(As per the Prevailing Law i.e., ICA 62)
The shipment of export cargo has to be made with prior permission of, and under the close supervision of the custom authorities. The goods cannot be loaded on board the ship unless a formal permission is obtained from the custom authorities. The custom authorities grant this permission only when it is being satisfied that the goods being exported are of the same type and value as have been declared by the exporter or his C&F agent, and that the duty has been properly determined and paid, if any.
The custom procedure can be briefly explained as follows:
• Submission of Documents: The exporter or his agent submits the necessary documents along with the shipping bill to the Custom House. The documents include:
o ARE-1 (Original and duplicate)
o Excise gate pass (Original and duplicate transporters’ copy o Proforma Invoice
o Packing List
o GRI form (Original and duplicate)
o Customs Invoice (where required in the importing country) o Original letter of credit/contract
o Declaration form in triplicate o Quality Certificate
o Purchase memo o Labels
o Licence (if any required) including advance licence copy o Railway receipt/lorry way bill
o Inspection Certificate by Export Inspection Agency
• Verification of Documents: The Customs Appraiser verifies the documents and appraises the value of goods. He then makes an endorsement of “Examination Order” on the duplicate copy of shipping bill regarding the extent of physical examination of the goods at the docks. All documents are returned back to the agent or exporter, except
o Original Copy of GR to be forwarded to RBI o Original copy of shipping bill
o One copy of commercial invoice
• Carting Order: The exporter’s agent has to obtain the carting order from the Port Trust Authorities. Carting Order is the permission to bring the goods inside the docks. The carting order is issued by the superintendent of Port Trust. Carting Order is issued only after verifying the endorsement on the duplicate copy of shipping bill. The Carting Order enables the exporter’s agent to cart goods inside the docks and store them in proper sheds.
• Storing the Goods in the Sheds: After securing the carting order, the goods are moved inside the docks. The goods are then stored in the sheds at the docks.
• Examination of Goods: The exporter’s agent then approaches the customs examiner to examine the goods. The customs examiner examines the cargo and records his report on the duplicate copy of the shipping bill. The customs examiner then sings the “Let Export Order”
• Let Export Order: The Let Export Order is then shown to the Customs Preventive Officer, along with other documents. The CPO is in charge of supervision of loading operations on the vessel. If CPO finds everything in order, he endorses the duplicate copy of shipping bill with the “Let Ship Order” This order helps the exporter/shipper to load the goods on the ship.
• Loading Goods: The goods are then loaded on the ship. The CPO supervises the loading operations. After loading is completed, the Chief Mate (Cargo Officer) of the ship issues the “Mate’s Receipt”. The Mate’s Receipt is sent to the Port Trust Office. The C&F agent pays the port trust dues and collects the mate’s receipt.
The C&F agent then approaches the CPO and gets the certification of shipment of goods on AR Forms and other documents
• Obtaining Bill of Lading: The Mate’s Receipt is then handed over to the shipping company (on whose vessel the goods are loaded). The shipping company issues bill of lading. The Bill of Lading is issued in:
o 3 negotiable copies of Bill of Lading
o 10 to 12 Non-negotiable copies of Bill of Lading.
The negotiable copies have title to goods; whereas non-negotiable copies do not have title to goods but are used for record purpose.
PROCEDURE OF EXCISE CLEARANCE:
The common procedure of excise clearance under “bond” and under “rebate” is discussed as follows:
• Preparing of Invoice: The export goods have to be cleared from the factory under invoice. The invoice contains details like name of the exporter, value of goods, excise duty chargeable, etc. The invoice is to be prepared in triplicate. In case of export under Bond, the invoice should be marked as “For Export without payment of duty”. In addition to the invoice, a prescribed for ARE 1 has to be filed in by exporter.
• Filling up of ARE-1 form (Annexure-20): The ARE-1 form needs to be filled in four copies. A fifth (Optional) may be filled in by the exporter, which can be used at the time of claiming other export incentives. The ARE-1 copies have distinct color for the purpose of verification and processing.
• Application to Assistant Commissioner of Central Excise (ACCE): The exporter has to make an application to ACCE regarding the removal of goods from the factory/warehouse for export purpose.
• Information to Range Superintendent of Central Excise (RSCE): The ACCE will inform the RSCE under whose jurisdiction the goods are intended to be cleared for export
• Deputation of Inspector: The RSCE will then depute an inspector to clear the goods, either at the factory or warehouse, and in certain cases at the port.
• Processing of ARE-1 Form: The Excise Officer/Inspector will make endorsement on all copies of ARE-1. The handling of ARE-1 Form is done as
o The inspector returns the original and duplicate copies to the exporter
o The triplicate copy is sent to officer (ACCE or Maritime Commissioner (MCCE) to whom bond was executed or letter of undertaking (LUT) was given. This copy can also be handed over to the exporter in a tamper proof sealed cover to be submitted to ACCE/MCCE.
o The 4th copy will be retained by the excise inspector.
o The 5th copy is also handed over to the exporter.
o At the time of export, original, duplicate and the 5th copy (optional) will be submitted to customs officer. The customs officer will examine these copies and then export will be allowed.
o The customs officer will then make endorsement of export on all copies of ARE-1. He will cite shipping bill number and date and other particulars of export on ARE-1.
o The original copy and quintuplicate (optional) will be returned to the exporter. The duplicate copy will be sent directly to the ACCE\MCCE i.e. excise officer with whom bond was executed will get 2 copies, one from RSCE (or excise inspector) when goods are cleared from factory and other Custom Officer after export.
This will enable him to keep track to ensure that all goods cleared from factory or warehouse without payment of duty are actually exported. In case of export after payment of duty, under claim of rebate, the basic procedure is same as above, except that the triplicate copy (by excise inspector) and duplicate copy(by customs officer)will be sent to the officer to whom rebate claim is filed. If claim of rebate is by electronic submission, these copies well be sent to excise rebate audit section at the place of export.
• Refund or Release of Bond: The exporter should make an application to the excise officer for refund or release of bond. The application must be supported by
original copy of ARE-1 form. The excise officer crosschecks the original copy of ARE-1 form and the duplicate and triplicate copies of ARE-1 form, which he had received earlier. If the copies match, then refund is given or the bond is released.
FACTORY STUFFING OF CARGO
Clearance of goods to docks: If the goods meant for export is of a small quantity which may not be sufficient to make one full container, the cargo is said to be less than container load (LCL) cargo. Such cargo has to be taken to the docks where the goods will be consolidated (combining the cargo of other exporters to make up quantity for a full container) by the agent and loaded into a container. Here the examination of the cargo is done at the docks.(There are also inland container depots approved by the customs where the goods can be consolidated and stuffed into the container by the agent under the supervision of the customs officer)
If the goods meant for export is of sufficient quantity to make up a full container, the exporter has the option to take the goods to the docks and get them examined and stuffed into a separate container. An exporter gets the benefit on the freight amount for a full container. (Generally called box rate)
Alternatively, he can have a container allotted to him and get the same to his Mills Premises. The goods meant for exports can be stuffed into the container under the supervision of the regional Central Excise Authority. Here the exporter has to
• Obtain permission from the Customs for getting the container to his mills premises for stuffing (House Stuffing)
• Inform the C.Excise Authorities at least 24 hours before bringing the container for loading.
The C.Excise Authority will supervise the loading, seal the container and certify the invoice as directed in the permission given by the custom authorities. A special Lock is used to lock the doors of the container. Samples from the goods will be drawn, if necessary, as required under the customs permission. Such samples will be sealed and
forwarded along with the container. The examiner in the docks may arrange to send the sample for testing. Then the container is moved to the dock for loading. Generally, such containerized goods are not subject to further examination in the customs. They will be directly taken for loading.