TIOL-DDT 370
25 05 2006
Wednesday

TIOL’s relentless battle to stop the smuggling that was going on through the ports of Vizag, Mumbai, Kakinada has at last resulted in the Board notifying these ports. Let us see the issue through earlier editions of DDT.

DDT 73 - 14-03-2005 asked, Hazira appointed a Customs port – What about Vizag?

As per section 7 of the Customs Act, the Board can appoint customs ports which alone shall be the Customs ports for imports and exports. By Notification No. 62/94-CUSTOMS (N.T.), dated the 21st November, 1994, several ports have been appointed. Now Hazira(Surat) is added to the list. But this notification No. 62/94 has been giving me the jitters for the past decade. Sl. No. 2 of the table to the Notification is as follows:-

TABLE

So the two very important ports in Andhra Pradesh, Visakhapatnam and Kakinada are not really full-fledged ports.

Kakinada is only for loading of export goods and unloading of only Petroleum products. And the largest operating port in India, Visakhapatnam, as per this notification is only for export. That is ‘no import’ from either port, except of course Petroleum products in Kakinada.  The notification specifies several ports like Kandla, Mangalore, Cochin, Nhava Seva, Paradeep, Madras. And all these ports are for the purposes of “Unloading of imported goods and loading of export goods or any class of such goods.”  Why then the difference for Visakhapatnam and Kakinada? Beats me!  Of course there is another Notification which is not yet rescinded - Notification No. 77 – cus dated 19.5.1973, which also appoints Visakhapatnam and Kakinada as ports but only for the shipment and loading of goods.

So, as per the law, imported goods cannot be unloaded at Visakhapatnam and imported goods other than Petroleum products cannot be unloaded at Kakinada.  But I have personal knowledge that imported goods are being unloaded at both these ports for any number of years. 

It is a genuine doubt that I have been carrying for the last decade or so as to why these ports are not declared as ports for unloading imported goods and how they have functioned as import ports all these years. In the beginning, I was afraid to ask; May be I would be considered a stupid fool to ask such elementary questions. Slowly I took courage and started asking people. My colleagues in Central Excise were of no help. I asked friends in Customs. They were more helpless. “It should be somewhere, search and thou shalt find”, said many. I searched and found – nothing. Can somebody help in solving this mystery?

DDT 99 - 21 04 2005 - Appointment of ports – Muldwarka. What about Vizag?

So, as per the law, imported goods cannot be unloaded at Visakhapatnam and imported goods other than Petroleum products cannot be unloaded at Kakinada. But I have personal knowledge that imported goods are being unloaded at both these ports for any number of years. There are a lot of illegal imports going on in Vizag and Kakinada as they are not really recognised ports and this is going on for ages!

DDT 171 - 03 08 2005

DDT has pointed out several times that in the notification, Vizag is notified as a port only for loading of export goods but NOT for import of goods, but the Vizag Customs earns nearly a thousand Crores from Revenue on import of goods, which is totally illegal as per the notification. We hope one day the Government will rectify this defect.

DDT 217 - 06 10 2005 - Smuggling in Visakhapatnam goes unchecked with the approval of the Government for more than a decade

But in the callous way that notifications are prepared, a very important lapse has gone undetected and in spite of DDT mentioning it several times, Board has not bothered to rectify the lapse. As per Sl. No 2(4) of Notification No. 62/94-Cus NT, Visakhapatnam is a port for Loading of export goods. Imports through Vizag port are illegal, as Vizag is not declared as a port for import. There is a Chief Commissioner sitting in Vizag assisted by a Commissioner in collecting Crores of Revenue on import duty when import itself through the port is illegal. Whenever the goods are unloaded from a vessel in Vizag port, the goods should be seized as Vizag is not a port for unloading of imported goods. As per Section 111(a) of the Customs Act, any goods imported by sea or air which are unloaded or attempted to be unloaded at any place other than a customs port or customs airport appointed under clause (a) of section 7 for the unloading of such good are liable for confiscation. As mentioned earlier Vizag is a port only for loading of export goods and not for unloading of imported goods. And so all the goods unloaded at Vizag port are liable for confiscation.

As per Section 2(39) of the Customs Act “smuggling”, is defined as any act or omission which will render (such) goods liable to confiscation under section 111 or section 113;

So the goods unloaded at Vizag port are smuggled goods and there is a whole Custom House there abetting this smuggling, which is going unabated for more than a decade. As per Section 112, any person who abets any act which makes the goods liable for confiscation is also liable to a penalty. So every officer of Vizag Customs who allows clearance of this illegally unloaded cargo in Vizag is liable for this penalty!

DDT 220 - 13 10 2005 - Customs ports appointed – What happens in Vizag?

Nagpur, Maharashtra; Vadinar, Gujarat appointed as Customs ports/airports. Port after port is being notified but nothing happens about Vizag which we had pointed out was not a port for import, but still imports take place there illegally. Even the Board’s detailed essay on Right To Information Act mentions about Unscrupulous parties do attempt to evade the duties leviable and bypass various prohibitions/restrictions in relation to imports by attempting to bring the goods into the country from places other than the notified ports/airports/Land Custom Stations. DDT’s report that Vizag is not a port authorised for import had indeed evoked some angry responses, but no attempt seems to be made to correct the lapse.

DDT 259 - 12 12 2005

Pune has been an airport only for unloading of certain goods now it is made an airport for unloading of all imported goods and loading of export goods. Will Vizag Customs do something like this?

DDT 286 - 19 01 2006 - Crew baggage can be loaded and unloaded at Panaji but what about other places?

And there is the classic example of Vizag and Kakinada which, we are not tired of pointing out, are illegal ports all because the Board does not bother to issue proper notifications!

DDT 303 - 15 02 2006 - Customs ports - Trombay

Trombay is declared as a port for unloading of coal. Should we again remind about Vizag?

DDT 306 - 20 02 2006 - Smuggling is not the dishum dishum of Mumbai films; it can simply be imports through Vizag port.

DDT 307 21 02 2006 - Rampant Smuggling in Mumbai too, not in Vizag alone

DDT had mentioned on several occasions that import through a port other than a port notified is an offence and falls within the definition of smuggling under the Customs Act. As Vizag has not been notified as a port for import all imports through Vizag amount to smuggling. Many officers of Vizag Customs are not exactly happy with DDT for highlighting the fact that every import through Vizag is smuggling. A very senior officer told us that this is sensational reporting, but why can’t they get a notification issued? DDT’s comments yesterday drew sharp comments from another officer of Vizag Customs. “Why can’t you write about the smuggling in Mumbai port?”, he asks us in apparent anguish, “by your logic, there is more smuggling in Mumbai – for Mumbai port is also not declared as a port under the Act”. Yes Sir, you are right. All imports in Mumbai also fall under the category of smuggling. Strangely the Board has no time for elementary basic concepts. Actually this is where it all started. My Bangalore lawyer friend told me, “There is lot of smuggling in Mumbai!”

Board has finally woken up and a notification is now issued to not only appoint Vizag and Kakinada for imports but also to add several ports. Is the problem solved? For the future, YES, but what about the past? Commissioners were very angry with us and accused us of sensationalised reporting when we said imports through these ports were illegal and not only the goods were liable for confiscation but officers abetting the smuggling were liable for penal action. Senior officers could not believe that such a major flaw could go on for years. Another officer asked us to look in the Old Sea Customs Act for a notification, as these ports are very old! But the Board’s amendment to the notifications proves us right. The fact that these ports were notified now proves that they were not till yesterday. Any way we are grateful that at least now reason has dawned on the powers that be to set right an error glaringly mocking at the law for the last 12 years. In fact we called up one of the Commissioners to congratulate him on finally being able to preside over a legal port!

NOTIFICATION NO. 52/2006 (N.T.)-Cus., Dated: May 23, 2006

Beware! Draconian laws are on their way – Taxation Laws (Amendment) Bill passed by Parliament

With the Taxation Laws (Amendment) Bill having been passed by both Houses of Parliament, it is only a matter of a few days before they become Law and what a Law? Officers can attach your property immediately after issuing a Show Cause Notice. Penalty for misdeclaration can be five times the value. Many in the Revenue departments have a feeling that they do not have enough powers; now they are given enough and more powers to misuse. TIOL had the honour of appearing before the Parliamentary Standing Committee that studied this Bill.

THE CESS LAWS (REPEALING AND AMENDING) BILL also cleared by Parliament.

DDT had covered this extensively  in TIOL-DDT 187 25 08 2005

nemo judex in re sua  - a man should not be a judge in his own cause.Right against bias

Two fundamental maxims of natural justice are

(i) audi alteram partem and

(ii) nemo judex in re sua.

Until Tomorrow with more DDT

Have a nice day.

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