RECENT CUSTOMS PROVISIONS REGARDING LABELING OF IMPORTED GOODS IN INDIA


Dated 01st September 2012

As a measure to mitigate the labeling related issues of imported goods The Central Board of Excise &Customs (CBEC) through Circular No. 19 /2011-Customs dt: 15.04.2011 has stated as follows, (PLEASE PAY SPECIAL ATTENTION TO PARA 5) :

  1. DGFT Notification No.44 (RE-2000)/1997-2002 dated 24.11.20009 (ANNEXURE-A) provides for labeling of the goods imported into India which are covered by the provisions of ‘Standards of Weights & Measures (Packaged Commodities) Rules, 1977’(now the Legal Metrology Act). This Notification mandates that compliance of labeling conditions have to be ensured before the import consignment of such commodities are cleared by Customs for home consumption.
  2. The matter has been examined in the Board. In order to redress the issue and to remove the difficulties faced by importers on account of space constraints at CFSs/ Port / ICDs and the nature of goods, etc., it has been decided to extend the facility of labeling on imported goods in Bonded warehouses subject to certain procedural conditions.

  3. In this regard, it is clarified that the importers should first ascertain that for such marking / labeling facility, space, is available in warehouse prior to exercising this option. In such cases, importers may file Warehousing Bill of Entry. The assessing group will give suitable directions to Dock staff to allow bonding of the goods without labeling and with endorsement on the Warehousing Bill of Entry that verification of compliance of DGFT Notification No.44 (RE-2000)/1997-2002 is to be done prior to de-bonding by Bond Superintendent. The goods will be labeled in the bonded premises and compliance of DGFT Notification No.44 (RE-2000)/1997-2002 will be ensured at the time of ex-bonding of the goods, by the Bond Officer, by examining the goods again and endorsing the Examination Report on the Ex-bond Bill of Entry. It is provided that 100% examination at the time of Ex-bond clearance of goods should be done to ensure compliance of DGFT Notification No. 44 (RE-2000)/1997-2002. The Examination Report can be endorsed on hard copy of Ex-bond Bill of Entry where EDI facility is not extended, and on hard copy as well as EDI system where EDI facility is extended to Bonded Warehouses. It is also clarified that this facility is applicable only to goods that cannot be easily labeled in ports / CFS, having regard to their size and other factors such as sensitivity to temperature and dust.

  4. Further, as the activity of labeling and re-labeling including declaration of Retail Sale Price (RSP) on goods amounts to manufacture in terms of section 2(f) of the Central Excise Act, 1944, if the same is carried out on goods warehoused, it would be considered as manufacturing operations having been undertaken in bond / warehouse and accordingly, the provisions of ‘Manufacture and Other Operations in Warehouse Regulations, 1966’ would apply on those goods. Importers can, therefore, avail the facility of carrying out labeling in warehouse after following above procedure and the provisions of ‘Manufacture and Other Operations in Warehouse Regulations, 1966’(ANNEXURE-B).

ANNEXURE-A

NOTIFICATION NO. 44 (RE-2000)/1997-2002 DT:24.11.2000

S.O (E) – In exercise of powers conferred under section 5 of the Foreign Trade (Development and Regulation) Act, 1992 read with paragraph 1.3 and 4.1 of the Export and Import Policy, 1997-2002, the Central Government hereby makes the following amendments in the ITC (HS) Classifications of Export and Import Items, 1997-2002 published on 31st March, 1997 (RE-98) as amended from time to time, namely –

  1. The following shall be added after paragraph 4 of Chapter 1A: General notes regarding import policy, of ITC (HS) Classifications of Export and Import Items, 1997-2002:

“4. All such packaged products, which are subject to provisions of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 when produced/ packed/ sold in domestic market, shall be subject to compliance of all the provisions of the said rules, when imported into India. The compliance of these shall be ensured before the import consignment of such commodities is cleared by Customs for home consumption. All prepackaged commodities, imported into India, shall in particular carry the following declarations:

(a) Name and address of the importer;

(b) Generic or common name of the commodity packed;

(c) Net quantity in terms of standard unit of weights and measures. If the net quantity in the imported package is given in any other unit, its equivalent in terms of standard units shall be declared by the importer;

(d) Month and year of packing in which the commodity is manufactured or packed or imported;

(e) Maximum retail sale price at which the commodity in packaged form may be sold to the ultimate consumer. This price shall include all taxes local or otherwise, freight, transport charges, commission payable to dealers, and all charges towards advertising, delivery, packing, forwarding and the like, as the case may be.

ANNEXURE-B
MANUFACTURE & OTHER OPERATIONS IN WAREHOUSE REGULATIONS, 1966

Notification No.155-cus.,dated 30th July,1966 as amended by Notification No. 44/98-Cus., dated 2-7-1998 and Notification No. 29/1999-Cus.(N.T.), dated 11-05-1999

In exercise of the powers conferred by section 157 of the Customs Act, 1962 (52 of 1962), the Central Board of Excise and Customs hereby makes the following regulations, namely:—

  1. Short title and commencement. — (1) These regulations may be called the Manufacture and Other Operations in Warehouse Regulations, 1966.

(2) They shall be deemed to have come into force on the 4th day of June, 1966.

  1. Definitions. — For the purpose of these regulations, unless the context otherwise requires —

(i) “Act” means the Customs Act, 1962 (52 of 1962);
(ii) “manufacturer” means the owner of any warehoused goods to whom sanction has been accorded under regulation 5;
(iii) “proper form” means such form as the Assistant Commissioner of Customs or Deputy Commissioner of Customs may require to be adopted.

  1. Owner to make applications. — (a) The owner of any goods warehoused under the Act intending to undertake any manufacturing process or other operations in the warehouse in relation to such goods shall make an application to the Assistant Commissioner of Customs or Deputy Commissioner of Customs in the proper form and furnish inter alia —

(i) information regarding the nature of the manufacturing process or other operations;

(ii) particulars of imported and other goods proposed to be used in the manufacturing process or other operations;

(iii) the detailed plan and description of the warehouse;

(iv) data regarding the volume of trade anticipated of the manufacturing process or other operations; and

(v) the applicant shall, on being called upon to do so, furnish such other information as may be required.

  1. Execution of Bond. — The Assistant Commissioner of Customs or Deputy Commissioner of Customs may, if he is satisfied that the applicant has carried out such alterations to the warehouse premises as may be required for this purpose and that the volume of trade and other considerations justify grant of sanction direct the applicant to file a bond, undertaking inter alia to —

(i) observe all the provisions of these regulations;

(ii) maintain detailed accounts of all imported and other goods used in the manufacturing process or other operations in the proper form and to produce such accounts for inspection by the proper officer;

(iii) submit detailed statements of all imported and other goods used in the manufacturing process or other operations and those remaining in stock, at any time the proper officer directs;

(iv) provide to the officers of customs office space, wherever required, and access to warehouse, for control and supervision of the manufacturing process or other operations or imported and other goods as may be specified by Assistant Commissioner of Customs or Deputy Commissioner of Customs;

(v) pay all the charges including pay, allowances, leave and pensionary charges of such officers as may from time to time be posted by the Assistant Commissioner of Customs or Deputy Commissioner of Customs in the warehouse for supervision and control of the manufacturing process or other operations, or imported and other goods;

(vi) comply with such conditions as may be imposed by the Assistant Commissioner of Customs or Deputy Commissioner of Customs from time to time for carrying out the purposes of these regulations and the Act.

  1. Grant of sanction. — On execution of the bond, in the manner hereinbefore provided, the Assistant Commissioner of Customs or Deputy Commissioner of Customs shall accord sanction to the applicant to carry on such manufacturing process or other operations specifying:

(a) the manufacturing process or other operations permitted to be carried on in the warehouse;

(b) the types and nature of imported and other goods permitted to be used;

(c) the period for which the sanction is valid; and

(d) the conditions, if any, subject to which the manufacturing process or other operations may be carried on in the warehouse;

(e) the input-output norms, wherever considered necessary, for the raw-materials and the finished goods.

  1. Conditions that may be imposed by the Assistant Commissioner of Customs or Deputy Commissioner of Customs — The Assistant Commissioner of Customs or Deputy Commissioner of Customs may from time to time:

(i) Omitted

(ii) determine the number of customs officers that may be attached to the warehouse for purposes of supervising the manufacturing process or other operations;

(iii) fix the sum payable by the manufacturer towards the cost of such establishment and the extra charges payable towards the overtime services, if any, performed by such establishment at the request of the manufacturer; and

(iv) Omitted

  1. Omitted
  • Omitted

  • Maintenance of accounts. — The manufacturer shall maintain accounts relating to stocks, raw materials, goods in process, finished goods, waste and refuse in proper form:

  • Provided that where the manufacturer maintains for his own purpose such detailed accounts and has carried out such alterations in the form of accounts as may be required in this behalf, the Assistant Commissioner of Customs or Deputy Commissioner of Customs may in his discretion direct such forms of accounts to be adopted as the proper form.

    1. Accounts to be accessible to Customs Officer. — The proper officer may, at any time, inspect or call for the accounts and connected records for scrutiny.
  • Special Audit in certain cases:

  • (i) The Chief Commissioner of Customs may, for reasons to be recorded in writing, direct a manufacturer to get the accounts of his warehouse, office, stores, godowns, factory, depot, or other establishment audited by a Cost Accountant, nominated by him in this behalf.

    (ii) The Cost Accountant, shall submit the audit report duly signed and certified by him within the period specified by the Chief Commissioner of Customs, or such extended period as may be allowed by him, to the Commissioner, giving therein such other information or particulars as may have been asked for by the Chief Commissioner.

    (iii) The provisions of sub-regulation (i) shall be in addition to, and not in derogation of any other law for the time being in force.

    (iv) The expenses of, and incidental to, such audit (including the remuneration of the Cost Accountant) shall be determined by the Chief Commissioner and paid by the manufacturer and in default of such payment shall be recoverable from the manufacturer in the manner provided in section 142 of the Customs Act, 1962 (52 of 1962).

    (v) The manufacturer shall be given a copy of the audit report conducted in pursuance of sub-regulation (1) who may make a representation, if he so likes.

    Explanation: For the purpose of this regulation “Cost Accountant” shall have the meaning assigned to it in clause (b) of sub-section (1) of section 2 of the Cost and Works Accountants Act, 1959 (23 of 1959).

    1. Issue and return of imported goods to/from the manufacturing process or other operations. — (a) The Assistant Commissioner of Customs or Deputy Commissioner of Customs shall, having regard to the manufacturing process or other operations to be carried on in the warehouse, direct the manner in which the imported goods shall be issued from and the unused items received back into stock.

    (b) The application for issue of imported goods and the vouchers against which the unused items may be returned shall be in the proper form.

    1. Manufacturer to give notice before suspending or discontinuing the manufacturing process or other operations. — No manufacturer shall suspend or discontinue the manufacturing process or other operations authorised to be carried on in the warehouse without giving in writing to the Assistant Commissioner of Customs or Deputy Commissioner of Customs, one month’s notice of his intention so to do:

    Provided that in any particular case the aforesaid period of one month may, on sufficient cause being shown, be reduced by the Assistant Commissioner of Customs or Deputy Commissioner of Customs by such period as the Assistant Commissioner may deem fit:

    1. Cancellation and suspension of sanctions. — If the manufacturer or any person in his employ commits a breach of the provisions of the Act or the terms and conditions imposed by or under these regulations or if the particulars furnished in the application for sanction are false or incorrect/ or if any undertaking given in the bond is not fulfilled the Assistant Commissioner of Customs or Deputy Commissioner of Customs may, without prejudice to any other action that he may take under the provisions of the Act or these regulations cancel the sanction for carrying on the manufacturing process or other operations :
      Provided that before the sanction is cancelled the manufacturer shall be given reasonable opportunity of being heard.

    SOURCE: GOVT. OF INDIA, Ministry of Commerce and Industry

     

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