The chairman of the Central Board of Excise and Customs (CBEC) has confirmed that for the present, the on-site post clearance audit (OSPCA) system by the Customs will not be applied to exporters. This assurance is given in a letter dated September 1 by him in response to certain apprehensions expressed by the President of the Delhi Exporters Association (DEA) through his letter dated August 23, that OSPCA by the Customs will cause hardships and inconvenience to the exporters.
The apprehensions of DEA followed the introduction of ‘self assessment’ in the Customs Act of 1962, and provisions that were introduced in section 17 of the Act to empower the Customs officers to carry out verification of correctness of assessment of duty relating to import or export of goods at the premises of the importer or exporter.
CBEC had clarified this will lead to introduction of ‘On-Site Post Clearance Audit’ in Customs in near future. The worry of the trade is that the Customs auditors will indulge in fault finding that will only increase harassment and costs for managing the auditors in their premises. Their view is that the officers can check all their documents at the port itself.
The CBEC chairman has clarified that the OSPCA system will be implemented in a phased manner, starting only with importers who avail the accredited clients programme. Other categories of importers will be covered in subsequent phases, and even then, taking into account the administrative costs of conducting OSPCA and the nature and size of business, it is not intended to cover all the importers and the present Customs House Audit will continue side-by-side with the OSPCA, says the CBEC chairman. He adds the OSPCA will require an effective risk management system, an essential prerequisite that is so far not even introduced on the export side and that the chambers of trade and industry would be definitely consulted before implementation of OSPCA on the export side.
In another useful Circular (no. 952/13/2011-CX dated September 8), CBEC has reiterated the processes for examination and sealing of export containers at the factory or warehouse. The most noteworthy part of the Circular says that “in respect of the services provided by the central excise officers at any premises other than the ones not the normal work premises of that officer, i.e. for export from premises other than those registered with the central excise officer, merchant overtime (MOT) charges will be payable at the applicable rates even if the said services are being provided during the normal working hours.”
This means for sealing of containers at the premises registered with central excise, exporters need not pay MOT for services provided during normal working hours. In case of the services provided beyond the normal working hours MOT charges as applicable will be payable for all the premises whether registered with the central excise or not, as the circular makes abundantly clear.
CBEC has also clarified (Circular no. 40/2011-Cus dated September 9, 2011), that an importer can pay duty with interest anytime before final assessment and that the prohibition on export of onions is subject to the benefit of transitional arrangements made available in Para 1.5 of the Foreign Trade Policy (Circular no. 41/2011-Cus dated September 14, 2011).
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