CS Executive · Tax Laws and Practice

Overview of Customs Act: formula sheet

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Key formulas

Charging section: Section 12: duty is levied on goods imported into, or exported from, India at rates under the Customs Tariff Act, 1975 or any other law; Applies equally to Government-owned goods under section 12(2). Quote it as the source of the levy.
Extent of the Act: Section 1(2): whole of India, plus offences or contraventions committed outside India by any person (save as otherwise provided); The extra-territorial limb was inserted in 2018.
Commencement: Section 1(3): comes into force on the date appointed by the Central Government by notification; date appointed was 1 February 1963; The Act was not effective from the date of assent.
Electronic cash ledger: Section 51A: deposits of duty, interest, penalty or fee are credited to the person's electronic cash ledger and used for payments; The balance after payments may be refunded as prescribed.
Advance ruling questions: Section 28H(2): classification, notifications on rate of duty, valuation principles, other notifications, origin of goods, and other matters notified; The applicant may withdraw the application at any time before the ruling is pronounced, and may be represented by an authorised person resident in India.
Repeal and savings: Section 160(3)(a): things done under a repealed enactment are deemed done under the corresponding provision of this Act, if not inconsistent; Section 160(4): the Act applies to goods under customs control at commencement even if imported earlier.
Import: Import = bringing into India from a place outside India; Section 2(23). Direction of movement decides it.
Export: Export = taking out of India to a place outside India; Section 2(18). India includes territorial waters, section 2(27).
Goods: Goods = vessels, aircrafts, vehicles + stores + baggage + currency and negotiable instruments + any other movable property; Section 2(22).
Dutiable goods: Dutiable goods = chargeable to duty AND duty not yet paid; Section 2(14). Both conditions must be met.
Imported goods: Imported goods = goods brought into India from outside, excluding goods cleared for home consumption; Section 2(25). Once cleared, they stop being imported goods.
Prohibited goods: Prohibited goods = import or export subject to prohibition, excluding goods where permission conditions are complied with; Section 2(33).
Customs station: Customs station = customs port, customs airport, international courier terminal, foreign post office or land customs station; Section 2(13).
Customs area: Customs area = area of a customs station or warehouse + area where imported/export goods are ordinarily kept before clearance; Section 2(11).
Importer: Importer = owner, beneficial owner or person holding himself out as importer, between importation and clearance for home consumption; Section 2(26). Exporter is defined similarly in section 2(20).
Bill of entry and bill of export: Bill of entry: section 46. Shipping bill / bill of export: section 50; Defined in section 2(4), 2(5) and 2(37).
Hierarchy under section 3 (top to bottom): Principal Chief Commissioner → Chief Commissioner → Principal Commissioner → Commissioner → Principal Commissioner (Appeals) → Commissioner (Appeals) → Additional Commissioner → Joint Commissioner → Deputy Commissioner → Assistant Commissioner → other classes; This follows clauses (a) to (k). Each clause also includes the Preventive, Audit or Revenue Intelligence equivalent of that rank.
Equivalent posts in each clause: Clause (a) Principal Chief Commissioner of Customs / (Preventive) / Principal Director General of Revenue Intelligence; Clause (d) Commissioner / (Preventive) / Additional Director General of Revenue Intelligence / (Audit); Revenue Intelligence posts are listed alongside customs posts of matching rank.
Residuary class: Section 3(k): such other class of officers of customs as may be appointed for the purposes of the Act; Covers any class not named in clauses (a) to (j).
Appointment: Section 4(1): Board may appoint persons as officers of customs; Section 4(2): Board may authorise senior officers to appoint officers below Assistant or Deputy Commissioner; Section 3 lists classes; section 4 deals with appointment.
Delegation of powers: Section 152: Central Government, by notification, may let a lower officer exercise a higher officer's power; Clause (d) allows a Gazetted Officer of Customs to exercise an Assistant or Deputy Commissioner's power if the Board empowers them.
Main appointing power: Section 4(1): Board may appoint such persons as it thinks fit to be officers of customs; The Board, not the Central Government, holds this power now.
Appointment by authorised officers: Section 4(2): Board may authorise a Principal Chief Commissioner / Chief Commissioner, Principal Commissioner / Commissioner, or Joint / Assistant / Deputy Commissioner to appoint officers of customs below the rank of Assistant / Deputy Commissioner; Limit: only ranks below Assistant or Deputy Commissioner. Authorisation comes from the Board.
Entrustment to other government officers: Section 6: Central Government, by notification, may entrust conditionally or unconditionally to any officer of the Central or State Government or a local authority any functions of the Board or of an officer of customs; Done by notification in the Official Gazette.
Proper officer: Section 5(1A) and (1B): Board by notification, or Principal Commissioner / Commissioner by order within assigned jurisdiction, assigns functions to an officer of customs, who is the proper officer for those functions; The Commissioner acts within the jurisdiction assigned by the Board.
Delegation of powers: Section 152: Central Government, by notification, may let powers of the Board be exercised also by a Principal Chief Commissioner / Chief Commissioner or Principal Commissioner / Commissioner; Commissioner's powers by a Joint, Assistant or Deputy Commissioner; Joint Commissioner's powers by an Assistant or Deputy Commissioner; Assistant or Deputy Commissioner's powers by a Gazetted Officer of Customs empowered by the Board; Each step down needs empowerment. The last step is empowered by the Board, the others by the Central Government.
Assistance to customs officers: Section 151: officers of Central Excise, Navy, Police, and Central or State Government officers at a port or airport, and others notified, are empowered and required to assist officers of customs; These officers are not appointed as customs officers. They assist.
Section 8(a) - landing places: Commissioner approves proper places in a customs port / customs airport / coastal port for unloading and loading of goods or any class of goods; The power is exercised by the Principal Commissioner of Customs or Commissioner of Customs.
Section 8(b) - customs area: Commissioner specifies the limits of any customs area; Boundary of the area is fixed by the Commissioner, not the Board.
Section 7 - appointment of places: Board, by notification in the Official Gazette, appoints customs ports, customs airports, ICDs/air freight stations, land customs stations, routes, coastal ports, foreign post offices, international courier terminals; This is the first layer. Section 8 operates inside these places.
Section 33 - approved places only: No imported goods unloaded and no export goods loaded at a place other than one approved under section 8(a), except with the proper officer's permission; Permission of the proper officer is the only exception.
Section 29 - arrival of vessels and aircraft: First landing, and any landing while carrying passengers or cargo, must be at a customs port or customs airport, unless permitted by the Board; Forced landing by accident, stress of weather or other unavoidable cause is excepted, with reporting duties.
Section 96 - coastal goods: Coastal goods loaded or unloaded only at a customs port or coastal port appointed under section 7 for such goods; Applies to coastal trade.
Section 113(a)-(c) - export confiscation: Goods attempted to be exported by sea or air from a place other than an appointed customs port or airport, or by land or inland water through an unspecified route, are liable to confiscation; Links section 7 to penal consequences.

Quick revision

Section 3 lists the classes of officers of customs; clause (k) allows other classes to be appointed for the purposes of the Act.
Under section 4(1), the Board may appoint persons it thinks fit as officers of customs.
Under section 4(2), the Board may authorise senior officers to appoint officers below the rank of Assistant Commissioner or Deputy Commissioner.
Section 6: the Central Government may, by notification, entrust functions of the Board or customs officers to officers of the Central or State Government or a local authority.
Section 7: the Board, by notification, appoints customs ports, customs airports, inland container depots, air freight stations, land customs stations, routes and coastal ports.
Section 8: the Principal Commissioner or Commissioner may approve places for loading and unloading and specify the limits of a customs area.
Section 10: the Principal Commissioner or Commissioner appoints boarding stations by notification, in or near a customs port.
Section 141(1): conveyances and goods in a customs area are subject to the control of customs officers.
Section 151 names officers who must assist customs officers, including police, Navy and Central Excise officers.
Section 151A: the Board may issue instructions, but not to require a particular assessment or to interfere with the Commissioner (Appeals)'s discretion.
Specified area under section 11H(c) includes Indian customs waters and an inland area up to one hundred kilometres in width from a coast or border, as notified.
Section 127: a confiscation or penalty by a customs officer does not prevent punishment under Chapter XVI or other law.

Common mistakes

Saying the Customs Act, 1962 contains the rates of duty. Fix: Say the Customs Act is the machinery law and the rates are in the Customs Tariff Act, 1975, as section 12 itself points out.
Writing that the Act applies only within India's territory. Fix: Add that it also applies, save as otherwise provided, to offences or contraventions committed outside India by any person.
Treating goods as only physical trade items and leaving out currency and negotiable instruments. Fix: Remember the five limbs of section 2(22): vessels/aircrafts/vehicles, stores, baggage, currency and negotiable instruments, other movable property.
Saying goods remain imported goods even after clearance for home consumption. Fix: Imported goods exclude goods cleared for home consumption, section 2(25).
Writing that section 3 gives the powers of each officer. Fix: Say section 3 only names the classes. Appointment is in section 4 and delegation of powers in section 152.
Omitting the Appeals posts or placing them at the bottom. Fix: Place Principal Commissioner (Appeals) and Commissioner (Appeals) after the Commissioner and before the Additional Commissioner, as in the section.
Saying the Central Government appoints customs officers under section 4. Fix: Write that the Board appoints under section 4(1). Central Government appears in sections 6 and 152.
Saying a Commissioner can appoint any officer, including an Assistant Commissioner. Fix: Always add: only officers below the rank of Assistant or Deputy Commissioner, and only if the Board has authorised.
Saying the Board approves landing places under section 8. Fix: Board notifies ports, airports and stations (section 7). The Commissioner approves landing places and customs area limits (section 8).
Writing that section 8 appoints customs ports and airports. Fix: Section 8 works within a port or airport. The appointment itself is section 7.

Exam tips

Always cite section 12 when asked how customs duty is levied, and name the Customs Tariff Act, 1975 for the rates.
Write the extent of the Act in two parts: whole of India, and offences outside India by any person.
For a note on types of duty, give a one-line purpose for each duty rather than only a list.
Quote section numbers only for the provisions you are sure of: 1, 12, 28H, 51A and 160.
Close every answer with a one-line conclusion, as ICSI answers require.
Learn definitions nearly word for word, because short-note questions reward exact conditions.
Write the section 2 clause number only for terms you remember with certainty. Otherwise write section 2.
In fact-based questions, tick each condition of the definition and then conclude.