draft regulation-handling of cargo

The Central Board of Excise and Customs is proposing to formulate Handling of Cargo in Customs Areas Regulations, 2008 in exercise of powers conferred by sub-section (2) of Section 141 read with Section 157 of the Customs Act, 1962 (52 of 1962).

2. These regulations are being framed on the basis of the recommendations of the Public Accounts Committee (PAC) 2007-08. The scope of the regulations cover the manner in which imported or export goods may be received, stored, delivered, dispatched or otherwise handled in customs area and the responsibilities of the persons engaged in such activities.

3. The CBEC solicits views, comments and suggestions on the draft regulation from the trade and industry associations, departmental officers and from all other concerned. The views, comments and suggestions to the draft regulations may please be sent to Director (Customs) on Fax No.(011) 23092173 or at E-mail I.D: dircus@nic.in latest by 17.11.2008.

CBEC solicits views, comments and suggestions on the draft regulations, from the trade and industry associations, departmental officers and others. The views, comments and suggestions to the draft circular may please be sent to Director (Customs) on Fax No. (011) 23092173 or at E-mail I.D: dircus@nic.in latest by 17.11.2008.

Disclaimer:- This Draft regulation has been put up only to elicit public response. No final decision has been taken by Government / Board. Government / Board will proceed further in the matter only after due examination of the response received.

In exercise of powers conferred by sub-section (2) of Section 141 read with Section 157 of the Customs Act, 1962 (52 of 1962), the Central Board of Excise and Customs hereby makes the following regulations, namely:-

(1) These regulations may be called the Handling of Cargo in Customs Areas Regulations, 2008.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. Definitions. – In these regulations, unless the context otherwise requires, -

(a) “Customs Cargo Services provider” means any person responsible for receipt, storage, delivery, dispatch or otherwise handling of imported goods and export goods and includes a custodian as referred to in Section 45 of the Customs Act, 1962 and persons as referred to in sub-section (2) of Section 141 of the said Act;

(b) “prescribed’ means prescribed by rules, regulations, notifications and orders under the provisions of the Customs Act, 1962;

(c) the words and expressions used herein and not defined in these regulations but defined in the Customs Act, 1962 shall have the same meaning respectively assigned to them in the said Act.

(1) These regulations shall be applicable to the handling of imported and export goods in customs areas in ports, airports, Inland Container Depots and Land Customs Stations approved or specified under section 8 of the Customs Act, 1962.

(2) Any action taken or anything done in respect of appointment of Customs cargo service providers, immediately preceding the coming into force of these regulations, shall be deemed to have been done under the corresponding provisions of these regulations.

(3) Customs cargo service providers already approved on or before the date of coming into force of these regulations shall comply with the conditions of these regulations within a period of six months or such extended period not exceeding a period of one year as the Commissioner of Customs may allow for approval under regulation 7.

4. Conditions to be fulfilled by an applicant for custody and handling of imported or export goods in a customs area. –

Any person who intends to be approved as a customs cargo service provider for custody of imported goods or export goods and for handling of such goods, in a customs area, hereinafter referred to as the applicant, shall fulfill the following conditions, namely:-

(1) The applicant shall provide the following to the satisfaction of the Commissioner of Customs, namely:

(i) Infrastructure and equipment for loading, unloading, stacking, handling, stuffing and de-stuffing of containers, storage, dispatch and delivery of containers and cargo etc., including:

(a) standard pavement for heavy duty equipment for use in the operational and stacking area;

(b) building for Customs office, EDI Service Centre and user agencies with basic facilities;

(i) computerized system for location and accountal of goods, and processing of documents;

(j) adequate air-conditioned space and power back up, hardware, networking and other equipment for secure connectivity with the Customs Automated system; and for exchange of information between Customs Community partners;

(k) facilities for auction, including by e-auction, for disposal of uncleared, unclaimed or abandoned cargo;

(ii) safe, secure and spacious premises for loading, unloading, handling and storing of the cargo for the projected capacity and for the examination and other operations as may be required in compliance with any law for the time being in force;

(iii) insurance for an amount equal to the average value of goods likely to be stored in the customs area based on the projected capacity, and as may be specified by the Commissioner of Customs.

(2) The applicant shall undertake to bear the cost of the Customs officers posted by the Commissioner on cost recovery basis at such customs area and shall make payments at such rates and in the manner prescribed by the Government of India in the Ministry of Finance, unless specifically exempted by an order of the said Ministry;

(3) The applicant shall execute a bond equal to the average amount of duty involved on the imported goods and ten percent of value of export goods likely to be stored in the customs area during a period of thirty days and furnish a bank guarantee or cash deposit equivalent to ten percent of such duty:

Provided that the condition of furnishing of Bank guarantee or cash deposit shall not be applicable to ports notified under the Major Ports Act, 1962, or to the Central or State Governments or their undertakings;

(4) The applicant shall also execute a separate bond for an amount equal to ten percent of value of export goods with a bank guarantee for an amount equal to ten percent of the value of the bond, towards the export goods transported from the customs area to any other customs area for export or transshipment, as the case may be;

(5) The applicant shall undertake to comply with the provisions and abide by all the provisions of the Customs Act, 1962, and the rules, regulations, notifications and orders issued thereunder.

(a) keep a record of imported goods, goods brought for export or transshipment, as the case may be, and produce the same to the proper officer as and when required;

(b) demarcate separate areas for unloading of imported goods for their storage with respect to the category of importers, nature of goods, place of destination, mode of transportation or any other criterion as may be prescribed;

(c) demarcate separate areas for loading of export goods for their storage with respect to categories of exporters, nature of goods, examined and sealed containers or other criterion as may be prescribed;

(d) not permit goods to be removed from the customs area, or otherwise dealt with, except under and in accordance with the permission in writing of the proper officer;

(e) not permit any export cargo to enter the customs area with out a shipping bill in a bill of export having been filed with the proper officer;

(f) not permit any import cargo to enter the customs area or be unloaded therein without the import report or the import manifest having been filed with the proper officer;

(g) be responsible for the safety and security of imported and export goods under its custody;

(h) be liable to pay duty on goods pilfered after entry thereof in the customs area;

(i) be responsible for the secure transit of the goods from the said customs area to any other customs area at the same or any other customs station in accordance with the permission granted by the proper officer;

(j) subject to any other law for the time being in force, shall not charge any rent or demurrage on the goods seized or detained by the proper officer:

Provided that after the ownership of the goods vests in the Government on confiscation, rent may be paid at such rates, as may be determined by the Commissioner of Customs for the period beyond 120 days from the date of such confiscation;

(k) dispose off in the prescribed manner and within a time limit of ninety days, the imported or export goods lying unclaimed, uncleared or abandoned:

Provided that the period of ninety days may be extended by the Commissioner of Customs by such further period as may be allowed, on sufficient cause being shown for delay in the disposal;

(l) not make any alteration in the entry or exit points or boundary wall without the permission of the Commissioner of Customs;

(m) shall bear the cost of the customs officers posted by the Commissioner of Customs on cost recovery basis and shall make payments at such rates and in the manner prescribed by the Government of India in the Ministry of Finance unless specifically exempted by an order of the said Ministry; and

(n) abide by all the provisions of the Customs Act, 1962, and the rules, regulations, notifications and orders issued thereunder.

(2) The Customs cargo service provider approved for custody of imported or export goods and for handling of such goods shall not lease, gift, sell or sublet or in any other manner transfer any of the premises in a customs area; or sub contract or outsource functions permitted or required to be carried out by him in terms of these regulations to any other person, without the written permission of the Commissioner of Customs.

(3) The customs cargo service provider shall publish and display the schedule of charges for the various services provided by him in relation to the imported goods or export goods in the customs area.

6. Power to relax and regulate: (1) The Commissioner of Customs may for reasons to be recorded in writing, exempt a customs cargo service provider from any of the conditions of regulation 4.

(2) The Commissioner of Customs may regulate the entry of goods in a customs area for efficient handling of such goods.

7. Commencement of operations: The customs cargo service provider approved for custody of imported or export goods and for handling of such goods shall not commence any operations in a customs area for the first time unless the Commissioner of Customs is satisfied that all the requirements of the Customs Act, 1962 have been fulfilled and grants permission to commence the operations by an order in writing.

8. Application for approval of customs cargo service provider: An application to act as a Customs cargo service provider for custody of imported or export goods and for handling of such goods in a customs area shall be made in the form of a letter to the jurisdictional Commissioner of Customs containing details as specified in ‘Form A’.

9. Approval of appointment of a Customs Cargo service provider and review thereof:

(1) Where the Commissioner of Customs is satisfied that the applicant has fulfilled the conditions specified in regulation 4, he may approve such an applicant as a Customs Cargo service provider, for a period of five years from the date of issue of such approval.

(2) The approval shall be reviewed after every five years, provided that the Commissioner of Customs may order for review before the completion of five years for reasons to be recorded in writing.

10. Suspension or revocation of approval of a Customs Cargo service provider:

(1) The Commissioner of Customs may, subject to the provisions of these regulations, suspend or revoke the approval granted to the customs cargo service provider subject to the observance of procedure specified under regulation 11 and also order for forfeiture of security, if any, for failure to comply with any of the provisions of the Customs Act, 1962, and the rules, regulations, notifications and orders made thereunder;

(2) Notwithstanding anything contained in sub-regulation (1), the Commissioner of Customs may, in appropriate cases where immediate action is necessary, suspend the approval granted to a Customs Cargo service provider where an enquiry against such Customs Cargo service provider is pending or contemplated.

11. Procedure for suspension or revocation of approval and imposition of penalty:-

(1) The Commissioner of Customs shall issue a notice in writing to the Customs Cargo service provider stating the grounds on which it is proposed to suspend or revoke the approval and requiring the said Customs Cargo service provider to submit within such time as may be specified in the notice not being less than thirty days, to the Assistant Commissioner or Deputy Commissioner of Customs nominated by him, a written statement of defence and also to specify in the said statement whether the Customs Cargo service provider desires to be heard in person by the said Assistant Commissioner or Deputy Commissioner of Customs.

(2) On receipt of the written statement from the Customs Cargo service provider, or where no such statement has been received within the time-limit specified in the notice referred to in sub-regulation (1), the Assistant Commissioner or Deputy Commissioner of Customs may inquire into such of the grounds as are not admitted by the Customs Cargo service provider.

(3) The Assistant Commissioner or Deputy Commissioner of Customs shall, in the course of inquiry, consider such documentary evidence and take such oral evidence as may be relevant or material to the inquiry in regard to the grounds forming the basis of the proceedings and he may also put any question to any person tendering evidence, for or against the Customs Cargo service provider, for the purpose of ascertaining the correct position.

(4) The Customs Cargo service provider shall be entitled to cross-examine the persons examined in support of the grounds forming the basis of the proceedings and where the Assistant Commissioner of Customs or Deputy Commissioner of Customs declines to examine any person on the grounds that his evidence is not relevant or material, he shall record his reasons in writing for so doing.

(5) At the conclusion of the aforesaid inquiry, the Assistant Commissioner of Customs or Deputy Commissioner of Customs shall prepare a report of the inquiry recording his findings.

(6) The Commissioner of Customs shall furnish to the Customs Cargo service provider a copy of the report of the Assistant Commissioner or Deputy Commissioner of Customs and shall require the Customs Cargo service provider to submit within the specified period not being less than thirty days any representation that he may wish to make against the findings of the Assistant Commissioner of Customs or Deputy Commissioner of Customs.

(7) The Commissioner shall, after considering the report of the inquiry, and the representation thereon, if any, made by the Customs Cargo service provider, pass such orders as he deems fit.

(8) If any Customs Cargo service provider contravenes any of the provisions of these regulations, or abets such contravention or who fails to comply with any provision of the regulation with which it was his duty to comply, then, he shall be liable to a penalty which may extend to fifty thousand rupees.

(9) Any Customs Cargo service provider aggrieved by any decision or order passed under this regulation, may appeal under section 129A of the Customs Act, 1962, to the Customs Central Excise and Service Tax Appellate Tribunal established under section 129(1) of the Customs Act, 1962.

12. Renewal of appointment: The Commissioner of Customs may on application made by the customs cargo service provider before the expiry of the validity of the appointment under regulation 9, renew the licence for a further period of five years from the date of expiration of the original licence granted under regulation 9 or of the last renewal of such licence, as the case may be, if the performance of the licensee is found to be satisfactory with reference to his obligations under any of the provisions of the Customs Act, 1962, and the rules, regulations, notifications and orders made thereunder.

Subject: Application Form for approval / renewal of Customs cargo service provider under the Handling of Cargo in Customs Areas Regulations, 2008 issued under Section 141(2) of the Customs Act, 1962.

I/we, the undersigned hereby submit the following details for approval as a Customs cargo service provider under the Handling of Cargo in Customs Areas Regulations, 2008:

(b) Full Address (Registered Office, in case of limited Companies & Head Office for others) ____________

(f) Name and address of each of the Directors/Partners/ Promoters, as the case may be ___________

Note:- Copy of certificate of incorporation along with Article of Association and Memorandum in case of companies and partnership deed in case of partnership firms may please be attached.

3. Extent of the proposed premises, giving details of area allocated for unloading / loading, operational and stacking area, storage area, delivery, Customs Automated System, Customs office premises, service centre, other user agencies etc.

4. Whether the applicant holds a valid Letter of Approval given by the Inter-Ministerial Committee of the Ministry of Commerce or any other Government Body for setting up of Customs cargo service facility at the premises applied for? If so, provide details thereof.

5. Projected capacity of the cargo / container proposed to be handled in the proposed premises.

6. Details of infrastructure and equipment put in place for handling of cargo in the proposed premises. (Details to be given separately for loading / unloading, stacking, storage and delivery)

7. Details of security system installed for entry / exit of cargo and other safety and security measures.

9. Details of the computerized system put in place for location of cargo / container, processing of documents.

10. Whether any exemption from payment of cost recovery charges for posting of Customs officers is claimed. If so, furnish the details of the order issued in this regard by the Ministry of Finance.

11. Whether the applicant is already functioning as Customs cargo service provider. If so, details of the premises along with the respective jurisdiction of the Commissioner of Customs.

12. Whether the applicant had earlier applied for approval to act as Customs cargo service provider and whether such application was approved / rejected:-

(i) within the jurisdiction of the Commissioner of Customs to whom application has been made;

13. Whether the applicant has been penalized, convicted or prosecuted under any of the provisions of the Customs Act, 1962 (52 of 1962) or any other law for the time being in force:

14. If the application is for renewal, details of original approval granted under regulation 9, along with the date of its expiration or the date of last renewal of such approval.

I/We hereby affirm the I/we have read the Handling of Cargo in Customs Areas Regulations, 2008 and agree to abide by them.

I/We hereby undertake to intimate any change in respect of the information provided in the aforesaid application within a period of 30 days.

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