PROCEDURE OF CUSTOMS UNDER CUSTOMS ACT, 1962

INTRODUCTION:

Customs is an authority or tax collection wing appointed by the Government in every country for controlling and for collecting of tax on the flow of goods into and out of a country. ‘Customs Duty’ refers to the tax imposed on the goods when they are transported across the international borders. Custom Duty is an indirect tax, imposed under the Customs Act formulated in 1962. Following are the types of customs duty in India, 

• Basic Customs Duty (BCD)
• Countervailing Duty (CVD)
• Additional Customs Duty or Special CVD
• Protective Duty,
• Anti-dumping Duty

The power to enact the law is provided under the Constitution of India under the Article 265, which states that ―no tax shall be levied or collected except by authority of law. Entry No. 83 of List I to Schedule VII of the Constitution empowers the Union Government to legislate and collect duties on import and exports.

The primary objective behind levying customs duty is to safeguard each nation’s economy, jobs, environment, residents, etc., by regulating the movement of goods in and out of any country. It is also to minimise the smuggling of demerit goods such as cigarettes and alcoholic beverages across borders since these items are usually highly taxed and their tax rates may also vary significantly across borders. The Quantum of Customs duty in India depends upon the provisions of Customs Act, 1962 and Customs Tariff Act, 1975 and related Customs Rules, Notifications, Circulars, case Laws and Annual Union Finance Acts. The Customs Act, 1962 is the principal act which governs entry or exit of different categories of vessels, aircrafts, goods, passengers etc., into or outside the country. The Act extends to the whole of India. 

All goods imported into India have to pass through the procedure of customs for proper examination, appraisal, assessment and evaluation. This helps the custom authorities to charge the proper tax and also check the goods against the illegal import. Import and export of goods into and outside a country should undergo a customs clearance process. The importer and exporter of the goods should submit valid documents to clear this process. In this article, we look at some of the major steps and processes in clearing customs in India. Goods are imported in India or exported from India through sea, air or land. Goods can come through post parcels or as baggage with passengers. Procedures naturally vary depending on mode of import or export. Procedures discussed in this are applicable for imports by sea, air or land.

PROCEDURES FOR IMPORT:

Bill of entry:

Goods imported into the country attract Customs duty and are also required to confirm relevant and corresponding legal requirements. Thus, unless the imported goods are not meant for Customs clearance at the port/airport of arrival such as those intended for transit by the same vessel/aircraft or transshipment to another Customs station or to any place outside India, detailed Customs clearance formalities have to be followed by the importers. In contrast, in terms of Section 52 to 56 of the Customs Act, 1962, the goods mentioned in the IGMor Import Report for transit to any place outside India or meant for transshipment to another Customs station in India are allowed transit without payment of duty. In case of goods meant for transshipment to another Customs station, simple transshipment procedure has to be followed by the carrier and the concerned agencies at the first port/ airport of landing and the Customs clearance formalities have to be complied with by the importer after arrival of the goods at the other Customs station where goods are intended to be delivered to the importer. There could also be cases of transshipment of the goods after unloading to a port outside India. For this purpose, a simple procedure is prescribed and no duty is required to be paid. 

Self-assessment of imported and export goods: 

Section 17 of the Customs Act, 1962 provides that an importer entering any imported goods under section 46 or an exporter entering any export goods under section 50 shall self-assess the duty. Thus, under self-assessment, it is the importer or exporter who will ensure that he declares the correct classification, applicable rate of duty, value, benefit of exemption notifications claimed, if any, etc. in respect of the imported / export goods while presenting Bill of Entry or Shipping Bill. In cases, where the importer or exporter is not able to determine the duty liability or make self assessment for any reason, except in cases where examination is requested by the importer under proviso to Section 46(1), a request shall be made to the proper officer for provisional assessment of duty under Section 18 (1)(a) of the Customs Act, 1962. In such a situation an option is available to the proper officer to resort to provisional assessment of duty by asking the importer / exporter to furnish security as deemed fit for payment of the deficiency, if any, between the duty as may be finally assessed or reassessed, as the case may be, and the duty provisionally assessed.

Examination of Goods:

All imported goods are required to be examined for verification of correctness of description given in the bill of entry. However, a part of the consignment is selected on a random selection basis and is examined. In case the importer does not have complete information with him at the time of import, he may request for examination of the goods before assessing the duty liability or, if the Customs Appraiser/Assistant Commissioner feels the goods are required to be examined before assessment, the goods are examined prior to assessment. The importer has to request for a first check examination at the time of filing the bill of entry or at data entry stage. The reason for seeking First Appraisement is also required to be given. On the original copy of the bill of entry, the Customs Appraiser records the examination order and returns the bill of entry to the importer/CHA with the direction for examination, who is to take it to the import shed for examination of the goods in the shed. Shed Appraiser/Dock examiner examines the goods as per examination order and records his findings. 

After assessment by the appraising group or for cases where examination is carried out before assessment, a bill of entry needs to be presented for registration for examination of imported goods in the import shed. The proper officer of customs examines the goods along with requisite documents. The shipments, found in order are given clearance order by the proper officer of customs in the Import Shed.

Execution of Bonds:

Wherever necessary, for availing duty free assessment or concessional assessment under different schemes and notifications, execution of end use bonds with Bank Guarantee or other surety is required to be furnished. These have to be executed in prescribed forms before the assessing Appraiser.

Payment of duty:

The duty can be paid in the designated banks or through TR-6 challans. Different Custom Houses have authorised different banks for payment of duty. It is necessary to check the name of the bank and the branch before depositing the duty. Bank endorses the payment particulars in challan which is submitted to the Customs.

Amendment of Bill of Entry: 

Bonafide mistakes noticed after submission of documents, may be rectified by way of amendment to the Bill of Entry with the approval of Deputy/Assistant Commissioner. The request for amendment may be submitted with the supporting documents. 

Prior Entry for Bill of Entry:  

For faster clearance of the goods, provision has been made in section 46 of the Act, to allow filing of bills of entry prior to arrival of goods. This bill of entry is valid if a vessel/aircraft carrying the goods arrives within 30 days from the date of presentation of the bill of entry. The importer is to file 5 copies of the bill of entry and the fifth copy is called Advance Noting copy. The importer has to declare that the vessel/aircraft is due within 30 days and they have to present the bill of entry for final noting as soon as the IGM is filed. Advance noting is available to all imports except for into the bond bill of entry and also during the special period.

Bill of Entry for bond/warehousing:

A separate form of Bill of Entry is used for clearance of goods for warehousing. All documents, as are required to be filed with a Bill of Entry for home consumption are also required with the Bill of Entry for Warehousing which is assessed in the same manner and duty payable is determined. However, since duty is not required to be paid at the time of warehousing, the purpose of assessing the duty at this stage is only to secure the duty by way of execution of Bond. The duty is paid at the time of ex-bond clearance of goods for which an Ex-Bond Bill of Entry is filed. In terms of Section 15 of the Customs Act, 1962, the rate of duty applicable to imported goods cleared from a warehouse is the rate in- force on the date of filing of the Ex-Bond Bill of Entry. 

PROCEDURE FOR EXPORTS:

Shipping bill: 

For clearance of export goods, the exporter has to obtain an Importer- Export Code (IEC) number from the DGFT prior to filing of Shipping Bill. Under the EDI System, IEC number is received online by the Customs System from the DGFT. The exporter is 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 Drawback incentive, if any. All the exporters intending to export under the export promotion scheme need to get their licenses etc. registered at the Customs Station. For such registration, original documents are required. 

Waiver of GR form: 

Generally the processing of Shipping Bills requires the production of a GR form that is used to monitor the foreign exchange remittance in respect of the export goods. However, there are few exceptions when the GR form is not required. These exceptions include export of goods valued not more than US $25,000/- and export of gifts valued upto Rs.5 lakhs. 

Arrival of goods to the dock:

The goods brought for the purpose of examination and subsequent ‘let export’ are 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 Checklist.

Customs examination of export goods:

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 checklist to the Dock Appraiser. If the Dock Appraiser is satisfied that the particulars entered in the system conform 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.

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. 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.

Stuffing / loading of goods in containers: 

In case of container cargo the stuffing of containers at Dock is done under Preventive supervision. Further, loading of both containerized and bulk cargo is to be done under Preventive supervision. The Customs Preventive Officer supervising the loading of container and general cargo into the vessel may give “Shipped on Board” endorsement on the Exporters copy of the Shipping Bill.  

Amendments: 

Any correction/amendment in the check list generated after filing of declaration can be made at the Service Centre provided the documents have not yet been submitted in the EDI system and the Shipping Bill number has not been generated. Where corrections are required to be made after the generation of the Shipping Bill number or after the goods have been brought into the Export Dock, the amendments will be carried out in the following manner: 

(i) If the goods have not yet been allowed to “Let Export” the amendments may be permitted by the Assistant / Deputy Commissioner (Exports). 

(ii) Where the “Let Export” order has already been given, amendments may be permitted only by the Additional/Joint Commissioner in charge of Export. 

Drawback claim:  

After actual export of the goods, the Drawback claim is processed through the EDI system by the officers of the Drawback Branch on a first come first served basis. There is no need for filing separate drawback claims. The status of the shipping bills and sanction of DBK claim can be ascertained from the query counter set up at the service center. If any query has been raised or deficiency noticed, the same is shown on the terminal. A print out of the query/deficiency may be obtained by the authorized person of the exporter from the service center. The exporters are required to reply to such queries through the service center. The claim will come in the queue of the EDI system only after reply to queries/deficiencies are entered by the Service Center.

Export General Manifest(EGM):

All the shipping lines/agents need to furnish the Export General Manifests, Shipping Bill wise, to the Customs electronically within 7 days from the date of sailing of the vessel. Apart from lodging the EGM electronically the shipping lines need to continue to file manual EGMs along with the exporter copy of the shipping bills as per the present practice in the export department. The manual EGMs need to be entered in the register at the Export Department and the Shipping lines may obtain acknowledgements indicating the date and time at which the EGMs were received by the Export Department. The above is the general procedure for export under EDI Systems. However special procedures exist for specified schemes, details of which may be obtained from the Public Notice/Standing Orders issued by the respective Commissionerates.

Facility 24×7 Customs Clearance:  

In order to faster Customs clearance of imported and export goods to reduce dwell time and lower the transaction cost, CBE & C, vide Circular No. 19/2014-Customs, dated 31.12.2014 has made facility of 24×7 Customs Clearance for specified imports, namely, goods under ‘facilitated “Bills of Entry and specified exports, namely factory stuffed containers and goods exported under free shipping Bills have made available in 18 sea ports. Similarly, facility of 24×7 Customs clearance for specified imports, namely, goods covered by facilities Bills of Entry and all exports viz. goods covered by all shipping Bills has been extended at 17 air cargo complexes.

Sealing of Export Goods: electronic sealing facility:

Board has laid down a simplified procedure for stuffing and sealing of export goods by introducing self-sealing subject to certain conditions.

CONCLUSION:

In line with Government’s policy “Ease of Doing Business “ the Central Board of Excise and Customs  has taken-up the various measures to facilitate trade and commerce to bring hassle free working environment as well as  reduction of transaction costs of goods and services to make them competitive in the domestic and international market.  The various initiatives taken by the Board are welcome steps and this will reduce the prices of Goods and services in the GST regime. The initiatives for “ease of doing of business certainly will boost the economic growth of the country in the coming days.

Written by –Gokul Abimanyu.O.R

Edited By – Aaditya Bhatt Advocate, Chandni Joshi Advocate 

Retraction Of statements and confessions

Introduction

A Confession is an admission made by a person charged with a crime at any time stating or suggesting the inference that he committed that crime. Confession is received in criminal cases upon the principle that a person will not  make an untrue statement against his own interest. Confession may be divided into two categories; judicial confession and extra-judicial confession. 

• Judicial confessions are those confessions which are made before a Magistrate or in Court in the due course of legal proceedings.
• Extra-judicial confessions are those confessions which are made by the accused anywhere other than before a Magistrate or in Court and extrajudicial confession can be made to any particular person or to a group of persons.

The term confession has not been defined in the Indian Evidence Act, 1872 and it attains its first appearance in section 24 of the Indian Evidence Act.

Sections 24, 25, 26 and part of Section 27 of the Indian Evidence Act, 1872 deals with irrelevant confession. Apart from Section 27, relevant confessions have been dealt with under Sections 28, 29 and 30 of the Indian Evidence Act, 1872.

Evolving of the concept of retraction of statements and confession basically comes from the Article 20(3) of the constitution which states, ‘No person accused of any offence shall be compelled to be a witness against himself’.

A retracted confession is a confession voluntarily made by a person and subsequently retracted. The credibility of such a confession is a matter to be decided by the court according to the facts and circumstances of each case and if the court is of the opinion that such confession is proved; the court is bound to act upon it so far as the person making the confession is concerned. The retracted confession may also form the basis of conviction and punishment if it is believed to be true and voluntary.

Retracted confession can also be used against the person making it if it is supported by independent and corroborative evidence. In the case of Pyare Lal v. State of Rajasthan. The Supreme Court held that a retracted form of confession can form the basis of a conviction if and only if the Court is satisfied that it was true and was made voluntarily.

Relevant and specific Provisions

Section 24 made all the confessions made by an accused under any form of inducement by the means of either threat or promise from any person as irrelevant in any criminal proceeding. It was held in the case State of Punjab v. Gurdeep Singh that if the circumstances are such that the Courts believe the witness and are satisfied that such a confession is made on a voluntary basis, an order of conviction can be found on the same.

The conditions of irrelevance under section 24 of Indian Evidence Act, 1872 are as follows:

1. a) The confession must be a result of inducement or a threat or a promise;
2. b) Inducement, etc. should proceed from a person in authority;
3. c) It should be relating to the charge that is in question;
4. d) It should obtain a worldly benefit or any form of disadvantage

The Confession must be a result of inducement or threat or a promise.

A confession will justly be admitted if and only if it is voluntary and any confession that is obtained by the means of a threat, promise or inducement cannot be admitted. An inducement to confess may be upon a promise of pardon. A promise or threat made to one accused will not render a confession made by another, who was present and heard the inducement, irrelevant.

Person in the authority

The particular inducement or threat caused must flow from a person who has authority. This refers to the government officials who are having a particular authority due to their position in the services. Every government official is the person who is capable of influencing the course of prosecution.

A confession is made relevant even it is obtained in the following circumstances:

1. On promising the accused that the information obtained will be kept a secret or that it will not be used against him 

It may be recalled that an admission made in a civil case under promise that evidence of it shall not be given is not relevant, (Section 23) the policy being that litigants should be encouraged to compromise their differences. That policy has no relevance to criminal cases because here the public interest lies in prosecuting criminals and not compromising with them. Consequently, therefore, where an accused person is persuaded to confess by assuring him of the secrecy of his statements, the confession is nevertheless relevant.

1. By practicing a deception on the accused for the purpose of obtaining his confession

When the confession is the outcome of a fraud being played with the accused, it stands relevant. Thus, where the two accused persons were left in a room where they thought they were all alone, but secret tape recorders were recording their conversation, the confessions thus recorded were held to be relevant. Similarly, where an accused was persuaded to submit for a medical examination for an innocent purpose which was in fact conducted for criminal purpose, his statements to the doctor and the doctors report were held to be relevant at the discretion of the Court. A confession secured by intercepting and opening a letter has also been held to be relevant.

1. Circumstances when the accused was drunk

A confession obtained by intoxicating the accused is equally relevant. The law is concerned to see that the confession is free and voluntary and if this is so it does not matter that the accused confessed under the influence of drink. According to the English practice the judge will have discretion in the matter.

Section 30 deals with the consideration of proven confession affecting the person making it and others jointly under for the same trial for the same offence. It provides that When more persons than one are being tried jointly for the same offence and a confession made by one of such persons affecting himself and some other of such person is proved, the court may take into consideration such confession as against such other persons as well as against person who make such confession.

 In Reference to the case of State of Maharashtra v. Mohd. Ajmal Mohd. Amir Kasab,

The courts held that it is safe to place reliance on retracted confessions if it can be established that the confession is true and has been made voluntarily. It is also important to keep in mind that the confession has been corroborated sufficiently. The courts have the power to discard the exculpatory facts and consider the inculpatory facts.

The courts laid down the following essential principles:

1. A confession can be acted upon only if the court is satisfied that it is true and has been made voluntarily.
2. The confession must stand true to the facts and should not counter it.
3. It is a rule of judiciousness as to not base a conviction on the basis of a confession that has not been corroborated.

Retraction of Statement made under the Customs Act or Income tax act

Statement Under Section 108 of Customs Act, 1962 is an admissible piece of evidence before court of law. Section 108 is a machinery section to gather evidence in case of violations/offence under Customs Act. The power of recording of statements and calling for documents is vested in Officers not lower than the rank of Superintendent and Appraiser (AO in short) in rank. Whoever is found involved in violation of customs law, his/ her statement can be recorded to gather evidence in order to bring the guilty home. 

Section 108 of the customs Act states that, 

(1).Any gazetted officer of customs duly empowered by the Central Government on this behalf, shall have power to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry which such officer is making under this Act.]

(2).A summons to produce documents or other things may be for the production of certain specified documents or things or for the production of all documents or things of a certain description in the possession or under control of the person summoned.

     Retraction or rebuttal of earlier statements/admitted facts can, inter alia, be:

• In the form of statement which is recorded later on ; or
• In the form of a letter; or
• In the form of an affidavit filed.

It is a settled situation of law that affirmation made by the assessee u/s 132(4) is a significant piece of proof however the equivalent isn’t convincing. It is available to the assessee who made the admission to show that it is erroneous and the equivalent is given under mixed up conviction of actuality or law. 

• In the case of Jyotichand Bhaichand Saraf and Sons (P.) Ltd. v DCIT ,the Hon’ble ITAT Pune held that however It is a settled position that confession made by assessee under area 132(4) of the IT Act is a significant piece of proof yet the equivalent isn’t decisive. It is available to the assessee who made the admission to show that it is wrong and the equivalent is given under mixed up conviction of truth or law.

• In the case of Union of India v. Kisan Ratan Singh,

K.R. Shriram, J. observed, “If I have to simply accept the statement recorded under Section 108 as gospel truth and without any corroboration, I ask myself another question, as to why should anyone then go through a trial. The moment the Customs authorities recorded the statement under section 108, in which the accused confessed about his involvement in carrying contraband gold, the accused could be straightaway sent to jail without the trial court having recorded any evidence or conducting a trial.”

The Court also reiterated that in absence of any corroboration by an independent and reliable witness, a statement recorded under Section 108 in isolation could not be relied upon. 

• It was observed in Haroom Hazi Abdulla v. State of Maharashtra that a “retracted confession must be looked upon with greater concern unless the reasons given for having made it in the first instance are on the face of them false.” There was a further observation that; retracted confession is a weak link against the maker and more so against a co-accused.” 
•  In the case of  K.I. Pavunny v. Asst. Collector (HQ) Central Excise Collectorate, Cochin the Supreme Court held:

“Even though the Customs officers have been invested with many of the powers which an officer in charge of a police station exercises while investigating a cognisable offence, they do not, thereby, become police officers within the meaning of Section 25 of the Evidence Act and so the confessional statements made by the accused persons to Customs officials would be admissible in evidence against them.

• In Bharat vs. State of U.P.. Hidayatullah, C.J., speaking for a three-Judge Bench observed thus: 

“Confessions can be acted upon if the court is satisfied that they are voluntary and that they are true. The voluntary nature of the confession depends upon whether there was any threat, inducement or promise and its truth is judged in the context of the entire prosecution case. The confession must fit into the proved facts and not run counter to them. When the voluntary character of the confession and its truth are accepted, it is safe to rely on it. Indeed a confession, if it is voluntary and true and not made under any inducement or threat or promise, is the most patent piece of evidence against the maker. Retracted confession, however, stands on a slightly different footing. As the Privy Council once stated, in India it is the rule to find a confession and to find it retracted later. A court may take into account the retracted confession, but it must look for the reasons for the making of the confession as well as for its retraction, and must weigh the two to determine whether the retraction affects the voluntary nature of the confession or not. If the court is satisfied that it was retracted because of an after-thought or advice, the retraction may not weigh with the court if the general facts proved in the case and the tenor of the confession as made and the circumstances of its making and withdrawal warrant its user. All the same, the courts do not act upon the retracted confession without finding assurance from some other sources as to the guilt of the accused. Therefore, it can be stated that a true confession made voluntarily may be acted upon with slight evidence to corroborate it, but a retracted confession requires the general assurance that the retraction was an after-thought and that the earlier statement was true. This was laid down by this Court in an earlier case reported in Subramania Gounden v. The State of Madras.”

In case of Satinder Kumar , their lordships held that it is true that an admission made by an assessee constitutes a relevant piece of evidence but if the assessee contends that in making the admission he had proceeded on a mistaken understanding or on misconception of facts or on untrue facts such an admission cannot be relied upon without first considering the aforesaid contention.

Conclusion

Retraction of statements and confession is a result of Article 20(3) and thus, if the         accused is retracting the statements or any confession within the stipulated time period according to the  set provisions then it should be validated and considered. A retracted statement under Section 132(4) of the Act would require some corroborative material for the AO(Officers not lower than rank of Superintendent and Appraiser) to proceed to make additions on the basis of such statement.

From the standards of law set down as references thus above, it could be derived that admission is one significant piece of proof however it can’t be said that it is definitive. It is rebuttable. It is available to an assessee who made an admission to set up that the admission was involuntary and the equivalent was extricated under pressure and coercion.

Of course, where the retraction is not for any convincing reason, or where it is not shown by the Assessee that he was under some coercion to make the statement in the first place, or where the retraction is not followed by the Assessee producing material to substantiate his defense, the AO(Officers not lower than rank of Superintendent and Appraiser ) might be justified in make additions on the basis of the retracted statement. And thus, confessions and statements, whether retracted or not; should always result in the justice for all because justice is a Right and not a privilege. 

Author: Pooja Shukla

Editor: Adv. Aditya Bhatt & Adv. Chandni Joshi