JUNE 12,2020

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 (Board) in the field of customs in the recent years was presented. It was explained how these initiatives have catapulted India from its dismal rank at 142 in 2014 to an impressive 63 in 2019 on the World Bank's 'Ease of doing business' Index. In Part-II, the salient aspects of 'Faceless Assessment' were discussed. In this Part, the structure being put in place by the Board for the purpose of Faceless Assessment is discussed.

B. Laying down the platform for the future:

I. Nomination of 'Nodal Commissioners':

One of the main objectives of Faceless Assessment is to ensure speedy and uniform assessment practices. With this aim in mind, the Board has, in Phase I of the roll-out, nominated the following officers as 'Nodal Commissioners' in Bengaluru and Chennai Customs Zone viz.

- Principal Commissioner/Commissioner of Customs, Bengaluru City, Bengaluru;

- Principal Commissioner/Commissioner of Customs, Airport and Air Cargo Complex, Bengaluru;

- Principal Commissioner/Commissioner of Customs (II), Chennai;

- Principal Commissioner/Commissioner of Customs (VII), Air Cargo Complex, Chennai.

These Nodal Commissioners are appointed for the purpose of administratively monitoring the assessment practice in respect of imported goods which are assigned in the Customs Automated System to the officers of the Faceless Assessment Groups in Bengaluru and Chennai, for items primarily falling under Chapter 84 and 85 of the CTA. As noted by the Board, this arrangement would pave the way for the establishment of the 'National Assessment Commissionerates' ('NACs').

II. National Assessment Commissionerates - An idea whose time has come

The NACs are expected to be put in place as and when the Faceless Assessment is rolled out in phases across the country. The main mandate of the NACs would be to examine the assessment practices of imported articles across Customs stations and suggest measures to bring about uniformity and enhanced quality of assessments. Considering the vital role envisaged by the Board for the NACs, it will be worthwhile to understand the objectives behind setting up of the NACs and the functions expected by them.

The Board, in February, 2020, had released a 'Concept Paper on Faceless e-Assessment' inviting the views/comments/suggestions from the trade/stakeholders on the Concept Paper. In the Concept Paper, the Board has discussed the idea of the establishment of the NACs and the functions expected to be performed by them. As stated in the Concept Paper, the existing (Customs) Commissionerates are proposed to be restructured into two distinct categories viz.

a. National Assessment Commissionerates (NACs)

b. Jurisdictional Port Commissionerates (JPCs)

All NACs would be "Virtual Commissionerates" comprising of the officers drawn from different customs locations, who are not physically co-located, but are virtually connected. Each NAC would have an all India jurisdiction and would comprise of a cluster of "Faceless Assessment Groups" which, in turn, would be headed by Assistant/Deputy Commissioner drawn at all India level drawn either from different Virtual Commissionerates or different JPCs. These 'Faceless Assessment Groups" would be legally empowered to undertake assessments pertaining to any Customs location in the country. (Refer notification no.50/2020-Cus-ibid). The officers of the NACs would be designated as AC/DC (NAC), JC/ADC (NAC) and Commissioner (NAC), whereas, the officers of JPC would be designated as AC/DC (JPC), JC/ADC (JPC) and Commissioner (JPC).

The following, amongst other, functions are envisaged to be performed by the NACs as outlined in the Concept Paper:

a. Monitor the assessment practice followed by the FAGs assigned to their NAC and ensure uniformity of classification, valuation, exemption benefit and enforcing import policy conditions

b. Ensure best practices, taking into account international practices, are followed by the FAGs in assessment

c. Study audit objections and take corrective action with regard to assessments, wherever necessary

d. Analyse the RMS facilitated Bills of entry pertaining to their industrial sector and advise the DGARM regarding interventions

e. Liaise with JPCs with regard to interpretation matters pertaining to classification, valuation, exemption and policy conditions

f. Interact with their sectoral trade and industry for inputs, as well as to resolve their issues

g. Function as a knowledge hub or repository for that particular industrial sector

h. Examine the orders/appellate orders in relation to assessment practices pertaining to commodities assigned to each NAC and provide inputs for reviewing of such orders so that uniformity of assessment orders could be upheld at legal forums.

i. Make suggestions for policy intervention, pertaining to the commodities specifically assigned to each NAC

j. Assist and guide NACIN in designing training modules and impart training to officers to promote sector specific specialization.

It may be pointed out here that the functions described at (a) to (h) above are already expected to be performed by the 'Nodal Commissioners' as stated in Para 5.1.1 of the captioned Instruction no. 09/2020-Customs. This is understandable as the 'Nodal Commissioners' may ultimately head the NACs, as and when set up.

The Board has proposed the establishment of total 12 (twelve) NACs across the country who are expected to be assigned the specified Chapters of the CTA for the purpose of Faceless e-Assessment as under -

It is interesting to note that the Faceless Assessment of bills of entry for goods imported primarily falling under Chapters 84 or 85 of the CTA are proposed to be assigned to NACs at Delhi Export (Delhi Zone) and Kandla (Ahmedabad Zone) respectively as outlined in the Concept Paper. However, in the 1 st Phase of the roll-out, the Faceless Assessment has been restricted to Chapters 84 and 85 of the CTA at Bengaluru and Chennai Zones. This may be based on the experience and expertise gained by these two zones during the pilot programme launched in August, 2019 at Chennai and later, at Delhi, Bengaluru, Gujarat and Vishakhapatnam.

III. Jurisdictional Port Commissionerates (JPCs) and their responsibilities:

The Concept Paper read with the captioned Instructions provide that the JPC having the jurisdiction over the Port of Import would continue to have the Port Assessment Group(s) to cater to all other functions pertaining to the bills of entry not marked to the Faceless Assessment Group by the Customs Automated System including the cases, referred by the Faceless Assessment Group to the Customs station of Import for any reason. In addition to PAG, JPC would continue to handle examination/inspection of goods and all other functions other than assessment. It is further clarified that the following matters shall continue to be dealt with by the designated proper officers of the port of import:

- The request for waiver of fee for late filing of bill of entry;

- The request in relation to S.49 of the CA (i.e. storage of imported goods in warehouse pending clearance or removal); and

- The request for permission under S.48 of the CA (i.e. procedure in case of goods not cleared, warehoused, or transshipped within thirty days after unloading).

From the above discussion, it is evident that the proposed restructuring of the Customs Commissionerates as contemplated by the Board in the Concept Paper in near future would revolutionize the entire functioning of the Commissionerates in relation to the assessment of the goods imported under various Chapters of the CTA. In fact, it will not be an exaggeration to say that the concept of 'Faceless Assessment' would change the 'face' of the Assessment Mechanism under the Customs!

In the next part, we shall discuss the procedure for assessment of bill of entry by Faceless Assessment Group as prescribed by the Board by its captioned Circular and Instructions.

[To be continued…]

[The views expressed are strictly personal.]