In this year budget various changes are made in customs law in a direction of ease of doing business and reduction in the litigation. Some provisions have been amended to catch loopholes in the existing law. At this stage it may be mentioned that lot more could have been done which is opportunity missed. Some of the major changes are as under:
Definition of importer and exporter expanded to include beneficial owner of the goods
There were situations where the IEC was borrowed by the assessees/importers and the import documents were filed in name of the original IEC holder by some other persons. In case of any dispute, when the customs demand duty from the actual owner of the imported goods, then the actual owner use to take plea that he is not the importer thus duty cannot be demanded from him in terms of section 28 of the customs Act. The said practises were adopted for export goods also.
To curb the said practices, now definition of importer and exporter is expanded to include the beneficial owner of the goods. Thus after amendment of the definition of the importer and exporter, it would not be possible for the IEC borrower to argue that they are not the importer and duty cannot be demanded from them.
Further Section 17 of the Customs Act is amended to simplify the production of documents or information by the importer or exporter or any other person for verification of self-assessment. This amendment is in direction of ease of doing business.
Amendment in the provisions pertaining to refund
Earlier refund arising out of any reassessment was also subject to unjust enrichment. Now Section 27 of the customs Act providing for refund is amended to provide that refund arising out of following two situations would not be subject to unjust enrichment:
• Where excess payment of the duty is evident form the self assessed bill of entry
• Where duty actually payable is reflected in the reassessed bill of entry in case of reassessment
Thus in situations, where the importer paid duty twice on the very same imports or in a situation where the importer did not claim any available exemption or there is mistake in calculation of duty or other errors which lead to excess payment of customs duty, in all these case, the principal of unjust enrichment would not apply. Thus need for producing books of accounts and charted accountant’s certificate showing the amount of excess customs duty as receivables from customs is not required. Thus this is welcome change.
However, the provision does not suggest if the said refund of excess duty is automatic and period of limitation for refund application would be applicable. Further it is also not clear as to whether the reassessment of bill of entry happening because of pending litigation/order of higher authority would also be part of this beneficial scheme.
It is now provided that that the Authority for Advance Rulings constituted under section 245-O of the Income-tax Act shall be the Authority for giving advance rulings for the purposes of the Customs Act and the Member of the Indian Revenue Service (Customs and Central Excise), who is qualified to be a Member of the Board, shall be the revenue Member of the Authority. It further provides that transferring the pending applications before the erstwhile Authority for Advance Rulings (Central Excise, Customs and Service Tax) to the Authority of advance ruling under Income tax. The application fee is enhanced to rupees ten thousand and time limit for pronouncing ruling is extended to six months.
Obligation on Person-In charge of vessel
New section 30A is inserted so as to make it obligatory on the personin-charge of a conveyance to deliver the passenger and crew arrival manifest to the customs officer before arrival in the case of an aircraft/vessel and passenger name record information of arriving passengers. The form and manner would be prescribed by Rules framed under Section 157 of the customs Act. In case of any delay in providing such information, the person in charge of a conveyance would be liable for penalty not exceeding fifty thousand Rupees. Corresponding provisions in case of departing vessels is incorporation in Section 41.
Section 46 of the Customs Act is amended and obligation is casted upon the importer to file bill of entry on next day of the arrival of the conveyance and in case of delay additional charges would be imposed. Further section 47 is also amended to provide for payment of interest in case of delay in payment of customs duty.
Section 49 of the customs Act is amended and it is now provided that the imported goods in respect of warehousing bill of entry is filed may also be stored in the public warehouses licenced under section 49 of the customs Act. This is also a good step in ease of doing business.
Section 82 of the customs Act providing for the treatment of label as entry for the goods imported and exported through courier is omitted from the Act and Section 84 is amended to give power to central government to frame rules in this regards.
Section 127B of the Customs Act is amended to enable the co-noticees in the SCN to make an application to the Settlement Commission. This would provide clarity for the co-noticees in a situation where the main noticees have already approached the settlement commission and the application has been disposed off by settlement commission.
Section 127C of the Customs Act, is amended to give power to the Settlement Commission to amend the order passed by it and to rectify any error apparent on the face of record.
Issues still not resolved
There are various areas under the customs Act which require clarity and legislative changes such as challenge to bill of entry for filing refund claim and grant of automatic refund in case of finalisation of provisional assessments.
Further provisional release of imported goods and conditions for the provisional release of the goods are also a point of continuous dispute between department and assessee.
Further provisions governing arrest also needs to be ratioinised and it has to provided that the cases pertaining to interpretation of law need not be subject matter of arrest.