

At any warehousing station, the Assistant Commissioner of Custom or Deputy Commissioner of Custom may license private warehouses wherein dutiable goods imported by or on behalf of the licensee, or any other imported goods in respect of which facilities for deposit in public warehouse are not available, that time Assistant commissioner of custom or Deputy Commissioner of Custom appoint the Private Warehouse.

INLAND CONTAINER DEPOT :-

Inland container depot have been set up in many major cities where there is no sea port facility. The objective of I.C.Ds is to cater the needs of surrounding importers and exporters of the respective city. The I.C.Ds possess ware housing facility to station various types of containers for stuffing of export cargo and de-stuffing of import cargo in the presence of custom officials for examination, assessment, clearance etc. Most of the I.C.Ds are located near the railway stations for rapid movement connecting to adjacent port. Due to global liberalization, containerization of cargo has become a must to achieve the full benefits. Hence the container should move from the exporter’s factory premises to the importer’s factory premises or vice versa or in close proximity to import industrial stations, so that the importer / exporter can save time and expenditure and also ensure safety of the goods. To begin with the Government of India appointed suitable industrial stations as Inland Container Depots for unloading of imported goods and loading of export goods by issuing notification under section 7AA of the Custom Act 1962. Correspondingly, the Commissioner of Customs having jurisdiction over the place approves places in the I.C.D for loading and unloading of goods and the limits of customs area where the custom officers and staff shall function by issuing a notification under section 8 of custom act 1962.

Transhipment of containerized cargo from the ports to destination to I.C.D is done by the steamer agents after customs permission. No extra duty is charged on the freight from harbour to I.C.D. Steamer agents are liable to pay fine equal to duty on short landing / Pilferage/ Damage under section 116 of Custom Act 1962 to ensure safety avoid demurrage and to relieve congestion.

The Container Corporation of India generally arrange container movements either by rail or road. If the importer intends to import the goods at a particular ICD he should

inform well in advance to his foreign supplier so that the containers are manifested to the particular ICD . When such containers are landed in a sea port the steamer agent arranges through Container Corporation of India or any other authorized agency to transport to that particular ICD. The ICD receives the containers and shifts to CFS to enable the importer to file the bill of entry and other documents as they do in the case of clearance through Sea ports or Airport .

EXPORT PROMOTION CAPITAL GOODS (EPCG) :-

Under Export Promotion Capital Goods (EPCG) scheme, a licence holder can import capital goods (i.e. plant, machinery, equipment, components and spare parts of the machinery) at concessional rate of customs duty of 5% and without CVD and special duty. Computer software systems are also eligible. Import of spares of capital goods is permitted, without any limit. Jigs, fixtures, dies, moulds will be allowed to the extent of 100% of CIF value of licence. Spares for existing plant and machinery can also be imported. Second hand capital goods upto 10 year old can also be imported under EPCG scheme.

EPCG authorisation is issued with validity period of 24 months. Relevant exemption notification is 55/2003-Cus dated 1-4-2003 (earlier No. 44/2002-Cus dated 19-4-2002).

Merchant Exporters can also import capital goods under EPCG scheme, if the capital goods are installed in the factory of their supporting manufacturer. The name and address of supporting manufacturer should be endorsed on EPCG licence and bond with Bank guarantee has to be executed jointly and severally by merchant exporter and his supporting manufacturer.

The basic customs duty payable is 5%. Additional Customs Duty / CVD is exempt.

Importer has to fulfil export obligation equal to eight times duty saved on imported capital goods to be fulfilled over a period of 8 years. In respect of EPCG authorisations for Rs 100 crore or more, the export obligation shall be required to be fulfilled over a period of 12 years.  Similarly, sick companies under BIFR and units in Agri Export Zones can fulfil export obligation in 12 years. Export obligation for every block of two/four

years has been specified. In first two years, there is no export obligation. Extension for fulfilling export obligation upto two years can be obtained. – MF(DR) circular No. 25/2003-Cus dated 1-4-2003.

The export obligation shall be fulfilled by export of goods capable of being manufactured or produced by the capital goods imported under the scheme. However, goods can be manufactured in other unit of authorisation holder also. - - Export obligation can also be fulfilled by export of other goods and services by enhancing export obligation. If the goods are further processed, export obligation shall stand enhanced by 50%. The export obligation will be over and above the average level of exports of previous three years.

Export shall be physical exports, but certain specified deemed exports are also permissible.

Year-wise slab rates for achieving export obligation have been specified. If the goods are not exported as per the obligation, differential customs duty plus 15% interest is payable. The importer of capital goods has to execute ‘Letter of Undertaking’ (LOU) and execute a bond.

Manufacturer-exporters having exports over Rs one crore and having clean track record and status holders (star trading houses etc.) can execute bond without bank guarantee. Others will have to execute bond with bank guarantee equal to 50% of the differential duty.

The authorisation holder can also procure such machinery from India. The Indian manufacturer will be able to import components for the machinery at concessional rate of 5%. However, the export obligation will be that of licence holder and not of Indian machinery manufacturer.

If the goods are cleared from warehouse, the licence should be valid on date of clearance from warehouse. However, licence issued after date of shipment but before its clearance from customs or customs bonded warehouse is acceptable. - CC, Mumbai PN 19/99 dated 10-2-1999.

The exemption from furnishing Bank Guarantee shall be available provided the following conditions are fulfiled :-

(i) Where he has been already issued an EPCG Licence, and is having a turnover

of Rs.1 Crore or more in the preceding financial year;

(a) he must also have a record of having achieved the export obligation specified in the EPCG notification(s); or

(b) if the Export Obligation has not expired, the Exporter has not defaulted on the export obligation specified in EPCG for the block period in any licence(s) as prescribed in the relevant Customs notification (s).

(ii) For a licence holder who has no previous Hence issued under EPCG Scheme, he must have Export turnover of Rs. 1 Crore or more in the preceding financial year. The exemption from Bank Guarantee shall, however the withdrawn if such exporter defaults on his export obligation for two successive block periods under Zero duty EPCG Scheme, or for three consequtive years under 1O% duty EPCG Scheme.

(iii) For exporters operating under the DEEC Scheme, where he has been issued a DEEC Licence(s) and he has a turnover of Rs.1 Crore or more in the preceding financial year, he must have a record of achieving the export obligation as specified in the relevant customs notification(s).

(iv) For first time licence holders under DEEC Scheme, who have previous export performance with a turnover of Rs. 1 Crore or more in the preceding financial year.

(v) The exporter should not have been penalised under the provisions of Customs Act, Central Excise Act, Foreign Exchange Regulation Act or Foreign Trade (Development and Regulation) Act during the last two financial years.

(vi) Provided that the person standing surety to the Bond (format annexed to the Circular) is certified by his Bank or a Chartered Accountant that he is solvent.

Eligibility :- The scheme covers manufacturer exporters with or without supporting manufacturer(s)/ vendor(s), merchant exporters tied to supporting manufacturer(s) and service providers

EPCG Registration Purpose Required Documents :-

Original EPCG License. Original Bond duly Notarized

Original Bank Guarantee with their letter in sealed cover

Affidavit duly Notarized

Copy of Central Excise Registration duly self attested

Copy of RCMC self attested

Copy of Engineering Export Promotion Council self attested

Copy of IEC self attested & Company branch list as per IEC.

Bank AD code no.

Invoice, Packing list, Certificate of origin, Charter Engineer Certificate, Catalogues, Etc.

Note : EPCG License description, quantity should be tally word to word along with Invoice.

PROJECTS IMPORT :-

This scheme is applicable for making imports of several items falling under different classifications for the purpose of setting up a single project. Since in a project, several different items are required, each of which is importable at different rates of customs duties, it becomes very complicated to make assessment for such project imports. Therefore one consolidated rate of customs duty has been made applicable for all items imported under project irrespective of the nature of the goods and their customs classification.

The items eligible for project imports are specified in heading 98.01 of the Customs Tariffs Act, 1975. There include all items of machinery, components or raw materials for initial setting up of a unit or substantial expansion, spare parts within prescribed limits, etc. This scheme has been made applicable to industrial plants, irrigation projects, Power projects, Mining projects, Projects for Oil or Mineral Exploration and other projects as may be notified by the Central Government.

EPCG for Projects:-

An EPCG licence can also be issued for import of capital goods for supply to projects notified by the Central Board of Excise and Customs under S.No 441 of Customs Exemption Notification No 21/2002 dated 01.03.2002 wherein the basic customs duty on imports is 10% with a CVD of 8%.

 The export obligation for such EPCG licences would be eight times the duty saved. The duty saved would be the difference between the effective duty under the aforesaid Customs Notification and the concessional duty under the EPCG Scheme.

DUTY ENTITLEMENT PASS BOOK SCHEME(DEPB SCHEME)

The scheme is easy to administer and more transparent. The scheme is similar to Cenvat credit scheme. The exporter gets credit when he exports the goods. The credit is on basis of rates prescribed. This credit can be utilised for payment of customs duty on imported goods.

Provisions are contained in notification No. 45/2002-Cus dated 22-4-2002.

The objective of the scheme is to neutralise incidence of customs duty on the import content of export product. The neutralisation shall be provided by way of grant of duty credit against the export product.

Exports under DEPB scheme are allowed only when DEPB rate for the concerned export product is finalised.

Under this scheme, exporters will be granted duty credit on the basis of notified entitlement rates. The entitlement rates will be notified by DGFT. The entitlement rates will be a % of FOB.  The entitlement rate will be fixed on basis of SION (Standard Input Output Norms) and deemed import content. Value addition achieved in export product will also be taken into account.

Supplies made to unit in SEZ are also entitled to DEPB. – MF(DR) Circular No. 25/2003-Cus dated 1-4-2003.

DEPB is issued only on post-exportation basis. Excise duty paid in cash on inputs will be eligible for brand rate of duty drawback. – CBE&C circular No. 24/2002-Cus dated 6-5-2002.

Non-transferable DEPB can be issued before realisation of export proceeds, but if export proceeds are not realised within 6 months, full customs duty along with SAD should be paid with 15% interest.

CIF Value of Imports affected under DEPB shall not exceed FOB Value against which DEPB has been issued.

Value of exports (i.e. export earnings) should be in freely convertible currency like dollars, Euro, British Pounds, Yen etc. Thus, the DEPB scheme is not available in case of exports to Nepal or Bhutan where we have Rupee trade or to Russia etc., if the export is not in hard currency. The credit will be granted on basis of actual amount of FOB value of export realised, as per Bank certificate.

The credit of duty in pass book will entitle the exporter to import raw materials, components, packaging materials etc. duty free. Goods which are otherwise eligible for imports can be imported under the credit. However, capital goods cannot be imported under DEPB.

The scheme is available to both manufacturer exporters as well as merchant exporters. DEPB has to be registered with customs house.

The DEPB rates fixed are inclusive of SAD (Special Additional Duty) w.e.f. 1-4-2002. Hence, goods imported under DEPB scheme are not free from special additional customs duty. [SAD].

If DEPB credit is insufficient, excess amount of duty can be paid in cash. Two separate entries in Bill of Entry should be made.

The CVD (additional duty) paid in cash on inputs can be utilised for availing Cenvat credit.

Export under this scheme will be under a blue coloured shipping bill so that customs authorities can maintain separate record. Declaration in prescribed form should be made on the shipping bill. The shipping bill should give details Serial number of export product in public notice issued by DGFT specifying the rate of entitlement and rate claimed. Exports under the scheme can be made from specified CFS (Container Freight Station) also.

Samples will be drawn for test as per guidelines issued by department.

Limit on credit based on PMV - Where DEPB rate is 10% or more, amount of credit shall not exceed 50% of PMV (Present Market Value) of the product. Customs can check PMV (Present Market Value) of export goods, if over invoicing is suspected. It is clarified that PMV will be verified only if there is specific intelligence. There will be no verification of PMV where value cap exists.

ADVANCE AUTHORISATION :-

Inputs required to manufacture export products can be imported without payment of customs duty under Advance Authorisation. Advance Authorisation can be granted to merchant exporter or manufacturer exporter to import raw materials. Since the raw materials can be imported before exports of final products, the Authorisations issued for this purpose are called ‘advance authorisations’.

‘Manufacture’ has the meaning assigned to it in para 9.30 of EXIM Policy. This definition is very wide. Hence, import for mere processing will also be permissible.

Advance Authorisation is issued to allow duty free import of inputs with normal allowance for wastage. In addition, fuel, oil, energy, catalysts etc. required can also be allowed. Duty free import of mandatory spares upto 10% of CIF Value of Authorisation, which are required to be exported with resultant products may also be allowed. However, prohibited items of imports cannot be imported.

Advance Authorisation issued on pre-export basis (i.e. where import takes place before fulfilment of export obligation), would contain description, value and quantity of each material permitted against it and value of export obligation to be fulfilled. Advance

authorisation issued on post-exportation basis (i.e. where import takes place after fulfilment of export obligation), would, in addition, contain details of exports made against the authorisation. – CBE&C circular No. 24/2002-Cus dated 6-5-2002.

Material can also be imported free of cost, which shall be re-exported after job work, after allowing for wastage.

The advance Authorisation will be for Actual User only. It is not transferable.  The material imported under advance authorisation is also not transferable even after completion of export obligation. There must be positive value addition.

Advance Authorisation can be issued for (a) Physical Exports (b) Intermediate Supplies (c) Deemed Exports.

Advance Authorisation for physical exports can be issued to manufacturer-exporter or merchant-exporter tied to supplementary manufacturer.

Advance Authorisation after exports can be issued on basis of actual proof of exports.  In such case, BG/LUT [Bank Guarantee/Letter of Undertaking] is not necessary.

Advance Authorisation is valid for 24 months for import and 18 months for export. - - Export obligation under Advance Authorisation should be fulfilled within 18 months. In case of projects, export obligation shall be fulfilled within duration of execution of project. Advance authorisation can be revalidated for 6 months if export obligation was fulfilled, on payment of composition fee of 1%. Further extension of 6 months can be obtained on payment of 5% of unfulfilled FOB Value as composition fee.

Goods exported under Advance authorisation/DFRC/DEPB may be re-imported in the same or substantially same form under ‘Duty Neutralisation Scheme’.

The imports of raw materials is on the basis of standard input - output norms (SION). The SION are finalised and quantity allowed to be imported will be based on quantity exported. The price of inputs will be as declared by applicant. However, there must be positive value addition.

Application for authorisation shall be made in form given in Appendix 10B to licensing authority of DGFT.

Advance Authorisation will indicate name and description and of items to be imported and exported/supplied, aggregate CIF value of imports, FOB/FOR value and quantity of exports/supplies. If quantity cannot be indicated, value shall be indicated.

If the goods are cleared from warehouse, the licence should be valid on date of clearance from warehouse. However, licence issued after date of shipment but before its clearance from customs or customs bonded warehouse is acceptable. - CC, Mumbai PN 19/99 dated 10-2-1999.

Goods can be exported in anticipation of advance authorisation, after submission of application to licensing authority.

SECOND HAND MACHINE REQUIRED DOCUMENTS.

1. Import invoice required on FOB basis2. Packing list 3. Chartered Engineer Certificate4. YOM required in all documents and Invoice description should be tally

with EPCG License and Charter Engineer Certificate.5. Required Depreciation chart for valuation purpose.6. Old or New Machine should be mention in all documents

Below points required in Chartered Engineer Certificate.

For valuation of second hand machinery / capital goods, the assessing officers must insist

on importers submitting a certificate issued by an independent Chartered Engineer or any equivalent in the country of supply.  The certificate should indicate interalia:-               i)  Price of new machinery as in the year of its manufacture,               ii) Current CIF value of new machinery if purchased now,               iii)Year of the manufacture of machinery,               iv) Sale price of the supplier,               v) Present condition of machinery,   vi)Nature of reconditioning or repairs carried out, if any, and the cost     (including the dismantling cost, if any) thereof,               vii) Expected life span.  

                                 

THIS IS FOR YOUR INFORMATION. 

OFFICE OF THE COMMISSIONER OF CUSTOMS (IMPORT),JAWAHARLAL NEHRU CUSTOM HOUSE, NHAVA SHEVA, DIST:- RAIGAD

F.No.S/26-Misc-2665/08-09 VA Date : 03.12.2008

PUBLIC NOTICE No. 84 /2008

Attention of all Importers, Custom House Agents and the members of the Trade is invited to the Board’s Circular No.4/2008-Cus dtd.12.02.2008 (F.No.467/34/2006-Cus.V) regarding the valuation of the imported second hand (old and used) machinery.

2. For the purpose of determination of value of the old and used second hand machinery / capital goods, the importer or his authorized agent shall submit a certificate

issued by an independent Chartered Engineer or any equivalent in the country of supply. The certificate should indicate, interalia :(i) Price of new machinery as in the year of its manufacture;(ii) Current CIF value of new machinery if purchased now;(iii) Year of the manufacture of machinery;(iv) Sale price of the supplier;(v) Present condition of machinery;(vi) Nature of reconditioning of repairs carried out, if any, and the cost (including the dismantling cost, if any) thereof; and(vii) Expected life span (Residuary life).

3. In the absence of the above mentioned load port certificate, the importer or his authorized agent shall submit such certificate, interalia, indicating the above mentioned details from any of the following Chartered Engineers / Inspection and Certification Agencies. It may be noted that the following approved Chartered Engineers / Inspection and Certification Agencies are among those recognized by the Ministry of Commerce and enlisted in the Appendix 5 of the Handbook of Procedures 2004-09.

(i) Bureau Veritas Marwah Centre, 6th floor, Krishna Marwah Marg, Opp.Ansa Indl.Estate, Off.Saki Vihar Road, Andheri (East), Mumbai-072. Tel.No.022-66956300, 66956387 Fax : 0222- 66956308 E-mail : www.bureauveritas.com

(ii) Det Norske Veritas 201-D, Poonam Chambers, “A” wing, Dr.Annie Besant Road, Worli, Mumbai – 400 018 Tel : 66606639/40/41 ; Fax : 022-66606642 E-mail : www.dnv.in

(iii) Indian Register Quality Systems 52-A, Adi Shankaracharya Marg, Opp.Powai lake, Mumbai – 400 072 Tel : 022- 30519400, 22154128/64 Fax : 022 -25703011 / 22154250 E-mail : irqs@irclass.org

(iv) TUV India Pvt.Ltd. 801, Raheja Plaza I, LBS Marg, Ghatkopar (W) Mumbai-400 086 Tel : 66477000 / Fax : 66477009 E-mail : Mumbai@tuv-nord.com

(v) Moody International (India) Pvt.Ltd. 32/33, Gautam Complex, Sector-11, CBD Belapur, Navi Mumbai – 400 614 Tel : 022-27580044 / Fax : 27580033 e-mail : k.parkar@moodyint.com

(vi) SGS India Pvt.Ltd. 4B, Adi Shankaracharya Marg, Powai Road, Vikhroli (W), Mumbai-083. Tel : 25798421 – 29 , 25782413 fax : 25782412, E-Mail : k-devadas@sgs.com

(vii) Best Mulyakan Consultants Ltd. 307-A, BEST Commercial Complex Opp.Andheri Rly Station (W),

Mumbai-400 058 Tel : 022-26285662 / Fax : 26702917 E-mail : mulyakan@vsnl.com

4. Such certificate from the Chartered Engineer, invoice and any other relevant documents and the NIDB data indicating the values of similar goods would be examined by the Assessing Officers and decide whether the declared value can be accepted as transaction value or the declared value merits to be rejected in terms of Rule 12 of the Customs Valuation (Determination of value of Imported goods) Rules, 2007 (CVR 2007) and re-determine the value, in terms of said CVR 2007.

5. The contents of the Public Notice shall be brought to the notice of all the concerned.

(SANJEEV BEHARI)COMMISSIONER OF CUSTOMS

(IMPORT)JNCH, NHAVA SHEVA

To1. All the Trade Associations2. The Bombay Custom House Agents Association

Copy to :1. The Chief Commissioner of Customs, JNCH, Nhava Sheva.2. The Commissioner of Customs Import/Export, JNCH, Sheva.3. All the ADC/JC/DC/AC, JNCH, Nhava Sheva.

DOCUMENTS REQUIRED FOR 100%EOU REGISTRATION PURPSOE.

1.2. Original Green Card along with the self attested copy of Green Card 3. Original LOP along with the self attested Copy Letter of Permission 4. Original self attested Copy of Acceptance of B-17 Bond 5. Oriingal Central Excise Registration , along with self attested copy.6. Original Bond Lic. U/s 58/65 vide file no. VIII(Cus)/40-49/Seco(EOU)/05-06

along with self attested copy7. Self attested Copy of IEC No. 8. Self attested Copy of PAN Card9. Consignee request letter10. CHA request letter.

HIGH SEA SALE REGISTRATION PURPOSE REQUIRED DOCUMENTS

11. Required Original HSS agreement with Buyer and seller along with authorized signatory signature and Notaries. Notary date should be HSS agreement date.

12. Buyer original letter address to Customs.13. Seller original letter address to Customs14. Consignee authority letter to CHA15. CHA Authority letter16. Local / Tax invoice17. Original OBL along with stamp and signature by Buyer and seller.

CHANGE OF OWNER SHIP REGISTRATION PURPOSE REQUIRED DOCUMENTS.

1. Required Original Change of owner ship agreement with Buyer and seller along with authorized signatory signature and Notaries. Notary date should be agreement date.

2. Buyer original letter address to Customs.3. Seller original letter address to Customs4. Consignee authority letter to CHA

5. CHA Authority letter6. Local / Tax invoice7. Annexure III for Line position purpose.

RE-IMPORT SHIPMENT DOCUMENTS REQUIRED

1. Import B/L, invoice, Packing list and other related import documents. (Reject and Re- import material mention in invoice and packing list)

2. Supplier material rejection letter along with the reason (Mention Export invoice no and description, Packages). Letter address to Nhava sheva custom.

3. Consignee letter to custom of rejection materials, letter address to Nhava sheva custom

4. Export B/L, Invoice, Packing list along with attested from customs at the time of Export

5. Original EP copy6. Shipping bill Xerox copy7. Other export related original documents8. Import and Export insurance charges9. Testing charges10. Original ARE 1

EXPORT CLEARANCE:-

For clearance of export goods, the export or his agents have to undertake the following formalities:-

Registration :-

The exporters have to obtain PAN based Business Identification Number (BIN) from the Directorate General of Foreign Trade prior to filing of shipping bill for clearance of export goods. Under the EDI system, PAN based BIN is received by the customs system

from the DGFT online. The exporters are also required to register authorized foreign exchange dealer code(Through which export proceeds are expected to be realized ) and open a current account in the designated bank for credit of any drawback incentive.

Whenever a new Airline, Shipping line, Steamer Agent, port or airport comes into operation. They are required to be registered into the Custom System. Whenever, electronic processing of shipping bill etc. is held up on account of non-registration of these entities, the same is to be brought to the notice of Assistant / Deputy Commissioner in-charge of EDI system for registering the new entity in the system.

Registration in the case of export under export promotion schemes:-

All the exporters intending to export under the export promotion scheme need to get their licences / DEEC book etc. registered at the customs station. For such registration, original documents are required.

Processing of Shipping Bill – Non-EDI :-

Under manual system, shipping bills or, as the case may be, bills of export are required to be filed in format as prescribed in the shipping bill and bill of export regulation, 1991. The bills of export are being used if clearance of export goods is taken at the land customs stations. Different forms of shipping bill / bill of export have been prescribed for export of duty free goods, export of dutiable goods and export under drawback etc.

Shipping bills are required to be filed along with all original documents such as invoice, AR-4, packing list etc. The assessing officer in the export department checks the value of the goods, classification under drawback schedule in case of drawback shipping bills, rate of duty / cess where applicable, exportability of goods under EXIM policy and other laws inforce. The DEEC/DEPB shipping bill are processed in the DEEC group. In case of DEEC shipping bill, the assessing officer verifies that the description of the goods

declared in the shipping bill and invoice match with the description of the resultant product as given in the DEEC book. If the assessing officer has any doubts regarding value, description of goods, he may call for samples of the goods from the docks. He may also call for any other information required by him for processing of shipping bill. He may assess the shipping bill after visual inspection of the sample or may send it for test and pass the shipping bill provisionally.

Once, the shipping bill is passed by the export department, the exporter or his agent present the goods to the shed appraiser (Export)in dock for examination. The shed appraiser may mark the document to a Custom officer ( Usually an examiner )for examining the goods. The examination is carried out under the supervision of the shed

appraiser ( Export ). If the description and other particulars of the goods are found to be as declared, the shed appraiser gives a ‘let export’ order, after which the exporter may contact the preventive superintendent for supervising the loading of goods on to the vessel.

In case the examining staff in the docks finds some discrepancy in the goods, they may mark the shipping bill back to export department / DEEC group with their observations as well as sample of goods, if needed. The export department re-considers the case and decide whether export can be allowed, or amendment in description, value etc. is required before export and whether any other action is required to be taken under the Custom Act, 1962 for mis-declaration of description of value etc.

Processing of Shipping Bill – EDI :-

Under EDI system, declaration in prescribed format are to be filed through the service centers or customs. A checklist is generated for verification of data by the exporter / CHA. After verification, the data is submitted to the system by the service center operator and the system generates a shipping bill number, which is endorsed on the printed checklist and returned to the exporter / CHA. For export items which are subject to export cess, the TR-6 challans for cess is printed and given by the service center to the exporter / CHA immediately after submission of shipping bill. The cess can be paid on the strength of the challan at the designated bank. No copy of shipping bill is made available to exporter / CHA at this stage.

Octroi procedure, Quota Allocation and Other certification for export goods:-

The quota allocation label is required to be pasted on the export invoice. The allocation number of AEPC is to be entered in the system at the time of shipping bill entry. The certification of export invoice needs to be submitted to customs along-with other original documents at the time of examination of the export cargo. For determining the validity date of the quota, the relevant date needs to be the date o which the full consignment is presented to the customs for examination and duty recorded in the computer system. In EDI system at Delhi Air Cargo, the quota information is automatically verified from the AEPC / TEXPROCIL system.

Since the shipping bill is generated only after the ‘let export order’ is given by customs, the exporter may make use of export invoice or such other document as required by the octroi authorities for the purpose of octroi exemption.

Arrival of Goods at Docks:-

The goods brought for the purpose of examination and subsequent ‘let export’ allowed entry to the Dock on the strength of the checklist and other declarations filed by the exporter in the service center. The port authorities have to endorse the quantity of goods actually received on the reverse of the check list.

System Appraisal of Shipping bills :-

In many cases the shipping bill is processed by the system on the basis of declarations made by the exporter without any human intervention. In other cases where the shipping bill is processed on screen by the customs officer, he may call for samples, if required for confirming the declared value or for checking classification under the Drawback schedule. He may also give any special instructions for examination of goods, if felt necessary.

Custom Examination of Export Cargo : -

After the receipt of the goods in the dock, the exporter / CHA may contact the customs officer designated for the purpose present the check list with the endorsement of port authority and other declarations as aforesaid along with all original documents such as, Invoice and packing list, AR-4, etc. Customs officer may verify the quantity of the goods actually received and enter into the system and thereafter mark the Electronic shipping Bill and also hand over all original documents to the Dock Appraiser of the Dock who many assign a customs officer for the examination and intimate the officers’ name and

the packages to be examined, if any, on the check list and return it to the exporter or his agent.

The customs officer may inspect / Examine the shipment along with the Dock appraiser. The customs officer enters the examination report in the system. He then marks the electronic Bill along with all original documents and check list to the Dock Appraiser. If the Dock Appraiser is satisfied that the particulars entered in the system confirm to the description given in the original documents and as seen in the physical examination, he may proceed to allow “let Export” for the shipment and inform the exporter or his agent.

Variation Between the Declaration & Physical Examination :-

The check list and the declaration along with all original documents is retained by the Appraiser concerned. In case of any variation between the declaration in the shipping bill and physical documents / examination report, the appraiser may mark the Electronic shipping bill to the Assistant Commissioner / Deputy Commissioner of Custom (Export) and instruct the exporter or his agent to meet the Assistant Commissioner / Deputy Commissioner of Custom (Exports) for settlement of dispute. In case the exporter agrees with the views of the Department, the shipping bill needs to be processed accordingly. Where, however, the exporter disputes the view of the Department principles of natural justice is required to be followed before finalization of the issue.

Stuffing / Loading of Goods in Containers : -

The exporter or his agent should hand over the exporter copy of the shipping bill duly signed by the Appraiser permitting “Let Export” to the steamer agent who may then approach the proper officer ( Preventive Officer ) for allowing the shipment. In case of container cargo the stuffing of container at Dock is done under preventive supervision. Loading of both containerized and bulk cargo is done under Preventive Supervision. The customs Preventive Superintendent (Dock) may enter the particular of package actually

stuffer in to the container, the bottle seal number particulars of loading of cargo container on board into the system and endorse these details o the exporter copy of the shipping bill presented to him by the steamer agent. If there is difference in the quantity / Number of packages stuffed in the containers / goods loaded on vessel the superintendent (Dock) may put a remark on the shipping bill in the system and that shipping bill requires amendment or changed quantity. Such shipping bill also may not be taken up for the purpose of sanction of Drawback / DEEC logging, till the shipping bill is suitably amended for the changed quantity. The customs Preventive officer supervising the loading of container and general cargo in to the vessel may give “Shipped on Board” endorsement on the exporters copy of the shipping bill.

Drawal of Samples:-

Where the Appraiser Dock (Export) orders for samples to be drawn and tested, the Customs officer may proceed to draw two samples from the consignment and enter the particulars thereof along with details of the testing agency in the ICES/E system. There is no separate register for recording dates of samples drawn. Three copies of the test memo are prepared by the Customs officer and are signed by the customs officer and appraising officer on behalf of customs and the exporter or his agent. The disposal of the three copies of the test memo are as follows:-

1. Original – to be sent along with the sample to the test agency.2. Duplicate – Customs copy to be retained with the 2nd sample.3. Triplicate – Exporter’s copy.

The Assistant Commissioner / Deputy Commissioner if he considers necessary, may also order for sample to be drawn for purpose other than testing such as visual inspection and verification of description, market value inquiry etc

DRAWBACK : -

Section 75 of the customs Act, 1962 provides for paying drawback on the goods exported and it is generally equivalent to duties of customs and central excise paid by the exporters on the raw materials used in such exported goods.

Drawback is not customs duty. It is only an INCENTIVE to boost export. It is a rebate of duty chargeable on imported raw materials, components and excisable materials used in the goods exported. No separate application for claiming drawback. The shipping bill itself is a claim for drawback. No drawback below Rs.50/- Drawback is always given to the exporter no time limit for claiming drawback except under section 74 of the customs Act 1962. It is payable to claiming Agents if authorized by the exporters. Drawback can be sanctioned by the appraiser.

Procedure for Claiming Drawback:-

The exporter has to duly fill a form for claiming drawback under Rule 13, along with the shipping bill or bill of Export before customs making a declaration to that effect as under.

That Drawback claimed under draw back rules That no separate claim for rebate of duty has been or will be made to the central

excise authorities under CE Rules, 1944 and the claim for drawback is being made on the export goods for which duties of customs and central excise have been paid.

That invoice of shipment to be produced reflection description, quantity and value of the goods exported. Additional declaration to that effect has to be made as under if the amount or rate of drawback has been fixed under Rule 6 or Rule 7of the drawback rules 1995.

That the export goods so manufactured are from the imported materials or component subject to no change in the manufacturing formula or / and in the quantity per unit.

That the materials and components imported, continue to be imported and / or obtained from domestic sources are as per rule 6 or rule 7 as stated in the application form for claim for drawback.

A separate claim in the prescribed form has to be filed on drawback section of customs with 90 days from the date of “Let Export Order” endorsement made on the relevant shipping bill by the proper officer of customs and a further period may be extended, subject to reasonable grounds satisfied by the commissioner of Customs

Following Documents are to be enclosed with the Drawback claim form-

Pre – receipt for drawback amount on the back page f the shipping bill duly signed on Rs.1/- revenue stamp.

Triplicate copy of the shipping bill Copy of the Bank Certified Invoice. Copy of the Invoice and Packing List duly certified by Custom Copy of the Bill of Lading / Airway bill

Six triplicate copy of AR 4 Form / Gate pass if any Insurance Certificate if any Freight and Insurance Certificates Copy of the Test Report if applicable Copy of communication regarding rate of Drawback where the drawback

claim is for a rate determined by the Central Government under rule 6 & rule 7 of these rules

Declaration to be filed by the exporter under these rules. Any other documents as may be called for by the proper officer.

At present certain Custom House follow EDI system where after export of goods the steamer agent issues the mate receipt. The exporter shall submit the mate receipt and a copy of the shipping bill to the concerned preventive officer of the custom . On receipt of such documents the preventive officer releases the exchange control copy of the shipping bill subsequently, the exporter files a claim for drawback for the goods so exported before the appraiser of the drawback section, with the necessary documents as stated above along with original freight certificate and insurance certificate. The Appraiser confirms with respective the drawback claim. Then the AO releases the drawback amount is credited to the exporters bank account.