Customs Circular No- 16/2012 dated 13.6.2012
Procedure followed for import of Indian vessels and filing of Import General
Manifest, Bill of Entry – regarding.
I am directed to invite your attention to the Board’s instruction issued vide
F.No.450/79/2010-Cus.IV dated 23.09.2010 which state that the requirement for
filing Import General Manifest (IGM) and Bill of Entry should be complied with
even in cases, where goods are exempt from payment of any duty. The
jurisdictional Commissioners were also instructed to review the situation, and
take appropriate action for past cases, including adjudication, if warranted, in
case of non-fulfillment of aforesaid filing of documents.
2. In this regard, certain difficulties have been brought to the notice of the
Board by the trade and Indian Ship Owners’ Association stating that the Customs
field formations are insisting on filing of IGM and Bill of Entry even in
respect of those vessels that were imported in the past and which were exempt
from payment of import duty.
3.1 In this regard, it is stated that as the provisions of Section 29 of the
Customs Act, 1962 read with Section 2 (22) and 2(25), the term ‘imported goods’,
interalia, includes vessels entering India from any place outside the country
(India). These vessels may fall into any of the following category (i) Foreign
flag vessels i.e., vessels that have been registered outside India and which
carry imported/ exported goods or passengers, during its foreign run (voyage
from a port outside India to an Indian port, whether touching any intermediate
port in India or not); (ii) Vessel entering India for the first time on arrival
in the country, for registration as Indian Flag vessel; (iii) Vessels which are
intended for conversion from foreign run to coastal run/ trade (voyage between
two or more Indian ports); and (iv) Vessels which are brought into India for
breaking up.
3.2 Foreign flag vessels: These are the vessels that are registered abroad and
its entry into the country is for carrying cargo or passengers, as a conveyance.
Hence, there is no requirement for filing an IGM, Bill of Entry for foreign flag
vessel which is being used as conveyance. However, the requirement for filing an
import manifest in the prescribed manner for the goods or passengers which are
being carried in the vessel, on its entry into an Indian port in terms of the
provisions under Section 30 of the Customs Act needs to be complied with.
3.3 Indian Flag Vessel: In terms of the provisions of Part-V of the Merchant
Shipping Act, 1958, vessels entering into India for the first time, are required
to be registered with specified authority of the Mercantile Marine Department as
Indian ship, which can then display the national character of the ship as Indian
Flag Vessel for the purpose of Customs and other purposes specified in the said
Act. Such Indian ship or vessel may be used for foreign run or exclusively for
coastal run/ trade. Further, any ship or vessel may be taken outside India or
chartered for coastal trade in India, only after obtaining the requisite licence
from the Director General of Shipping, under the provisions of Section 406 or
407, respectively, of the said Merchant Shipping Act. Hence, in all such cases
the Customs declarations such as IGM, Bill of Entry is required to be filed with
jurisdictional Customs authority.
3.4 Vessels for conversion into coastal run: Any vessel could be used for
coastal run/ trade after obtaining requisite clearance from Director General of
Shipping and on fulfilment of certain specified conditions under Section 407 of
the Merchant Shipping Act, 1958. In case of foreign going vessel, exemption from
import duties, including CVD, have been extended vide serial No.462 of
notification No.12/2012-Cus. dated 17.03.2012, subject to prescribed conditions,
which binds the importer to file fresh Bill of Entry at the time of its
conversion for coastal run/ trade and payment of applicable duty on such
conversion of vessel for costal run/ trade. Similarly, excise duty is also
payable on vessels which are being used for coastal trade vide serial No.306 of
notification No.12/2012-Cus. dated 17.03.2012. Hence, if any Indian Flag vessel
which is used for time being as foreign going vessel is converted for use in
coastal trade or any vessel which is to be used for coastal trade, there is a
need to file a Bill of Entry for payment of applicable duty as CVD.
3.5 Vessels for breaking up: Vessel and other floating structures intended for
breaking up are liable to payment of applicable duty. All vessels for the
transport of persons or goods, falling under heading 8901 (excluding those which
are imported for breaking up) are fully exempt from payment of import duty under
vide serial No.461 of notification No.12/2012-Cus. dated 17.03.2012, subject to
the condition that the importer should file fresh Bill of Entry at the time of
its breaking up of the vessel after its importation. Hence, in these cases the
importer has to file an IGM and Bill of Entry, claiming the exemption as may be
applicable, at the time of initial import and later file fresh Bill of Entry at
the time of breaking up of the vessel as per the condition attached to the
aforesaid exemption.
4. In view of the above, it is clarified that in respect of foreign flag
vessels, for Indian flag vessels, there is no requirement of filing of IGM and
Bill of Entry, since its usage is as conveyance. In respect of Indian flag
vessels and vessels for breaking up as explained in para 3.3 and 3.5 above, the
importer has to file IGM and Bill of Entry, under the provisions of the Customs
Act, 1962. As regards the vessel for conversion into costal run/ trade as
detailed in para 3.4, since the changes in the duty structure for levy of CVD on
vessels which are being converted for coastal trade was initially imposed from
1.3.2011, and subsequently retrospective exemption has been provided for the
period 1.3.2011 to 16.3.2011 vide clause 129 of the Finance Act, 2012, the
requirement for filing IGM and Bill of Entry may be insisted in all such cases
w.e.f. 17.03.2012, that is the date from which levy of CVD has come into force.
5. It is also clarified that all vessels including foreign going vessels for its
entry into / exit from the country during its journey as foreign going vessel
and the Indian flag vessel / Indian Ship for subsequent use as foreign going
vessel would not require filing of IGM and Bill of Entry as conveyance, since
the same are not imported goods to be cleared for home consumption.
6. Accordingly, the field formations may adjudicate the cases involving any
violation where the IGM or Bill of Entry in respect of import of vessel were not
filed at the time of import, on its first arrival in India or on its conversion
into coastal trade and appropriate penal action be taken against the offenders.
7. The above instructions may be brought to the notice of all the concerned
immediately through appropriate Public Notice.
8. Receipt of this Circular may be kindly acknowledged.
F. No.450/79/2010-Cus.IV
Yours faithfully,
(G. S. Sinha),
OSD (Customs IV)