Contents -
1. Introduction of Custom Act, 1962.
2. Definitions of the Customs Act, 1962 U/S 2.
3. Calculation of Custom Duty Payable w.e.f. 17th March, 2012.
4. Officers of Customs.
5. Chart of Sections for Information.
- Introduction -
The meaning of the world custom as is a law not written, established by long usage and the consent of the ancestores. So law can oblige a free people without their consent, so wherever they consent and use a certain rule or method as a law, such rule etc. gives it the power of law.
In earlier days when the traders entered to the other country through ships, they gifted the valuable articles to the king of the concerned jurisdiction. It was the customary rule, to say it was implied that when the tradesman wants to do the business in other country, he has to give the valuable articles to the king. (Indirectly tax).
A usage that has by long continuance acquired legally blinding force. In early period i.e. before 80 years ago, it was the sea customs act which was amended time to time. The trade was changing with the changes in the society. The need to amend the law for the imports of goods or exports the goods by air.
The land customs Act was passed in 1924, it was proposed to amend the Sea Customs Act with the provisions and administration for the consolidation of the sea Custom Act, The land custom act and The air customer in the comprehensive measure.
With the above observation, it is simply to say that the modern state formalized the custom into "Custom Duty" which the states collect on the goods imported in to or occasionally, export out of its frontiers.
In the Global trade, it was caused to then the Prime Minister Late Narsimha Rao and its ministry to sign the treaty and became the member of GATT.
The GATT thrn replaced by the World Trade Organisation (WTO) on 1.1.1995. It was third organisation after World Bank and IMF. GATT was focused primarily on trade in goods while WTO covers multinational trading system and commercial activities like trade in services, intellectual property protection.
Duties of customs are levied and collected at such rates as may be specified in the custom Tariff on goods imported in to or exported from India. If the goods are brought in to or exported out from a place other than customs ports, Air ports or inland customs station such goods are liable for penal action.
The goods on import are ordinarily assessed under the transaction value. The value in such cases is deemed to be the price at which such goods are ordinarily sold or offered for sale for delivery at the time and place of importation or exportation in the course of international trade to the country of importation or exportation.
The customs act 1962 is the main act, which provides for levy and collection of Duty, import / export procedure, prohibitions on importation and exportation of goods, penalties, offences etc. There are 141 sections under the act divided into the different chapters. Students should keep in the mind that some of the chapters are discussed which is important for the minimum knowledge of the act.
- Definition of the Customs Act, 1962 Under Section 2 :
Section 2(22) "Goods" means goods include (a) vessels, aircraft and vehicles (b) stores (c) baggage (d) currency and negotiable instrument and (e) any other kind of movable property.
It is important to note that movable goods means the goods must be movable and must be marketable.
The definition of "Goods" under the Custom Act is inclusive. The goods may be transported by road/ sea/ air, which are treated under the act as movable.
E-mail transfer is not transfer of movable property and is not "Goods"
In the case of,
WARTSILA INDIA V/S CC (2005 (190) ELT100 (CESTAT)
It was held that "electricity" is specified in customs tariff and hence is "goods".
Section 2(14) : Dutiable Goods"means any goods which are chargeable to duty and on which duty has not been paid.
Section 2(15) : 'Duty' means a duty of customs leviable under customs act.
Section 2(25) 'Imported goods' means any goods brought in India from a place outside India, but does not include goods have been cleared for home consumption.
In the case of CC V/S M.AMBALAL and CO 2010(260 ELT 487 (SC) the questions raised that whether examination of Duty applicable to the smuggled goods. It is held that the smuggled goods are not imported goods and the exemption is available to the imported goods only under the Custom Act.
Section 2(19) : 'Export goods' means any goods which are to be taken out of India to a place outside India.
There is a difference between export goods and exported goods. When the goods which are meant to be exported are export goods and when the duty on exported goods is payable only when export is complete.
In the case of,
THOMAS DUFF V/S CC 2000(123) ELT330(CALHCDB)
It was held that after the goods are exported, they are not 'export goods' and can not be confiscated.
Section 2(7) : 'Costal goods' means goods, other than imported goods, transported in a vessel from one port in India to another.
Section 2(10) : 'Customs Air Port' means any Airport appointed under clause (a) of sections 7 to be a custom air port.
Section 2(16) : 'Entry' in relation to goods, means an entry made in a bill of entry, shipping bill or bill of export and includes in the case of goods imported or to be exported by post, the entry referred to in Section 82 or the entry made under the regulation made under section 84.
Section 2(21) : 'Foreign going vessel or air craft' means any vessel or Air craft for the time being engaged in the carriage of goods or passenger between any port or airport in India and any port or airport outside India, whether touching any intermediate port or airport in India and includes :
1) Any navel vessel of a foreign government yakking part in any navel exercise.
2) Any vessel engaged in fishing or any other operations outside territorial waters of India.
3) Any vessel or Aircraft proceeding to a place outside India for any purpose whatsoever.
Section 2(3) : 'Baggage' includes unaccompanied baggage but does not include motor vehicle.
In the case of,
ASSOCIATED CEMENT COMPANIES LIMITED V/S CC
(2001AIRSCW559=AIR2001SC862=124STC59(SC 3 MEBERS BENCH)
It was held that any other kind of movable property in goods i.g. baggage "includes all tangible movable article whether brought as baggage or imported in any other manner". Hence, in this case it was held that "drawings" are goods.
Section 2(26) : 'Importer' means in relation to any goods at any time between their importation and the time when they cleared for home consumption, includes any owner or any person or any person holding himself out to be the importer.
Section 2(28) : 'Indian customs waters' means the water extending in to the sea up to the limit of contagious zone of India under Section 5 of the territorial waters, Continental shelf, exclusive economic zone and other maritime zones act 1976 (80 of 1976) and includes any bay, gulf, harbour, creek or tidal river.
Section 2(15) : 'Duty' means the custom duty levied under section 3 of the Customs Act 1962.
Section 3(1) : 'Custom tariff Act' additional custom duty is often called "countervailing duty (CVD)" additional is levied under section 3(1) of custom tariff act and not under customs act please note.
1) "CVD" means the additional duty of customs, levied under section 3 of the customs tariff act, 1975.
2) "Special CVD" means the additional duty of customs levied under section 3(5) of the customs tariff act, 1975.
- Calculation of Custom Duty Payable w.e.f. 17th March, 2012 is as follows :
No. | Description | Duty % | Amount | Total Duty |
1 | Assessable value for custom duty |
| 10,000 |
|
2 | Basic custom duty u/s 12 | 10% | 1000 | 1000 |
3 | For calculation CVD i.e. Additional custom duty (Rs,10,000+Rs.1,000) |
| 11,000 |
|
4 | CVD Rate 12% on 11,000/- (u/s 3(1) | 12% | 1320 | 1320 |
5 | Foe education cess 2% Custom duty + CVD i.e. Rs.1000 + Rs.1320=Rs.2320/- | 2% | 46.40 | 46.40 |
6 | Higher education cess 1% on Rs.2320/- | 1% | 23.20 | 23.20 |
7 | Total of 3+4+5+6= |
| 12389.60 |
|
8 | Special CVD 4% on Rs.12,389.60 (u/s 3(5) | 4% | 495.58 | 495.58 |
9 | Total duty payable i.e. Last column (2+4+5+6+8) |
|
| 2,885.18 |
- Officers of Customs -
There shall be the following classes of officers of
1. Chief commissioner of customs
2. Commissioner of customs
3. Commissioner of customs (Appeals)
4. Joint commissioner of customs
5. Deputy commissioner of custom
6. Assistant commissioner of customs
7. Such other class of officers of custom as may be appointed for the such purpose of this act.
The Board may appoint such person as it thinks fit to be officers of customs. The board may appoint assessing authority on the basis of value / jurisdiction and officer of Defence, Border Security, police etc. as officer of customs to discharge a functions under customs act. Such officer are not from custom department but for the entrustment of certain custom functions to others.
- The following is the chart of sections for information :
Sections | Subject Matter |
1-2 | Preliminary |
3-7 | Officers Of Customs |
7-10 | Appointment Of Custom Ports Air Ports Ware Housing |
11 | Prohibitions Of Importation/ Exportation Goods |
11a-11-g | Detection Of Illegally Imported Goods And Prevention Of The Disposal Thereof |
11-H-11 M | Prevention Or Detection Of Illegal Export Goods |
11-N | Power Of Exemption |
12-28-D | Levy, Exemption, Refund |
28-E-28-M | Advance Ruling |
29-43 | Provisions Relating To Conveyance Carrying Imported Or Exported Goods |
44-51 | Clearance Of Imported Or Exported Goods |
52-56 | Goods In Transit |
57-73 | Ware Housing |
74-76 | Drawback |
77-90 | Provision For Goods Imported And Exported By Post And Stores |
91-99 | Provisions For Vessels Carrying Costal Goods |
100-110 | Search, Seizure And Arrest |
111-127 | Confiscation And Conveyances And Penalties, Settlement Of Cases |
128-131 | |
132-140 | |
141-161 | Miscellaneous |
Customs Tariff Act, 1975 contains two schedules :
1. Schedule I gives the classification and rate of duties for import.
2. Schedule II gives classification and rates of duties for exports.
In addition, the custom tariff act makes the provision for duties like additional duty, preferential duty, anti dumping duty, protective duties etc.
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