INDIRECT TAX

CENVAT CREDIT:
What is CENVAT Credit?

CENVAT Credit is a scheme where the manufacturers or the output service providers are
allowed a set off of the taxes paid on the inputs or the input services that are used while
manufacturing the final products or providing the output service.

How does it work?

In the manufacture of product X, if raw material A and raw material B are used, the
manufacturer is allowed to take credit of the Central Excise duty paid on the raw materials A and
B used in the manufacture of the final product X. He is allowed to use this credit while paying
duty on the final product, X

Can the CENVAT Credit be availed on capital goods also?

Yes. CENVAT Credit can be availed on capital goods also. But the credit should be taken in
installments. 50% of the credit in the Financial year in which the goods are received and the
remaining 50% in the next financial year or subsequent years. For Capital goods received in
March, 50% credit can be taken in March and the balance 50% can be taken in April as they fall
under two financial years.

For taking the credit on the inputs or capital goods, is it mandatory that the
goods should be directly purchased from the manufacturer?
Not always. The goods can also be procured from the dealers who are registered with the Central
Excise department as first stage or second stage dealers.

What are the inputs eligible for taking the credit?

All goods, except light diesel oil, high speed diesel oil and motor spirit (petrol) which are used in
or in relation to the manufacture of final products are eligible for credit.

What are the capital goods eligible for credit?

The list of eligible capital goods has been provided in the CENVAT Credit rules 2004( for e.g.,
goods falling under chapter headings 82,84,85 and 90 etc of the schedule to the Central Excise
Tariff Act).

If these capital goods are used in the factory of the manufacturer, the credit can be availed.
Can the service tax paid also be availed as credit?

Yes. From 10.9.2004, CENVAT Credit has been extended across goods and services. This means
a manufacturer of final products can avail the credit of excise duty paid on the inputs, and he can
also avail the service tax paid on various services like insurance, telephone etc for payment of
central excise duty on final products. Similarly, a service provider can also avail the credit of
central excise duty paid on the inputs/capital goods /input services used for providing the out put
service.

Can input credit be taken if the final products/ out put service is exempted?
No. Credit is not allowed if the final products are exempted or the output service is exempted.

What if I manufacture both dutiable and exempted goods?

If both exempted and dutiable products are manufactured, the assessee has two options. First
one, he needs to maintain separate accounts for the receipt, consumption and inventory of the
inputs used for exempted goods and dutiable goods and take credit only on the inputs used in the
dutiable goods. Under the second option, if separate accounts are not maintained, the assessee
can take full credit on all the inputs, but has to pay 10% on the price of the exempted goods to
neutralize the credit component of the inputs used in exempted goods. There are certain
exceptions to this rule which can be seen in Rule 6 of the CENVAT Credit Rules 2004

Does the same ratio apply to service providers also?

Yes. If a service provider is engaged in providing both taxable and non taxable (or exempted)
services, he can maintain separate accounts and take credit only on those inputs/input services
which are used in taxable services. Or alternatively if separate accounts are not maintained, he is
allowed to use only 20% of the credit for payment of service tax on taxable service. In other
words, if the tax liability is Rs 100, only Rs. 20 can be paid from the CENVAT Credit account
and the remaining Rs 80 has to be paid in cash.

Any such restriction in case of capital goods?

No. If the capital goods are used for both dutiable and exempted goods, full credit is allowed.
Same is the case with service providers. However credit is not allowed on capital goods used
exclusively in exempted products or exempted services.

Any special provisions relating to credit on capital goods?

Yes. While availing credit on capital goods, the manufacturer shall not avail the depreciation on
that part which represents the CENVAT credit. If the value of goods is Rs 1,00,000 and duty
paid at 16% is Rs 16,000, the manufacturer shall claim depreciation only on base value of Rs
1,00,000. If depreciation is claimed on the full value, of Rs 1,16,000/-, no CENVAT credit is
allowed.
I am manufacturer. I pay the freight for outward transport and also pay the
service tax under GTA as receiver of the service. Can I take credit of the
service tax paid on GTA?

Yes. Transportation of goods up to the place of removal is defined as input service in the
CENVAT Credit rules 2004 and therefore the Service Tax paid on outward transportation is
eligible for credit.

I am a small scale assessee availing exemption. I pay duty only after crossing
Rs one crore. Am I eligible for credit?

Credit is not allowed upto the value of Rs one crore turnover. Only on crossing Rs one crore turn
over, credit is admissible. Credit is also allowed on the inputs lying in stock, contained in work
in process and contained in finished goods lying in stock as on the date of crossing Rs one crore
turn over. The reverse process applies when the assessee goes into fresh exemption from 1st
April of the next year. That means he should pay back the credit on the inputs lying in stock,
contained in WIP and Finished goods when he starts clearing the goods under exemption.

Is there any time limit for taking the credit?

No. There is no time limit prescribed. But it is advisable to take credit in a reasonable time which
was held to be one year by CESTAT in a recent case.

Any statutory records are prescribed under the CENVAT Scheme?

No statutory records are prescribed, but the assessee has to maintain records containing the
information of receipt, disposal, consumption and inventory of the input and capital goods in
which the relevant information regarding the value, duty paid, CENVAT credit taken and
utilized, the person from whom the input or capital goods have been procured is recorded. Same
is the case with the input services.

Can the credit be availed on Education Cess also?

Yes. Credit can be availed on Education cess also, but the credit can be used only for payment of
education cess on the final products or the out put service.

Can the input or capital goods on which credit was already availed be cleared
from the factory?
Yes. The inputs or capital goods can be cleared from the factory on payment of an amount equal
to the CENVAT Credit availed on them.

Is the same logic applied if the capital goods are removed temporarily for
repairs etc?
If the capital goods or inputs as such or after being partially processed are sent to a job worker
for further processing, testing, repair, re-conditioning or for the manufacture of intermediate
goods necessary for the manufacture of final products or any other purpose there is no need to
reverse any credit. Only condition is that all such goods are to be received back in the factory
within 180 days from the date of removal.

Can the inputs on which CENVAT credit is availed be stored outside the
factory?

Yes, with the permission of the Deputy Commissioner of Central Excise or the Assistant
Commissioner of Central Excise.

I have availed credit of first installment of 50% on capital goods. But I want
to clear the capital good as such in the first year itself. Can I do so?

Yes. As special case, in such instances, the full 100% credit can be taken on the capital goods in
the first year itself.

What precautions a manufacturer taking CENVAT credit is required to take?

A manufacturer is required to take all reasonable steps like he being satisfied himself about the
identity and address of the manufacturer or supplier , as the case may be, either-

(a) from his personal knowledge; or

(b) on the strength of a certificate given by a person with whose handwriting or signature he is
familiar; or

(c) on the strength of a certificate issued to the manufacturer or the supplier , as the case may be,
by the Superintendent of Central Excise within whose jurisdiction such manufacturer has his
factory or the supplier has his place of business.

What are the returns prescribed to be filed with the department?

Manufacturer -

Monthly return by 10th of the subsequent month ( Quarterly for SSI units)Registered dealer

Quarterly return within 15 days of the closure of the quarter Service provider

Half yearly return – not later than the last day of the month following the half year Input service
distributor - Half yearly return not later than the last day of the month following the half year
period. All the above returns are to be filed with the Jurisdictional Range Superintendent of
Central Excise.
Small Scale Industry (SSI) Exemption under Central Excise:
Introduction-
Eligibility for SSI Concession-Units having turnover up to Rs. 400 lakhs in the previous
financial year and manufacturing goods specified in the SSI exemption notification are eligible
for exemption from duty up to turnover of Rs. 150 lakhs in the current financial year. It means
excise duty would be payable on the turnover over & above Rs. 150 Lacs. Further, if the entity
had started up the business in Current Year, then it is entitled for the benefit of the said
notification for the current year as its previous year clearances are Nil (even with the fact that the
company has not started the operations).

Non applicability of SSI Exemption-

 SSI Exemption is not applicable to the manufacturers of the following products Tea/Coffee
Ice-Cream

 Pan Masala, Unbranded Chewing Tobacco

 Sandalwood Oil

 Matches

 Photographic Plates

 Films Stainless Steel

 Aluminum Circles Refined Copper

 Copper alloys Tractors, Motor Vehicles, Cars, Chassis, Motorcycles

 Mopeds Watches

 Revolvers, Pistols

 Firearms Travel Sets for personal toilets

 Ceramic Tiles other than those subjected to the process of printing

 Decorating Power Driver Pumps for water not confirming to Bureau of Indian Standards
(BIS) Products covered under compounded levy scheme.

Goods manufactured by an SSI Unit under the Brand Name of others, are not
eligible for SSI Concession, Unless the goods are manufactured in Rural area.
 However, SSI exemption will be available in the following cases Goods manufactured in Rural
areas Raw materials used by manufacturers

 Packing Material, Account books, Registers, Writing pads etc.

 Manufacture of components/parts of any machinery/equipment for use as original

 equipment in the factory Goods bearing the brand name of KVIC/NSIC/SSIDC etc. "House
Mark" in respect of medicinal preparations

 (Note- Brand name or Trade name is defined in explanation to notification as any mark,
symbol, monogram, label, signature or inventor word or writing which may or may not be
registered. This Brand or Trade name must indicate a connection in the trade between the goods
& the person using such mark or name.)

Clubbing of Clearances-
The basic idea behind this is to curtail the creation of dummy units for availing the benefits of
the notification for each such units. This limit will be calculated by taking into account the
clearances in respect of one manufacturer from one or more factories or from a factory by one or
more manufacturers.

Availability of CENVAT Credit CENVAT Credit on Inputs-

If the unit is availing the benefits of Notification No. 8/2003 (i.e. Full Exemption till 150 Lacs),
CENVAT Credit will not be available till the turnover exceeds Rs. 150 Lacs. Once the limit
exceeds Credit on Inputs will be available.  CENVAT Credit on Capital Goods SSI units can
avail the CENVAT Credit on Capital Goods for the 100% amount of duty paid in the year of
receipt of such goods (unlike other than SSI units who are allowed 50% Credit during the year of
receipt). However, this Credit can be utilized only after clearances exceeds Rs. 150 Lacs.

Calculation of Limit of Rs. 150 Lacs-

Following Items will be excluded while calculating the aggregate value not exceeding Rs. 150
Lacs Clearances exempt from whole of the excise duty under any other notification Clearances
bearing the Brand name or Trade name of another person which are ineligible for the grant of
this exemption. Clearance of intermediate goods/goods captively consumed in case the final
product is eligible for SSI Exemption Export clearances.

Calculation of Limit of Rs. 400 Lacs-

Following Items will be excluded while calculating the aggregate value not exceeding Rs. 400
Lacs Clearances to FTZ/ SEZ/ 100% EOU/ HTP/ STP/ UNO/ International organization
Clearances bearing the Brand name or Trade name of another person which are ineligible for
the grant of this exemption. Clearance of intermediate goods/goods captively consumed in case
the final product is eligible for SSI Exemption Clearances exempt under specific job work
notifications, viz. Notification No. 214/86-CE dated 25-Mar-1986, No. 83/94-CE dated 11-Apr-
1994 or No. 84/94-CE dated 11-Apr1994. Export Clearances.

Registration SSI Units whose turnover is < Rs. 150 Lacs are exempted from
registration.
Once the limit exceeds, the unit shall compulsorily get registered with Central Excise authorities.
SSI Units whose turnover is more than specified limit (at present Rs. 90 Lacs) but less than
exemption limit (i.e. Rs. 150 Lacs) have to file a declaration in prescribed form.

Filling of Returns-

Assessees are required to file quarterly return in ER3 on/before 10th of the following month
from the end of the relevant quarter.

Due date for Payment Once the turnover exceeds the exemption limit, SSI units are liable to pay
ED. Due date for payment of duty is 5 th of the following month from the end of relevant
quarter (6th in case of e-payment) for clearances during Apr-Feb, and 31st March for clearances
during Mar. SSI units (whether claiming benefit of exemption or not) are liable to pay ED on
quarterly basis. Further, this relaxation is available for the entire financial year even if the SSI
unit crosses the limit of Rs. 400 Lacs during the current year.

Clearance of goods for home consumption: -

[(1)] Where the proper officer is satisfied that any goods entered for home consumption are not
prohibited goods and the importer has paid the import 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 of the goods for home consumption.

[(2) Where the importer fails to pay the import duty under sub-section (1) ##[within ### [five
days] excluding holidays] from the date on which the bill of entry is returned to him for payment
of duty, he shall pay interest at #### [such rate, not below ###[ten per cent]. and not exceeding
thirty-six per cent. per annum, as is for the time being fixed by the Central Government, by
notification in the Official Gazette], on such duty till the date of payment of the said duty:

Provided that where the bill of entry is returned for payment of duty before the
commencement of the Customs (Amendment) Act, 1991 and the importer has not paid such
duty before such commencement, the date of return of such bill of entry to him shall be deemed
to be the date of such commencement for the purpose of this section.]
**[Provided further that if the Board is satisfied that it is necessary in the public interest so to do,
it may, by order for reasons to be recorded, waive the whole or part of any interest payable under
this section.]

Entry of goods for exportation: -

(1) The exporter of any goods shall make entry thereof by presenting to the proper officer in the
case of goods to be exported in a vessel or aircraft, a shipping bill, and in the case of goods to be
exported by land, a bill of export in the prescribed form.

(2) The exporter of any goods, while presenting a shipping bill or bill of export, shall at the foot
thereof make and subscribe to a declaration as to the truth of its contents.

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.

Clearance of warehoused goods for exportation:-

(1) Any warehoused goods may be exported to a place outside India without payment of import
duty if -

(a) a shipping bill or a bill of export has been presented in respect of such goods in the prescribed
form;

(b) the export duty, penalties, rent, interest and other charges payable in respect of such goods
have been paid; and

(c) an order for clearance of such goods for exportation has been made by the proper officer.

(2) Notwithstanding anything contained in sub-section (1), if the Central Government is of the
opinion that warehoused goods of any specified description are likely to be smuggled back into
India, it may, by notification in the Official Gazette, direct that such goods shall not be exported
to any place outside India without payment of duty or may be allowed to be so exported subject
to such restrictions and conditions as may be specified in the notification.

Entry of goods on importation: -

(1) The importer of any goods, other than goods intended for transit or transhipment, shall
make entry thereof by presenting to the proper officer a bill of entry for home consumption or
warehousing in the prescribed form :

Provided that if the importer makes and subscribes to a declaration before the proper officer,
to the effect that he is unable for want of full information to furnish all the particulars of the
goods required under this sub-section, the proper officer may, pending the production of such
information, permit him, previous to the entry thereof (a) to examine the goods in the presence of
an officer of customs, or (b) to deposit the goods in a public warehouse appointed under section
57 without warehousing the same.

(2) Save as otherwise permitted by the proper officer, 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.

(3) A bill of entry under sub-section (1) may be presented at any time after the delivery of the
import manifest or import report as the case may be :

Provided that the #[Commissioner of Customs] may in any special circumstances permit a bill of
entry to be presented ## [before the delivery of such report]:

###[Provided further that a bill of entry may be presented even before the delivery of such
manifest if the vessel or the aircraft by which the goods have been shipped for importation into
India is expected to arrive within thirty days from the date of such presentation.]

(4) The importer while presenting a bill of entry shall at the foot thereof make and subscribe to a
declaration as to the truth of the contents of such bill of entry and shall, in support of such
declaration, produce to the proper officer the invoice, if any, relating to the imported goods.

(5) If the proper officer is satisfied that the interests of revenue are not prejudicially affected and
that there was no fraudulent intention, he may permit substitution of a bill of entry for home
consumption for a bill of entry for warehousing or vice versa.

Procedure in case of goods not cleared, warehoused, or transhipped within #

[thirty 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 ## [thirty 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:

Provided that -
(a) animals, perishable goods and hazardous goods, may, with the permission of the proper
officer, be sold at any time;

(b) arms and ammunition may be sold at such time and place and in such manner as the Central
Government may direct.

Explanation. -In this section, "arms" and "ammunition" have the meanings respectively assigned
to them in the Arms Act, 1959 (54 of 1959) .

Restrictions on custody and removal of imported goods:-

(1) Save as otherwise provided in any law for the time being in force, all imported goods
unloaded in a customs area shall remain in the custody of such person as may be approved by the
#[Commissioner of Customs] until they are cleared for home consumption or are warehoused or
are transhipped in accordance with the provisions of Chapter VIII.

(2) The person having custody of any imported goods in a customs area, whether under the
provisions of sub-section (1) or under any law for the time being in force, -

(a) shall keep a record of such goods and send a copy thereof to the proper officer;

(b) shall not permit such goods to be removed from the customs area or otherwise dealt with,
except under and in accordance with the permission in writing of the proper officer.

##[(3) Notwithstanding anything contained in any law for the time being in force, if any
imported goods are pilfered after unloading thereof in a customs area while in the custody of a
person referred to in sub-section (1), that person shall be liable to pay duty on such goods at the
rate prevailing on the date of delivery of an import manifest or, as the case may be, an import
report to the proper officer under section 30 for the arrival of the conveyance in which the said
goods were carried.]]

Storage of imported goods in warehouse pending clearance: -

Where in the case of any imported goods, whether dutiable or not, entered for home
consumption, the # [Assistant Commissioner of Customs or Deputy Commissioner of Customs]
is satisfied on the application of the importer that the goods cannot be cleared within a
reasonable time, the goods may, pending clearance, be permitted to be stored in a public
warehouse, or in a private warehouse if facilities for deposit in a public warehouse are not
available; but such goods shall not be deemed to be warehoused goods for the purposes of this
Act, and accordingly the provisions of Chapter IX shall not apply to such goods.

Power to exempt imported materials used in the manufacture of goods in

warehouse: -
If any imported materials are used in accordance with the provisions of section 65 for the
manufacture of any goods and the rate of duty leviable on the imported materials exceeds the rate
of duty leviable on such goods, the Central Government, if satisfied that in the interests of the
establishment or development of any domestic industry it is necessary so to do, may, by
notification in the Official Gazette, exempt the imported materials from the whole or part of the
excess rate of duty.

Removal of goods from one warehouse to another. -

The owner of any warehoused goods may, with the permission of the proper officer, remove
them from one warehouse to another $[Omitted] , subject to such conditions as may be
prescribed for the due arrival of the warehoused goods at the warehouse to which removal is
permitted.

Clearance of warehoused goods for home consumption. -

The importer of any warehoused goods may clear them for home consumption, if -

(a) a bill of entry for home consumption in respect of such goods has been presented in the
prescribed form;

(b) the import duty leviable on such goods and all penalties, rent, interest and other charges
payable in respect of such goods have been paid; and

(c) an order for clearance of such goods for home consumption has been made by the proper
officer.

*Provided that the owner of any warehoused goods may, at any time before an order for
clearance of goods for home consumption has been made in respect of such goods, relinquish his
title to the goods upon payment of rent, interest, other charges and penalties that may be payable
in respect of the goods and upon such relinquishment, he shall not be liable to pay duty thereon.

** Provided further that the owner of any such warehoused goods shall not be allowed to
relinquish his title to such goods regarding which an offence appears to have been committed
under this Act or any other law for the time being in force.

Clearance of warehoused goods for exportation: -

(1) Any warehoused goods may be exported to a place outside India without payment of import
duty if -
(a) a shipping bill or a bill of export has been presented in respect of such goods in the prescribed
form;

(b) the export duty, penalties, rent, interest and other charges payable in respect of such goods
have been paid; and

(c) an order for clearance of such goods for exportation has been made by the proper officer.

(2) Notwithstanding anything contained in sub-section (1), if the Central Government is of the
opinion that warehoused goods of any specified description are likely to be smuggled back into
India, it may, by notification in the Official Gazette, direct that such goods shall not be exported
to any place outside India without payment of duty or may be allowed to be so exported subject
to such restrictions and conditions as may be specified in the notification.

Allowance in case of volatile goods: -

(1) When any warehoused goods to which this section applies are at the time of delivery from a
warehouse found to be deficient in quantity on account of natural loss, the #[Assistant
Commissioner of Customs or Deputy Commissioner of Customs] may remit the duty on such
deficiency.

(2) This section applies to such warehoused goods as the Central Government, having regard to
the volatility of the goods and the manner of their storage, may, by notification in the Official
Gazette, specify.

Goods not to be taken out of warehouse except as provided by this Act. -

No warehoused goods shall be taken out of a warehouse except on clearance for home
consumption or re-exportation, or for removal to another warehouse, or as otherwise provided by
this Act.

Goods improperly removed from warehouse, etc. -

(1) In any of the following cases, that is to say, -

(a) where any warehoused goods are removed from a warehouse in contravention of section 71;
(b) 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;
(c) where any warehoused goods have been taken under section 64 as samples without payment
of duty;
(d) where any goods in respect of which a bond has been executed under #[section 59 [
Omitted]] and which have not been cleared for home consumption or exportation are not duly
accounted for to the satisfaction of the proper officer,

the proper officer may demand, and the owner of such goods shall forthwith pay, the full amount
of duty chargeable on account of such goods together with all penalties, rent, interest and other
charges payable in respect of such goods.

(2) If any owner fails to pay any amount demanded under sub-section (1), the proper officer may,
without prejudice to any other remedy, cause to be detained and sold, after notice to the owner
(any transfer of the goods notwithstanding) such sufficient portion of his goods, if any, in the
warehouse, as the said officer may select.

Cancellation and return of warehousing bond: -

When the whole of the goods covered by any bond executed under # [section 59 $[Omitted]]
have been cleared for home consumption or exported or are otherwise duly accounted for, and
when all amounts due on account of such goods have been paid, the proper officer shall cancel
the bond as discharged in full, and shall on demand deliver it, so cancelled, to the person who
has executed or is entitled to receive it.

PROVISIONS RELATING TO CONVEYANCES CARRYING

IMPORTED OR EXPORTED GOODS
Arrival of vessels and aircrafts in India: -

(1) 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 -

(a) for the first time after arrival in India; or

(b) at any time while it is carrying passengers or cargo brought in that vessel or aircraft; at any
place other than a customs port or a customs airport, as the case may be.

(2) The provisions of sub-section (1) shall not apply in relation to any vessel or aircraft which is
compelled by accident, stress of weather or other unavoidable cause to call or land at a place
other than a customs port or customs airport but the person-in-charge of any such vessel or
aircraft -
(a) shall immediately report the arrival of the vessel or the landing of the aircraft to the nearest
customs officer or the officer-in-charge of a police station and shall on demand produce to him
the log book belonging to the vessel or the aircraft;

(b) shall not without the consent of any such officer permit any goods carried in the vessel or the
aircraft to be unloaded from, or any of the crew or passengers to depart from the vicinity of, the
vessel or the aircraft; and

(c) shall comply with any directions given by any such officer with respect to any such goods,

and no passenger or member of the crew shall, without the consent of any such officer, leave the
immediate vicinity of the vessel or the aircraft :

Provided that nothing in this section shall prohibit the departure of any crew or passengers
from the vicinity of, or the removal of goods from, the vessel or aircraft where the departure or
removal is necessary for reasons of health, safety or the preservation of life or property.

Delivery of import manifest or import report:

(1) The person-in-charge of -

(i) a vessel; or

(ii) an aircraft; or

(iii) a vehicle,

carrying imported goods or any other person as may be specified by the Central Government,
by notification in the Official Gazette, in this behalf shall, in the case of a vessel or an aircraft,
deliver to the proper officer an import manifest prior to the arrival of the vessel or the aircraft, as
the case may be, and in the case of a vehicle, an import report within twelve hours after its
arrival in the customs station, in the prescribed form and if the import manifest or the import
report or any part thereof, is not delivered to the proper officer within the time specified in this
sub-section and if the proper officer is satisfied that there was no sufficient cause for such delay,
the person-in-charge or any other person referred to in this sub-section, who causes such delay,
shall be liable to a penalty not exceeding fifty thousand rupees.]

(2) The person delivering the import manifest or import report shall at the foot thereof make and
subscribe to a declaration as to the truth of its contents.
(3) If the proper officer is satisfied that the import manifest or import report is in any way
incorrect or incomplete, and that there was no fraudulent intention, he may permit it to be
amended or supplemented.

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

(1) 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.

(2) No order under sub-section (1) shall be given until an import manifest has been delivered or
the proper officer is satisfied that there was sufficient cause for not delivering it.

(3) Nothing in this section shall apply to the unloading of baggage accompanying a passenger or
a member of the crew, mail bags, animals, perishable goods and hazardous goods.

Imported goods not to be unloaded unless mentioned in import manifest or

import report: -
No imported goods required to be mentioned under the regulations in an import manifest or
import report shall, except with the permission of the proper officer, be unloaded at any customs
station unless they are specified in such manifest or report for being unloaded at that customs
station.

Unloading and loading of goods at approved places only: -

Except with the permission of the proper officer, no imported goods shall be unloaded, and no
export goods shall be loaded, at any place other than a place approved under clause (a) of section
8 for the unloading or loading of such goods.

Goods not to be unloaded or loaded except under supervision of customs

officer: -
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:

Provided that the Board may, by notification in the Official Gazette, give general permission and
the proper officer may in any particular case give special permission, for any goods or class of
goods to be unloaded or loaded without the supervision of the proper officer.

Restrictions on goods being water-borne: -

No imported goods shall be water-borne for being landed from any vessel, and no export goods
which are not accompanied by a shipping bill, shall be water-borne for being shipped, unless the
goods are accompanied by a boat-note in the prescribed form :
Provided that the Board may, by notification in the Official Gazette, give general permission,
and the proper officer may in any particular case give special permission, for any goods or any
class of goods to be water-borne without being accompanied by a boat-note.

Restrictions on unloading and loading of goods on holidays, etc: -

No imported goods shall be unloaded from, and no export goods shall be loaded on, any
conveyance on any Sunday or on any holiday observed by the Customs Department or on any
other day after the working hours, except after giving the prescribed notice and on payment of
the prescribed fees, if any : Provided that no fees shall be levied for the unloading and loading of
baggage accompanying a passenger or a member of the crew, and mail bags.

Power to board conveyances: -

The proper officer may, at any time, board any conveyances carrying imported goods or export
goods and may remain on such conveyance for such period as he considers necessary.

Power to require production of documents and ask questions: -

For the purposes of carrying out the provisions of this Act, the proper officer may require the
person-in-charge of any conveyance or animal carrying imported goods or export goods to
produce any document and to answer any questions and thereupon such person shall produce
such documents and answer such questions.

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.

Export goods not to be loaded unless duly passed by proper officer:-

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

(a) of export goods, other than baggage and mail bags, unless a shipping bill or bill of export or a
bill of transhipment, as the case may be, duly passed by the proper officer, has been handed over
to him by the exporter;

(b) of baggage and mail bags, unless their export has been duly permitted by the proper officer.

Delivery of export manifest or export report:-

 (1) 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 in the case of a vessel or aircraft, an export manifest, and in the case of a
vehicle, an export report, in the prescribed form.

(2) The person delivering the export manifest or export report shall at the foot thereof make and
subscribe to a declaration as to the truth of its contents.

(3) If the proper officer is satisfied that the export manifest or export report is in any way
incorrect or incomplete and that there was no fraudulent intention, he may permit such manifest
or report to be amended or supplemented.

No conveyance to leave without written order:-

(1) 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.

(2) No such order shall be given until -

(a) the person-in-charge of a conveyance has answered the questions put to him under section 38;

(b) the provisions of section 41 have been complied with;

(c) the shipping bills or bills of export, the bills of transhipment, if any, and such other
documents as the proper officer may require, have been delivered to him;

(d) all duties leviable on any stores consumed in such conveyance, and all charges and penalties
due in respect of such conveyance or from the person-in-charge thereof have been paid or the
payment secured by such guarantee or deposit of such amount as the proper officer may direct;

(e) the person-in-charge of the conveyance has satisfied the proper officer that no penalty is
leviable on him under section 116 or the payment of any penalty that may be levied upon him
under that section has been secured by such guarantee or deposit of such amount as the proper
officer may direct;

(f) in any case where any export goods have been loaded without payment of export duty or in
contravention of any provision of this Act or any other law for the time being in force relating to
export of goods, -

(i) such goods have been unloaded, or

(ii) where the #[Assistant Commissioner of Customs or Deputy Commissioner of Customs] is
satisfied that it is not practicable to unload such goods, the person-in-charge of the conveyance
has given an undertaking, secured by such guarantee or deposit of such amount as the proper
officer may direct, for bringing back the goods to India.

Exemption of certain classes of conveyances from certain provisions of this

Chapter: -

(1) The provisions of sections 30, 41 and 42 shall not apply to a vehicle which carries no goods
other than the luggage of its occupants.

(2) The Central Government may, by notification in the Official Gazette, exempt the following
classes of conveyances from all or any of the provisions of this Chapter -

(a) conveyances belonging to the Government or any foreign Government;

(b) vessels and aircraft which temporarily enter India by reason of any emergency.