No Outsourcing/Sub-letting/Transfer of Operations by CFS/ICD – CBEC wants Commissioners to take action
Board clarifies that 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 forklifts 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.
Board further clarifies 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.
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 Board wants them 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.
CBEC F.No.450 /105/2008- Cus.IV Dated the 25th July, 2008.