Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise and Customs
Circular No. 38/ 2016-Customs
Dated 22nd August 2016
To,
All Principal Chief Commissioners of Customs / Customs & Central Excise All
Chief Commissioners of Customs,
All Chief Commissioners of Customs & Central Excise,
All Directorate-Generals, Chief Departmental Representative,
All Principal Commissioners of Customs,
All Principal Commissioners of Customs & Central Excise, All Commissioners of
Customs,
All Commissioners of Customs & Central & Excise
Subject:- Guidelines regarding Provisional Assessment under section 18 of the
Customs Act, 1962
The Customs (Provisional Duty Assessment) Regulations 2011 issued under
notification no. 81/2011 - Customs (NT) dated 25.11.2011 were reviewed in view
of references from the field formations regarding guidelines on the
implementation of Regulation 2(2) and Regulation 4.
2. Regulations 2(2), 3 and 4 require three elements - namely, (a) deposit of 20%
of the differential duty between "provisional duty" and duty to be "finally
assessed or re-assessed"; (b) execution of a bond; and (c) surety or security or
both, as deemed fit.
2.1 Section 18 of the Customs Act, 1962 defines the cases where provisional
assessment may be resorted, as under:
- (1) Notwithstanding anything contained in this Act but without prejudice to
the provisions of section 46,-
(a) where the importer or exporter is unable to make self-assessment under
sub-section (1) of section 17 and makes a request in writing to the proper
officer for assessment; or
(b) where the proper officer deems it necessary to subject any imported goods or
export goods to any chemical or other test; or
(c) 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; or
(d) where necessary documents have not been produced or information has not been
furnished and the proper officer deems it necessary to make further enquiry,
2.2 Further, Section 18 goes on to state how a provisional assessment is to be
carried out:
"the proper officer may direct that the duty leviable on such goods be assessed
provisionally if the importer or the exporter, as the case may be, furnishes
such security as the proper officer deems fit for the payment of the deficiency,
if any, between the duty as may be finally assessed and the duty provisionally
assessed."
2.3 Thus, the provisions of section 18 of the Customs Act, 1962, require that in
cases where goods are to be provisionally assessed:
(a) the importer binds himself for the payment of deficiency, if any, between
the duty as may be finally assessed and the duty provisionally assessed; and
(b) furnishes such security as the proper officer deems fit for the payment of
the deficiency.
2.4 In view of the requirement that the importer binds himself to pay the
deficiency, if any, between the duty as may be finally assessed and the duty
provisionally assessed, it would be necessary to obtain a bond for meeting the
aforesaid condition.
2.5 Insofar as the requirement of obtaining a 20% deposit of the duty
provisionally assessed, the Board has decided that this condition be dispensed,
particularly, as it necessitates following the procedure of refunds in cases
where final assessment is in favour of the importer. Such requirements add to
the transaction costs, lead to delays in clearance and detract from the ease of
doing business.
2.6 It was also noted that Regulation 4 required that the importer should
furnish such surety or security or both, as deemed fit, along with the Bond. In
this connection, it was felt that acceptance of a surety requires making an
evaluation of the underlying asset value or of the net worth of the person
executing the same. This poses difficulties to the importers as well as
administrative challenges to the Department in valuing sureties. Therefore, the
Board has decided that the requirement of security needs to be met by either
obtaining a bank guarantee or a cash deposit, as convenient to the importer, and
that no sureties shall be obtained.
2.7 In view of the aforesaid, the Board has rescinded "The Customs (Provisional
Duty Assessment) Regulations 2011" vide notification no. 113/2016 - Cus (NT)
dated 22nd August 2016 since section 18 itself lays down the procedure to be
followed in the case of provisional assessment. The only issue which is required
to be addressed is regarding the amount of security since section 18 requires
the same to be obtained as "deemed fit" by the proper officer. For the sake of
uniformity of practice, transparency and predictability for the tax payer, the
Board has decided that the following procedure and guidelines will be followed
by all Customs stations while assessing goods provisionally:
2.8 Wherever, duty is to be assessed provisionally, the importer shall:
(a) for the purposes of undertaking to pay on demand the deficiency, if any,
between the duty as may be finally assessed and the duty provisionally assessed,
execute a bond in the prescribed form (enclosed); and
(b) furnish such security for the payment of the duty deficiency, as indicated
in para 3 below.
2.9 The security to be obtained shall be in the form of a bank guarantee or a
cash deposit, as convenient to the importer.
3. The following guidelines shall be followed while obtaining security where
provisional assessment under section 18 of the Customs Act is being undertaken:
Sl. No.
|
Class of Importer
|
Amount of Bank Guarantee or Cash deposit to be obtained as "security
"of the differential du
|
Remarks
|
1.
|
Imports by Authorised Economic Operators (AEO -T3)
|
0%
(including cases at Sl. No. 4 to 6b.)
|
In terms of Circular no. 33/2016-Customs dated 22nd July
2016, as amended.
|
2.
|
Imports by Authorised Economic Operators (AEO – T1 and AEO - T2)
(excluding importers mentioned at Sl. No.3)
|
(a) 0% (in terms of Sl. No. 5(b), 6(a) and
(b) 50% (for AEO-T1) or 25% (for
AEO-T2) of the
applicable bank guarantee or cash deposit specified at Sl. No. 4,
5(a), 5(c), 6(b)(1).
|
In terms of Circular no. 33/2016-Customs dated 22nd July
2016, as amended.
|
3.
|
Imports by Public Sector Undertakings / Government Central/State/UT
and their undertakings)
|
0%
including cases at Sl. No. 4 to 6b.)
|
|
4.
|
Cases referred to SVB
|
As per circular No.5/2016 Customs dated 9.2.2016 issued from F. No.
465/12/2010-cus v
|
|
5(a)
|
Cases related to verification of origin under FTAs based on the
reasonable belief that the matter involves mis-declaration of origin /
value addition.
|
100%
|
Based upon "Operational Certification Procedures" contained in the
non-tariff notifications issued on Rules for determination of Origin
|
5(b)
|
Cases selected on random basis for verification of origin.
|
0%
|
|
5(c)
|
Cases related to verification of signatures and seals under FTAS
|
100%
|
Provided that the Principal Commissioner of Customs or the
Commissioner of Customs may reduce the amount of security where there
are good and justifiable reasons to do so.
|
6(a)
|
Cases, where the importer is not able to make self-assessment and has
sought provisional assessment.
|
Not applicable
|
As this such cases will be provisionally assessed by the proper
officer as deemed fit.
|
6(b)
|
Cases, where the proper officer deems it necessary to order a
provisional assessment, whether for the purposes of chemical test or
requirement of information or causing inquiries:
(1) Where differential duty has been estimated.
(2) Where, despite best efforts by the proper officer, differential
duty cannot be computed
|
100%
0%
|
Provided that the Principal Commissioner of Customs or the
Commissioner of Customs may reduce the amount of security where there
are good & justifiable reasons to do so.
N.A.
|
3.1 By way of a clarification, attention is also drawn to an earlier
instruction of the Ministry contained in F.No. 511/7/77-Cus VI dated 09.01.1978,
to the effect that the amount of security shall be determined on the basis of
duty differential and not the CIF value of goods.
3.2 It is also clarified that provisional assessments under section 18 are to
be carried out with respect to cases where the duty is in dispute. Cases
relating to execution of a bond or undertaking specified as a condition to a
notification or those requiring compliance of conditions under allied acts are
not to be provisionally assessed under section 18 of the Customs Act. This
position had been earlier clarified by the Ministry of Law and Justice and
circulated vide Ministry F.NO. 353 / 91 / 74 - Cus dated 28th January
1977.
4. Difficulties, if any, may be brought to the notice of the Board.
5. Hindi version follows.
Yours faithfully,
(S. Kumar)
Commissioner (Customs)
F. No: 465 / 01 / 2016 - Cus V
Encl: Format of bonds
Bond
Individual Importation
(With Bank Guarantee or Cash Deposit)
(To be executed by the Importer of goods with bank guarantee/cash deposit
under section 18 of the Customs Act, 1962 (52 of 1962)
(Circular No. 38 /2016-Customs dated 22/08/2016 issued from CBEC F.No:
465/01/2016 - cus V)
KNOW ALL MEN BY THESE PRESENTS THAT We M/s ________________ having our
registered office located at ________________________________and holding
Import-Export Code No. _______________hereinafter called the "Importer" (which
expression shall include its successors/heirs, executors, administrators and
legal representatives) are held and firmly bound unto the President of India
hereinafter called the "President" (which expression shall include his
successors and assigns) in the sum of Rs ____________ Rupees _________(please
fill amount in words) to be paid to the President for which payment well and
truly to be made, we bind ourselves, our successors, heirs, executors,
administrators and legal representatives firmly by these presents.
Sealed with our seal(s) this_ day of_______20____
WHEREAS the Assistant Commissioner of Customs/Deputy Commissioner of Customs
at the_________(place), (hereinafter called the "proper officer') has agreed to
make provisional assessment of the goods imported by us, pending submission of
further documents and/or furnishing information and/or completion of further
enquiries and/or chemical test and/or other test and the Proper Officer has
agreed to allow provisional assessment of the goods mentioned in the schedule
hereto annexed upon the importer agreeing to furnish such bond as is herein
contained; and
WHEREAS the importer has deposited with the Principal Commissioner of Customs
or Commissioner of Customs, as the case may be, at_______ (location),
1a bank guarantee;
OR
1 a cash deposit
mentioned in the schedule hereunder for the due observance of and performance
of the terms and undertakings on the part of the importer and for being applied
in part or full towards the indemnity hereby given or otherwise according to
law.
1 strike out whatever is not applicable.
(1) If the importer shall within _____days or within such extended period as
the Proper Officer may allow, produce such documents and furnish such
information as may be called for by the Proper Officer, and
(2) If the importer pays to the President, the difference between the
duty finally assessed and the duty provisionally assessed in respect of the
imported goods and mentioned in the Schedule hereto annexed.
Then the above written bond shall be void and of no effect; otherwise the
same shall remain in full force and virtue.
AND IT IS HEREBY AGREED AND DECLARED by the importer as follows:-
1 . This bond and cash deposit/bank guarantee are given under the orders of
the Central Government for the performance of an act which is in public
interest.
2. The President through the [Deputy Commissioner / Assistant Commissioner of
Customs] or other officer may recover the said sum of Rs_____in the manner laid
down in Section 142 of the Customs Act, 1962 without prejudice to any other mode
of recovery.
IN WITNESS WHEREOF the importer has herein set and subscribed its hands and
seals the day, month and year first above written.
SIGNED AND DELIVERED by and on behalf of the importer at_______ (place) in
the presence of:-
(Signature of Authorised Signatory and Corporate Seal)
Witnesses:
1 .
2.
Accepted for and on behalf of the President of India
(Signature of the Proper Officer)
Schedule to Bond
(Individual importation)
(With Bank Guarantee or Cash Deposit)
(To be executed by the Importer of goods with bank guarantee/cash deposit
under section 18 of the Customs Act, 1962 (52 of 1962)
(Circular No.38 /2016-Customs dated 22/08/2016 issued from
CBEC F.No: 465/012016 - cus V)
Bill of Entry Number
|
Date
|
Value at which provisionally assessed
|
Bond value
|
Details of security deposit or bank guarantee whichever is applicable
|
Remarks (attach bank guarantee/cash deposit receipt in
original)
|
Signature / date / name / designation of officer making the entry
|
(1)
|
(2)
|
(3)
|
(4)
|
(5)
|
(6)
|
(7)
|
Bond
Individual Importation
(Without Bank Guarantee or Cash Deposit)
(To be executed by the Importer of goods without bank guarantee/cash
deposit under section 18 of the Customs Act, 1962 (52 of 1962)
(Circular No. 38 / 2016-Customs dated
22/08/2016 issued from CBEC F.No. 465/01/2016 - cus V)
KNOW ALL MEN BY THESE PRESENTS THAT We ______________M/s having our
registered office located at______________________and holding Import Export Code
No.__________ hereinafter called the "Importer" (which expression shall include
its successors/heirs, executors, administrators and legal representatives) are
held and firmly bound unto the President of India hereinafter called the
"President" (which expression shall include his successors and assigns) in the
sum of Rs_______Rupees_____________(please fill amount in words) to be paid to
the President for which payment well and truly to be made, we bind ourselves,
our successors, heirs, executors, administrators and legal representatives
firmly by these presents.
Sealed with our seal(s) this day of_______20____
WHEREAS the Assistant Commissioner of Customs/Deputy Commissioner of Customs
at the __________(place), (hereinafter called the "proper officer") has agreed
to make provisional assessment of the goods imported by us, pending submission
of further documents and/or furnishing information and/or completion of further
enquiries and/or chemical test and/or other test and the Proper Officer has
agreed to allow provisional assessment of the goods mentioned in the schedule
hereto annexed upon the importer agreeing to furnish such bond as is herein
contained; and
NOW THE CONDITION of the above written bond is such that -
(i) If the importer shall within ______days or within such extended period as
the Proper Officer may allow, produce such documents and furnish such
information as may be called for by the Proper Officer, and
(2) If the importer pays to the President, the difference between the duty
finally assessed and the duty provisionally assessed in respect of the imported
goods and mentioned in the Schedule hereto annexed.
Then the above written bond shall be void and of no effect; otherwise the
same shall remain in full force and virtue.
AND IT IS HEREBY AGREED AND DECLARED by the importer as follows:-
- This bond is given under the orders of the Central
Government for the performance of an act which is in public interest.
- The President through the [Deputy Commissioner / Assistant
Commissioner of Customs] or other officer may recover the said sum of Rs in
the manner laid down in Section 142 of the Customs Act, 1962 without
prejudice to any other mode of recovery.
IN WITNESS WHEREOF the importer has herein set and subscribed its hands and
seals the day, month and year first above written.
SIGNED AND DELIVERED by and on behalf of the importer at (place) in the
presence of:-
(Signature of Authorised Signatory and Corporate Seal)
Witnesses:
1 .
2.
Accepted for and on behalf of the President of India
(Signature of the Proper Officer)
Schedule to Bond
(Individual importation)
(Without Bank Guarantee or Cash Deposit)
(To be executed by the Importer of goods without bank guarantee/cash
deposit under section 18 of the Customs Act, 1962 (52 of 1962)
(Circular No. 38/2016 -Customs dated
22/08/2016 issued from CBEC F.No: 465/01/2016 - cus V)
Bill of Entry Number
|
Date
|
Value at which Provisionally assessed
|
Bond value
|
Remarks (if any)
|
Signature / date / name / designation of officer making the entry
|
(1)
|
(2)
|
(3)
|
(4)
|
(5)
|
(6)
|
Continuity Bond
(With Bank Guarantee or Cash Deposit)
(To be executed by the Importer of goods with
bank guarantee/cash deposit under section 18 of the Customs Act, 1962 (52 of
1962)
(Circular No.38 /2016-Customs dated 22/08/2016
issued from CBEC F.NO. 465/01/2016 - cus V)
KNOW ALL MEN BY THESE PRESENTS THAT We M/s_______________________ having our
registered office located at______________________ and holding Import-Export
Code No.___________ hereinafter called the "Importer" (which expression shall
include its successors/heirs, executors, administrators and legal
representatives) are held and firmly bound unto the President of India
hereinafter called the "President" (which expression shall include his
successors and assigns) in the sum of Rs_________Rupees______________(please
fill amount in words) to be paid to the President for which payment well and
truly to be made, we bind ourselves, our successors, heirs, executors,
administrators and legal representatives firmly by these presents.
Sealed with our seal(s) this____ day of___20___
WHEREAS the Assistant Commissioner of Customs/Deputy Commissioner of Customs
at the _________ (place), (hereinafter called the "proper officer') has agreed
to make provisional assessment of the goods imported from time to time by us,
pending submission of further documents and/or furnishing information and/or
completion of further enquiries and/or chemical test and/or other test and the
Proper Officer has agreed to allow provisional assessment of the goods mentioned
in the schedule hereto annexed upon the importer agreeing to furnish such bond
as is herein contained; and
WHEREAS the importer has deposited with the Principal Commissioner of Customs
or Commissioner of Customs, as the case may be, at_______ (location),
1 a bank guarantee;
OR
1 a cash deposit
mentioned in the schedule hereunder for the due observance of and performance
of the terms and undertakings on the part of the importer and for being applied
in part or full towards the indemnity hereby given or otherwise according to
law.
1 strike out whatever is not applicable
NOW THE CONDITION of the above written bond is such that -
(1) If the importer shall within days or within such extended period as the
Proper Officer may allow, produce such documents and furnish such information as
may be called for by the Proper Officer, and
(2) If the importer pays to the President, the difference between the duty
finally assessed and the duty provisionally assessed in respect of the goods
imported from time to time and mentioned in the Schedule hereto annexed.
Then the above written bond shall be void and of no effect; otherwise the
same shall remain in full force and virtue.
AND IT IS HEREBY AGREED AND DECLARED by the importer as follows:-
1. This bond and cash deposit/bank guarantee are given under the orders of
the Central Government for the performance of an act which is in public
interest.
2. The President through the [Deputy Commissioner / Assistant Commissioner of
Customs] or other officer may recover the said sum of Rs______ in the manner
laid down in Section 142 of the Customs Act, 1962 without prejudice to any other
mode of recovery.
3. This bond and the cash deposit/bank guarantee shall remain in force
from the date hereof and the obligation and liability of the importer shall be a
continuing one in respect of all goods imported from time to time by the
importer between the period of ____and the payment by the importer of the
difference between the duty finally assessed and the duty provisionally assessed
in respect of the goods imported from time to time.
IN WITNESS WHEREOF the importer has herein set and subscribed its hands and
seals the day, month and year first above written.
SIGNED AND DELIVERED by and on behalf of the importer at_____ (place) in the
presence of:-
(Signature of Authorised Signatory and Corporate Seal)
Witnesses:
1 .
2.
Accepted for and on behalf of the President of India
(Signature of the Proper Officer)
Schedule to Continuity Bond
(With Bank Guarantee or Cash Deposit)
(To be executed by the Imponer of goods with
bank guarantee/cash deposit under section 18 of the Customs Act, 1962 (52 of
1962)
(Circular No. 38 /2016-Customs dated
22/08/2016 issued from CBEC F. No: 465/01/2016 - cus V)
Bill of Entry Number
|
Date
|
Value at which provisionally assessed
|
Bond Value
|
Balance of bond value
|
Details of security deposit or bank guarantee
whichever is applicable
|
Balance of security deposit or bank guarantee value (whichever is a
licable
|
Remarks (attach bank guarantee/ cash deposit receipt in original)
|
Signature/ date/name/ designation of officer making the entry
|
(1)
|
(2)
|
(3)
|
(4)
|
(5)
|
(6)
|
(7)
|
(8)
|
(9)
|
Continuity Bond
(Without Bank Guarantee or Cash Deposit)
(To be executed by the Importer of goods
without bank guarantee/cash deposit under section 18 of the Customs Act, 1962
(52 of 1962)
(Circular No.38 /2016-Customs dated 22/08/2016
issued from CBEC F.No. 465/01/2016 - cus V)
KNOW ALL MEN BY THESE PRESENTS THAT We M/s ________________having our
registered office located at______________________________ and holding
Import-Export Code No._______ hereinafter called the "Importer" (which
expression shall include its successors/heirs, executors, administrators and
legal representatives) are held and firmly bound unto the President of India
hereinafter called the "President" (which expression shall include his
successors and assigns) in the sum of Rs________Rupees__________(please fill
amount in words) to be paid to the President for which payment well and truly to
be made, we bind ourselves, our successors, heirs, executors, administrators and
legal representatives firmly by these presents.
Sealed with our seal(s) this day of__20___
WHEREAS the Assistant Commissioner of Customs/Deputy Commissioner of Customs
at the ____________ (place), (hereinafter called the "proper officer") has
agreed to make provisional assessment of the goods imported from time to time by
us, pending submission of further documents and/or furnishing information and/or
completion of further enquiries and/or chemical test and/or other test and the
Proper Officer has agreed to allow provisional assessment of the goods mentioned
in the schedule hereto annexed upon the importer agreeing to furnish such bond
as is herein contained; and
NOW THE CONDITION of the above written bond is such that -
(1) If the importer shall within days or within such extended period as the
Proper Officer may allow, produce such documents and furnish such information as
may be called for by the Proper Officer, and
(2) If the importer pays to the President, the difference between the duty
finally assessed and the duty provisionally assessed in respect of the goods
imported from time to time and mentioned in the Schedule hereto annexed.
Then the above written bond shall be void and of no effect; otherwise the
same shall remain in full force and virtue.
AND IT IS HEREBY AGREED AND DECLARED by the importer as follows:-
- This bond is given under the orders of the Central
Government for the performance of an act which is in public interest.
- The President through the [Deputy Commissioner / Assistant
Commissioner of Customs] or other officer may recover the said sum of
Rs__________ in the manner laid down in Section 142 of the Customs Act, 1962
without prejudice to any other mode of recovery.
- This bond shall remain in force from the date hereof and the
obligation and liability of the importer shall be a continuing one in
respect of all goods imported from time to time by the importer between the
period of_______and the payment by the importer of the difference between
the duty finally assessed and the duty provisionally assessed in respect of
the goods imported from time to time.
IN WITNESS WHEREOF the importer has herein set and subscribed its hands and
seals the day, month and year first above written.
SIGNED AND DELIVERED by and on behalf of the importer at______ (place) in the
presence of:-
(Signature of Authorised Signatory and Corporate Seal)
Witnesses:
1 .
2.
Accepted for and on behalf of the President of India
(Signature of the Proper Officer)
Schedule to Continuity Bond
(Without Bank Guarantee or Cash Deposit)
(To be executed by the Importer of goods
without bank guarantee/cash deposit under section 18 of the Customs Act, 1962
(52 of 1962)
(Circular No. 38 /2016-Customs dated
22/08/2016 issued from CBEC F.No: 465/01/2016 - cus V)
Bill of Entry Number
|
Date
|
Value at which provisionally assessed
|
Bond Value
|
Balance of bond value
|
Remarks (if any)
|
Signature / date / name / designation of officer making the entry
|
(1)
|
(2)
|
(3)
|
(4)
|
(5)
|
(6)
|
(7)
|
|