Customs (Amendment and Validation) Bill passed in Lok Sabha
ALL the Show Cause Notices issued by DRI invalidated by Supreme Court, are to be validated by the retrospective law that was passed by Lok Sabha yesterday. For a change, there was a debate for about 80 minutes in the House on various facets of Customs.
Bipasha Sandals
A Member observed, “The rules, as they stand, say that ‘used personal effects' are free ….. perhaps the reason that actor Bipasha Basu walked through the green channel happily a few days ago, expecting that her sandals, purse and sunglasses qualified. If that was her supposition, it wasn't an unreasonable one; but it isn't a supposition shared by the Customs officials at Mumbai airport, always ready to grab the headlines by fining or detaining a celebrity or two. Basu was eventually fined Rs.12,000 and sent on her way. Why? Because her sunglasses and handbag and sandals were top-of-the line brands, their face value took them over Rs. 25,000, the duty free allowance. ………
Transparent Customs:
Another Hon'ble Member said, “The customs department should be made more sophisticated and its personnel should have more training. The policy of transfer of customs officers should be followed meticulously to make the customs transactions more transparent”.
Ingenuity of the business community:
Yet another Member said, “The ingenuity of the business community and the corporate sector has gone up so much that they want to hoodwink the law somehow or the other, by utilizing their genius. If it were to be a moral aspect or the ethical aspect, and legitimately if the business community or the person who is engaged in imports were to pay the customs duty as per the customs duty and tax rules, all this is not necessary. But unfortunately, human intelligence is being put to use more for the evil than for the good. Always, a businessman tries to avoid as much tax – whether it is customs duty or income tax or the others – as possible; but if the corporate sector or the business community were fair, there is no need for us to bring in so many legislations time and again.
I request the business community and the corporate sector also to be reasonable, to maintain ethics and values so that at least what is provided in the Act is adhered to. If the officer were to put the assessment wrongly, then I can understand. But they want to utilize each and every word, the technical aspect, the meaning of it; they interpret it and then try to avoid the tax”.
Customs Corruption under the table:
A Member wanted severe action to be taken against the officers who are indulging in corruption. Whenever we go to the airport, we see ‘customs duty point'. Next to that, we see ‘negotiation point' also. It is not ‘on the table' negotiation; but it is ‘under the table' negotiation. We have to curb corruption in the Customs Department and the Central Excise Department. For this purpose, all the vacancies that exist in the Customs Department and the Central Excise Department should be filled up immediately. Additional posts must be created for this purpose.
The Minister of State in The Ministry Of Finance (Namo Narain Meena) replied to the debate and said that taxation laws require action to be taken for recovery of duty not paid correctly. On 18 th February, 2011, hon. Supreme Court in the case of Sayed Ali and Anr held that only such a Customs Officer who has been assigned the specific functions of assessment and re-assessment of duty in the jurisdictional area where the import concerned has been affected, by either the Board or the Commissioner of Customs, in terms of Section 2 (34) of the Act is competent to issue notice under Section 28 of the Act. However, Customs Officers of DRI, etc. were not specifically assigned the assessment powers given to jurisdictional Customs Officers. Hence, on the basis of the Supreme Court order, on this technical ground, a large number of notices would get invalidated thereby adversely impacting huge revenue. For the future, the Government has taken remedial steps with effect from 6th July, 2011 by issue of a notification. The Customs (Amendment and Validation) Bill, 2011 will validate notices issued earlier.
The minister also answered several questions raised by the members:
Computer network of customs either slow or not working. To some extent, I agree with the hon. Member and we have upgraded our system. This is largely due to the teething problems that we are having but at the same time, we have round the clock helpline to assist the customers.
Special Valuation Branch: The SVB checks against under valuation so that correct duty is charged. The questionnaire is a transparent method to get information if importers do not have any information. It is not mandatory. The functioning of SVB is already under review. It is being examined as to whether it can be brought under one Directorate for a more professional approach.
Baggage allowance of Rs. 25,000 is less: This is reviewed regularly.
The customs laws are cumbersome and clearance takes too much of time: In this year's Budget, we have introduced self-assessment of customs duty by importers and exporters. Further, almost 60 per cent goods are cleared without examination, based on self-assessment. At airports, over 98 per cent passengers go through Green Channel without customs intervention.
Vacancies in the Department: 'Yes', there are a few vacancies and the cadre restructuring is under consideration.
The Minister concluded, “In the end, I would like to say that this House will appreciate that no one is disputing that proper customs duty must be paid. The Government only wants that those who have not paid duty correctly should not benefit from a technicality”.