MONDAY EXPORT CLASS With DR GODWIN OYEFESO (SUCCESSEDGE EXPORTERS NETWORK)

MONDAY EXPORT CLASS

With

DR GODWIN OYEFESO (SUCCESSEDGE EXPORTERS NETWORK)

Topic: CUSTOM CLEARANCE OF EXPORT CARGO (Part 3)

COMPUTERISED CUSTOMS CLEARANCE PROCEDURE—SHIPMENT BY SEA

Normally, Clearing and Forwarding Agents handle customs clearance as they are specialised in the line of activity and familiar with the changing documentary requirements as well as clearing procedures.

Customs clearance procedure in respect of shipment by sea, when processing of documents is computerised is as under:

1. Registration for Business Identification Number

Exporters have to obtain PAN based Business Identification Number (BIN) from the Directorate General of Foreign Trade, prior to filing for customs clearance of export goods. Under the EDI System, PAN based BIN is received from the DGFT online.

Purpose of BIN is to bring a common identification number to all persons dealing with various regulatory agencies, such as Central Excise and Customs Department, Income Tax Department, Offices of Director General of Foreign Trade etc. All the assessees would be, considerably, benefited if they have to obtain just one identification number for use by various Government agencies. The background for deciding on PAN based Business Identification Number is given at the end of the chapter.

Exporters are also required to obtain authorised foreign exchange dealer code (through which export proceeds are expected to be realised) and open a current account in the designated bank for credit of any drawback incentive.

2. Electronic Filing of Shipping Bill

Exporters/CHAs are required to register their Import Export Codes, Customs House Agent Licence Nos., and the Bank A/c No. (for credit of Drawback amount) in the Customs Computer Systems, before an EDI Shipping Bill is filed.

Exporters/CHAs would be required to submit the following documents at the Data Entry Centre of the Customs Station (Service Centre):

A declaration in the specified format (Applicable annexure A or B);
SDF(Statutory declaration form) declaration;
Quota/Inspection certificate and
Drawback/DEEC/DFRC/DEPB Declarations , as applicable

The formats should be duly completed in all respects and should be signed by the exporter or his authorised CHA. Forms, which are incomplete or unsigned, are not accepted for data entry.

Initially, data entry for Shipping Bills is allowed to be made only at Service Centre. After exporters/CHAs become conversant with the EDI procedures, option of Remote EDI System would also be made available. In the Remote EDI System (RES), Exporters/CHAs can electronically file their shipping bills from their offices.

3. Shipping Bill

Under manual system, Shipping bill is submitted by exporter/CHA. Under computerised system, exporter is not required to file shipping bill. It is rather generated through computer system. The information is filled in the applicable two forms- Annexure A and B. If exports are duty free goods, Annexure A is filled in. If exports are under claim of duty drawback (duty is paid first and refunded after shipment), Annexure B is to be filled in. The applicable annexure is submitted at Service Centre- Data entry Centre of Customs Station.

Once the data is fed into the computer, a checklist is generated. Checklist is verified by the exporter/CHA and if the data is in order, they sign in token of approval. After correct data is entered into the system, Shipping Bill is processed, automatically, by the System on the basis of declaration made by Exporter. Then, the service centre generates shipping bill for noting and further processing. Service centre assigns a number to the shipping bill, which is endorsed on the printed checklist and returned to exporter/CHA.

The shipping bill so generated is used as the basic document for issue of “Let Export Order”, later. The Exporter/CHA at Service Center can check status of the Shipping Bill. They should also check whether any query has been raised in respect of their Shipping Bill. In case of any query, they should file a reply to the query through Service Centre. It is important to note that the shipping Bill is only generated in the computer and no print out is taken at this stage. Endorsements are not made manually until ‘Let Export Order’ stage but entered on Shipping Bill, in computer system. Computer print out is taken only after the issuance of “Let Export Order”.

The Assistant Commissioner assesses the following categories of Shipping Bill (Export):

Shipping Bills where the FOB value is more than 10 Lakhs.
Shipping Bills relating to free trade samples whose value is more than 20,000.
Drawback Shipping bills where drawback amount is more than 1 Lakh.

4. Checking of Documents at Customs House

Shipping bills involving foreign exchange are sent to the Appraisement section. In appraisement section, Dutiable and Drawback Shipping Bills are allotted to appraisers for scrutiny and examination Free Shipping Bills are sent to examiners.
Verification of Shipping Bill is made to ascertain whether quantity and value of goods are as per export order/letter of Input-output norms (wherever applicable) and details of drawback rate are checked by the inspector and superintendent of customs. Further, verification is also made in respect of the compliance of formalities as regards Exchange Control, Licensing, Pre-Shipment Inspection, if applicable, and other statutory requirements.
The customs appraiser/examiner assesses value of goods. The value of goods assessed by the appraiser is considered in all future transactions, especially for settlement of incentive
After verification, the customs appraiser/examiner feeds “Examination Order” on the Shipping Bill into the system. The examination order determines the extent of physical examination of goods at Docks and assigns the official to conduct This “order” enables the Dock Appraiser to conduct physical examination of the goods in the docks. The principal appraiser also countersigns the “examination order”.
The CHA, in turn, can enquire about the status of his documents from his own He can view any memo or objections on his documents as they are posted in the system.
The shipping bill number is put on the GR/SDF SDF form is used in place of GR form if the customs operations are computerised at that customs centre.
Where export duty is to be paid, exporter/agent has to pay at Cash & Accounts section of the

5. Physical Examination of Export Cargo by Dock Appraiser

Export goods are transported into the shed, after completing port
The exporter/agent presents the following documents to Dock Appraiser along with check
- Packing List
- Invoice
- ARE-Forms
- Agmark Certificate, if applicable
The shed Appraiser/Examiner conducts physical examination of goods as per the examination
If the examination is satisfactory, the shed Appraiser/Examiner records the report of physical examination on the shipping bill through the computer
The Appraiser also signs and stamps the original & duplicate copies of SDF. He returns exporter copy and second copy of SDF to exporter or his
In case of any variation between the declaration in the Shipping Bill and physical documents/examination report, the Appraiser may mark Electronic Shipping Bill to the Assistant Commissioner/Deputy Commissioner of Customs (Exports). He may also forward physical documents to Assistant Commissioner/Deputy Commissioner of Customs (Exports) and instruct the exporter or his agent to meet the Assistant Commissioner/Deputy Commissioner of Customs (Exports) for settlement of
Documents once entered and submitted are then reviewed by different officers of the Custom House at various stages of processing and final clearance is accorded on the computer system after all formalities are over for physical examination of goods at the ICES keeps track of officers who have handled the documents at various stages of processing. The trail of processing cycle is available to superior officers at any time.
In case, exporter agrees with the views of Department, the Shipping Bill is processed Where, however, the exporter disputes the view of the Department, principles of natural justice are required to be followed, before finalisation of the issue.

(6) Drawl of Sample

Where the Appraiser Dock (export) orders for samples to be drawn and tested, the Customs Officer may proceed to draw two samples from the consignment and enter particulars thereof. There is no separate register for recording dates of samples drawn. Three copies of test memo are prepared and signed by the Customs Officer and Appraising Officer on behalf of Customs and the exporter or his agent. The disposal of three test memo copies is as follows:

Original—to be sent along with the sample to the test
Duplicate—Customs copy to be retained with the second
Triplicate—Exporter’s

The Assistant Commissioner/Deputy Commissioner if he considers necessary, may also order for sample to be drawn for purpose other than testing such as visual inspection and verification of description, market value inquiry, etc.

Results of testing agency are fed in the ICES-Export System.

(7) Generation of Shipping Bills

After examination of goods and scrutiny of documents, if every thing is found to be in order, the Appraiser feeds “Let Export Order” into system on the Shipping Bill. Then, Shipping Bill is generated by the system in two copies i.e., one Customs copy and one exporter’s
After obtaining the print out, the appraiser obtains the signatures of representative of the CHA on both the copies of shipping It is necessary as the shipping bill has been computer generated and does not bind exporter, in the absence of signature. The name and Licence No. of the CHA should be clearly mentioned below his signature. The Appraiser thereafter signs & stamps both the copies of the shipping bill at the specified place.
In case of discrepancy, the matter is reported to the Assistant Collector of Customs for further instructions/decision.
Exporter gets Export Promotion Copy and Exporter’s copy of shipping bill, duly signed by the competent
Customs copy of Shipping bill and original copy of SDF are forwarded by the Appraiser to Export Department of Customs Original copy of SDF is sent to RBI.

8. Loading of Goods under Supervision of Preventive Officer

Exporter submits his copy of Shipping Bill to the Preventive Officer of
Preventive Office makes an endorsement “Let Ship Order” on the exporter’s copy of Shipping
The above endorsement is an authorisation from customs to the shipping company to accept cargo on the vessel for
Goods are loaded under the supervision of Preventive
Preventive Officer supervises the loading of container general cargo into the vessel and gives “Shipped on Board” endorsement on the exporter’s copy of shipping

9. Mate’ Receipt

Shipping Company hands over mate’s receipt to
Exporter collects the mate’s receipt after paying dues to

10. Post Loading Certification

Exporter presents mate’s receipt to Preventive
Preventive Officer, earlier, recorded certificate of shipment on exporter’s copy of shipping Now, he records the fact of shipment on other copies of shipping bill and on copies of ARE-1 and returns them to exporter/CHA.

11. Collection of Bill of Lading

Exporter/CHA submits the mate’s receipt to the shipping company and requests it to issue the Bill of Lading (Negotiable and non-negotiable copies).

Port Procedures

Export cargo can be brought into the port after the ship has been allotted a berth and declared for loading. Shippers have to pay the port charges dependent on the procedure followed by each port. Some ports collect port charges before loading while Bombay port offers the facility of collecting port charges, after loading.

Carting Permission: Before bringing cargo to the shipment shed, it is necessary to take “Carting permission” from superintendent of the shed and agent of the shipping
Vehicle Ticket: At the port gate, while entering with cargo, shipper has to show carting permission and vehicle ticket, in duplicate, to the Gate Gate inspector examines goods and documents to ensure permitted goods in the documents only are entering into port. The packages, bundles, cases mentioned in the vehicle ticket are tallied with those in the vehicles before goods are allowed in. Necessary entry is made in the registers in respect of cargo passed through the gate.
Mate’s Receipt: Soon after goods are cleared by customs, exporter/CHA obtains “Let Ship Order” from the Preventive officer of customs on the exporter’s copy of Shipping The master of the vessel allows loading of cargo on board, in consultation with Preventive Officer of Customs. The master of the vessel issues mate’s receipt to Port authorities in respect of shipment taken on board, indicating the condition of goods at the time of receipt. After payment of port dues, shipper collects the mate’s receipt. Mate’s receipt is an important document as it is to be exchanged to Bill of Lading. So, shipper has to collect it from the superintendent of the shed, immediately, soon after it is received to avoid the delay and problems in negotiation.
Bill of Lading: Shipper collects blank copies of Bill of Lading from the shipping company and prepares two/three negotiable and required non-negotiable copies of Bill of Shipping Company issues Bill of Lading to the shipper in exchange of mate’s receipt. Bill of Lading may be marked “Freight Paid” if shipper has paid freight and “Freight to Pay” when freight is to be collected from importer. Shipping Company incorporates those clauses that are appearing in the mate’s receipt, before Bill of Lading is issued.

TO BE CONTINUED……

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Till then, you will succeed