[Cites 0, Cited by 451]
[Entire Act]
Union of India - Section
Section 7 in The Customs Act, 1962
7.
/419Statement of Objects and Reasons.-The Sea Customs Act which lays down the basic law relating to customs was enacted more than 80 years ago. It has been amended from time to time and some important amendments were made by the Sea Customs (Amendment) Act, 1955. General and comprehensive revision of the Act has not so far been undertaken. Several provisions of the Act have become obsolete. Difficulties have also been experienced in the implementation of certain other provisions. The trade has been pressing for certain changes and facilities. Smuggling, consequent to controlled economy, has presented new problems. To meet these requirements, it has become necessary to revise the Act.The Land Customs Act was passed in 1924. It is not a self-contained Act and applies by reference, provisions of the Sea Customs Act to land customs with certain modifications. There is no separate law relating to air customs, and the administration of air customs is governed by certain rules made under the Indian Aircraft Act, 1911. While revising the Sea Customs Act, it is proposed to consolidate the provisions relating to sea customs, land customs and air customs into one comprehensive measure.The Notes on Clauses explain in detail all the changes which are proposed to be introduced in the new as compared with the existing law.Amendment Act 80 of 1985-Statement of Objects and Reasons.-The Customs Act, 1962 (52 of 1962), provides for the levy of duties of customs. It is proposed to make certain amendments to the Act so as to remove certain practical difficulties experienced in the administration of the Act.2. The Bill provides, among other things, for the following amendments, namely:-(i) Section 20 of the Act provides for the re-importation of goods produced or manufactured in India free of duty if such importation takes place within three years of their export. It is proposed to amend this section to enable the Central Government to extend the said period of three years in certain cases in the public interest;(ii) Section 28 of the Act empowers the proper officer to serve notice on the person chargeable with the duty for payment of duties not levied, short-levied or erroneously refunded by reason of collusion or any wilful mis-statement or suppression of facts by the importer or the exporter or his agent or employees within a period of five years from the relevant date as defined in the section. The Assistant Collector of Customs then determines the amount due from the concerned person. In order to ensure a more judicious exercise of this power, it is proposed to suitably amend this section to provide that this power is exercised by the Collector of Customs;(iii) Section 48 of the Act provides for the procedure for the sale of goods if they are not cleared, warehoused or transhipped within two months after their unloading. It is proposed to reduce this period to forty-five days;(iv) Section 61 deals with the period for which the goods may remain warehoused without payment of interest on the amount of duty payable. It is proposed to suitably amend this section to provide for a longer warehousing period without payment of interest in respect of some more categories of goods;(v) Section 74 provides for allowing drawback on the export of goods in respect of which duty has been paid on the importation thereof. It is proposed to suitably amend this section so as to allow such drawback also on goods exported as baggage or by post;(vi) Section 75 deals with drawback on imported materials used in the manufacture of goods which are exported. It is proposed to amend this section so as to allow such payment of drawback in the case of goods exported by post also retrospectively from the 13th day of May, 1983.The provision for allowing drawback on goods exported by post which was in the Act originally got excluded from the 13th day of May, 1983 when an amendment was made to the relevant provisions. In view of this, the amendment is proposed to be made retrospectively from that date and a necessary validating provision has also been included ;(vii) Section 110 of the Act deals with the seizure of goods, documents and things. It is proposed to suitably amend this section to provide for the procedure to be adopted for the disposal of certain seized goods having regard to their perishable nature or depreciation in their value with the passage of time or other relevant circumstances;(viii) Section 125 provides for option to the owner of the goods to pay fine in lieu of confiscation thereof in addition to any duty and charges payable thereon. It is proposed to suitably amend this section so as to specifically provide that whenever any fine in lieu of confiscation of goods is imposed on any owner of the goods, such owner shall also be liable for duty and charges payable in respect of such goods. It is also proposed to clarify that in a case where the owner of the goods is not known, the person from whose possession or custody such goods are seized will be made responsible for the payment of the fine, duty and other charges;(ix) Section 129-C provides for the procedure of the Appellate Tribunal constituted under the Act. With a view to providing facility for speedy disposal of appeals by Special Benches of the Appellate Tribunal, it is proposed to amend this section so as to enable the constitution of special Benches of not less than two members instead of three members, as at present. It is also proposed to provide that in case of difference of opinion on any point among the members of any such Bench, the point shall be decided by the President of the Appellate Tribunal;(x) It is proposed to take over power to enable the Central Board of Excise and Customs to issue orders or instructions to officers of customs in respect of classification of goods or of the levy of duty thereon for the purpose of achieving uniformity in respect of these matters.3. The Bill seeks to achieve the above objects.Amendment Act 29 of 1988-Statement of Objects and Reasons.-The Customs Act, 1962 and the Central Excises and Salt Act, 1944 provide for the levy and collection of duties of customs and excise, respectively. The Customs and Excise Revenues Appellate Tribunal is being set up for adjudication of disputes with respect to the determination of the rates of duties of customs and central excise on goods and to the valuation of goods for the purposes of assessment of such duties. It is proposed to make certain amendments in these Acts to streamline the procedures, to safeguard revenue interest, to mitigate hardships of the assessees in assessment matters, and to include the provisions relating to the powers to grant exemption from duty of excise in the Central Excises and Salt Act, itself which presently are available in the Central Excise Rules.2. The Bill, accordingly, provides mainly for the following amendments:-(i) to specify Principal Collectors as a separate class of officers and empowering the Central Government to delegate to them certain powers presently exercised by the Central Board of Excise and Customs;(ii) to restore powers of the Board and the Collectors to revise assessment orders passed by the subordinate officers and making such orders appealable to the said Customs and Excise Revenues Appellate Tribunal;(iii) to empower the Central Government to grant refund of duties in cases where an assessee had paid duties as an exception to the generally prevalent practice if the Central Government issues notification under section 28-A of the Customs Act or, as the case may be, under section 11-C of the Central Excises and Salt Act and the assessee had not passed on the duty incidence to others and the claim is made within six months of issue of the said notification. Such notifications, when issued, will be laid before each House of Parliament;(iv) to accept micro films, facsimile copies and statement contained in a document produced by a computer as a document and as evidence for the purposes of the said Acts. This will, however, be subject to certain conditions and safeguards;(v) to include in the Central Excises and Salt Act, itself provisions of rule 8 of the Central Excise Rules, 1944 which authorises the Central Government to grant exemption from duties of excise on any excisable goods or payment thereof since these are important substantive provisions and should more appropriately find place in the Act itself. Notification granting exemption from duties of excise, whenever issued under the new provisions, will be laid before each House of Parliament.3. The Bill seeks to achieve the above objectives. The Notes on clauses explain the provisions of the Bill.Amendment Act 40 of 1991-Statement of Objects and Reasons.-The question of "unjust enrichment" in cases of goods subject to duty of excise or customs has been the subject-matter of discussion for quite sometime now. The concept of "unjust enrichment", in so far as it relates to the said duties, is that any refund of these duties made to any manufacturer or importer, who may have initially paid these duties but had passed on the same to the buyers, would be in the nature of a windfall gain to such manufacturer or importer.2. The Public Accounts Committee made an inquiry into all aspects of the issue relating to refund of central excise duty. The Committee presented its report to the Parliament on the 11th day of March, 1991. The Committee has also recommended for the introduction of suitable legislation to amend the Central Excises and Salt Act, 1944 and the Customs Act, 1962 to deny refunds in cases of unjust enrichment.3. The Bill aims at giving effect to the aforesaid recommendation of the Committee and proposes the following main amendments in the said Acts, namely:-(a) the manufacturer or importer of goods shall not be entitled to refund of the duty of excise or, as the case may be, the duty of customs if he has already passed on the incidence of such duty to the buyer;(b) the burden of proof that the incidence of the duty has not been passed on to the buyer shall be on the person claiming the refund;(c) every person, who is liable to pay duty of excise or, as the case may be, the duty of customs on any goods, shall be under an obligation to prominently indicate, at the time of clearance of the goods, in all the documents relating to assessment, etc., the amount of duty which will form part of the price at which such goods will be sold;(d) the refund of any of the said duties is proposed to be made only to the person who has ultimately borne the incidence of such duty;(e) it is proposed to establish a Consumer Welfare Fund wherein the amount of duty of excise or, as the case may be, the duty of customs, which is not refundable to the manufacturer or importer or the buyer in accordance with the proposed provisions, shall be credited. In addition, any income from investment of the amount credited to the Fund and any other monies received by the Central Government for the purposes of the Fund will be credited to the Fund. The Fund will be utilised by the Central Government for the welfare of the consumers in accordance with the rules to be made in this behalf;(f) it is also proposed to provide that notwithstanding anything to the contrary contained in any judgment, decree, order or direction of the Appellate Tribunal or any Court or in any other provision of the said Acts, etc. no refund shall be made except as provided in new sub-section (2) of section 11-B of the Central Excises and Salt Act, 1944 or new sub-section (2) of section 27 of the Customs Act, 1962;(g) it is also proposed to provide that where any manufacturer or importer of goods has collected any amount in any manner from the buyer as representing the duty of excise or, as the case may be, the duty of customs, he shall pay the said amount to the credit of the Central Government and the said amount shall be utilised in adjusting the duty payable by the manufacturer or importer on finalisation of assessment. The surplus, if any, will be dealt with in accordance with the aforesaid provisions of section 11-B of the Central Excises and Salt Act, 1944 and section 27 of the Customs Act, 1962.4. The Bill seeks to achieve the above objects.Amendment Act 55 of 1991-Statement of Objects and Reasons. This Bill aims at amending the provisions mainly relating to warehousing of goods after import without payment of duty under the Customs Act, 1962. Under the present law the imported goods may be stored in bonded warehouses till their actual clearance for home consumption on payment of appropriate duty or their re-export without payment of duty to any foreign port.2. Existing provisions permit warehousing for three months and charging of interest at the rate of 18 per cent, on delayed clearance which are being misused by the importers by blocking large amounts of revenues.3. Besides, at present, there is no time-limit for payment of duty under section 47 of the Customs Act, 1962 and also for payment of interest for delayed payment of duty.4. This Bill seeks to curtail the period of warehousing, prescribe the increased rate of interest on duty leviable on the warehoused goods, ensure prompt payment of duty and impose interest on delayed payments of duty.5. The proposed amendments will expedite the realisation of revenue and discourage indiscriminate warehousing of imported goods and ensure prompt payment of duties.6. The Bill seeks to achieve the above objects.(iii) Act 25 of 1978 :- The Bill seeks to carry out certain amendments in the Customs Act, 1962 and the Central Excises and Salt Act, 1944. Essentially the amendments are intended to remove certain practical difficulties experienced in the operation of Customs and Central Excises laws, and doubts regarding the interpretation of certain important provisions therein, to provide facilities to exporters and to increase the minimum punishment of smuggling. Some of the amendments to the Customs Act and the Central Excises and Salt Act are similar in nature.The Bill also seeks to amend the Central Boards of Revenue Act, 1963, with a view to raise the minimum strength of members of each of the two Boards (the Central Board of Direct Taxes and the Central Board of Excise and Customs) as it has become necessary in view of the phenomenal increase in the responsibilities of the two Boards.The Notes on clauses appended to the Bill explain in detail the various provisions thereof. - Gazette of India, 1974, Pt. II, Section 2, Ext., P. 918.Act 27 of 1988.- The Customs Act, 1962 (52 of 1962) deals with the law relating to levy of duties of customs. Section 14 thereof provides for the valuation of goods for the purposes of assessment of duties of customs chargeable on goods by reference to their value. Article VII of the General Agreement on Trade and Tariff (GATT), to which India is a contracting party, lays down general principles on customs valuation. The provisions of the said section 14 are, therefore, based on Article VII of GATT.2. During the Tokyo Round of Multi-lateral Trade Negotiations under the GATT (1973-1979), an Agreement on Implementation of Article VII of the GATT, also known as GATT Code of Valuation, was adopted. This Agreement lays down elaborate rules to provide for greater uniformity and certainty in the application of Art. VII of the GATT for determining the value of imported good's. As India is contracting party to this Agreement also, we are required to implement the said GATT Code of Valuation.3. The purpose of the Bill is, therefore, to suitably amend Section 14 of the Customs Act so as to enable the Central Government to frame rules on the basis of GATT Code of Valuation for the determination of the price of imported goods.Act 8 of 1999.- Section 75-A of the Customs Act, 1962, which was inserted by the Finance Act, 1995, provides that where any drawback payable to a claimant under section 74 or section 75 of the Customs Act as the case may be, is not paid within a period of three months from the date of filing of claim to the date of payment of such drawback, there shall be paid to the claimant in addition to the amount of drawback interest fixed under section 27-A of the said Act from the date after the expiry of the said period of three months till the date of payment of such drawback.2. With a view to arrest the declining trend in exports, several measures were announced by the Government in the recent past to give a special package of measures for boosting exports. One of the measures includes a commitment on the part of the Government to pay interest to exporters if Government dues by way of duty drawback is delayed beyond two months. Thus, with a view to reduce the time limit from three months to two months as given under section 75-A of the Act, it is necessary to amend that section. The reduced time-limit of two months instead of the present three months will expedite the process of payment of drawback, and, thereby emphasise the urgency of delivering export related benefits to the exporters within shortest possible time.3. Simultaneously, it is proposed to empower the Central Government to levy interest where the claimant has been sanctioned drawback erroneously, if such drawback is not refunded by him within a period of two months, instead of the present three months.4. The proposed amendments will expedite the process of payment of drawback and realization of revenue.5. The Bill seeks to achieve the above objects. - Gazette of India, 21-12-1998, Pt. II - Section 2, Ext. P. 7 (No. 49).Act 49 of 2005.- Under the direct and indirect tax enactments, an appeal lies to the High Court on a substantial question of law. Due to pendency of a large number of cases in the High Courts, huge revenue is blocked in such litigations. This is adversely affecting the national economy. Hence, urgent measures are required to be taken to speed up taxation matters pending before the High Courts. To achieve the aforesaid objective, it is proposed to establish a Tax Tribunal to be known as the National Tax Tribunal to hear cases on substantial question of law from the decisions of the Income-tax Tribunal to hear cases on substantial question of law from the decisions of the Income-tax Appellate Tribunal and the Customs, Excise and Service Tax Appellate Tribunal. This Tribunal is being set up under Article 323B of the Constitution and will act through its Benches. A person who has been a Judge of the Supreme Court or the Chief Justice of a High Court shall be the Chairperson of the National Tax Tribunal. The number of Benches to hear the cases under the direct tax laws and indirect tax laws shall be decided by the Central Government from time to time. With the establishment of the National Tax Tribunal all matters and proceedings pending in appeals and references under the direct tax laws and indirect tax laws before the High Courts shall stand transferred to it.2. The Bill seeks to achieve the above objects. The notes on clauses explain the various provisions of the Bill.[13th December, 1962]An Act to consolidate and amend the law relating to Customs.Be it enacted by Parliament in the Thirteenth Year of the Republic of India as follows:-| Brought into force on 1.2.1963. Act extended to Sikkim with effect from 1.10.1979 vide Notification No. 185/79-Cus., dated 1.10.1979. |