JUNE 10,2020

By Shailesh Sheth, Advocate & Founder, M/s. SPS LEGAL

IN Part-I, a bird's eye view of the major reforms undertaken by the CBIC in the field of Customs in the recent years was presented. It was explained how these initiatives have resulted into a quantum jump in the India's ranking from a dismissal 142 in 2014 to an impressive 63 in 2019 on the World Bank's 'Ease of doing business' Index. These reforms have paved the way for the phased roll out of the most critical reforms under the umbrella of the 'Turant Customs' viz. Faceless Assessment. In this Part, the salient aspects of 'Faceless Assessment' are discussed.

A. Putting the building blocks into place:

I . Constitution of the 'Faceless Assessment Groups':

The Board has recommended the establishment of two 'Faceless Assessment Groups', one for Chapter 84 and another for Chapter 85 of the CTA. These Groups would be independently set up at Bengaluru and Chennai Customs Zones and would comprise of the officers from both the zones. The Appraisers/ Superintendents and Assistant/Deputy Commissioners would be a part of these Groups and are expected to undertake the verification of assessment of any bill of entry that is assigned to the Group in the Customs Automated System. The Board has proposed the drawing of the officers from the existing appraising groups for Chapter 84 and 85 in each Customs station in each Zone to be made part of the Faceless Assessment Group. This is a pragmatic move as Chapters 84 and 85 of the CTA remain two of the most complex Chapters of the Tariff and numerous issues continue to surface with regard to the classification of the goods imported under these Chapters. The experience and expertise gained over the years by the existing Appraising Officers in each Zone to whom these Chapters are presently assigned would certainly help in making the Assessment process by the Faceless Assessment Group robust and less susceptible to the litigation.

Total number of the officers to be placed in each Group is left to the discretion of the Principal Chief Commissioners/Chief Commissioners of Customs of the selected zones who may determine the strength of the Group based on the volume of the bills of entry.

II. Constitution of the 'Port Assessment Group':

Port Assessment Groups (PAGs) are the Appraising Groups currently located in each port of import for verification of the assessment and other related functions. The PAGs are slated to handle all other functions pertaining to the bills of entry -

- which are not marked to the Faceless Assessment Group by the Customs Automated System; and

- that are referred by the Faceless Assessment Group to the port of import for any reason.

The 'port of import' is the Customs station of import of the goods where the importer has entered any bill of entry under S.46 or S.68 of the Customs Act, 1962 ('the CA') for home consumption or warehousing, as the case may be.

III. Turant Suvidha Kendras:

The Board has advised the setting up of the ' Turant Suvidha Kendras' ('TSK') in every Customs port of import. TSK would be a dedicated cell to be manned by the Customs Officers and would perform, amongst other functions, the functions and roles relating to:

a. Acceptance of Bond or Bank Guarantee;

b. Carrying out of any other verification that may be referred by the Faceless Assessment Groups;

c. Defacing of documents/permit licences, wherever required;

d. Debit of documents/permits/licences, wherever required; and

e. Such other functions as may be determined by the Commissioner to facilitate trade.

The basic objective behind setting up of the TSKs is to facilitate the trade in completing various formalities relating to the Customs assessment locally at the port of import even though the assessment may actually be done remotely or virtually by the proper officer physically located in another Customs station. It is heartening to note that the Board expects the officers manning the TSKs to be properly trained in their role as facilitators while ensuring legal compliance. This should be welcomed by the Trade as it can look forward to a 'facilitating role' - and not 'the obstructing role' - to be played by the TSKs. This hints at the possibility of the change in the mindset of the revenue officers entrusted with the tasks relating to the assessment.

It is also interesting to note that the Board has proposed the establishment of the TSKs in every Customs port of import. It is, therefore, evident that the TSKs will be a crucial cog in the 'assessment wheel' and are expected to ensure a smooth and friction-free running of the 'wheel' when pan India roll-out of 'Faceless Assessment' takes place by December 31, 2020, as proposed by the Board.

Readers may also note that at Bengaluru and Chennai, the 'Turant Suvidha Kendras' have already been set up and inaugurated on June 8, 2020.

IV. Empowerment of the 'Proper Officer' and Commissioner of Customs (Appeals):

It is obvious that the reform in the form of 'Faceless Assessment' cannot make headway unless the 'Proper Officers' are designated and empowered suitably to undertake the assessment of a bill of entry pertaining to any Customs station/port of import. This is essential as the 'Faceless Assessment', as stated above, is expected to be rolled out pan India by December 31, 2020.

The Board has accordingly issued a notification no. 50/2020-Customs (NT) on June 5, 2020 implementing Faceless Assessment across different Principal Chief Commissioner/Chief Commissioner zones. This notification is issued under S.4(1) [i.e. Appointment of officers of customs] read with S.5(1) [i.e. Powers of officers of customs] read with S.2(34) [i.e. defining 'proper officer'] of the CA. The notification enables an assessing officer i.e. the proper officer under S.17 [i.e. Assessment of duty] and S.18 [i.e. Provisional assessment of duty], who is physically located in a particular jurisdiction to assess a bill of entry pertaining to imports made at a different Customs station/port of import, whenever such a bill of entry has been assigned to him in the Customs Automated System . However, in the Phase-I of the roll-out, the applicability of this notification is being restricted only to the inter-linking of Bengaluru and Chennai Customs Zones for the purpose of 'Faceless Assessment'.

The Board, by its aforesaid Instructions, has instructed that effective from 8th June, 2020, the Customs Automated System would assign the non-facilitated bills of entry filed for imports of articles primarily falling under Chapters 84 and 85 of the CTA, at any of the Customs station/ports of import of Bengaluru and Chennai Customs Zones, to the officers of the Faceless Assessment Group concerned for assessment on a first-come-first basis. In other words, irrespective of whether the goods are imported at any Customs station/ port of import falling under the jurisdiction of Bengaluru or Chennai Customs Zone, the bills of entry pertaining to the said two Chapters will be marked by the Customs Automated System to the nominated Faceless Assessment Group for assessment.

For the uninitiated, it may be clarified that the concept of the categorization of a bill of entry into 'facilitated' or 'non-facilitated' stems from the 'Risk Management System' ('RMS') in Imports' which, along with the 'Accredited Clients Programme' ('ACP'), was implemented in 2005. The Commissioner of Customs, Chennai by its Public Notice no. 68/2006 dated 26.05.2006, has prescribed a detailed procedure for clearance of the Bills of Entry under the Indian Customs EDI System ('ICES') after the introduction of the RMS. Primarily, the 'facilitated bills of entry' are those self-assessed bills of entry which have been processed by the RMS for the evaluation of risk, if any, therein and the duty is calculated and challan is generated by ICES based on the declaration/self assessment by the importer. On the other hand, the 'non-facilitated Bills of Entry' are those bills of entry which are selected for further action on the following basis viz. -

- Selection by the RMS based on the risk parameters and also on a random basis;

- Selection on the basis of specific intelligence available;

- In case any non-compliance is noticed.

On a careful perusal of the Board's captioned Circular and the Instructions dated June 5, 2020, it appears that only ' non-facilitated' bills of entry filed for the import of goods primarily falling under Chapter 84 and 85 of the CTA will be assigned for the purpose of the 'Faceless Assessment'. This is quite significant as it would mean that every bill of entry filed for the import of goods under these two Chapters at Customs Stations/port of import of Bengaluru and Chennai Customs Zones will not automatically be subjected to the 'Faceless Assessment'. The Board, it appears, is moving slowly and cautiously in the implementation of this reform and it is a welcome strategy.

The Board has also simultaneously issued another notification no. 51/2020-Customs (NT) on June 5, 2020, whereby the jurisdictional Commissioners of Customs (Appeals) at Bengaluru and Chennai are empowered to take up the appeals filed in respect of Faceless Assessments pertaining to the imports made in their jurisdiction even though the assessing officer may be located at the other customs station.

To illustrate, Commissioner of Customs (Appeals) at Bengaluru would decide appeal filed for imports at Bengaluru though the assessing officer may be located at Chennai. This is a pragmatic and thoughtful move as it will ensure that the trade is not put to any hardship or inconvenience and can get their appeals heard locally, as at present.

[To Be Continued…]

[The views expressed are strictly personal.]