Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise and Customs
Circular No. 31/2013-Cus.
New Delhi, the 6th August, 2013
All Chief Commissioner of Customs
All Chief Commissioner of Customs and Central Excise
All Commissioners of Customs
All Commissioners of Customs and Central Excise
Sir/Madam,
References have been received in the Board to clarify whether or not a purchase
order can be considered as a contract in terms of provisions contained in the
Project Import Regulations, 1986. It is also reported that in this regard
varying practices are being followed in different Customs Houses.
- The matter has been examined. Regulation 5 of Project Import Regulations,
1986 mandates that amongst other requirements, every importer claiming
assessment of the goods under the heading No. 98.01 shall apply to the proper
officer at the port where the goods are to be imported or where the duty is to
be paid, for registration of the contract or contracts, as the case may be. Such
application shall be accompanied by the original “deed of contract” together
with a true copy thereof. In regard to the scope of the terms “deed of contract”
it is seen that as per Section 10 of the Indian Contract Act, 1872 a valid
contract is one that contains the following ingredients:-
- it is entered into by free consent of parties competent to contract;
- there should be lawful consideration;
- there should be a lawful object; and
- it is not expressly declared to be void (i.e. void under the statute).
- In view of the aforementioned legal position it is evident that a purchase
order that contains all the essential ingredients of a valid contract must be
treated as one under the Indian Contract Act, 1872. The implication is that such
a purchase order can be accepted as a “deed of contract” for the purpose of
Regulation 5 of Project Import Regulations, 1986. Board desires that pending
cases, if any, may be finalized accordingly.
Yours faithfully
(Alok Agarwal)
OSD (Tariff Unit)
F. No. 528/43/2013-STO (TU)