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Procedure for collection of duty on ship stores consumed during coastal
run
Circular No.
58 dated 6th November 1997
I am directed to
refer Board's circular F.No. 433/ 1/ 81-CUS.IV dated 22.1.85 on the above
subject. In view of representations made by Indian National Ship owner's
Association from time to time and the references made by Commissioners of
Customs, the procedure relating to recovery of duty on ship stores Consumed by
foreign going vessels during their temporary reversion into coastal run has been
reviewed.
2.
It has been observed that the work relating to assessment and collection
of duty on ship stores consumed during temporary reversion to coastal run is not
being given due attention. It has resulted in accumulation of backlog at all the
ports. The Comptroller and Auditor General has also pointed out lapses in
recovery of duty on ship stores in its reports. It has also been observed that
the instructions contained in Board's circular dated 22.1.85 are not being
followed uniformly. The duty has not been collected at the time of reversion of
vessel from foreign run to coastal to foreign run the assessment are kept
pending for want of the inventory list of ship stores from the port at which the
vessel reverted to foreign run. This has resulted in assessments remaining
un-finalised, and even when finalised, the steamer Agents have showed no urgency
to honour their duty liability despite the Bonds furnished by them.
3.
Therefore in modification of existing procedure, it has been decided that
if the Steamer Agents do not desire to pay duty on the entire quantity of Bonded
stores carried by the ship, it is open to them to take the estimated quantity
out of the Bonded stores and pay duty on the same. The remaining quantity may
remain on board such vessels in terms of Section 86 of the Customs Act 1962. The
duty on stores like alcoholic liquor, cigarettes, etc. (other than liquid cargo
like diesel, furnace oil etc.) may be recovered on quantity likely to be
consumed during coastal run, and remaining quantity may be kept in bond under
customs seal as per procedure laid down under Imported Stores (Retention on
Board) Regulations, 1963. The Steamer Agents are required to file the Bill of
Entry as soon as the conversion takes place, and the assessment would be
completed and duty collected within 7 days of the date of conversion to coastal
run.
The duty on bunkers like
diesel, furnace oil etc. may be recovered at 100% (one hundred and ten) of the
duty leviable on the quantity estimated to be consumed during the coastal run at
the time of conversion from foreign run to coastal run on provisional assessment
basis. The steamer agent may file refund claim if any to get refund of duty at
the time of recon version from coastal to foreign run. The assessment may be
finalised within 15 day of recon version from coastal to foreign run.
4.
The procedure as contained at Annexure I to this circular may be adopted
for assessment and recovery of duty.
5.
Customs Houses may issue suitable Public Notice and standing order
incorporating the above positions. The difficulty if any in following the above
procedure may be brought to the notice of the Board.
Procedure
for collection of duty on ship stores consumed onBoard vessel during the coastal run
1.
Whenever vessels in the foreign run revert to coastal trade at any port,
the Steamer Agents should present an application, in duplicate, to the Assistant
Commissioner concerned, with a copy to the Assistant Commissioner of Customs,
Preventive Department, intimating such reversion to coastal trade and requesting
for the services of a preventive Officer for inventorying the Bonded stores. The
application should also indicate whether the Steamer Agents would like to pay
duty on the entire bonded stores carried by the vessel; or, the quantum of
bonded stores that they would like to take out for the crew etc. on payment of
duty and keep the remaining under Customs seal in terms of Imported Stores
(Retention on Board) Regulations, 1963.
2.
As per the request of the Steamer Agents, the Preventive Department will
take an inventory of the stores. If the request is for taking out only a portion
of such stores, the Preventive Officer concerned should supervise the quantity
that is taken out and make an inventory of the same. Inventory of the private
property of the crew would similarly be taken separately. In regard to the
inventory of fuel oil, lubricant, etc., the quantity remaining on board the
vessel at the time of reversion would be noted separately for HSD, furnace oil,
lubricants, etc.
3.
The inventory so taken as well as the PP (Personal Properties)
declaration shall be signed by the Master/ representative of the Steamer Agents
and the Preventive Officer making the inventory as to its correctness. On copy
of the inventory and declaration would be kept in the Preventive Department,
another copy would be sent to the Import/ Export Department and the third copy
will be handed over to the Steamer Agents.
4.
On receipt of this inventory, the Steamer Agents will prepare the Bill of
Entry and file the same in the Department concerned within a period of 5 days.
5.
On receipt of the Bill of Entry in the Customs House, the Department
concerned will correlate the same with the inventory already sent through the
Preventive Department and assessment will be completed within a course of
another 5 days and the Bill of Entry will be returned to the Steamer Agents for
Payment of duty.
6.
In the case of fuel oils, samples taken for test by the chemicals
laboratory should be forwarded to the laboratory as soon as the inventory is
taken, and the result should be obtained by the assessing Department within a
period of one week. On the basis of the test results the assessment should be
completed as indicated in para 5 above.
7. The Steamer Agents
should make arrangements for payment of duty within the next 5 days.
8.
The Post clearance for the vessel reverting to coastal trade need not be
held back pending assessment of the ship stores and payment of duty.
9.
In so far as the private property declarations are concerned, one copy
will be retained in the Preventive Department, another copy will be given to the
Steamer Agents and another to the Master of the vessel. The preventive
Department should take a simple guarantee from the Steamer Agents to safeguard
the revenue and the baggage is cleared in accordance with the rules when the
crew are finally paid off. At the time of reversion to coastal trade, since the
crew are not finally paid off, the baggage items will be retained on board after
taking an undertaking from the Steamer Agents in the form appended at
Annexure-B. This guarantee will be cancelled when the certificate, from the
Custom House of the last Indian Port of call, to the effect that all the crew
members have retained the baggage items/ signed off in the intermediate ports
and duly cleared through Customs, is produced by the Steamer Agents.
10. If in another Indian Port the vessel on the coastal
run needs any further bonded stores, then they should make a similar application
in the port concerned and pay duty on such stores taken off, on the same
lines as indicated above.
11. At the time of reversion to foreign run, the Master
of the Vessel or the Steamer Agents should make an application to the Assistant
Commissioner of Customs, Import/ Export Department alongwith a copy of the
application to the Preventive Department requesting for the services of a
Preventive Officer for inventorying the stores on which duty has been paid and
for which they would now be claiming refund ot duty paid in excess of duty
leviable on goods consumed during coastal run.
12. On completion of such inventory a copy will be
retained in the Preventive Department, another copy will be sent to Export
Department and another copy will be given to the Steamer Agents, or the Master
of the Vessel. On the basis of the copy Steamer Agent would file a refund claim
in the Export Department of the Custom House alongwith the triplicate copy of
the Bill of Entry under which duty was originally paid on the stores.
13. The refund application so received will be dealt
with in the Department in the usual course after considering the same with the
inventory forwarded by the Preventive Department.
14. In so far as the private property declaration is
concerned, the Custom House, at which the reversion to foreign run takes place,
should verify and ensure that the private property had been properly accounted
for, either by retention on board by the crew member or by its clearance through
Customs in that port or in any other intermediate ports in India. A certificate
to that effect will be issued by the Preventive Department of the Steamer Agents
so that the same will be produced by the Agents at the original Customs port at
which the reversion to coastal trade took place, so that the guarantee executed
by the Steamer Agent could be cancelled.
ANNEXURE - B
(On Steamer
Agent's Letter Head)
We,
M/s____________________________ the local agents to the vessel
___________________________ now lying at the at the port of
__________________________hereby undertake that the private properties of the
officers/ crew onboard the said vessel now reverted to coastal trade at
_____________________, shall not cause to be landed without proper clearance
from the Custom House through which the said office/ crew will get signed off
during the period of coastal voyage or the baggage of the crew members
re-exported when the vessel reverts to foreign voyage, which-ever is earlier.
A list of officers and crew on board the
vessel now under reversion is enclosed.
(________________________)As Agent
Place:
Date:
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