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Thread: Customs - Circulars - year - 2011

  1. #41

    Thumbs up Customs - Circulars - Circular No. 28/2011-Customs - Collection of Anti-dumping duty beyond the validity period-regarding.

    Circular No. 28/2011-Customs

    F.No.354/150/2011-TRU
    Government of India
    Ministry of Finance
    Department of Revenue
    Tax Research Unit
    ***
    R.No.146 I, North Block
    New Delhi, dated the 8th July, 2011
    To
    Chief Commissioner of Customs (All)
    Chief Commissioner of Customs & Central Excise (All)
    Director Generals (All)
    Sir/Madam,

    Subject: Collection of Anti-dumping duty beyond the validity period-regarding.

    Representations have been received from the trade that, in some cases, field formations are collecting anti-dumping duty even after the expiry of the statutorily prescribed period of levy. It has been reported that the basis for such a practice could be that the notification providing for levy of anti-dumping duty does not specify the end date.

    2. In this regard, attention is drawn to the Section 9A (5) of The Customs Act, 1975, which reads as under:
    “(5) The anti-dumping duty imposed under this section shall, unless revoked earlier, cease to have effect on the expiry of five years from the date of such imposition:


    Provided that if the Central Government, in a review, is of the opinion that the cessation of such duty is likely to lead to continuation or recurrence of dumping and injury, it may, from time to time, extend the period of such imposition for a further period of five years and such further period shall commence from the date of order of such extension.
    Provided further that where a review initiated before the expiry of the aforesaid period of five years has not come to a conclusion before such expiry, the anti-dumping duty may continue to remain in force pending the outcome of such a review for a further period not exceeding one year.”

    3. From a plain reading of this provision it is evident that definitive/final anti-dumping duty can be collected only for a period of five years from the date of its imposition. Generally by virtue of Sub-section (2) of Section 9A of the Customs tariff Act, 1975, the anti dumping levy notified in pursuance of final findings of the Director General (AD) is effective from the date of imposition of provisional duty and therefore the period of five years is to be computed from such date. Collection beyond that period is permissible only when the said levy is extended by a notification either for further period of five years (in pursuance of the final findings of the Designated Authority in a Sun Set Review) or for one year (during the pendency of Sun Set Review). Thus, a definitive/final anti-dumping duty can be collected beyond the stipulated period only when a notification extending the levy has been issued, before the expiry of the parent notification. Unless such revalidation or extension is carried out by a fresh notification, the collection of final anti-dumping duty should cease on the completion of five years as mentioned above. Where the findings in a review are notified after the lapse of the parent notification, the notification in such cases would be effective prospectively from the date of issue of such notification.

    4. The above position may be brought to the notice of formations under your charge, for strict compliance.

    Yours faithfully,

    (Vivek Johri)
    Joint Secretary (TRU)
    Tel: 2309 2687
    Fax: 2309 2031

  2. #42

    Thumbs up Customs - Circulars - Circular No. 29/2011-Customs - Regarding Handling of Cargo in Customs Areas Regulations, 2009–clarification.

    Circular No. 29/2011-Customs

    F.No.450/55/2008-Cus.IV (Pt.II)
    Government of India
    Ministry of Finance
    Department of Revenue
    Central Board of Excise & Customs

    *****
    229-A, North Block,
    New Delhi, 18th July, 2011.
    To,
    All Chief Commissioners of Customs / Customs (Prev.).
    All Chief Commissioners of Customs & Central Excise.
    All Commissioners of Customs / Customs (Prev.).
    All Commissioners of Customs & Central Excise.
    All Director Generals under CBEC.

    Subject: Handling of Cargo in Customs Areas Regulations, 2009–clarification - regarding.

    Sir/Madam,

    Attention is invited to Board’s Notification No.26/2009-Customs (NT) dated 17.3.2009 notifying ‘Handling of Cargo in Customs Areas Regulations, 2009’ and Circulars No.13/2009-Customs dated 23.3.2009, No.21/2009-Customs dated 4.8.2009 and No.4/2011-Customs dated 10.1.2011 on the above mentioned subject.

    2. References have been received in the Board seeking clarification whether ‘Customs Cargo Service Providers’ (CCSP) who were exempted from payment of cost recovery charges in terms of Circular No.27/2004-Customs dated 6.4.2004 and Para 5.3 of Board’s Circular No.13/2009-Customs dated 23.3.2009 continue to be exempted from payment of cost recovery charges for customs staff posted at these facilities subsequent to issue of Board’s Circular No.4/2011-Customs dated 10.1.2011. Difficulties have also been reported to Board regarding provisioning of residential accommodation and transport by CCSP to Customs staff deployed at these facilities, as required under Notification No.96/2010-Customs (NT) dated 12.11.2010 and in terms of Para 7 of the Circular No.4/2011-Customs dated 10.1.2011.

    3. The matter has been examined. It is clarified that custodians already exempted from payment of cost recovery charges under Circular No.27/2004-Customs dated 6.4.2004 and Para 5.3 of Board’s Circular No.13/2009-Customs dated 23.3.2009 would continue to avail the exemption even after issue of Board Circular No.4/2011-Customs dated 10.1.2011.

    4. Further, Board clarifies that Commissioner of Customs, subject to his satisfaction, should not insist for residential accommodation for staff from CCSP in cases where concerned facility of CCSP is located in the city area. The underlying idea is to provide for residential facilities for staff deployment at Customs facilities located in far flung and remote areas where it is difficult to have appropriate residential facility and which can not be easily commuted by the officers. Therefore requirement of residential accommodation should not be insisted upon in cases where the location is commutable from the base town/city. Commissioner of Customs concerned should exercise due diligence before enforcing provisions of 5(1)(i)(b) of Notification No.96/2010-Customs (NT) dated 12.11.2010. The type of residential accommodation to be provided to Customs staff would be determined as per entitlement of the officer of Central Government.

    5. However, it is clarified that CCSPs shall continue to provide transport facilities irrespective of location of facilities.

    6. Para 7 and 8 of Board’s Circular No.4/2011-Customs dated 10.1.2011 stand modified accordingly.

    7. Suitable Public Notices or standing orders may be issued to guide the trade/Industry and officers.

    8. Any difficulties in implementation of these regulations may be brought to the notice of the Board immediately.

    Yours faithfully,

    (G.S. Sinha)
    OSD (Customs-IV)
    Encl: A

  3. #43

    Thumbs up Customs - Circulars - Circular No.30/2011-Customs - dated - 19-07-2011.

    Circular No.30/2011-Customs

    F.No.401/46/2008-Cus.III(Pt.)

    Government of IndiaMinistry of FinanceDepartment of Revenue
    Central Board of Excise and Customs

    North Block, Room No. 253-A,
    New Delhi, the19th July, 2011.
    To,

    All Chief Commissioners of Customs/Customs (Prev.),
    All Chief Commissioners of Customs & Central Excise,
    All Commissioners of Customs/Customs (Prev.),
    All Commissioners of Customs & Central Excise.

    Subject:- Refund of 4% CVD (SAD)-Extension of time upto 15th September, 2011 for using re-credited 4% CVD (SAD) amount in DEPB.

    Sir/Madam,

    Your kind attention is invited to the Circular No.11/2011-Customs, dated 24.02.2011, regarding procedure on refund of 4% CVD (SAD). The above Circular provides the facility of manual filing of Bill of Entry for utilizing the amount of re-credited 4% CVD refunds (SAD) for payment of duty in case of re-credited DEPB/ Reward Scheme scrips upto 30.06.2011. However several representations have been received from trade and industry to extend the time limit for using re-credited 4% CVD (SAD) amount in DEPB as they have not been able to utilize the reccredited DEPB/Reward Scheme scrips within the stipulated time.

    2. The matter has been examined in consultation with Ministry of Commerce. Accordingly, it has been decided to extend time limit for using re-credited DEPB scrips/ Reward Scheme scrips in case of 4% CVD (SAD) upto 15.09.2011 with following conditions:

    (a) The extension of utilization of re-credited amount of SAD refund in relevant scrip is granted for two months i.e. upto 15.09.2011. No further extension shall be given.

    (b) The importers shall utilize re-credited amount of SAD refund in scrips for payment of CVD and BCD only and not for payment of SAD subsequently.

    (c) Commissioners of Customs should ensure that issuance of consolidated certificate indicating total amount of 4% SAD refund sanctioned is carried out in time without any delay.

    3. A suitable Public Notice and Standing Order may be issued for the guidance of the trade and staff.

    Yours faithfully,
    (Vikas)
    Under Secretary (Customs-III/VI)

  4. #44

    Thumbs up Customs - Circulars - Circular No.31/ 2011-Customs - Classification of Palm Stearin –Reg.

    Circular No.31/ 2011-Customs

    F.No.521/64/2010-STO (TU)
    Government of India
    Ministry of Finance
    Department of Revenue
    Central Board of Excise & Customs

    229A, North Block, New Delhi-110001
    Dated 26th, July, 2011
    To,
    All Chief Commissioners of Customs / Customs (Prev.).
    All Chief Commissioners of Customs & Central Excise.
    All Commissioners of Customs / Customs (Prev.).

    All Commissioners of Customs & Central Excise.
    All Director Generals under CBEC.

    Subject: - Classification of Palm Stearin –Reg.

    Sir/Madam,

    Attention is invited to Board Circular No. 81/2002-Customs dated 03.12 2002, which clarifies that ‘‘Crude Palm Stearin” should be assessed keeping in view the chemical examination of the product whether they are glycerides (ester) of fatty acid or a mixture of fatty acids. Accordingly, the good merits classification or assessment either under CTH 1511(in case of glycerides of fatty acids) or CTH 3823 (in case of a mixture of fatty acids), as the case may be.

    2. Hon’ble Supreme Court of India in Civil Appeal No. 6979-6982 of 2009 in case of C.C.E.C. & S.T., Visakhapatnam Vs. JOCIL India, vide Order dated 15.12.2010 has held that ‘Palm Stearin’ is specifically mentioned under CTH 3823 11 and is further differentiated as “Crude”, “RBD” in sub-heading 3823 11 11 and 3823 11 12 respectively. The Explanatory Notes are categorical in affirming the accepted practice that Rule 3(b) of ‘General Rules for the Interpretation’ shall be used only if classification under Rule 3(a) fails. The Hon’ble Court has opined that the issue of the essential character of the subject matter in question may be resorted to only if identification under Rule 3(a) is impossible.

    3. Accordingly, it is clarified that the goods declared as “Crude Palm Stearin” shall be assessed under CTH 3823 11 11 of Customs Tariff Act, 1975. All pending cases should be finalized accordingly.

    4. The Board Circular No. 81/2002-Customs dated 03.12.2002 stands withdrawn.

    5. Difficulty, if any, faced in implementation may be brought to the notice of the Board.

    Yours faithfully,
    (Alok Agarwal)OSD (Customs)

  5. #45

    Thumbs up Customs - Circulars - Circular No. 32 /2011-Customs - Regarding leviability of Cess on export of Lac/shellac.

    Circular No. 32 /2011-Customs

    F. No. 341/26/2011-TRU
    Government of India
    Ministry of Finance
    Department of Revenue
    Tax Research Unit
    ***
    New Delhi dated 26th July, 2011
    To

    All Chief Commissioners of Customs / Customs (Prev.),
    All Chief Commissioners of Customs & Central Excise,
    All Commissioners of Customs / Customs (Prev.),
    All Commissioners of Customs & Central Excise,
    All Director Generals under CBEC.

    Subject: Leviability of Cess on export of Lac/shellac - regarding

    Sir/Madam,

    Representations have been received from Trade and Industry stating that they are being required to pay Cess on Lac/Shellac at the time of export of such goods.

    2. The matter has been examined. Exports of Lac/shellac were subject to Cess under ‘The Produce Cess Act, 1966’. However, vide Produce Cess Laws (Abolition) Act, 2006, the said Produce Cess Act, 1966 has been repealed w.e.f 25thSeptember, 2006. Thus, a Cess under this Act is no longer required to be paid on exports of Lac/shellac.

    3. Suitable instructions may accordingly be given to the field formations under your charge.

    Yours faithfully,
    Limatula YadenDirector (TRU)

  6. #46

    Thumbs up Customs - Circulars - Circular No. 33/2011- dated - 29-07-2011 - Regarding making E-payment of Customs duty mandatory.

    Circular No. 33/2011-Customs

    F.No.450/180/2009-Cus.IV(Pt.)
    Government of IndiaMinistry of Finance
    Department of RevenueCentral Board of Excise & Customs

    *****
    229-A, North Block,
    New Delhi, 29th July, 2011.
    To,
    All Chief Commissioners of Customs
    All Chief Commissioners of Central Excise and Service Tax

    Subject: Making E-payment of Customs duty mandatory-regarding.

    Sir/Madam,

    E-payment facility at Customs locations was introduced in 2007 and is available through more than one authorised bank at all major Customs locations having ICES facility. Though voluntary, the facility has been made use of by numerous importers. Besides expediting the process of payment of duty and clearance of imported goods, the facility of e-payment has resulted in reduction of transaction costs.

    2. In the aforestated background, in order to reduce the transaction cost of the importers and expedite the time taken for customs clearance the Board has decided to make e-payment of duty mandatory for the importers paying an amount of Rupees one lakh or more per transaction. Additionally, for Accredited Clients under the Customs Accredited Client Programme irrespective of any amount of duty, the Customs duty will have to be paid through E- payment mode only. The date from which the E- payment will be made mandatory will be notified separately.

    3. DG (Systems) has prepared instructions outlining the procedure for electronic payments. It is requested to sensitise concerned officers, importers, trade and industry regarding the E- payment.

    4. As a large number of taxpayers would be required to pay the taxes electronically, it is requested that importers, trade and industry may be provided all assistance so as to help them in adopting the new procedure.

    5. Suitable Public Notices or Standing Orders may be issued to guide the trade / Industry and officers.

    Yours faithfully,
    (G.S. Sinha)
    OSD (Customs-IV)
    Encl.: As above

    ------------------------------------------------------------------------------------------------
    Procedure for e-payment Payment of Customs duty

    In continuation of its efforts for trade facilitation, CBEC has now implemented centralized application called Indian Customs EDI System (ICES1.5) and E-payment facility has been extended to all ICES locations from more than one authorized bank.

    (a) Person desirous of availing the E-payment facility must approach the designated bank at the location for opening an INTERNET ACCOUNT (Annexure);

    (b) The Central Board of Excise and Customs has set up a CUSTOM E-Payment Gateway (CEG) at ICEGATE (www.icegate.gov.in). The users who are already registered with ICEGATE will automatically be able to avail the facility of e- Payment as REGISTERED USER without any further registration process. However, even the users who are not registered with the ICEGATE can avail e-payment facility as an UNREGISTERED USER;

    (c) In the ICEGATE home page, a person can select the e-payment icon from the main menu or if the person is using any other module of ICEGATE (like document filing), he can select the e-Payment option from the side screen menu;

    (d) On selection of E-Payment option, the e-Payment page will open. The users already registered with ICEGATE can login with their username and password as REGISTERED USER. Thereafter their (personal) web page would open which will display all the unpaid challans details for the Bills of Entry filed by him;

    (e) If the person is an UNREGISTERED USER, or he intends to make payments of duties on the documents not field by him through ICEGATE, then he can make E-Payment by entering the IE Code of the importer. The CEG will display all the unpaid challans against the IE Code;

    (f) On selection of the Challan the user will be shown the options of the “designated” banks for the purpose of E-payment. The user can select any bank authorized for e-payment at the Customs locations;

    (g) Thereafter, the user will see the web page of the selected bank. He would be required to login as an “Internet Customer” of the bank;

    (h) After successful login in the bank site, the user will be shown the details of the challan including the amount to be paid. The user shall be prompted to confirm the payment option;

    (i) On successful payment, a cyber receipt will be generated by the bank for successful transaction. Then user may take the printout of the cyber receipt for his reference. The bank will prompt the user to come back to the CEG (Customs E-Payment Gateway) after completion of the bank transaction;

    (j) The user must come back to the ICEGATE site to complete the transaction;

    (k) In case of an incomplete transaction or link failure, a VERIFY option is automatically activated against the concerned challan for verification of the duty payment details. In case of incomplete transaction, the Importer/CHA must go back to ICEGATE and select the VERIFY option against the challan. On selecting the VERIFY option, the importer/CHA is taken back to the site of the Bank for completion of the transaction. The VERIFY option must be exercised on the date of payment itself, and the option would be de-activated the next day;

    (l) After e-payment is made at CEG, ICEGATE will send the payment particulars to the ICES. Thereafter, the Bill of entry shall automatically move to the examination queue;

    (m) The importer/CHA need not produce any proof of payment for the clearance of goods in case of e-payment. However, he is advised to keep the copy of the cyber receipt with him for future reference for his own convenience;

    (n) In case of problems in e-Payment, the Importer/CHA can contact the ICEGATE 24 hour helpdesk by phone at toll free no. 1800-3010-1000 or by email at icegatehelpdesk@icegate.gov.in. They can also contact the Systems Manger/AC (EDI) at Customs Location, in case of any difficulty.

    ---------------------------------------------------------------------------------------------------------------------------------------------------
    ANNEXURE

    E-PAYMENT A/C OPENING PROCEDURE
    1. To fill up Bank Account opening Forms
    2. Memorandum of Association
    3. Articles of Association
    4. Certificate of Incorporation
    5. Board Resolution to open A/c
    6. Commencement Certificate in case of Public Ltd.
    7. List of Authorised Signatory along with PAN card, photograph
    8. IEC code copy
    9. Address proof
    10. For Public Ltd.- Signature to be verified from Principal Bank A/c.

    Photo copies of all above documents to be produced with original for verification
    *****

  7. #47

    Thumbs up Customs - Circulars - Circular No.34 / 2011- Customs - dated -03-08-2011- Prohibition on Carrying rice in baggage by air passengers travelling to USA.

    Circular No.34 / 2011- Customs
    F.No. 528/34/2011-STO (TU)
    Government of India
    Ministry of Finance
    Department of Revenue
    Central Board of Excise & Customs
    Tariff Unit
    ***
    229A, North Block, New Delhi - 1,
    3rd August, 2011.
    To

    All Chief Commissioners of Customs / Customs (Prev.),
    All Chief Commissioners of Customs & Central Excise,
    All Commissioners of Customs / Customs (Prev.),
    All Commissioners of Customs & Central Excise,
    All Director Generals under CBEC.

    Sir/Madam,

    Subject: Prohibition on Carrying rice in baggage by air passengers travelling to USA - Regarding.


    Ministry of Agriculture, Department of Agriculture and Cooperation has informed that the U. S. Department of Agriculture, Animal and Plant Health Inspection Service (USDA – APHIS) has notified new phytosanitary regulations for the entry of rice from countries including India where Khapra beetle (Trogodermagranarium) is known to occur. These regulations, inter alia prohibit non-commercial rice consignment including passenger baggage and mail with effect from 30th July, 2011.

    2. It is, therefore, clarified that all air passengers travelling to USA should not carry rice in their baggage. The prohibition would also be applicable in dispatch of rice through other means such as courier or mail.

    3. A suitable public notice/advisory may be issued by the Commissioner of Customs concerned for guidance of staff, trade and passengers.

    Yours faithfully,
    (Subodh Singh)

  8. #48

    Thumbs up Customs - Circulars - Circular No. 35 / 2011- Customs -Date - 09-08-2011.- Reports of illegal imports of pesticides by some traders – reg.

    Circular No.35 / 2011- Customs

    F.No. 450/160/2010-Cus.IV

    Government of India
    Ministry of Finance
    Department of Revenue
    Central Board of Excise & Customs
    Tariff Unit
    ***


    299-A, North block, New Delhi-1,
    9th August, 2011

    To

    All Chief Commissioners/Commissioners of Customs/Customs (Prev.),
    All Chief Commissioners/Commissioners of Customs & Central Excise,
    All Directors General under CBEC.

    Sir/Madam,

    Subject: Reports of illegal imports of pesticides by some traders – reg.

    It has come to the notice of the Board that some unscrupulous importers are illegally importing pesticides under various headings of harmonised tariff by declaring their chemical names instead of both common and chemical names.

    2. Section 46 of the Customs Act, 1962 makes it mandatory for an importer/CHAs to declare full, correct and accurate information concerning the goods being imported in the appropriate columns while filing the Bill of Entry. The accuracy of this information is vital to correct classification and assessment of duty including application of import restrictions, if any. Thus especially in case of imported items like chemicals, pesticides and insecticides it is necessary to properly declare basic information like complete description of goods, common name and chemical name, grade, specification, etc. If an importer/CHA fails to furnish the complete details then penal action may be warranted in terms of the provisions of the Customs Act, 1962 and other Acts and Rules for time being in force. Incorrect/incomplete declaration may impact assessment of goods, a composite function of classification, valuation, levy of correct duty and application of restrictions/prohibitions imposed under various allied laws.

    3. You are directed to specifically alert the concerned officers on the aforesaid aspects.

    4. Further, Rule 9(1) of the Insecticide Act, 1968 requires importers of insecticide to apply to the Registration Committee, Ministry of Agriculture for the registration of such goods. In case of pesticides in the Schedule to the said Act, registration and permit from Secretariat of CIB &RC is required. The certificate of registration and/import permit for import issued by the CIB &RC should also be properly checked at the time of import.

    5. Suitable Public Notice/Standing Order may be issued for guidance of all concerned.

    Yours faithfully,
    (Subodh Singh)
    OSD (Customs), Tariff Unit



    Internal Circulation: As usual

  9. #49

    Thumbs up Customs - Circulars - Circular No. 36/2011- dated - 12-08-2011.

    Circular No. 36/2011-Customs

    F. No. DGEP/EOU/18/2011
    Government of India
    Ministry of Finance
    Department of Revenue

    Central Board of Excise and Customs


    New Delhi dated 12 August, 2011.
    To
    All Chief Commissioners of Customs / Customs (Prev)
    All Chief Commissioners of Customs & Central Excise
    All Commissioners of Customs / Customs (Prev)
    All Commissioners of Customs (Appeals)
    All Commissioners of Customs & Central Excise
    All Commissioners of Customs & Central Excise (Appeals)

    Sub:- Waiver from the requirement of Bank Guarantee in respect of EOUs – Amendment to Circular No. 54/2004-Customs dated 13.10.2004 - reg.

    ***

    Attention is invited to para 19 of the Board’s Circular No. 54/2004-Customs dated 13.10.2004 which extends the facility of exemption from furnishing bank guarantee by 100% Export Oriented Units (EOUs) at the time of import or for sending goods on job work in Domestic Tariff Area (DTA).

    2. In terms of the provisions of para 6.12 (f) of FTP announced on 31.8.2004, exemption was granted for 100% EOUs from furnishing bank guarantee at the time of import or going for job work in DTA subject to certain prescribed conditions to be followed by the unit. These conditions are that (i) the unit has a turnover of Rupees 5 crores or above; (ii) unit is in existence for at least three years; and (iii) unit is having an unblemished track record. Accordingly, this was implemented by issue of instructions vide para 19 of the aforesaid Board’s Circular No. 54/2004-Customs.

    3. It has been brought to the notice of the Board that one of the conditions relating to ‘unblemished track record’ for grant of such exemption from furnishing bank guarantee to 100% EOUs has been changed in the annual FTP amendments and the same is not being properly implemented. It has been represented by the exporters that Customs/ Central Excise field formations are insisting for Bank Guarantee even for Status Holder EOUs on the ground that show cause notices have been issued to them, thereby such units are unable to fulfill the condition of ‘unblemished track record’.

    4.1 The issue has been examined in the Board. The provisions of para 6.12 providing other entitlements to 100% EOUs was amended in the FTP changes introduced w.e.f. 1.4.2008, and the said para 6.12 state the following:

    *6.12. (f): Unit will not be required to furnish bank guarantee at the time of import or going for job work in DTA, where unit has


    (i) a turnover of Rs. 5 crores or above;
    (ii) unit is in existence for at least three years; and

    (iii)The unit:

    (a) has achieved positive NFE / export obligation wherever applicable;


    (b) has not been issued a show cause notice or a confirmed demand, during the preceding 3 years, on grounds other than procedural violations, under the penal provision of the Customs Act, the Central Excise Act, the Foreign Trade (Development & Regulation) Act, the Foreign Exchange Management Act, the Finance Act, 1994 covering Service Tax or any allied Acts or the rules made thereunder, on account of fraud / collusion / willful mis-statement/ suppression of facts or contravention of any of the provisions thereof;

    [*Note: The said para has been re-numbered as 6.12(e) in the current FTP introduced w.e.f. 23.8.2010]


    From the above it could be seen that there are four conditions prescribed as (i), (ii), (iii)(a) and (iii)(b). The condition (iii) has been revised in the FTP changes introduced w.e.f. 1.4.2008. While there appears to be no difficulty for the trade and industry in complying with first three conditions, in respect of condition at (iii)(b) it is represented that mere issue of show cause notice on procedural non-compliance would not debar them from the entitlements of bank guarantee waiver granted under para 6.12(f).

    4.2 It could be seen from the provisions of para 6.12(f) sub-para (iii)(b) of FTP, that the prescribed condition clearly excludes show cause notices or cases booked for procedural violations. Hence, the entitlement of bank guarantee exemption to 100% EOUs / EHTP / STP / BTP units shall be denied only in cases involving fraud/ collusion/ willful mis-statement/ suppression of facts, whether or not extended period for issue of SCN has been invoked. Further, any violation or contravention of any of the provisions of the Customs Act, 1962 or Central Excise Act, 1944 or Finance Act, 1994 or other Acts specified in para 6.12(f) of FTP or any Allied Acts or Rules made thereunder, would also attract denial or exemption from furnishing bank guarantee. However, in simple cases of issue of show cause notices for procedural violation against such units, the entitlement of exemption from furnishing bank guarantee to EOU/EHTP/STP/BTP units need not be denied. These units shall continue to be eligible for availing the bank guarantee waiver mentioned in para 6.12(f) of the FTP, in view of the exclusion provided therein.

    5. Board’s Circular No. 54/2004-Customs dated 13.10.2004 stands modified to the above extent.

    6. These instructions may be given wide publicity and should be brought to the notice of all the concerned by way of issuance of instructions/ trade notice.

    7. Difficulty faced, if any, in implementation of the above instructions may be brought to the notice of the Board at an early date.

    8. This issues with the approval of competent authority.
    Yours faithfully,
    (H.S. Chimni)
    Deputy Director

  10. #50
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    Thumbs up Customs - Circulars - Circular No.37/2011-Customs, dated - 23-08-2011.

    Circular No.37/2011-Customs

    F.No.450/179/2009-Cus.IV(Pt)
    Government of India
    Ministry of Finance
    Department of Revenue
    Central Board of Excise & Customs
    227-B, North Block,
    New Delhi-110001. 23rd August, 2011.
    To


    All Chief Commissioners of Customs / Customs (Prev.).
    All Chief Commissioners of Customs & Central Excise.
    All Commissioners of Customs / Customs (Prev.).
    All Commissioners of Customs & Central Excise.
    All Director Generals under CBEC.

    Subject: Authorized Economic Operator (AEO) programme for implementation.

    *****
    Sir / Madam,

    In view of growing concern amongst Customs administrations about the threat posed through misuse of channels of import and export, there is a need to ensure security in global supply chain in international movement of goods. Keeping this in view, CBEC has finalized the ‘Authorized Economic Operators’ (AEO) programme for implementation to secure supply chain of imported and export goods. This programme has been developed pursuant to guidelines of WCO adopted in SAFE FoS (Framework of Standard) in 2005. Many Customs administrations have already instituted AEO programmes or similar programmes which share a common objective of ensuring security in global supply chain from the point of origin i.e. the point of export to import in the receiving country, keeping in view national requirements of respective administrations. The detailed guidelines on implementation of the AEO programme are appended as ‘Annexure to this Circular.


    2. One of the salient features of the AEO programme is that any economic operator such as importer, exporter, logistics provider, Customs House Agent can apply for authorization subject to the criteria that the applicant is:
    (i) able to establish a record of compliance in respect of Customs and other legal provisions.
    (ii) able to demonstrate satisfactory systems of managing commercial and, where appropriate, transport records.
    (iii) financially solvent.
    (iv) able to demonstrate satisfactory systems in respect of security and safety standards.

    3. The AEO programme shall be implemented by the Directorate General of Inspection (DGICCE) and Additional Director General, DGICCE (HQ), New Delhi will be the AEO Programme Manager. The AEO Programme Manager shall be assisted by a team of officers viz. the AEO Programme Team.

    4. The authorization shall normally be granted within 90 days of receipt of application if the same is found to be acceptable and not deficient in any material particulars. The programme also provides for circumstances under which the authorization may be considered for revocation or suspension.
    5. The AEO Programme envisages various benefits to different categories of economic operators such as importers, exporters, Customs House Agents, etc. The intention is to give AEO certified operators preferential treatment in terms of less Customs examination, relaxed procedural requirements etc. This is subject to the authorized operators maintaining security standards and compliance requirements as detailed in Annexure and informing the AEO Programme Manager within 30 days in case of any significant change in business or business processes.

    6. The AEO programme would be implemented on voluntary basis i.e. those who are interested in getting benefits of the programme may apply for authorization as per the procedure outlined in the Annexure. The authorization shall be granted after detailed pre-certification verification and validation done by AEO Programme Team.


    7. As DGICCE is assigned the work of implementation of the AEO programme, Board desires that process of inviting application, processing of the same, validation and certification shall be done as envisaged in the programme, as per the following time lines:


    Action
    Timeline
    Announcement of AEO programme
    23.8.2011
    Receipt of applications for pilots
    By 15.9.2011
    Scrutiny of applications for pilots
    By 30.9.2011
    Selection of 3 pilots and intimation thereof
    By 15.10.2011
    Validation process including field visits for pilots
    15.10.2011 - 15.1.2012
    Decision on grant of AEO status
    15.2.2012

    8. All Commissioners are requested to issue a suitable Public Notice and a standing order for guidance of trade and staff.

    Yours faithfully,
    ( R. P. Singh ) Director (Customs)
    Click here for Annexure


    Authorized Economic Operator (AEO) Programme
    1. Introduction
    1.1 The global trading system is vulnerable to terrorist exploitation while the international trade is an essential element for economic development. Customs plays a unique role in providing increased security to the global trade while facilitating the legitimate flow of goods. Thus, in 2005 the World Customs Organisation (WCO), an organization of 178 Customs administrations, adopted the SAFE Framework of Standards to secure and facilitate global trade, which includes the concept of an Authorized Economic Operator (AEO) whereby a party engaged in the international movement of goods is approved by Customs as compliant with the supply chain security standards, and given benefits, such as simplified Customs procedures and reduced Customs intervention. The AEO concept is being increasingly adopted by various Customs administrations with the objective of securing the supply chain with resultant benefits for the trading community.
    1.2 Consistent with the “SAFE Framework” developed by the WCO, the Indian Customs administration has developed an AEO Programme that encompasses various players in the international supply chain such as importers, exporters, warehouse owners, Custom House Agents, cargo forwarders and carriers. The objective of the AEO Programme is to provide businesses with an internationally recognized quality mark which will indicate their secure role in the international supply chain and that their Customs procedures are efficient and compliant. An entity with an AEO status can, therefore, be considered a 'secure' trader and a reliable trading partner.
    2. Benefits of an AEO Programme:
    2.1 Under the programme, a business authorized by the Customs as an AEO can enjoy benefits flowing from being a more compliant and secure company as well as favourable consideration in any Customs proceedings coupled with better relations with Customs. AEO status will also ensure a low risk score that may be incorporated into Customs ‘Risk Management System’ (RMS) and used to determine the frequency of Customs physical and documentary checks. The benefits may also include simplified Customs procedure, declarations, etc. besides faster Customs clearance of consignments of/for AEO status holders.
    2.2 Illustrations: Possible long term benefits flowing to different categories of AEO status holders are as under:
    (a) Importers:
    (i) Reduced examination and inspection with AEO status holder being given higher facilitation than that available to ACP Clients.
    (ii) Acceptance of pre-arrival import declarations.
    (b) Exporters:
    (i) Reduced examination and inspection.
    (ii) Acceptance of export declarations without bringing goods into Customs area.
    (c) Warehouse Owners:
    (i) Faster approvals for a new warehouse.
    (ii) Reduced audit.
    (d) Custom House Agents:
    (i) Acceptance of pre-arrival import declarations for client importers.
    (e) Logistics Providers (Carriers / Forwarders / etc.):
    (i) Transit of goods without case by case permissions.
    (ii) Transit of goods without Customs escort

    3. Criteria for considering application for grant of AEO status:
    (i) Appropriate record of compliance of Customs and other relevant laws;
    (ii) Satisfactory system of managing commercial and, where appropriate, transport records;
    (iii) Proven financial solvency; and
    (iv) Maintenance of approved security and safety standards.

    4.
    Who can apply for AEO status?

    4.1 Anyone involved in the international supply chain that undertakes Customs related activity in India can apply for AEO status irrespective of the size of the business. These include manufactures, exporters, importers, logistic providers, carriers (airlines, truckers, etc.), freight forwarders, and Customs House Agents.
    4.2 Others who may qualify include port operators, authorized couriers, stevedores. The list is not exhaustive.
    4.3 Businesses that are not involved in Customs related work / activities will not be entitled to apply. This means that in general banks, insurance companies, consultants and the like categories of businesses will not be eligible for AEO status.
    4.4 The application for AEO status will only cover the legal entity of the applicant and will not automatically apply to a group of companies.
    4.5 There is no provision to grant AEO status to specific site, division or branch of legal entity of the applicant. The application must cover all the activities and locations of the legal entity involved in the international trade supply chain and the identified criteria will be applied across all those activities and locations.
    4.6 In order to apply for AEO status the applicant must be established in India. For this purpose, the applicant will be asked to provide evidence which may include:
    (i) A certificate of registration issued by the Registrar of Companies.
    (ii) Details of where staff is employed for making supplies of goods and/or services.
    (iii) Proof that the business has its own accounts.

    4.7 An AEO status applies only to the legal entity applying for such status in its own capacity and covering its role in the international supply chain. Therefore, AEO status can be granted to a Custom House Agent, but this will not confer similar status on its client importers / exporters who will need to apply separately for that status.
    5. How to apply for AEO status?

    5.1 An applicant for grant of AEO status should submit the following:
    (i) Application for Authorized Economic Operator (AEO) (Annex - A)
    (ii) Security plan (Annex – B)
    (iii) Process map (Annex - C)
    (iv) Site plan (Annex – D)
    (v) Self-Assessment Form (Annex – E)

    5.2 The application should be sent to the AEO Programme Manager, Directorate General of Inspection, Customs & Central Excise, ‘D’ Block, I.P. Bhawan, I.P. Estate, New Delhi – 110002.
    5.3. The AEO Programme Manager will be the Additional Director General (Inspection), Directorate General of Inspection, Customs & Central Excise, ‘D’ Block, I.P. Bhawan, I.P. Estate, New Delhi – 110002 and the AEO Programme Team will comprise the officers from the Directorate General of Inspection and its regional offices.
    5.4 Each application will be acknowledged and recorded in an AEO Programme database.

    6.
    Return of application:

    6.1 If application is incomplete or deficient, the applicant will be suitably informed within 30 days of the receipt.
    6.2 AEO Programme Manager will not process the following applications until these are rectified, as indicated:
    (a) Which is incomplete – This may be resubmitted with the complete information.

    (b) Where the application has not been made by a legal person – This can only be resubmitted by the concerned legal entity.

    (c) Where no responsible person is nominated – This can only be resubmitted when the applicant nominates a responsible person who will be the point of contact for the AEO Programme.
    (d) Where the applicant is subject to bankruptcy proceedings at the time the application is made: This may be resubmitted when the applicant becomes solvent.
    (e) Where a previously granted AEO status has been revoked: This may not be resubmitted until three years after the date of revocation.

    7.
    Processing of application:

    7.1 On receipt of the complete application and after ensuring the applicant is eligible to apply certain validation tests will be carried out to check that applicant is:
    (i) Able to establish a record of compliance with Customs and other legal provisions.
    (ii) Able to demonstrate satisfactory systems of managing commercial and, where appropriate, transport records.
    (iii) Financially solvent.
    (iv) Able to demonstrate satisfactory systems in respect of security and safety standards.
    7.2. Once the application has been accepted, the applicant will be suitably informed of this within 30 days. The application will then be passed to the AEO Programme Team which will by prior appointment visit the applicant’s premises and carry out an AEO verification and make a recommendation to the AEO Programme Manager.
    8. Rejection of application:
    8.1 Applications will be rejected in cases where the applicant is not eligible for grant of AEO status, or has been convicted of a serious criminal offence linked to the economic activity of his business in the past, or in cases where the deficiency noticed in the application cannot be remedied. The information regarding the rejection of such application will be given to the applicant within 30 days of the receipt of the application.

    9.
    Time limit for grant of AEO certificate:

    9.1 Applications meeting the identified criteria will be granted the AEO status ordinarily within 90 days of receipt of the completed application.


    10.
    Compliance

    10.1 An applicant must meet certain conditions and ensure compliance with the criteria of grant of AEO status. Thus, an AEO Programme Team will examine applicant’s record of compliance over the last three years preceding the date of applicant’s application to ensure adherence to Customs, Central Excise and Service Tax laws as well as allied laws that are administered by the Department. Major violations in respect of any other fiscal law such as relating to Income/Corporate Tax will also be taken into account to confirm the compliance level of the applicant.
    10.2 Normally, ‘technical’ or procedural errors, if any, made by an applicant over the past three years in relation to Customs, Central Excise and Service Tax laws that have no significant impact on the revenue or compliance record may not be considered a disqualification for grant of AEO status. This approach would extend to the various allied laws that are administered by the Department. These ‘technical’ or procedural errors may include the following:
    (i) Any errors that have been voluntarily disclosed;
    (ii) Any decisions which have been overturned by Courts/Tribunal or departmental review;
    (iii) Any decisions currently under review; and
    (iv) Where a penalty is imposed for a minor irregularity.
    10.3. The company should have business activities for at least three years from the date of application.
    10.4 AEO Programme Manager will assess whether a serious infringement or repeat infringements of Customs, Central Excise and Service Tax laws has been committed by any of the following persons:
    (i) the applicant, and,
    (ii) any other responsible person involved in the running of the business.
    10.5 An applicant will also need to demonstrate that he has:
    (i) procedures in place to identify and disclose any irregularities or errors to the Customs authorities or, where appropriate, other regulatory bodies.
    (ii) taken appropriate remedial action when irregularities or errors are identified.
    10.6 Once an error has been identified, the applicant is expected to take steps to ensure that they do not happen again or, at least, to ensure that they are immediately remedied if they do arise. Failure to take such steps could count against applicant.
    10.7 Besides assessing the compliance of the business itself, the AEO Programme Team may also look at the previous compliance records of the following persons:
    (i) Company Directors;
    (ii) Company Secretary;
    (iii) Advocates directly employed by the applicant; and
    (iv) Employees directly responsible for the import/export of goods.
    10.8 Any errors made by third parties acting on applicant’s behalf would reflect upon the applicant’s compliance. Thus, the applicant should make such third parties aware of the standards that he operates to and that systems are in place to immediately identify any problems.
    11. Managing commercial and (where appropriate) transport records

    11.1 For the purpose of AEO status the applicant must have a satisfactory system of managing commercial and, where appropriate, transport records. Such a system may include the following:
    (i) An accounting system consistent with Generally Accepted Accounting Principles (GAAP) / International Financial Reporting Standards (IFRS) which facilitates audit-based Customs control.
    (ii) Allowing the AEO Programme Team physical or electronic access to Customs and, where appropriate, transport records.
    (iii) An ministrative set up and documented procedures to control and manage the movement of goods.
    (iv) Internal controls capable of detecting illegal or irregular transactions.
    (v) Satisfactory procedures for the handling of licences, authorizations and documents connected to export/import.
    (vi) Satisfactory procedures to archive and retrieve records and information, and also for protection against the loss of information.
    (vii) Ensure that employees are made aware of the need to inform the Customs authorities whenever compliance difficulties are discovered and establish suitable contacts for this.
    (viii) Satisfactory procedures for verifying the accuracy of Customs declarations.
    (ix) Appropriate information technology security to protect against unauthorized intrusion.

    12. Financial solvency


    12.1 An applicant must be financially solvent for the three years preceding the date of application. Solvency would generally be defined as good financial standing that is sufficient to fulfill the commitments of the applicant including ability to pay duties. Thus, the applicant should not be listed currently as insolvent, or in liquidation or bankruptcy and should not have an outstanding claim against any guarantee in the last three years. Further, the applicant should not have delayed in payment of due taxes. Only uncontested and undisputed claims will be treated as outstanding claims for the purpose of this Para.
    12.2 AEO Programme Team will rely on the applicants annual accounts due in the last three years to establish solvency. In particular, the following will be taken into account:
    (i) Where required, the accounts have been filed with Registrar of Companies within the time limits laid down by law.
    (ii) Where applicable, audit qualifications or comments in the annual accounts about the continuation of the business as a going concern.
    (iii) Any contingent liabilities or provisions.
    (iv) Net current assets are positive.
    (v) Net assets position and the extent of intangible assets.
    12.3 It is recognized that in some circumstances it may be normal practice for a company to have negative net assets. For example, a company may be set up by a parent company for research and development purposes when the liabilities are funded by a loan from the parent or from a financial institution. In these circumstances, negative net assets will not necessarily be seen as an indicator of insolvency but further evidence of solvency will be required such as a Bank letter or in case of sole proprietor or partnership firms, personal assets.
    12.4 If applicant is a newly established business or have just started trading, his financial solvency will be judged on the basis of records and information. This will include the latest:
    (i) Cash flow figures.
    (ii) Balance sheet.
    (iii) Profit and loss forecasts approved by directors/partners/sole proprietor.

    13. Safety and security


    13.1 Internal controls and measures to secure the safety of applicant’s business and his supply chain will be considered in addition to any specific legal requirements that may be applicable to the business.
    13.2 In order to satisfy the requirements of AEO status, the applicant will need to ensure security of import/export cargo, conveyances, premises, etc.
    13.3 Cargo Security:
    (a) Only properly identified and authorised persons should have access to the cargo.
    (b) Integrity of cargo should be ensured by permanent monitoring or keeping in a safe, locked area.
    (c) All seals must meet the current PAS / ISO 17712 standards for high security seals.
    (d) The integrity of container seals should be checked and appropriate procedure should exist for the fixing of seals.
    (e) Only designated personnel should distribute container seals and safeguard their appropriate and legitimate use.

    (f) When appropriate to the type of cargo container used, a seven-point inspection process is recommended: Front wall, Left side, Right side, Floor, Ceiling/Roof, Inside/outside doors, Outside/undercarriage.
    (g) Appropriate procedures should be laid down on measures to be taken when an unauthorized access or tampering is discovered.
    (h) It should not be possible to deliver goods to an unsupervised area.
    (i) Goods should be uniformly marked or stored in designated areas and procedures should exist to weigh / tally them and compare them against transport documents, purchase/sales orders and Customs papers.
    (j) Internal control procedures should exist when discrepancies and/or irregularities are discovered.
    13.4 Conveyance Security:
    (a) Ensure, to the extent possible that all conveyances used for the transportation of cargo within the supply chain are capable of being effectively secured.
    (b) Ensure, to the extent possible that all operators of conveyances used for transport of cargo are trained to maintain the security of the conveyance and the cargo at all times while in its custody.
    (c) Require operators, to report actual or suspicious incident to designated security department staff of both the AEO Programme Team and Customs, as well as to maintain records of these reports, which should be available to Customs.
    (d) Consider potential places of concealment of illegal goods on conveyances and ensure these are regularly inspected, and secure all internal and external compartments and panels, as appropriate. Records thereof are to be made and maintained.
    13.5 Premises Security:
    (a) Buildings must be secure against unlawful entry.
    (b) External and internal windows, gates and fences must be secured with locking devices or alternative access monitoring or control measures.
    (c) Management or security personnel must control the issuance of locks and keys.
    (d) Adequate internal and external lighting must be provided especially for entrances and exits, cargo handling and storage areas, fence lines and parking areas.
    (e) Gates through which vehicles and/or personnel enter/exit must be manned, monitored or otherwise controlled. Vehicles accessing restricted areas must be parked in approved area and their license plate numbers furnished to Customs upon request.
    (f) Only properly identified and authorized persons, vehicles and goods may be permitted access.
    (g) Access to document or cargo storage areas may be restricted.
    (h) There should be appropriate security systems for theft and/or access control.
    (i) Restricted areas should be clearly identified.
    (j) The integrity of structures and systems must be periodically inspected.
    (k) Perimeter fencing should enclose the areas around cargo handling and storage facilities.
    (l) Interior fencing within a cargo handling structure should be used to segregate domestic, international, high value and hazardous cargo.
    (m) All fencing must be regularly inspected for integrity and damage.
    (n) The number of gates should be kept to the minimum necessary for proper access and safety.
    (o) Private passenger vehicles should be prohibited from parking in or adjacent to cargo handling and storage areas.
    13.6 Personnel Security:
    (a) All reasonable precautions must be taken when recruiting new staff to verify that they are not previously convicted of security-related, Customs or other criminal offences.
    (b) Periodic background checks must be conducted on employees working in security sensitive positions.
    (c) Employee identification procedures should require all employees to carry proper identification that uniquely identifies the employee and organisation.
    (d) Procedures to identify, record and deal with unauthorized or unidentified persons, such as photo identification and sign-in registers for visitors etc. must be ensured at all points of entry.
    (e) Procedures must expeditiously remove identification and access to premises and information for employees whose employment is terminated.
    13.7 If necessary, encourage other concerned business entities/trading partners to assess and enhance supply chain security and, to the extent practical, include this requirement in contractual arrangements. In addition, make this information available to Customs upon request.
    13.8 The applicant must be able to produce documentation showing the safety and security measures and controls put in place for verification by the AEO Programme Team. In addition, the AEO Programme Team will need to see practical examples of the systems working.
    13.9 A self assessment should be carried out by a person with extensive knowledge of the risks and threats applicable to his type of business. This may be an independent third party or someone within the business but they must be considered competent to carry out the assessment.

    14. Pre-certification verification:

    14.1. Once the application is accepted and validated by the AEO Programme Manager, within 15 days thereof it will be sent to an AEO Programme Team under intimation to the applicant, for carrying out a pre-certification audit.
    14.2. The AEO Programme Team will visit the business premises and carry out checks to verify the information provided is accurate. Such visit shall be made on a convenient date after consulting the applicant.
    14.3. If within 45 days of the date of letter of acceptance of the application, the applicant has not been contacted by the AEO Programme Team than the applicant should contact the AEO Programme Manager immediately.
    14.4. The AEO Programme Team will examine the size and nature of business, the record keeping system, and strength of internal control system.
    14.5. The applicant should be prepared to answer questions or provide additional information on all aspect of the application to the visiting AEO Programme Team.
    14.6. Where appropriate, in addition to the other requirements detailed earlier, the AEO Programme Team will cover the following:

    (i) Information on Customs matters.
    (ii) Remedial action taken on previous Customs errors, if any.
    (iii) Accounting and logistic systems.
    (iv) Internal controls and procedures.
    (v) Flow of cargo.
    (vi) Use of Customs House Agents.
    (vii) Security of Computers/IT and documents.
    (viii) Financial solvency.
    (ix) Safety and security assessment – premises, cargo, personnel etc.
    (x) Logistic processes.
    (xi) Storage of goods.

    14.7 The person who is nominated in the application form as point of contact must ordinarily be available unless unforeseeable situation arises. In addition, individuals responsible for specific business activities such as transport, record keeping and security should also be available.
    14.8 In case several sites of applicant are run in a similar way by standard systems of record keeping and security etc. there will be no need for the AEO Programme Team to audit all of them. However, if the business of the applicant covers a range of activities or different sites have different method of operating, then it may be necessary for more visits to be made.
    14.9 The duration of visit/verification would depend on the size of business, number of sites, how they operate etc. The AEO Programme Team will give the applicant an estimate of time required, though this may have to be amended once the audit has commenced.
    14.10 On completion of verification, the AEO Programme Team will prepare their report and make a recommendation to the AEO Programme Manager. The contents of report and recommendation can be seen by applicant who will get the opportunity to sign the same, but this will not be a mandatory requirement.
    14.11 Where the application is not accepted after the AEO verification, the applicant will be informed suitably within 60 days and advised of the criteria that have not been met and give the applicant time to adapt procedures to remedy the deficiency. If applicant is unable to make the required changes within the specified time limits, the AEO Programme Manager will issue a decision to reject applicant’s AEO application, explaining thereasons for rejection. This decision will be subject to the applicant’s right of appeal.
    14.12 In exceptional cases, the AEO audit verification may be stopped by consensus between the applicant and the AEO Programme Manager in order for the applicant to provide additional information or to permit minor problems to be addressed. The period of stoppage will normally not longer than six months and applicant will be informed in writing of the date when the AEO verification will recommence and the revised date by which applicant can expect a decision on his application.

    15. Certification:


    15.1. The AEO Programme Manager will inform the applicant of the outcome of his application, which should ordinarily be done within 90 days of the date on acceptance of application. The period during which the AEO verification is stopped does not count towards the 90 days limit within which the AEO Programme Manager must give the applicant a decision on his application.
    15.2. If AEO status is granted, the AEO Programme Manager shall send the Certificate of AEO Status to the applicant in hard copy alongwith an electronic copy. The Certificate shall bear the ‘AEO logo’ that may be used where it is appropriate to do so for the business, for example, company stationary, signage on vehicles or other publicity materials. The copyright for the logo is owned by the AEO Programme Manager on behalf of the Indian Customs Administration.
    15.3. Once the applicant has received the Certificate of AEO Status, it will be activated within 10 days from the date of issue. Following this period, the applicant should enter the certificate number on all Customs documentation to indicate their AEO Status.
    15.4. It is highly recommended that the applicant should keep the Certificate of AEO status at a safe place and not release the Certificate number to anyone unless required to do so for business purposes. Although the AEO status can be advertised by the applicant, the Certificate number should not be part of their advertisement.
    15.5. The validity of AEO authorization shall be for three years.

    16. Maintaining AEO Status:



    16.1. After obtaining AEO status, the AEO status holder should maintain their eligibility by adhering to the appropriate standards.
    16.2. The holder of a Certificate of AEO Status is required to notify any significant change in business and processes this may affect the AEO status to the AEO Programme Team. These changes may include the following:
    (i) Change to the legal entity.
    (ii) Change of business name and/or address.
    (iii) Change in the nature of business i.e. manufacturer / exporter etc.
    (iv) Changes to accounting and computer systems.
    (v) Changes to the senior personnel responsible for Customs matters.
    (vi) Addition or deletion of locations or branches involved in international supply chain.
    16.3. The AEO status holder should notify the AEO Programme Team as soon as the change is known or, at least within 14 days of the change taking place.
    16.4. If the legal entity changes, the AEO status holder needs to reapply for AEO in the name of new legal entity.
    16.5. If the AEO status holder makes Customs errors, they must be reported to the local Customs officers as well as the AEO Programme Team. Errors that are voluntarily disclosed will not impact the AEO status provided that the AEO status holder has:
    (a) Examined the reasons for the errors.
    (b) Taken appropriate remedial action to prevent recurrence.
    17. Review of AEO Status:

    17.1. The AEO Programme Team will review AEO status periodically to ensure continued adherence to the conditions and standards of grant of Certificate of AEO Status. Although the Certificate has no expiry date, it will only remain valid for as long as they meet the

    conditions of certification. Thus, it is recommended that the AEO status holder should continue to re-assess it’s compliance with the conditions of certification and act upon any identified problems as soon as they arise. To begin with, the frequency of such review will be one year.
    18. Suspension of AEO Status:

    18.1 The AEO Programme Manager may suspend the Certificate of AEO Status in the following cases:
    (a) Where there is a reasonable belief that an act has been perpetrated that is liable to lead to prosecution and /or is linked to a serious infringement of Customs law.
    (b) Where non-compliance with the conditions or criteria for the Certificate of AEO Status is detected and no remedial steps have been taken within 30 days thereof.
    18.2 Ordinarily, prior to any decision to suspend the authorization, the applicant will be contacted and asked to explain why such action should not be taken. Any decision taken in this regard will be subject to right of appeal of the applicant.
    18.3 An applicant can also request the AEO Programme Manager that his authorization be suspended in case he has detected some irregularities and needs some time to correct the situation. In this case, if necessary, this period can be extended provided that the AEO Programme Team is satisfied that the difficulties cannot be resolved within a reasonable time.
    18.4 When the AEO Programme Team is satisfied that the problems affecting certification have been satisfactorily resolved, the AEO Programme Team will make suitable recommendation to the AEO Programme Manager who will withdraw the suspension under intimation to the AEO status holder and the AEO Programme Team.
    18.5. On suspension of AEO authorization, the intimation of the same shall be communicated to all Customs formations with immediate effect by AEO Programme Team.
    19. Revocation of AEO Status:
    19.1. In following circumstances, the Certificate of AEO Status will be revoked:
    (a) Where the Certificate of AEO Status is already suspended and the AEO holder fails to take the remedial measure to have the suspension withdrawn.
    (b) Where the AEO status holder has committed serious infringement of Customs law and has no further right to appeal.
    (c) Where the AEO status holder requests the authorization be revoked.
    19.2. Prior to any decision to revoke authorization, the applicant will be contacted. Any decision taken in this regard will be subject to right of appeal of applicant. Revocation is applied from the day following the authorization holder being notified.
    19.3. In case the authorization is revoked, the applicant will not be entitled to reapply for another certificate for a period of three years from the date of revocation.

    20. Right to Appeal:


    20.1. In case the Certificate of AEO Status is suspended / revoked, the AEO status holder can, within thirty days of the decision, file an appeal before the Director General of Inspection, New Delhi for review of the said order. The Director General of Inspection, after considering the case of the applicant, shall dispose of the appeal within a period of thirty days.

    *************
    Annexure – A
    APPLICATION FORM FOR GRANT OF AEO STATUS

    Name of Company / Economic Operator:
    Type of business :
    (i.e. importer / exporter / carriers etc.)
    Address:
    (A separate list can be attached for all locations)
    Contact person:*
    Designation:
    Phone number:
    Mobile No.:
    Fax No.:
    Email address:
    Company registration No.:
    (in case of companies registered under the Companies Act, 1956 and / or Limited Liability Partnership Act, 2008)
    PAN:
    List of sites, under control, where import / export goods are packed / unpacked / handled / loaded / unloaded / consolidated.
    Please include site address, phone number and contact person.
    (A separate list can be attached)
    Major Items of import:
    Main countries of import
    Major Items of export:
    Main countries of export:

    Signature:
    Full Name:
    Position in Company:
    Dated:
    * Contact person will be a senior management official who will be nodal contact point and responsible to the Customs for proper implementation of the AEO Programme.
    **************************************************************
    Annexure - B

    SECURITY PLAN

    The economic operator wishing to participate in the AEO Programme shall submit to Customs a security plan documenting the policies, processes and procedures that it has in place to ensure that goods for export/import are packed at a secure premise/facility, accurately accounted for and transported securely to the point of export/import from the point of origin.

    The security plan must detail the company’s written and verifiable policies, processes, procedures etc., in respect of the following:


    • Procedural security.
    • Document security.
    • Physical security.
    • Access controls.
    • Personnel security.
    • Training and skill upgradation.
    • Compliance with other Government security related requirements, if any.



    **************************************************************
    Annexure - C

    PROCESS MAP


    Process map which illustrates the flow of goods and documentation/information from receipt of order to the point of export/delivery/receipt of the product.


    Annexure - D
    SITE PLAN
    The site plan should cover the whole area managed by the company, clearly illustrating the following (if present):


    • The external perimeter of the area, including features such as boundary roads, railway lines, streams/rivers, neighbouring properties.



    • All access points to the site (e.g. vehicle, rail and pedestrian entrances) with traffic flows.



    • All buildings identified with access ways (e.g. administration office, export/import storage areas, export/import packing areas, export container movement).



    • Internal and/or external lighting facilities that contribute to security.
    • Other security features (e.g. CCTV, electronic access gates).
    • Visitor, contractor and company personnel parking areas.
    • Perimeter fences with description (e.g. 2-metre high security fence).
    • Areas used for container storage.

    *********************************************
    Annexure – E
    SELF-ASSESSMENT FORM
    (A) Compliance
    1
    Compliance
    Yes
    No
    Remarks
    (a)
    Whether any violation in respect of any provisions of Customs, Central Excise and Service Tax laws as well as allied laws that are administered by the Department has been committed in last three years preceding the date of application? If yes, please indicate the type of violation and action taken against the applicant in ‘Remarks’ column.
    (b)
    Whether any penalty has been imposed for violation of provisions of Customs, Central Excise and Service Tax laws?
    (c)
    Whether procedures are in place to identify and disclose any irregularities or errors to the Customs authorities or, where appropriate, other regulatory bodies? and
    (d)
    Whether appropriate remedial action is taken when irregularities or errors are identified?


    Note: The Self-Assessment can be carried out by the applicant themselves or through a third party having expertise.


    (B) Financial Solvency
    2
    Issues
    Yes
    No
    Remarks
    (a)
    Whether the applicant is financially solvent for the three years preceding the date of application? (Solvency would generally be defined as good financial standing that is sufficient to fulfill the commitments of the applicant including ability to pay duties)
    (b)
    Whether, where required, the accounts have been filed with Registrar of Companies within the time limits laid down by law?
    (c)
    Whether, where applicable, audit qualifications or comments in the annual accounts about the continuation of the business as a going concern?
    (d)
    Whether there are any contingent liabilities or provisions?
    (e)
    Whether the net current assets are positive?
    (C) Cargo Security
    3.1
    Cargo Security:
    Yes
    No
    Remarks
    (a)
    Whether only properly identified and authorised persons have access to the cargo?
    (b)
    Whether integrity of cargo has been ensured by permanent monitoring or keeping in a safe, locked area?
    (c)
    Whether all seals meet the current PAS / ISO 17712 standards for high security seals?
    (d)
    Whether the integrity of container seals has been checked and appropriate procedure exists for the fixing of seals?
    (e)
    Whether only designated personnel distribute container seals and safeguard their appropriate and legitimate use?
    (f)
    Whether when appropriate to the type of cargo container used, a seven-point inspection process is in place i.e. Front wall, Left side, Right side, Floor, Ceiling/Roof, Inside/outside doors, Outside/undercarriage?
    (g)
    Whether appropriate procedures have been laid down on measures to be taken when an unauthorized access or tampering is discovered?
    (h)
    Whether it is possible to deliver goods to an unsupervised area?
    (i)
    Whether goods have been uniformly marked or stored in designated areas and procedures exist to weigh / tally them and compare them against transport documents, purchase/sales orders and Customs papers?
    (j)
    Whether internal control procedures exist when discrepancies and/or irregularities are discovered?
    (D) Conveyance Security
    3.2
    Conveyance Security
    Yes
    No
    Remarks
    (a)
    Whether all conveyances used for the transportation of cargo within the supply chain are capable of being effectively secured?
    (b)
    Whether all operators of conveyances used for transport of cargo are trained to maintain the security of the conveyance and the cargo at all times while in its custody?
    (c)
    Whether there is a system for operators to report actual or suspicious incident to designated security department staff of both the AEO Programme Team and Customs as well as to maintain records of these reports which should be made available to Customs?
    (d)
    Whether potential places of concealment of illegal goods on conveyances are regularly inspected, all internal and external compartments and panels, as appropriate and secured?


    (E) Premises Security
    3.3
    Premises Security:
    Yes
    No
    Remarks
    (a)
    Whether building is secured against unlawful entry?
    (b)
    Whether external and internal windows, gates and fences are secured with locking devices or alternative access monitoring or control measures?
    (c)
    Whether management or security personnel control the issuance of locks and keys?
    (d)
    Whether adequate internal and external lighting has been provided especially for entrances and exits, cargo handling and storage areas, fence lines and parking areas?
    (e)
    Whether gates through which vehicles and/or personnel enter/exit have been manned, monitored or otherwise controlled?
    (f)
    Whether vehicles accessing restricted areas are parked in approved area and their license plate numbers furnished to Customs upon request?
    (g)
    Whether only properly identified and authorized persons, vehicles and goods are permitted access?
    (h)
    Whether access to document or cargo storage areas is restricted?
    (i)
    Whether there are appropriate security systems for theft and/or access control?
    (j)
    Whether restricted areas have been clearly identified?
    (k)
    Whether the integrity of structures and systems is periodically inspected?
    (l)
    Whether perimeter fencing exists for enclosing the areas around cargo handling and storage facilities?
    (m)
    Whether interior fencing exists within a cargo handling structure to segregate domestic, international, high value and hazardous cargo.
    (n)
    Whether all fencing has been regularly inspected for integrity and damage?
    (o)
    Whether the number of gates is kept to the minimum necessary for proper access and safety?
    (p)
    Whether private passenger vehicles are prohibited from parking in or adjacent to cargo handling and storage areas?
    (F) Personnel Security
    3.4
    Personnel security:
    Yes No Remarks
    (a)
    Whether all reasonable precautions have been taken when recruiting new staff to verify that they are not previously convicted of security-related, Customs or other criminal offences?
    (b)
    Whether periodic background checks are conducted on employees working in security sensitive positions?
    (c)
    Whether employee identification procedures require all employees to carry proper identification that uniquely identifies the employee and organisation?
    (d)
    Whether procedures to identify, record and deal with unauthorized or unidentified persons, such as photo identification and sign-in registers for visitors etc. have been ensured at all points of entry?
    (e)
    Whether procedure to expeditiously remove identification and access to premises and information for employees whose employment is terminated is in place?


    3.5
    Whether a system exists to encourage other concerned business entities/trading partners to assess and enhance supply chain security?
    3.6
    If answer in 3.5 above is ‘Yes’, whether information can be made available to Customs upon request?
    3.7
    Whether the applicant is able to produce documentation showing the safety and security measures and controls put in place for verification by the AEO Programme Team?
    3.8
    Whether a self assessment has been carried out by a person with extensive knowledge of the risks and threats applicable to his type of business?
    *********************************

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