Circular No. 19/2021-Customs
F. No. 15021/10/2020-ICD-CBEC
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
North Block, New Delhi
Dated 16th August, 2021
All Principal Chief Commissioners/Chief Commissioners of Customs
All Principal Chief Commissioners/Chief Commissioners of Customs (Prey.)
All Principal Chief Commissioners/Chief Commissioners of GST & Customs
All Principal Directors General/Directors General under CBIC
Subject: Amendment in Circular No. 38/2016-Customs with the insertion of a new entry 5(d) to enable Pr. Commissioners/Commissioners of Customs to decide the amount of security required in certain cases of provisional assessments – reg.
Reference is drawn to Board’s Circular no. 38/2016-Customs dated 22.08.2016, which provides guidelines for provisional assessment under section 18 of the Customs Act 1962.
2. Reference is also drawn to Circular no. 18/2020-Customs dated 11.04.2020, which allows provisional clearance of goods imported under India’s Trade Agreements without original Certificate of Origin (CoO) in certain situations. The said Circular 18/2020-Customs was issued to mitigate the difficulties faced by importers in producing original CoO at the time of import clearance owing to COVID-19 pandemic. It provides that the import consignments, where preferential treatment of goods under a Free Trade Agreement has been claimed but the original hard copy of CoO has not been submitted or only digitally signed copy or unsigned copy of CoO is submitted, may be assessed and cleared provisionally in terms of section 18 of the Customs Act, 1962; the final assessment may be done subsequently on submission of the original CoO by the importer; and the revenue may be secured through undertaking and appropriate security.
3. Further, vide Instruction No. 04/2020-Customs dated 04.05.2020, the scope of the facilitation extended by the above Circular no. 18/2020-Customs was aligned to the requirements of extant Circular No. 38/2016-Customs governing guidelines for provisional assessments under Section 18 of the Customs Act. It was stated that the cases covered by Circular no. 18/2020-Customs may be treated at par with category listed at serial no. 5(c) of the Circular 38/2016-Customs, provided that the matter is not covered under 5(a), wherein there is reasonable belief that it involves mis-declaration of origin/value addition. The aforesaid serial no. 5(c) under then existing Circular 38/2016-Customs provided flexibility to the Principal Commissioner/Commissioner of Customs to decide the security/BG amount.
4. Subsequently, vide Circular No. 42/2020-Customs dated 29.09.2020 certain entries in the Circular No. 38/2016-Customs were substituted with new entries primarily to reflect and align the requirements of the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 (CAROTAR) issued on 21.08.2020. In the amended Circular 38/2016-Customs, as it exists today, there is requirement of 100% security at serial no. 5(c) and no flexibility is available with Principal Commissioner/ Commissioner.
5. The above amendment dated 29.09.2020 in Circular no. 38/2016-Customs effectively nullified powers of field officers in exercising discretion on the subject matter as the entry 5 (c) now stood irrevocably linked to the provisions of Rule 6(1)(a) of CAROTAR 2020 which is reproduced below for ease of reference -
“6. Verification request. - (1) The proper officer may, during the course of customs clearance or thereafter. request for verification of certificate of origin from Verification Authority where:
(a) there is a doubt regarding genuineness or authenticity of the certificate of origin for reasons such as mismatch of signatures or seal when compared with specimens of seals and signatures received from the exporting country in terms of the trade agreement;”
6. As elucidated above, the aforesaid amendment done in September 2020 had the unintended consequence of negating the flexibility extended earlier in the year vide Circular 18/2020-Customs in view of the exceptional circumstances created by the ongoing Covid-19 pandemic.
7. In order to rectify the situation and facilitate legitimate trade impacted by the pandemic, Circular 38/2016-Customs is further amended as below:
Please refer to the attached file for full notification.