The Central Board of Excise and Customs (CBEC) has started the New Year with a circular to help the exporters avoid shipment delays even in situations when the Custom suspect or detect mis-declaration of quantity, value and description, unless the export goods are prohibited for exports.
The CBEC circular (no. 1 dated January 4, 2011) says that in case the export goods are suspected of mis-declaration or where declaration is to be confirmed and further enquiry/confirmatory test or expert opinion is required (as in case of chemicals or textiles materials), the goods should be allowed exportation provisionally against a bond for an amount equal to the value of goods backed by appropriate security to cover the redemption fine and penalty (in case goods are found to be liable to confiscation).
The bond for provisional release should contain a clause that finalisation of export incentives shall be done only after receipt of the test report/finalisation of enquiry and final decision in the matter. Export goods detained for purpose of tests etc. must be dealt with on priority and the export allowed expeditiously unless the prohibited nature of goods is confirmed. Continued detention of any export goods in excess of three days must be brought to the notice of the Commissioner of Customs, who will safeguard the interest of the genuine exporters as well as the revenue, says the Circular.
In case the export goods are found to be mis-declared in terms of quantity, value and description and are seized for being liable to confiscation under the Customs Act, 1962, the same may be ordered to be released provisionally on execution of a bond of an amount equivalent to the value of goods along with furnishing an appropriate security in order to cover the redemption fine and penalty.
However, in case the export goods are either suspected to be prohibited or found to be prohibited in terms of the Customs Act, 1962 or ITC (HS), the same should be seized and appropriate action for confiscation and penalty initiated. Essentially, the latest circular reiterates the earlier CBEC instructions (circular (33/2005 dated 2.8.2005).
In case of imports also, the CBEC had issued similar Circular (22/2004 dated 3.3.2004) stating that in case of classification disputes, by and large, option is given for provisional clearance/assessment, if the inquiries are going to take time.
However, a disputed or offending consignment should also not be held up unless its import/clearance is totally prohibited or banned under any law for the time being in force [e.g. PFA, CITES, Weight & Measures Act, etc.] or where prosecution is contemplated. At most, samples should be drawn and consignment should be allowed to be cleared on a provisional basis as a matter of right. This will prevent congestion at ports and warehouses. Adequate BG/security may be taken to safeguard revenue (including possible fine and penalty), said the circular.
The major problem at the ground level is that the Board Instructions are not followed in letter and spirit.
At an open house meet recently in Ahmedabad, a case of open defiance of the above Board Circular was pointed out. The Commissioner conceded that a wrong had been done but it is not known whether any exemplary action was taken against the concerned officer. The CBEC must ensure that its field formations respect its circulars.
Email: tncr@sify.com
