Government of India

Ministry of Finance

(Department of Revenue)

Central Board of Excise and Customs

To,

All Chief Commissioner of Customs,

All Chief Commissioner of Customs & Central Excise,

All Commissioners of Customs,

webmaster@cbec.gov.in

Subject:- Dispense with practice for recovery of revenue deposit of Rs. 3000/- u/s. 42 of the Customs Act, 1962 -regarding.-

The undersigned is directed to refer to above subject and to state that CBEC had issued an instructions vide F.No. 28/12/70-Cus IV dated 22.5.1970 regarding security deposit in respect of foreign going & coastal vessels under section 42 of the Customs Act, 1962. Accordingly, the quantum of deposit of Rs.3000/- and Rs.1000/- is taken from foreign vessel and coastal vessel, respectively, for covering liabilities of individual vessels. When shipping Lines handle a number of vessels, a one time deposit of Rs.15,000/- and Rs.5,000/- is taken for the foreign going and coastal vessels respectively.

1. As per Section 42 of the Customs Act, 1962, the vessel is permitted to depart from a customs station by the proper officer after considering that the person in charge of the conveyance has complied with,-

i. production of specified documents and replied the question, if any, raised

ii. Delivery of export manifest

iii. Payment of all duties leviable on any stores consumed in the conveyance,

iv. Payment of all charges and penalties due in respect of the conveyance

v. No penalty is leviable on the person-in-charge under section 116 for the deficiency of goods

vi. Exports goods contravening any of provision of the Customs Act have been unloaded

1. The issue was also discussed in Chief Commissioner's Conference at Mumbai. It was noted that Board's instructions vide letter F. No. 28/12/70-Cus. IV dated 22.05.70, prescribing the deposit of Rs.3,000/- and Rs.1,000/- etc. are not of much relevance in the present context where the department has ample power to recover dues, if any, under Section 142 of Customs Act, 1962 read with the Customs (Attachment of Property of Defaulters for Recovery of Government Dues) Rules, 1995. The prescribed deposit is meager and the effort/ manpower deployment and logistic involved in first collecting the deposit and refunding it subsequently far outweighs the benefits.

1. The issue was examined during the Chief Commissioners conference on 16.06.2006 at Mumbai and a discussion on this matter was taken. It was agreed that the recovery of dues i.e. duty, charges and penalties in respect of goods, conveyance and person in charge is ensured before giving an order for departure of the vessel by Customs officer in terms of section 42 of the Customs Act, 1962. The procedure for taking of a deposit initially and refunding it, each time the vessel enters and departs the port, involves avoidable administrative inconvenience and delay in re-payment of deposit. In view of the above and as a trade facilitation measure, Board has desired that such security amount may not be taken. However, the field formations should ensure that provisions of section 42 are complied before permitting the conveyance to depart from the customs station by the proper officer.

(Anupam Prakash)

Under Secretary to the Government of India

Ph.-23094182