Circular No. 44/2020-Customs

F.No.394/86/2020-Cus(AS)
Government of India
Ministry of Finance
Department of Revenue
(Central Board of Indirect Taxes and Customs)

*****

Room 512, Hudco Vishala Building New Delhi,
dated the 08th October, 2020

To,

All Principal Chief Commissioner/ Chief Commissioner of Customs,
All Principal Chief Commissioner/ Chief Commissioner of Customs (P),
All Principal Chief Commissioner/ Chief Commissioner of Customs and CGST,
Webmaster, CBIC.

Madam/Sir,

Subject: Procedure for inspection of ICDs/CFSs/AFSs -reg.

Kind reference is drawn to Audit Report 16 of 2018 on Working of Inland Container Depots (ICDs) and Container Freight Stations (CFSs) wherein several deficiencies have been pointed out by the Audit. Major deficiencies pointed out by the Audit are related to land area requirement, infrastructure, specified demarcated areas for imported and export goods and fumigation, adequate space for storing hazardous goods, monitoring of the movement of export and import cargo, handling of un-cleared cargo, execution of Bond, Bank Guarantee and Insurance and theft and pilferage of cargo.

2. Further the Audit, among other things, observed that there is lack of internal control including internal audit and inspection. Audit has also observed that corrective action on systemic deficiencies should not be restricted to the instances commented in audit report and all the field formations may be sensitized about the system deficiencies.

3. The Board vide Notification No. 26/2009-Customs (N.T.) dated 17.3.2009 notified Handling of Cargo in Customs Area Regulations 2009 to regulate the functioning of Customs Cargo Service Providers including custodians of ICDs/CFSs. Further, Circular 13/2009 dated 23.03.2009, Circular No. 04/2011 dated 10.01.2011, Circular No. 40/2016 dated 26.08.2016 and Circular No. 19/2018 dated 03.12.2018 were also issued to streamline various procedures relating to ICDs/CFSs. Further, D.0 letter No. 434/15/2017-Cus.IV dated 16.08.2019 was issued by Member (Customs) wherein, he has inter alia, stated that it is necessary that each ICD/CFS is closely monitored by way of some sort of audit /visits to ensure that the performance of ICDs/CFSs is of desired standards and requested to put a system in place and take necessary action in a time bound manner. Chief Commissioners were requested to take stock of the issues for all 1CDs/CFSs under their jurisdiction, draw a plan for time bound actions and submit an action taken report by 30th November, 2019. However, the compliance reports in response to the above letter arc not complete in many zones. Apparently, many other field formations are not checking the performance of ICDs and CFSs in their jurisdiction in a systemic way on regular basis.

4. Therefore, Board has decided to put in place a proper system for regular inspection for ICDs/CFSs. Such a system would ensure better functioning of ICDs/CFSs in future and would be of great benefit to the importers and exporters using these facilities. Periodical inspections and remedial actions would also avoid these kinds of audit objections. It will bring accountability, standardization and better facility for cross-border trading and in turn improve ease of doing business.

5. Accordingly, the Board directs that

(i) The jurisdictional Commissioner at the beginning of every financial year shall chalk out an action plan to conduct inspection of ICDs/CFSs in their jurisdiction, by an officer of the rank of Deputy/ Assistant Commissioner or above (who is not in-charge of such ICD/CFS) once every financial year probably in the first quarter of the financial year.

(ii) A report on the inspection conducted shall be submitted to the jurisdictional Commissioner of Customs with copy to Chief Commissioner concerned in the proforma given as per Annexure.

(iii) The first inspection, wherever required, shall be completed by 31.12.2020.

(iv) The jurisdictional Commissioner of Customs upon receipt of the inspection report shall take remedial action wherever deficiencies are noticed including penal action on the defaulting ICDs/CFSs.

(v) Normally the operations and records in respect of the previous financial year shall be covered in the inspection.

(vi) For the ICDs/CFSs, which have not been inspected/audited so far, the initial inspection shall be for the period of last five years or from the date of commencement whichever is earlier.

(vii) The Directorate General of Performance Management during the inspections of field commissionerates, done by them shall also examine the records relating to the inspections of ICDs/CFSs

6. All the field formation and stakeholders may be suitably sensitized about the circular.

7. Difficulty, if any, faced in the implementation may please be brought to the notice of the Board.

Encl: As above

Amit Singh Chandel
OSD (Anti Smuggling)

Download PROFORMA FOR INSPECTION OF ICD/CFS/AFS

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