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WELCOME

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INTRODUCTION

DEFINITIONS
IMPORT: Any goods brought into Indian territory from a
place outside India.
EXPORT: Any goods sent to another country from Indian
territory
GOODS: Means Vessels, Aircrafts and Vehicles, Stores,
Baggage, Currency and negotiable instruments
and any other kind of movable property.
INDIA: Includes territorial waters (waters extending
in to the sea upto a limit of contiguous zone
specified in Territorial waters, Exclusive
Economic Zone, Continental shelf and
Maritime Zones Act)

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TYPES OF GOODS

„ PROHIBITED: Import / Export of these goods are


completely banned/prohibited
„ RESTRICTED: Permitted to be imported / exported
subject to conditions like Licensing or
through only certain permitted agencies
etc. This category includes passenger
baggage.
„ FREE: In general anybody can import by
following the procedures prescribed.
Import is allowed without restrictions like
license etc.

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DEPARTMENT OF CUSTOMS ENFORCES THE PROVISIONS OF THE
FOLLOWING ACTS/REGULATIONS

1. Standard of Weights and Measures (Packaged Commodity)


Rules, 1997. Imported packaged commodities shall carry
the names, addresses of the importer, net quantity, month
and year of packing and retail sales price etc..

1. Environment Protection Act.


2. Indian Trade Merchandise Act.
3. Arms Act.
4. Wildlife Act.
5. Plants, Fruits, Seeds (Regulation of import into India)
Orders (PFS) Order 1989 used under Destructive Insects
and Pests Act.
6. The Live stock importation Act, 1898.
7. Prevention Food Adulteration Act, 1954 etc.,

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CUSTODIAN

The goods imported into India and exported out


of India are allowed through designated Sea
Ports / Land Custom Stations / Airports. The
goods so imported / exported are initially
deposited in the custody of Custodian such as
Port authorities for goods imported through sea.
Custodians for goods imported by air
Air Port Authority Of India
Air India or STC etc
For places other than points of landing
Inland Container Depot (ICD)-M/s CONCOR at Hyderabad.
Container Freight Station (CFS)-M/s CWC at Hyderabad.

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Export Promotion Schemes
• DUTY EXEMPTION/REMISSION SCHEMES:-
1) Advance Authorisation Scheme (DEEC/Adv. Licence)
2) Duty Free Replenishment Scheme (upto 4/06)
3) DEPB Scheme
4) Duty Free Import Authorisation (DFIA w.e.f 1.5.06)

• EXPORT PROMOTION CAPITAL GOODS SCHEME(EPCG)


• EOU/STP/EHTP/Biotechnology Parks
• SPECIAL ECONOMIC ZONES (separate Act & Rules framed)
• FREE TRADE AND WAREHOUSING ZONES
• DEEMED EXPORTS
• SPECIAL SCHEMES UNDER EXPORT PROMOTION
• SERVED FROM INDIA SCHEME ( formerly DFEC)
• VISHESH KRISHI AND GRAM UDYOG YOJANA
• FOCUS MARKET SCHEMES
(Export to certain specified countries)
• FOCUS PRODUCT SCHEMES
(Export of Specified commodities) 6
CENTRAL EXCISE
PROCEDURE-EXPORTS
There are two types of procedures
Export of Goods under Bond

¾ Execution of LUT by the Manufacturer Exp


¾ Execution of B1 bond with security in the
case of Merchant Exporter or Manufacturer
Exporter.
¾ Obtaining the CT1 Certificate CT1 against
the B1 bond by the Merchant Exporter

Export of goods on payment of C. Ex duty


under claim for Rebate of Duty
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Preparation of ARE 1/ARE 2 Document (5 Copies),
C.Ex Invoice/Pkg List
Manner of Clearance of Export goods
¾Under the supervision of Central Excise officer
or
¾Under Self Sealing and Self Certification of the
Manufacturer at the place of dispatch.

¾In the case of goods examined & sealed by the


Central Excise Officer ARE 1 shall be accompanied
by the Examination Report (Cir No. 630/21/2002-
Cx dt 27.3.2002).
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¾ In the case self sealed goods the exporter shall
certify on all copies of ARE 1 that the description
and value of the goods have been checked and goods
have been packed and sealed under his supervision.
¾ Self sealed and Self Certified goods are subjected to
examination norms at the port of export as
prescribed by the Customs.
¾ ARE 1 (Ori & Dup) send to the place of export along
with the goods, Tri & Quadruplicate to the Range
Office for certification and forwarding to AC before
whom the bond was executed. Quintuplicate is
Optional kept as exporter copy.

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Examination of goods at the Port of Export

¾ The ARE 1 copies received with goods at the port will


verified by the Customs w.r.t. quantity and identity of the
goods presented for examination and after allowing the
goods for export certifies on the copies of the ARE 1 citing
the SB No and date and other particulars of export and
return the Original copy of ARE1 to the Exporter and
Duplicate to the Central Excise Officer by post or in a
sealed cover though the exporter.
¾ Procedure is prescribed for admitting proof of export,
allowing re credit in the bond/LUT or for granting rebate of
duty paid.
¾ Simplified procedure is also prescribed for exempted units
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Procedure for Customs Clearance
The following documents are to be presented
to the Customs for clearance of goods.
„ Bills of Entry (For Imports-Section 46 of CA-62)
„ Shipping Bills (For Exports)
„ Baggage Declaration (For Pass Baggage) - Oral
„ Baggage Declaration (For Unaccompanied
Baggage)
The import duty is assessed and on payment of
duty, the importer’s goods are allowed clearance
into India.
Generally there is no customs duty on exports
except certain cesses levied under authority of
other Acts. 11
Export Procedures
• Registration: All exporters must obtain IEC
(Import Export Code number)from DGFT.
Under EDI system, IEC is received by the
Customs from the DGFT online.
• Exporters also required to register authorized
foreign exchange dealer code and open a
current a/c in the designated bank for credit of

• duty drawback if any.


• For availment of EPCG & DFIA, ADV Licence
export promotion schemes, exporters need to
get their licenses registered.
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Export Procedures
Processing of Shipping Bill- Non-EDI:

„ Shipping bill has to be filed in the format prescribed


„ Different forms of shipping bills have been prescribed
for different types
„ S/Bs are required to be filed along with all original
documents like invoice, AR-E1, packing list etc.
„ S/B will be assessed on the basis of declaration if
otherwise in order.
„ Goods should be presented for examination at the
Docks Examination unit
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Export Procedures
Processing of Shipping Bills-EDI:

„ Declaration in prescribed format are to be filed through the


Service Centers.
A checklist is generated for verification of data by the
exporter/CHA. After verification, the data is submitted to the
System and the System generates a Shipping Bill No, which is
endorsed on the printed checklist
„ No copy of shipping bill is given at this stage.

„ The exporter can verify the status of the shipping bill at the
Service Center.
„ The Appraising Officer/ Superintendent will verify the FOB
value declared, the RITC No etc., and the bill will be assessed
in the system it self. In the case of DEPB Scheme SBs the
DEPB sl. no. declared and for the DBK Scheme the DBK
Schedule sl.no. declared are verified.

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Export Procedures
„ If any query is issued, the same may be replied through the
service center or in case of CHAs having EDI connectivity
through their respective terminals or through ICEGATE )
„ Customs Examination: Goods have to be presented for
examination with all the documents.
„ Examination is done with reference to the declaration made in
the Bill and the actual quantity, value etc.
„ The packages to be examined is determined by the system
„ The Customs Officer enters the examination report in the
System
„ Superintendent or Appraiser will give “let export” order, if
they are satisfied with the documents and the same are tallied
with the physical examination.

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Export Procedures
„ If there is any variation between the check list and the
physical examination of the goods, matter will be
referred to the concerned Asst. Commissioner
„ Stuffing/Loading of Goods in Container:
The exporter or his agent must hand over the exporter
copy of the duly signed shipping bill to the steamer
agent for stuffing. In the case of containerised cargo,
the same is done under preventive supervision.
„ Customs Preventive Officer supervising the loading
of the container may give “Shipped on Board”
endorsement on the exporter copy of the S/B.
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MISTAKES IN DOCUMENTATION

Furnishing of incorrect and incomplete particulars in the


Central Excise Documents Viz. ARE1/ARE2, Central
Excise Invoices, Pkg List and Customs documents Viz.
Annexures filed in the Service Centre, Export Invoice,
Export Pkg List and Shipping Bills generated based on
these documents leads to many problems at the time of
export goods.
Errors generally committed:
„ The description of the goods, unit of quantity,
classification of the Chapter-Heading shown in the ARE1
and C Ex Invoice do not tally with the particulars
furnished in the Shipping Bill.
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MISTAKES IN DOCUMENTATION

Particulars often incorrectly declared


1. Quantity vis a vis Units of Qty
2. Gross weight & Net weight
3. Invoice No/Date & ARE 1 No in the SB
4. Port of Destination/ Discharge
5. Description of goods
6. Currency Viz USD/GBP/Aus D/Euro etc
7. CIF Value/FOB Value
8. Export promotion Scheme opted.
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MISTAKES IN DOCUMENTATION

Quantity vis a vis unit of qty


„ Qty is required to be furnished in Cubic Meters with
declaration of length x Breadth x width (thick ness)
in the case of Granite/Marble Slabs and Tiles for
verifying the eligibility of DEPB rate, but the qty is
declared in Square Meters.
„ The description of packing materials used for packing
the export product is relevant for granting DEPB in
certain cases. Failure to give the Pkg particulars
result in denial of benefit. Ex packed in cartoons/
plastic film etc.

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MISTAKES IN DOCUMENTATION

Gross & Net Weight:


„ Care has to be taken to correctly declare the Gross
weight and Net weight in the Excise documents
such as ARE1, Invoice and Pkg List and the said
weight should tally with the Gross and Net Weight
declared in the Shipping Bill. This mistake is
noticed in the case of Granite/Marble slabsand tiles.
The LINER insists for the correct decl of the Weight
in the SB where as the weights shown in the SB and
Excise documents don’t tally. If this mistake is
noticed after the LEO is given then the
amendment of particulars in SB becomes time
consuming and lengthy procedure.
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MISTAKES IN DOCUMENTATION

PORT OF DESTINATION
„ The declaration of the port of destination
properly in the Shipping Bill is very important.
The Exporters / CHAs are failing to distinguish
the difference between Country of Destination and
Port of Destination. One Important Point to be
remembered is to declare the Port of destination
basing the Purchase Order or any despatch
instructions given by the Foreign Buyer. Such
declaration should not be based on assumptions such
as basing on what is declared in previous export
document or basing on the Country Destination.
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MISTAKES IN DOCUMENTATION

Description:

„ The Description of the Chemicals/Medicines


(P & P) is given in general terms as brand
name etc where as for claiming the DEPB /
DBK benefits the actual chemical name has
to be given in the export documents. Same is
the case with the Machinery/ Electrical
Machinery/ Electrical Goods/ Electronic
Goods.
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MISTAKES IN DOCUMENTATION

Currency & Value:


„ Incorrect declaration of unit of Currency Viz
USD, Euro, GBP is another important field. The
exchange rates are different for each currency.
„ Incorrect declaration of the CIF Value and FOB
Value. If the Value as per the Purchase Order is
FOB and if exporter declares it as CIF value/
Invoice Value and exhibits Insurance and Freight in
the SB then automatically the FOB value arrived at
in the SB will be less than the actual FOB Value
since the freight & Insurance is deducted twice in
the system. The FOB Value has great relevance to
the DBK Scheme & DEPB Scheme since the
benefit is given based on the FOB Value.
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MISTAKES IN DOCUMENTATION

Export Promotion Scheme :


„ The exporter has to decide before hand whether the
exports are under FREE SB (no export incentive
scheme) or under any Export Scheme VIz.
DEPB/DFIA/DBK/EPCG etc., and file the bill
accordingly. The Conversion of SB from Free Bill
to any Scheme Bill is not permitted as per the Board
Circular. The conversion of SB from one Export
Scheme to another Export Scheme is not allowed as
matter of routine but examined case by case by
Commissioner. Hence all the care has to be taken to
avoid disappointment and delay in getting the
benefit. 24
MISTAKES IN DOCUMENTATION

The above cited mistakes are simple and rectifiable


mistakes by bestowing ones attention in furnishing
the correct particulars of description, Qty, unit of
measurement, Currency, FOB/CIF Value,
DEPB/DBK Schedule Sl.No, Port of destination,
Country of destination, Gross weight/ Net weight
in the Annexure filed in the Service Centre, Central
Excise Documents, Customs Documents as the
case may be.
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MISDECLARATION IN DEPB/DBK SCHEME
Few cases are
• Export of chalk powder by declaring them as NAPROXIN
bulk drug.
• Export of starch powder by declaring them as bulk drugs. In
the said case the top layer is filled with the bulk drug and the
lower layers with starch powder.
• The rags and worth less ready made goods are attempted to
be exported as Ladies dresses to claim the DBK benefit.
• Claiming the export benefits by tampering with export
documents, by creating the fictitious Customs documents
such as Shipping Bills, Transfer Release Advises (T R s).
• In many cases, the goods exported will not be taken delivery
abroad, no money will be received from foreign country
meanwhile exporter avail the export benefit and disappears.
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Misdeclaration in ADVANCE
LICENSE SCHEME:

Certain unscrupulous exporters obtain


Adv License from DGFT and import raw
materials with actual user condition and the
said inputs will be sold in the local market
and disappear or they don’t fulfill the export
obligation.

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Risk Management System:

¾RMS will be available only for


specified categories of importers.
¾Clearance will be allowed on self-
assessment.
¾No examination except marks & numbers.

¾Concurrent audit will be replaced by Post


clearance audit.
¾RMS will be introduced at ACC shortly &
ICD later.
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THE END

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