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 16" August, 2021
To,
All Principal Chief Commissioners/Chief Commissioners of Customs
All Principal Chief Commissioners/Chief Commissioners of Customs (Prev.)
All Principal Chief Commissioners/Chief Commissioners of GST & Customs
All Principal Directors General/Directors General under CBIC
Sir/Madam,
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.
Be 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.
de In order to rectify the situation and facilitate legitimate trade impacted by the pandemic,
Circular 38/2016-Customs is further amended as below:
(i) entry at serial no. 5(c) of Table at paragraph 3 of the said Circular 38/2016-Customs
is substituted with a new entry 5(c) as below:
5 (c) |Cases related to verification of 100% | In terms of Rule 6(1)(a) of
signatures and seals under CAROTAR,2020 (notification no.
FTAs, where there is a doubt regarding 81/2020-Customs (NT), dated
genuineness or authenticity of the 21.08.2020)
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
(ii) after entry at serial no. 5(c) of Table at paragraph 3 of the said Circular 38/2016-
Customs, a new entry 5(d) is inserted as below:
5 (d) |Cases covered under Circular no. | 100% (i) Where there is a reasonable
18/2020-Customs dated 11.04.2020 belief that the case involves
where original hard copy of certificate misdeclaration of origin or value
of origin (COO) under FTA has not addition.
been submitted or only digitally signed
copy or unsigned copy of COO is (ii) In other cases, the Principal
submitted Commissioner of Customs or
Commissioner of Customs, after
considering the facts and
circumstances of the case and for
reasons to be recorded in writing,
may reduce the amount of security
or remove it completely, as deemed
fit, for such provisional
assessments.
(iii) in view of insertion of the new entry 5(d), appropriate amendment is also made in
entry at serial no. 1, in its column 3, so as to make the security requirement of 5(d)(i)
above applicable to AEO - T3, as below:
1 Imports by Authorised Economic 0% In terms of Circular no. 33/2016-
Operators (AEO - T3) Customs dated 22nd July 2016, as
(including} amended.
cases at
serial no.
4 to 6(b),
except
5(a), 5(c)
and
5(d)().
8. The above amendments in Circular no. 38/2016-Customs de-link the cases covered under
Circular 18/2020-Customs from entry at serial no. 5(c) and create a separate entry 5(d) for
handling such cases with sufficient flexibility for Principal Commissioner/Commissioner to
reduce the amount of security required under provisional assessments in suitable cases.
9. The new entry 5(d) is applicable to all fresh import consignments and those pending
Customs clearances, including those pending finalisation of assessment under Section 18 of the
Customs Act on the date of issuance of this Circular.
10. With the above amendments in Circular 38/2016-Customs, the Instruction No. 04/2020-
Customs dated 04.05.2020 becomes redundant and is hereby rescinded.
11. Difficulties faced, if any, in implementing this Circular may be brought to the notice of
the Board.
12. Hindi version follows.
Yours faithfully
7
\
Nam
(Neetisha Verma)
OSD (ICD)