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Under sub-section
(d) of section 111 and sub-section (d) of Section 113, any goods which
are imported or attempted to be imported and exported or attempted to be
exported, contrary to any prohibition imposed by or under the Customs
Act or any other law for the time being in force shall be liable to
confiscation. Section 112 of the Customs Act provides for penalty for
improper importation and Section 114 of the Customs Act provides for
penalty for attempt to export goods improperly. In respect of prohibited
goods the Adjudicating Officer may impose penalty upto five times the
value of the goods. It is, therefore, absolutely necessary for the trade
to know what are the prohibitions or restrictions in force before they
contemplate to import or export any goods.
The terms "Prohibited Goods" have been defined in sub-section
33 of Section 2 of the Customs Act as meaning "any goods the import
or export of which is subject to any prohibition under the Customs Act
or any other law for the time being in force".
Under section 11 of the Customs Act, the Central Government has the
power to issue Notification under which export or import of any goods
can be declared as prohibited. The prohibition can either be absolute or
conditional. The specified purposes for which a notification under
section 11 can be issued are maintenance of the security of India,
prevention and shortage of goods in the country, conservation of Foreign
Exchange, safeguarding balance of payments etc. The Central Govt. has
issued many notifications to prohibit import of sensitive goods such as
coins, obscene books, printed waste paper containing pages of any holy
books, armored guard, fictitious stamps, explosives, narcotic drugs,
rock salt, saccharine, etc.
Under Export and Import Policy, laid down by the DGFT, in the Ministry
of Commerce, certain goods are placed under restricted categories for
import and export. Under section 3 and 5 of the Foreign Trade
(Development and Regulation) Act, 1992, the Central Government can make
provisions for prohibiting, restricting or otherwise regulating the
import of export of the goods. As for example, import of second hand
goods and second hand capital goods is restricted. Some of the goods are
absolutely prohibited for import and export whereas some goods can be
imported or exported against a licence. For example export of human
skeleton is absolutely prohibited whereas export of cattle is allowed
against an export licence. Another example is provided by Notification
No.44(RE-2000) 1997 dated 24.11.2000 in terms of which all packaged
products which are subject to provisions of the Standards of Weights and
Measures (Packaged Commodities) Rules, 1997, when produced/packed/sold
in domestic market, shall be subject to compliance of all the provisions
of the said Rules, when imported into India. All packaged commodities
imported into India shall carry the name and address of the importer,
net quantity in terms of standard unit of weights measures, month and
year of packing and maximum retail sale price including other taxes,
local or otherwise. In case any of the conditions is not fulfilled, the
import of packaged products shall be held as prohibited, rendering such
goods liable to confiscation.
Another restriction under the aforesaid Notification issued by the
Ministry of Commerce is that the import of a large number of products,
presently numbering 133, are required to comply with the mandatory
Indian Quality Standards (IQS) and for this purpose exporters of these
products to India are required to register themselves with Bureau of
Indian Standards (BIS). Non-fulfillment of the above requirement shall
render such goods prohibited for import.
Import and export of some specified goods may be restricted/prohibited
under other laws such as Environment Protection Act, Wild Life Act,
Indian Trade and Merchandise Marks Act, Arms Act, etc. Prohibition under
those acts will also apply to the penal provisions of the Customs Act,
rendering such goods liable to confiscation under section 111(d) of the
Customs Act (for import) and 113 (d) of the Customs Act (for export).
Any Importer or Exporter for being knowingly concerned in any
fraudulent evasion or attempted evasion of any prohibition under the
Customs Act or any other law for the time being in force in respect to
any import or export of goods, shall be liable to punishment with
imprisonment for a maximum term of three years (seven years in respect
of notified goods) under section 135 of the Customs Act. Any person who
is reasonably believed to be guilty of an offence, punishable under
section 135, may be arrested under the provisions of section 104 of the
Customs Act.
Keeping in view the above penal provisions in the Customs Act to deal
with any deliberate evasion of prohibition/restriction of import of
export of specified goods, it is advisable for the Trade to be well
conversant with the provisions of EXIM Policy, the Customs Act, as also
other allied Acts. They must make sure that before any imports are
effected or export planned, they are aware of any
prohibition/restrictions and requirements subject to which alone goods
can be imported/exported, so that they do not get penalised and goods do
not get involved in confiscation etc. proceedings at the hands of
Customs authorities.
Principles of Restriction
DGFT may, through a notification, adopt and enforce any measure
necessary for:-
- Protection of public morals.
- Protection of human, animal or
plant life or health.
- Protection of patents, trademarks
and copyrights and the prevention of deceptive practices.
- Prevention of prison labour.
- Protection of national treasures
of artistic, historic or archaeological value.
- Conservation of exhaustible natural
resources.
- Protection of trade of fissionable
material or material from which they are derived; and
- Prevention of traffic in arms,
ammunition and implements of war.
Terms and Conditions of a
Licence / Certificate / Permission
Every licence/certificate/permission shall be valid for the period of
validity specified in the licence/ certificate/ permission and shall
contain such terms and conditions as may be specified by the licensing
authority which may include:
- The quantity, description and value
of the goods;
- Actual User condition;
- Export obligation;
- The value addition to be achieved;
and
- The minimum export price.
Licence / Certificate /
Permission not a Right
No person may claim a licence/certificate/ permission as a right and
the Director General of Foreign Trade or the licensing authority shall
have the power to refuse to grant or renew a
licence/certificate/permission in accordance with the provisions of the
Act and the Rules made thereunder.
Penalty
If a licence/certificate/permission holder violates any condition of
the licence/certificate/ permission or fails to fulfil the export
obligation, he shall be liable for action in accordance with the Act,
the Rules and Orders made there under, the Policy and any other law for
the time being in force.
Registration-cum-Membership Certificate
Any person, applying for (i) a licence/ certificate/ permission to
import/ export, [except items listed as restricted items in ITC(HS)] or
(ii) any other benefit or concession under this policy shall be required
to furnish Registration-cum-Membership Certificate (RCMC) granted by the
competent authority in accordance with the procedure specified in the
Handbook (Vol.1) unless specifically exempted under the Policy.
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