Customs Duty

1. Background

It was an ancient ‘Custom’ that whenever a merchant entered a kingdom with his merchandise, he had to make a suitable offering of gifts to the king. In course of time, the modern state formalised this ‘Custom’ into Customs Duty which is collected by the Central Government on goods imported into or, occasionally exported out of its frontiers. The Customs Act was introduced by parliament on 13^th December 1962 applicable to whole of India.

2. Some important definitions:

1. “Import”, with its grammatical variations and cognate ex
2. pressions, means bringing into India from a place outside India.
3. “Imported goods” means any goods brought into India from a place outside India but does not include goods which have been cleared for home consumption
4. “Export”, with its grammatical variations and cognate expressions, means taking out of India to a place outside India.
5. “Export goods” means any goods which are to be taken out of India to a place outside India;
6. “Goods” includes -
   1. vessels, aircrafts and vehicles;
   2. stores;
   3. baggage;
   4. currency and negotiable instruments; and
   5. any other kind of movable property.
7. “India” includes the territorial waters of India;

Territorial waters of India extend upto 12 Nautical Miles from the base line of the coast of India

7. “Indian customs waters” means the waters extending into the sea up to the limit of contiguous 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.

3. The Levy of Customs Duty

The duties of customs are levied on the import of goods into India and export of goods out of India. In case of import of goods, the import triggers when the goods enters the territorial waters of India. However, the taxable event arises upon goods crossing the Customs barrier i.e time when the bill of entry for home consumption is filed as held in Kiran Spinning Mills v. C. C. (SC) 1999 (113) ELT 753. The export of goods triggers when the shipping bill is filed and is completed when the goods cross the territorial waters of India. The duties of customs shall be levied at the rates specified in the Customs Tariff Act, 1975 on goods imported into or exported from India.

4. Types of Major Customs Duties Leviable on Import of Goods:

5. The Valuation of Goods:
   1. The value of goods imported or exported shall be the Transaction value of such goods.
   2. Transaction Value shall be:
      1. the price actually paid or payable for the goods
      2. when sold for export to India for delivery at the time and place of importation or as the case may be, for export from India for delivery at the time and place of exportation
      3. where the buyer and seller of the goods are not related and price is the sole consideration
   3. If the above conditions are not satisfied or if the department has a reason to doubt the truth and accuracy of the declared transaction value than assessable value shall be determined by resorting to import and export valuation Rules.
   4. The price shall be calculated with reference to the rate of exchange as in force on the date on which:-
      1. A bill of entry for home consumption is presented
      2. A shipping bill of export
   5. The relevant date to be considered for rate of duty and tariff valuation of import goods shall be as follows:

6. The relevant date to be considered for rate of duty and tariff valuation of export goods shall be as follows:

6. Assessment of Duty:
   1. Self-assessment:

The duties of customs shall be self-assessed and paid by the importer or exporter of goods. The proper officer may verify such self-assessment made by the assessee and for this purpose, he may examine such imported and exported goods.

2. Provisional assessment:

The proper officer of customs can resort to provisional assessment in the following situations:

1. where the importer or exporter is unable to make self-assessment
2. where the proper officer deems it necessary to subject any imported goods or export goods to any chemical or other test
3. where the importer or exporter has produced all the necessary documents and furnished full information but the proper officer deems it necessary to make further enquiry
4. where the proper officer deems it necessary to make further enquiry on account of necessary documents have not been produced or information has not been furnished

The proper officer may direct that the duty leviable on such goods be assessed provisionally and excess/deficiency shall be either adjusted/refunded respectively. The interest @ 15% shall also be levied in case of deficiency.

3. Determination of duty where goods consist of articles liable to different rates of duty:

If the goods imported or exported consist of a set of articles, duty shall be calculated in the following manner:

If the set of articles imported or exported consist of goods which are not liable to duty, then the same levied to duty in the following manner:

1. If all the other articles in the set are chargeable to same rate of duty, than that rate shall be applied.
2. If all the other articles in the set are chargeable to different rate of duty, than the highest rate shall be applicable.

However, in all the above cases, if assessee is able to prove that all the goods are individually chargeable to respective different rate of duty or as the case may be not chargeable to duty, than such respective rates shall be considered for the purpose of assessment.

7. Waiver, Abatement or Remission of duty:
   1. Pilfered Goods: If the imported goods are pilfered after they are landed but before they are cleared for home consumption or deposit into warehouse, the importer shall not be liable to pay the duty leviable on such goods except where such goods are restored to the importer after pilferage.
   2. Abatement of duty on damaged and deteriorated goods: The duty on goods damaged or deteriorated shall be levied on the value of such damaged or deteriorated goods in the same proportion in which duty would have been levied on the value as if such goods were not damaged or deteriorated. However, it should be noted that goods should have been damaged or deteriorated only because of the following reasons:
      1. that any imported goods had been damaged or had deteriorated at any time before or during the unloading of the goods in India
      2. that any imported goods, other than warehoused goods, had been damaged at any time after the unloading thereof in India but before their examination under Section 17, on account of any accident not due to any wilful act, negligence or default of the importer, his employee or agent
      3. that any warehoused goods had been damaged at any time before clearance for home consumption on account of any accident not due to any wilful act, negligence or default of the owner, his employee or agent

3. Remission of duty on lost, destroyed or abandoned goods: Where it is shown to the satisfaction of the Assistant/Deputy Commissioner of Customs that any imported goods have been lost (otherwise than as a result of pilferage) or destroyed, at any time before clearance for home consumption, officer shall remit the duty on such goods. The owner shall relinquish the title on goods.

8. Refund of Duty:
   1. Refund of export duty in certain cases:

Export duty paid on goods shall be exported shall be refunded if:

1. The goods are returned to such person otherwise than by way of re-sale;
2. The goods are re-imported within one year from the date of exportation

An application for refund of such duty is made before the expiry of six months from the date on which the proper officer makes an order for the clearance of the goods, the export duty paid at the time of the exportation of any goods shall be refunded.

2. Refund of import duty in certain cases:

Import duty paid on goods imported shall be refunded if:

1. The goods are found to be defective or otherwise not in conformity with the specifications agreed upon between the importer and the supplier of goods
2. The goods are identified to the satisfaction of the Assistant / Deputy Commissioner of Customs as the goods which were imported
3. The importer does not claim drawback under any other provision of this Act; and

• The goods are exported; or
• The importer relinquishes his title to the goods and abandons them to customs;
• Such goods are destroyed or rendered commercially valueless in the presence of the proper officer, within a period not exceeding 30 days from the date on which the proper officer makes an order for the clearance of imported goods for home consumption under Section 47. Further extension of a period not exceeding 3 months shall be granted if sufficient cause is given.

In such cases, an application for refund of duty shall be made before the expiry of 6 months from the relevant date.

3. Claim for refund of duty in other cases:

Any person claiming refund of any duty or interest, paid by him; or borne by him, may make an application for such refund to the Assistant / Deputy Commissioner of Customs, before the expiry of one year, from the date of payment of such duty or interest. The limitation of one year shall not apply where any duty or interest has been paid under protest. The amount may get credited to Consumer Welfare Fund subject to provisions of Unjust Enrichment.

4. Interest on delayed refunds:

If any duty ordered to be refunded to an applicant is not refunded within three months from the date of receipt of application, interest @ 6% p.a. on such duty shall be payable from the date immediately after the expiry of 3 months from the date of receipt of such application till the date of refund of such duty.

9. Procedure for Import of goods:

Following procedures are to be adhered at different stages at the time of import of goods:

1. Arrival of vessels and aircrafts in India:

The person-in-charge of a vessel or an aircraft entering India from any place outside India shall not cause or permit the vessel or aircraft to call or land at any place other than a customs port or customs airport.

2. Delivery of import manifest or import report:

The person-in-charge of a vessel, aircraft or a vehicle carrying imported goods shall deliver to the Proper Officer:

In case of non-filling of the import manifest or the import report, the person in charge may be liable to a penalty not exceeding 50,000/-rupees.

3. Passenger and Crew Arrival Manifest and Passenger Name Record Information

The person-in-charge of a conveyance that enters India from any place outside India or any other person as may be specified by the Central Government by notification in the Official Gazette, shall deliver to the proper officer—

Where the passenger and crew arrival manifest or the passenger name record information or any part thereof is not delivered to the proper officer within the prescribed time and if the proper officer is satisfied that there was no sufficient cause for such delay, the person-in-charge or the other person shall be liable to such penalty, not exceeding 50,000/- rupees, as may be prescribed.

4. Imported goods not to be unloaded from vessel until entry inwards granted:

The master of a vessel shall not permit the unloading of any imported goods until an order has been given by the proper officer granting entry inwards to such vessel.

5. Imported goods not to be unloaded unless mentioned in import manifest or import report / Unloading and loading of goods at approved places only / Goods not to be unloaded or loaded except under supervision of customs officer:

1. Imported goods shall not be unloaded at customs station unless they are specified in such manifest or report for being unloaded at that customs station except where permission of the proper officer is taken
2. Imported goods cannot be unloaded except at the approved place unless, permission of the proper officer is obtained
3. Imported goods shall not be unloaded from, and export goods shall not be loaded on, any conveyance except under the supervision of the proper officer.

6. Restrictions on custody and removal of imported goods:

All imported goods unloaded in a customs area shall remain in the custody of such person as may be approved by the Principal Commissioner of Customs or Commissioner of Customs until they are cleared for home consumption or are warehoused or are transhipped.

7. Clearance of Goods after importation:

The imported goods, if not intended for transhipment may be cleared either for home consumption or may be warehoused for clearance at the later date. The bill of entry either for home consumption or for warehousing shall be filed before end of the next day following the day when the vessel or aircraft has arrived. A prior bill of entry can also be filed within 30 days before the arrival of vessel or aircraft. A bill of entry shall include all the goods mentioned in the bill of lading or other receipt given by the carrier to the consignor.

1. Bill of Entry for Home consumption: The importer of goods can clear the goods into the domestic taxable area by presenting the bill of entry for home consumption. The bill of entry for home consumptions shall be filed upon the payment of import duty in challan TR-6 and details of the same shall be mention in the bill of entry.
2. Bill of Entry for warehousing: If the importer of goods is unable to clear the goods within a reasonable time, than he may with the permission of the proper officer shall be allowed to store the goods in the warehouse. The importer shall execute a bond of the amount thrice the amount of duty leviable on imported goods for storing the goods in the warehouse. The amount of duty shall be paid at the time of clearance of goods from the warehouse for home consumption. The period for which goods can be warehoused is as follows:

This period can by the Principal Commissioner or Commissioner of customs by the period not more than one year if sufficient cause is shown. 

3. Owner’s right to deal with warehoused goods: The owner of any warehoused goods may, after warehousing the same may:

• inspect the goods
• deal with their containers in such manner as may be necessary to prevent loss or deterioration or damage to the goods
• sort the goods or
• show the goods for sale

The owner of any warehoused goods may carry on any manufacturing process or other operations in the warehouse in relation to such goods with the prior permission of the Principal Commissioner of Customs or Commissioner of Customs and subject to such conditions.

4. Clearance of Warehoused goods for Home Consumption: Any warehoused goods may be cleared for Home Consumption, if

• a bill of entry for home consumption in respect of such goods has been presented in the prescribed form;
• the import duty, interest, fine and penalties payable in respect of such goods have been paid; and
• an order for clearance of such goods for home consumption has been made by the proper officer

5. Clearance of Warehoused goods for Export: Any warehoused goods may be exported to a place outside India without payment of import duty, if:

• a shipping bill or a bill of export or the form as prescribed under Section 84 has been presented
• in respect of such goods
• the export duty, fine and penalties payable in respect of such goods have been paid;
• an order for clearance of such goods for export has been made by the proper officer

6. Goods improperly removed from warehouse: The proper officer may demand to the owner of the goods alongwith the duty and interest payable on goods, penalties in the following situation:

• If any warehoused goods are removed from a warehouse in contravention of the above provisions.
• where any warehoused goods have not been removed from a warehouse at the expiration of the period during which such goods are permitted under Section 61 to remain in a warehouse;
• where any goods in respect of which a bond has been executed under and which have not been cleared for home consumption or export are not duly accounted for to the satisfaction of the proper officer.

7. Procedure in case of goods not cleared, warehoused, or transhipped within 30 days after unloading:

If any goods brought into India from a place outside India are not cleared for home consumption or warehoused or transhipped within 30 days from the date of the unloading thereof at a customs station or within such further time as the proper officer may allow or if the title to any imported goods is relinquished, such goods may, after notice to the importer and with the permission of the proper officer be sold by the person having the custody thereof.

10. Procedure for export of goods:

Following procedures are to be adhered at different stages for export of goods:

1. Export goods not to be loaded on vessel until entry-outwards granted

The master of a vessel shall not permit the loading of any export goods, other than baggage and mail bags, until an order has been given by the proper officer granting entry-outwards to such vessel.

2. Export goods not to be loaded unless duly passed by proper officer / Delivery of export manifest or export report / No conveyance to leave without written order:

1. The person-in-charge of a conveyance shall not permit the loading at a customs station unless -

2. The person-in-charge of a conveyance carrying export goods shall, before departure of the conveyance from a customs station, deliver to the proper officer unless:

3. Passenger and crew departure manifest and passenger name record information:

1. The person-in-charge of a conveyance that departs from India to a place outside India or any other person as may be specified by the Central Government by notification in the Official Gazette, shall deliver to the proper officer—

• the passenger and crew departure manifest; and
• the passenger name record information of departing passengers,

2. Where the passenger and crew departure manifest or the passenger name record information or any part thereof is not delivered to the proper officer within the prescribed time and if the proper officer is satisfied that there was no sufficient cause for such delay, the person-in-charge or the other person shall be liable to such penalty, not exceeding 50,000/- rupees.

4. No conveyance to leave without written order:

The person-in-charge of a conveyance which has brought any imported goods or has loaded any export goods at a customs station shall not cause or permit the conveyance to depart from that customs station until a written order to that effect has been given by the proper officer. 

5. Presentation of Shipping Bill/Bill of export

The exporter of any goods shall make entry thereof by presenting electronically to the proper officer, in case of goods to be exported

6. Clearance of goods for exportation

Where the proper officer is satisfied that any goods entered for export are not prohibited goods and the exporter has paid the duty, if any, assessed thereon and any charges payable under this Act in respect of the same, the proper officer may make an order permitting clearance and loading of the goods for exportation.

11. Goods in Transit/Transhipment of Goods:
    1. Transit of certain goods without payment of duty

If any goods are imported in a conveyance and mentioned in the import manifest or the import report, as the case may be, as for transit in the same conveyance to any place outside India or to any customs station, the proper officer may allow the goods and the conveyance to transit without payment of duty, subject to certain conditions.

2. Transhipment of certain goods without payment of duty

If any goods imported into a customs station are intended for transhipment, a bill of transhipment shall be presented to the proper officer in the prescribed form.If any goods imported into a customs station are mentioned in the import manifest or the import report, as the case may be, as for transhipment to any place outside India, such goods may be allowed to be so transhipped without payment of duty.

12. Duty Drawback:
    1. Drawback on re-export of duty-paid goods

When any goods capable of being easily identified, which have been imported into India and upon which any duty has been paid on importation, then 98 % of such duty shall, except as otherwise hereinafter provided, be re-paid as drawback, if the goods:

1. are entered for export or
2. are to be exported as baggage or
3. are entered for export by post

Following conditions shall be satisfied for claiming refund:

1. The goods are identified to the satisfaction of the Assistant Commissioner of Customs or Deputy Commissioner of Customs as the goods which were imported; and
2. The goods are entered for export within 2 years from the date of payment of duty on the importation thereof.

The rate of drawback in the case of goods which have been used after the importation thereof shall be such as the Central Government notifies, having regard to the duration of use, depreciation in value and other relevant circumstances.

2. Drawback on imported materials used in the manufacture of goods which are exported:

The Central Government may allow drawback of duties paid on the import materials of a class or description that are used in the manufacture or processing of or carrying out any operation on goods which have been entered for export and in respect of which an order permitting the clearance and loading thereof for exportation has been made by the proper officer. The drawback shall be allowed subject to the conditions prescribed by the Central Government in the Official Gazette. However drawback shall not be allowed in the following conditions:

1. If market price of goods exported is less than the amount of Duty drawback claimed thereupon.
2. The amount of claim is less than Rs. 50/-.

3. Interest on Duty Drawback:

Where any drawback payable to a claimant as mentioned above is not paid within a period of 1 month from the date of filing a claim for such drawback, there shall be paid to that claimant in addition to the amount of drawback, interest from the date after the expiry of the said period of 1 month till the date of payment of such drawback.

13. Goods Imported as Baggage:

The owner of any material importing the same in the form of any baggage shall, for the purpose of clearing it, make a declaration of its contents to the proper officer. The rate of duty and tariff value of material imported as a baggage shall be rate and value that is applicable baggage on the date of making declaration.

Various types of exemptions from duty are also available to goods imported in the form of baggage as follows:

1. any article in the baggage of a passenger or a member of the crew in respect of which the proper officer is satisfied that it has been in his use for such minimum period as may be specified in the Baggage rules;
2. any article in the baggage of a passenger in respect of which the proper officer is satisfied that it is for the use of the passenger or his family or is a bona fide gift or souvenir; provided that the value of each such article and the total value of all such articles does not exceed such limits as specified in the Baggage rules

Where the baggage of a passenger contains any article which is dutiable or the import of which is prohibited and in respect of which a true declaration has been made, the proper officer may, at the request of the passenger, detain such article for the purpose of being returned to him on his leaving India.

14. Goods Imported or Exported by Post:

If any goods are imported or exported by way of post, the rate of duty and tariff value, applicable to such goods shall be the rate and valuation in force on the date on which the postal authorities present to the proper officer a list containing the particulars of such goods. The board has prescribed the form and manner in which the goods may be imported or exported by post.

15. Goods imported in the form of Stores on a vessel or aircraft:

If any imported goods are entered for warehousing and the importer makes and subscribes to a declaration that the goods are to be supplied as stores to vessels or aircrafts, the proper officer may permit the goods to be warehoused without the goods being assessed to duty.

16. Issuance of Show Cause Notices and Adjudication:

SCN is issued when a person is suspected of evasion or non-levy/ non-payment /short payment of duty or when duty is erroneously refunded. The show cause notices can be issued within 2 years of the relevant date. However, the period of 2 years can be extended upto 5 years if such non-levy/ non-payment /short payment of duty or duty is erroneously refunded as result of collusion, wilful misstatement, suppression of facts or contravention of provisions with the intent to evade the payment of duty.  An order of demand cannot be passed by the adjudication authority unless an opportunity of being heard is given to assesse

17. Confiscation of Goods and Conveyances:

The goods are liable to be confiscated if they are imported, exported or transhipped in contravention of the Customs Act and rules made thereunder. Similarly, the conveyance shall be liable for confiscation if such conveyance is found concealing or smuggling the goods or dealing with goods in a manner which is in contravention of the provision of the said Act.

18. Powers of Search / Seizure and Arrest:
    1. Power to search suspected persons entering or leaving India, etc.:

If the proper officer has reason to believe that any person has secreted about his identity, any goods liable to confiscation or any documents relating thereto, he may search that person. This section applies to the following persons, namely

1. any person who has landed from or is about to board, or is on board any vessel within the Indian customs waters;
2. any person who has landed from or is about to board, or is on board a foreign-going aircraft;
3. any person who has got out of, or is about to get into, or is in, a vehicle, which has arrived from, or is to proceed to any place outside India;
4. any person not included in clauses (a), (b) or (c) who has entered or is about to leave India;
5. any person in a customs area

2. Power to search suspected persons in certain other cases:

1. If the officer of customs has reason to believe that any person has secreted about any specified goods which are liable to confiscation, or documents relating thereto, he may search that person. The goods specified are as follows: –

• gold
• diamonds
• manufactures of gold or diamonds
• watches
• class of goods specified by Central government by notification in the Official Gazette

If the person who is being searched, requires to be taken before gazetted officer of customs or magistrate, then the officer shall take him without unnecessary delay to the nearest gazetted officer of customs or magistrate.

2. A female shall not be searched by a person except a female
3. Where the proper officer has reason to believe that any person referred above has any goods liable to confiscation secreted inside his body, he may detain such person and produce him without unnecessary delay before the nearest magistrate.
4. Where any such magistrate has reasonable ground for believing that such person has any such goods secreted inside his body and the magistrate is satisfied that for the purpose of discovering such goods it is necessary to have the body of such person screened or X-rayed, he may make an order to that effect.
5. A radiologist before whom any person is brought shall after screening or X-raying the body of such person, forward his report, together with any X-ray pictures taken by him, to the magistrate without unnecessary delay.

3. Power to search premises:

If the Assistant or Deputy Commissioner has reason to believe that any goods liable to confiscation, or any documents or things which in his opinion will be useful for or relevant to any proceeding under this Act, are secreted in any place, he may authorise any officer of customs to search or may himself search for such goods, documents or things.

4. Power to stop and search conveyances:

Where the proper officer has reason to believe that any aircraft, vehicle or animal in India or any vessel in India or within the Indian customs waters has been, is being, or is about to be, used in the smuggling of any goods or in the carriage of any goods which have been smuggled, he may at any time stop any such vehicle, animal or vessel or, in the case of an aircraft, compel it to land, and -

1. rummage and search any part of the aircraft, vehicle or vessel;
2. examine and search any goods in the aircraft, vehicle or vessel or on the animal;
3. break open the lock of any door or package for exercising the powers conferred by clauses stated above, if the keys are withheld.

For the purposes as stated above, it becomes necessary to stop any vehicle or animal, vessel or compel any aircraft to land, it shall be done by lawful means as provided,

5. Power to inspect:

An authorized proper officer may, for the purpose of ascertaining whether or not the requirements of the Customs Act have been complied with, at any reasonable time, enter any place intimated and inspect the goods kept or stored therein and require any person found therein, who is for the time being in charge thereof;

1. To produce to him for his inspection the accounts maintained under the said Chapter IVA or Chapter IVB, as the case may be,
2. To furnish to him such other information as he may reasonably require for the purpose of ascertaining whether or not such goods have been illegally imported, exported or are likely to be illegally exported.

6. Power to examine persons:

Any officer of customs empowered in this behalf by general or special order of the Principal Commissioner of Customs or Commissioner of Customs may, during the course of any enquiry in connection with the smuggling of any goods, -

1. require any person to produce or deliver any document or thing relevant to the enquiry
2. examine any person acquainted with the facts and circumstances of the case.

7. Power to summon persons to give evidence and produce documents:

1. Any Gazetted officer of Customs shall have power to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry which such officer is making under this Act.
2. All person so summoned shall be bound to attend either in person or by an authorized agent, such officer may direct: and all person so summoned shall be bound to state the truth or make statements and produce documents.

19. Penal Provisions:

1. Penalties in case of collusion, wilful misstatement, suppression of facts or contravention of provisions of Customs Act

2. Penalty for improper importation of goods:

A person, who in relation to imported or exported goods commits to certain acts or omission which would render such goods liable for confiscation or who acquires possession of or is in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing, or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation shall be liable for penalty in the following manner:

1. The goods in respect of which any prohibition is in force under any law for the time being in force shall be liable to a penalty not exceeding the value of the goods or Rs. 5,000/-, whichever is the greater
2. In case of dutiable goods, other than prohibited goods, to a penalty not exceeding 10% of the duty sought to be evaded or Rs. 5,000/-, whichever is higher
3. In the case of goods in respect of which the value stated in the Bill of entry or export bill or shipping bill or in the case of baggage, in the declaration is higher than the value thereof, a penalty not exceeding the difference between the declared value and the value thereof or Rs. 5,000/-, whichever is the greater.

3. Penalty for attempt to export goods improperly, etc.:

Any person who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation, or abets the doing or omission of such an act, shall be liable to penalty in the following manner:

1. In case of goods in respect of which any prohibition is in force under any other law for the time being in force, a penalty not exceeding 3 times the value of the goods as declared by the exporter or the value as determined under Customs Act, whichever is the greater;
2. In case of dutiable goods, other than prohibited goods, a penalty not exceeding 10% of the duty sought to be evaded or Rs. 5,000/-, whichever is higher :
3. In the case of any other goods, a penalty not exceeding the value of the goods, as declared by the exporter or the value as determined under this Act, whichever is the greater.

4. Penalty for not accounting for goods:

If any goods loaded in a conveyance for importation into India, or any goods transhipped under the provisions of this Act or coastal goods carried in a conveyance, are not unloaded at their place of destination in India, or if the quantity unloaded is short of the quantity to be unloaded at that destination, and if the failure to unload or the deficiency is not accounted for to the satisfaction of the Assistant / Deputy Commissioner of Customs, the person-in-charge of the conveyance shall be liable to penalty in the following manner, -

1. In the case of goods loaded in a conveyance for importation into India or goods transhipped under the provisions of this Act, a penalty not exceeding twice the amount of duty that would have been chargeable on the goods not unloaded or the deficient goods, as the case may be, had such goods been imported;
2. In the case of coastal goods, a penalty not exceeding twice the amount of export duty that would have been chargeable on the goods not unloaded or the deficient goods, as the case may be, had such goods been exported.

5. Penalty for use of false and incorrect material:

If a person knowingly and intentionally makes, sign or uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect In any material particular, in the transaction of any business shall be liable to pay penalty not exceeding 5 times of the value.

6. General Penalty for contravention, etc., not expressly mentioned:

Any person who contravenes any provision of the Customs Act or abets any such contravention or who fails to comply with any provision of the Act, where no express penalty is elsewhere provided for such contravention or failure, shall be liable to a penalty not exceeding Rs. 1,00,000/-.

20. Appeals:

1. Any person aggrieved by any decision or order passed by an officer of customs may appeal to the Commissioner (Appeals) within 60 days from the date of the communication to him of such decision or order.
2. Any person aggrieved by any of the following orders may appeal to the Appellate Tribunal against such order -
   1. a decision or order passed by the Principal Commissioner of Customs or Commissioner of Customs as an adjudicating authority;
   2. an order passed by the Commissioner (Appeals) under Section 128A;
   3. an order passed by the Board or the Appellate Commissioner of Customs under Section 128, as it stood immediately before the appointed day;
   4. an order passed by the Board or the Principal Commissioner of Customs or Commissioner of Customs, either before or after the appointed day, under Section 130, as it stood immediately before that day
3. A mandatory pre-deposit shall be paid by assesse preferring the first appeal either before Commissioner (Appeals) and CESTAT. Mandatory Pre-deposit of 7.5% /10% of duty demand is required to be deposited before First appellate authority or second appellate authority respectively. Hence, no separate application is required to be filed for stay.
4. An appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal if the High Court is satisfied that the case involves a substantial question of law. The appeal shall be filed within one hundred and eighty days from the date on which the order appealed against is received by the Principal Commissioner of Customs or Commissioner of Customs or the other party.
5. An appeal shall lie to the Supreme Court against a judgment delivered by the High Court, an appeal can also be preferred to Supreme Count against the order passed by the Appellate Tribunal relating to the determination of any question having a relation to the rate of duty of customs or to the value of goods for purposes of assessment.

21. Settlement of Cases:

1. Application for settlement of cases:
   1. Any importer, exporter or any other person may, in respect of a case, relating to him may make an application, before adjudication to the Settlement Commission to have the case settle and containing:
      • a full and true disclosure of his duty liability which has not been disclosed before the proper officer,
      • the manner in which such liability has been incurred,
      • the additional amount of customs duty accepted to be payable by him and such other particulars as specified including the particulars of such dutiable goods in respect of which he admits short levy on account of misclassification, under-valuation or inapplicability of exemption notification or otherwise and such application shall be disposed of in the manner hereinafter provided.
   2. Any person, other than an applicant referred above, may also make an application to the Settlement Commission in respect of a show cause notice issued to him in a case relating to the applicant which has been settled or is pending before the Settlement Commission and such notice is pending before an adjudicating authority, in such manner and subject to such conditions, as may be specified by rules.
   3. The application for settlement cannot be preferred in the following cases:
      • the applicant has not filed a bill of entry, or a shipping bill, or a bill of export, or made a baggage declaration, or a label or declaration accompanying the goods imported or exported through post or courier, as the case may be, and in relation to such document or documents no show cause notice has been issued to him by the proper officer
      • the additional amount of duty accepted by the applicant in his application is less than 3 lakh rupees; and
      • the applicant has not paid the additional amount of customs duty accepted by him along with interest due.
   4. Application to Settlement Commission shall not be entertained:
      • No application for settlement shall be entertained by the Settlement Commission in cases which are pending in the Appellate Tribunal or any court
      • No application for settlement shall be made in relation to goods which are seized believing them being smuggled or in relation to goods on which any offence under the Narcotic Drugs and Psychotropic Substances Act, 1985 has been committed
      • No application for settlement shall be made for the interpretation of the classification of the goods under the Customs Tariff Act, 1975.
   5. Every application made shall be accompanied by such fees as may be specified by rules. An application made shall not be allowed to be withdrawn by the applicant.
   6. The Settlement Commission may, at any time within 3 months from the date of passing of the order, may amend such order to rectify any error apparent on the face of record, either suo motu or when such error is brought to its notice by Principal Commissioner of Customs or Commissioner of Customs.

22. Advance Rulings
    1. Persons eligible to apply for advance ruling:

Following persons can apply for advance rulings:

1. a non-resident setting up a joint venture in India in collaboration with a non-resident or a resident; or
2. a resident setting up a joint venture in India in collaboration with a non-resident; or
3. a wholly owned subsidiary Indian company, of which the holding company is a foreign company, who or which, as the case may be, proposes to undertake any business activity in India;
4. a joint venture in India; or
5. a resident falling within notified class or category of persons.

2. The Advance Ruling can be sought in respect of the following matters:

1. Classification of goods under the Customs Tariff Act, 1975
2. Applicability of any exemption notification
3. Principles to be adopted for the purposes of determination of value of the goods under the provisions of Customs Act
4. Applicability of notifications issued in respect of duties under Customs Act, the Customs Tariff Act and any duty chargeable under any other law for the time being in force in the same manner as duty of customs leviable
5. Determination of origin of the goods in terms of the rules notified under the Customs Tariff Act and matters relating thereto

3. The application shall be made in quadruplicate and be accompanied by a fee of Rs. 10,000/- (Fees of Rs. 2,500/- would be increased to Rs. 10,000/- from the date of enactment of Finance Bill, 2017). An applicant may withdraw an application within 30 days from the date of the application. The Authority shall pronounce its advance ruling in writing within 6 months of the receipt of application.

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