Government
of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs
159A,
North Block, New Delhi.
Dated
the 25th July, 2008.
To
All Chief Commissioners of Customs.
All
Chief Commissioners of Customs & Central Excise.
All
Commissioners of Customs
All
Commissioners of Customs & Central Excise.
All
Directorates General / Directorates under CBEC.
The
Comptroller & Auditor General of India.
Subject:
Outsourcing / Sub-letting / Transfer of Operations by CFS/ICD –
Clarification - reg.
Sir
/ Madam,
It has been brought to the notice of the Board that in certain cases,
violation of licensing conditions by CFS/ICD operators have been noticed and
clarification has been sought as to how such violations of conditions of
licensing or approval by CFS/ICD operators should be dealt with.
2.
In this regard, it is stated that the jurisdictional Commissioner of
Customs is the appropriate authority for approval of any place as ‘Customs
Area’ and to approve / appoint a custodian under section 8 & 45 of the
Customs Act, 1962 respectively. In
terms of the section 16 of the General Clauses Act, 1897, powers vested with
an authority for any appointment include the power to suspend or dismiss the
person so appointed. Hence, the
Commissioner of Customs also has the authority to de-notify or take away the
custodianship in case of non-compliance by observing the principles of natural
justice.
3.
The approval of the Government for setting up an ICD / CFS is given to
the person who had applied for the same and hence, trading in custodianship,
in full or in part, is against the principle of custodianship vested on the
person to whom approval for setting up of an ICD / CFS and Letter of Intent
was given. Hence, transfer of
custodianship by way of lease, gift, sale or transfer in part or in full is
not permissible. However,
activities such as aggregation of cargo at ICD / CFS by bulk buyers abroad or
segregation or similar operation, provision of fork lifts and other
material-handling equipments, cleaning and housekeeping etc. which do not take
away the primary responsibility of a custodian and the chain of custody of
goods shall be permissible to be outsourced subject to prior approval of the
jurisdictional Commissioner of Customs.
4.
In view of the above, it is clarified that the jurisdictional
Commissioner of Customs is the competent authority to decide in a specific
case whether subletting / outsourcing of any of the functions of CFS/ICD
should be permitted and to give approval or reject the same after taking into
account the concerns of the revenue for safeguarding the duty on imported
goods and ensuring that the custodian duly appointed by the Commissioner on
the approval of Inter-Ministerial Committee (IMC) continues to be held
responsible for proper discharge of his functions including the ones that have
been outsourced with prior permission.
5.
Board had also noted that earlier, in case of violations of the
conditions / guidelines prescribed under the Circular No.34/2002-Customs dated
26.6.2002, some of the Commissioners had taken action against the erring
custodians imposing penalty under the Customs Act, 1962.
6.
As such, cases of subletting / sub-contracting / outsourcing / gift or
lease of any of the services of CFS/ICD have to be dealt by the jurisdictional
Commissioner of Customs concerned and they may be requested to verify the
existing position in various CFS/ICDs under their jurisdiction and initiate
necessary action against the erring CFS / ICD accordingly under the Customs
Act, 1962.