Customs commissionerates not to issue reports interpreting law: CBIC

In an instruction to all Principal Chief Commissioners of Customs, the Central Board of Indirect Taxes and Customs (CBIC) said in order to establish a standard practice on all matters of classification of goods, with respect to levy of duty and for the implementation of any other provision of the Customs Act, 1962, directorates/commissionerates/audit will not issue any circular which are in the nature of clarification or interpretation.

Currently, circulars/reports/alerts are issued by the directorates/ commissionerates/audit to all the Customs zones in order to promote information sharing on the modus operandi, findings or observations detected during the investigation, audit or risk analysis.

This has helped in uniform application of the findings resulting in the safeguarding of revenue and better enforcement of compliances.

However, it has been observed that on multiple occasions, communications are issued which are either contrary to an existing circular issued by the Board or delve on matters covered by Section 151A of the Customs Act without the approval of, or a reference to the Board, the CBIC said.

“…. in order to establish a standard practice on all matters of classification of goods, with respect to levy of duty thereon and for the implementation of any other provision of the Customs Act, 1962 or of any other law for the time being in force… it is hereby directed that – Directorates/Commissionerates/Audit shall not issue any Circulars/ Reports/Alerts etc. which are in the nature of interpretation/ clarification/prescription for the sake of uniformity, on matters covered under section 151A of the Customs Act, 1962…,” the CBIC said.

Clarifications on all such matters would be issued by the CBIC under Section 151A of the Customs Act, 1962, it added.

Section 151A of the Customs Act, 1962 empowers CBIC alone to issue instructions/ directions for the purpose of uniformity in classification of goods or with respect to levy of duty, or for the implementation of any other provision of the Act or of any other law which relate to import or export of goods.

The CBIC further said matters covered under Section 151A require wide ranging consultations involving multiple stakeholders, ministries and also international organisations.

“In such cases, referring such matters to the Board would enable undertaking a holistic analysis of such issues and ensure a consolidated view point to avoid unnecessary disputes and litigation,” the CBIC added.

AMRG & Associates Senior Partner Rajat Mohan said the CBIC has reinstated that in respect of classification of goods and levy of duty only it can issue orders, instructions and directions to officers of customs.

“This practice will establish a standard uniform practice across the custom clearance and will ensure ease of doing international business in India,” Mohan added.