Assessment procedure
As the Assessment and Examination order will cover all point, let us see how the B/E is processed in the typical environment:
B/E is assessed by the Appraising Officers (AO) who are either Appraisers of Customs or Superintendents. They are divided in to various appraising groups 1 to 7. All of us know that the Customs Tariff Act is divided in to 99 chapters. The chapter wise allocation is as follows:
Appraising Group 1 Chapter 1 to 26
Appraising Group 2 Chapter 27 to 49
Appraising Group 3 Chapter 50 to 71
Appraising Group 4 Chapter 72 to 83
Appraising Group 5 Chapter 84
Appraising Group 5A Chapter 85 to 89
Appraising Group 6 Chapter 90 to 99
Appraising Group 7/7A….. Export promotion related schemes
Each group comprises of appraisers and headed by an Asst/Deputy Commissioner. If selected for assessment, System allocates B/E to various appraising groups depending upon the value of the goods and the Scheme opted. B/E will be put into Assessment queue and will be available to AO on first come first serve basis. At present, B/E pertaining to Group 7 are not assessed under RMS, therefore all B/E are marked for assessment and examination.
Assessment of B/E
Assessment means verification of classification, valuation, licensing and compliance with other enactments. The Assessment of B/E will be done on screen by the A.O. with no physical verification of documents. AO may raise a query in the system with the approval of the AC for any clarification required for the Assessment. The query may be replied online.
There are two types of appraisement
First Check - If the AO feels that it is not possible to assess the B/E based on the available information, he may order for examination of the goods before assessment and based on examination report, assessment is completed. Generally, the first check appraisement is ordered in exceptional cases.
Second Check - Assessment is made based on the declarations in the B/E and examination order is given as per requirement. Goods may be allowed delivery directly, or on inspection of package or inspection of goods or on examination of goods.
Verification of Valuation - Generally the transaction value is accepted as assessable value. However, to verify the correctness of declared value, the AO take help of NIDB data maintained by Directorate of Valuation, valuation guidelines and alerts of DoV, trade journals and bulletins like London Metal Bulletin, Commodity Ledgers, PLATT plastic bulletin etc. If the declared value is found on lower side, he may issue a notice under Rule 10A for the rejection of declared value. The AO also verify whether the seller and buyer are related and if so whether the declared value is affected or not. If prima facie, he is of the view that relationship has affected the transaction value then he refers the matter to Special Valuation Branch (SVB).
License and Compliance with other enactments
for the protection of country and public, a large number of enactments are implemented by the Customs. An illustrative list is given below:
* Foreign Trade (Development and Regulation) Act 1992 & Foreign Trade Policy
* Live Stock Importation Act, 1898
* Wild Life Protection Act, 1972
* C I T E S - (Convention of International Trade in Endangered Species of Wild Fauna and Flora) * Plant Quarantine Order 2003 issued under Sec.3 (1) of Destructive and Insects and Pest Act, 1914
* Plants, Fruits and seeds (Regulation of Import into India) Order, 1989
* Prevention of Food Adulteration Act, 1954 and Rules, 1955
* Breast Milk Substitutes (Advertisements and Labeling) Act.1982
* Drugs and Cosmetics Act, 1940 and Rules, 1945
* Standards of Weights and Measures Act, 1976
* Essential Commodities Act, 1958
* Insecticide Act, 1968
* Trade marks Act, 1999
* Copyright Act, 1957 and Rules, 1958
* Patents Act, 1970 and Rules, 1972
* The Bureau of Indian Standards Act, 1986 and Rules, 1987
* Environment (Protection) Act, 1986 and Rules, 1986
* Explosives Act, 1884 and Rules 1983
* Gas Cylinder Rules, 1981 and S&MPV (unfired) Rules, 1981
* Information Technology Act, 2000
* Motor Vehicles Act, 1988
* Atomic Energy Act, 1962
* Arms Act, 1959
* BIS applicable as per DGFT NOT.44 (RE) 2000 DT. 24.11.2000
* Indian Telegraph Act, 1882
* Wireless Communication Act, 1933
Undertakings, declarations: import of some goods requires end use undertaking, end use declarations, bonds etc to be executed. Importer has to execute the same beforehand and incorporate the same in the B/E for online processing.
Provisional assessment
B/E are assessed based on the available information. If the AO feels that the available information, in spite of first check/query is not sufficient to make a correct assessment, he may order for Provisional Assessment under Section 18 of the Act. If the case has been taken for investigation by SIIB or DRI, the Importer can seek release of goods under provisional assessment. In these cases, assessment is made against Bond with or without cash deposit/ bank guarantee/ surety pending production of some documents/information/clarification/investigation. Assessed duty is required to be paid.
Other feature
Provisional assessment even for one purpose is deemed as provisional for all purpose;
Goods will be allowed delivery as usual;
B/E will be finally assessed on production of required documents;
If there is short levy during provisional assessment, interest has to be paid;
Relevant date for Demand under Section 28 or refund under Section 27 is the date of finalization of the provisional assessment;
On refund arising out of finalization, principle of unjust enrichment will apply.
Once the AO process the B/E, he gives the appropriate open order in the case of second check and the B/E goes to AC/DC screen. After AC/DC approval, one copy of the B/E along with three copies of the Challan for payment of assessed duty is generated and the duty is required to be paid, if any. In the RMS, concurrent audit has been done away and B/E gets audited by the system.
Concurrent Audit
In the case of B/E not under RMS, same is audited by a concurrent auditor before the B/E moves to DC/AC screen. In case of any objection, he returns the B/E to the group for clarification and B/E again go in the queue of the AO.
Speaking Order
While filing the B/E, importer declares classification and value of the goods and the exemption notification he intents to avail. In case the Department does not agree with any of the above, a query is raised in the system. If the Importer agrees with the contention of the department, he may accept the same in writing and assessment will be made accordingly. However, if does not agree with the contention of the department, then department will issue a speaking order which can be appealed. In such case, it is advisable to pay duty under protest so that time limit under section 27 of the Act will not apply and the refund application will not be time barred.
