Customs Act, 1962 Section 2 — Definitions
Customs Act, 1962 · Definitions
Plain-English Explanation
Overview
Section 2 of the Customs Act, 1962, is the bedrock of the entire legislation, providing crucial definitions of terms used throughout the Act. Understanding these definitions is essential for accurately interpreting and applying the Customs Act to various import and export activities. This section ensures clarity and consistency in the administration of customs laws.
Who Does This Apply To?
The definitions in Section 2 apply to a wide range of stakeholders involved in import and export, including:
- Importers and Exporters
- Customs Officials and Adjudicating Authorities
- Clearing Agents and Customs Brokers
- Shipping Companies and Airlines
- Anyone involved in the handling, transportation, or storage of goods subject to customs duties.
How It Works
Section 2 provides definitions for various terms, clarifying their meaning within the context of the Customs Act, 1962. Here are some key definitions explained:
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Adjudicating Authority: This refers to any authority competent to pass an order or decision under the Customs Act, excluding the Board (CBIC), Commissioner (Appeals), and the Appellate Tribunal. They have the power to issue judgements under the Act.
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Assessment: This is the determination of the dutiability of goods and the amount of duty, tax, cess, or any other sum payable under the Customs Act, the Customs Tariff Act, or any other applicable law. It encompasses various factors:
- Tariff classification of goods
- Value of goods
- Exemptions or concessions
- Quantity, weight, or volume
- Origin of goods
- Any other factor affecting the payable amount. This also includes various types of assessments like self-assessment and re-assessment.
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Baggage: Includes unaccompanied baggage but excludes motor vehicles.
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Beneficial Owner: This is any person on whose behalf goods are being imported or exported, or who exercises effective control over the goods.
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Coastal Goods: Goods, other than imported goods, transported by vessel from one port in India to another.
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Customs Area: The area of a customs station or warehouse, including any area where imported or export goods are ordinarily kept before clearance by Customs Authorities.
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Dutiable Goods: Any goods that are chargeable to duty and on which duty has not been paid.
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Export: Taking goods out of India to a place outside India.
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Goods: A broad definition that includes vessels, aircrafts, vehicles, stores, baggage, currency, negotiable instruments, and any other kind of movable property.
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Import: Bringing goods into India from a place outside India.
Important Conditions & Exceptions
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Context matters: The opening line of Section 2 states that the definitions apply "unless the context otherwise requires," meaning the specific context of a provision may necessitate a different interpretation.
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Specific exclusions: Certain definitions, such as "baggage," contain explicit exclusions (motor vehicles).
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Inclusive definitions: Some definitions, like "goods," are broad and inclusive, potentially covering a wide range of items.
Practical Example
A company, "Sunshine Exports," intends to export garments valued at INR 5,00,000 to the United States. According to Section 2(19), these garments are considered "export goods" because they are to be taken out of India to a place outside India. "Sunshine Exports" therefore falls under the definition of "exporter" as defined in Section 2(20) since they are exporting goods. The assessment of the value and application of any export duties (if applicable) would fall under Section 2(2). If the company were to ship these goods from Mumbai to Chennai, those goods would fall under the definition of coastal goods under Section 2(7).
Key Amendments
No major amendments since enactment.
No case laws found for this provision yet.
Browse all case laws →Frequently Asked Questions
What constitutes an 'adjudicating authority' under Section 2(1) of the Customs Act, 1962, and who is specifically excluded?
An 'adjudicating authority' is any authority competent to pass an order or decision under the Customs Act, 1962. However, Section 2(1) explicitly excludes the Board (Central Board of Indirect Taxes and Customs), Commissioner (Appeals), and the Appellate Tribunal from being considered adjudicating authorities. This distinction is important for understanding the hierarchy and separation of powers within the customs administration.
How is 'assessment' defined under Section 2(2) of the Customs Act, 1962, and what factors are considered during assessment?
'Assessment' under Section 2(2) means determining the dutiability of goods and the amount of duty, tax, cess or other sum payable under the Customs Act or the Customs Tariff Act, 1975, or any other law. This determination takes into account factors like tariff classification, value of goods, applicable exemptions, quantity/weight/volume, origin of goods, and any other factor affecting the duty payable. This also encompasses various types of assessments like provisional, self, reassessment, and nil assessment.
What is the meaning of 'beneficial owner' as defined in Section 2(3A) of the Customs Act, 1962, and why is this definition significant?
A 'beneficial owner,' according to Section 2(3A), is any person on whose behalf goods are being imported or exported or who exercises effective control over the goods being imported or exported. This definition is significant because it aims to identify the true economic beneficiary of the import or export transaction, crucial for preventing money laundering, tax evasion, and other illicit activities, and ensuring compliance with trade regulations.
Under Section 2(6), who constitutes the 'Board' and what is its relevance in the context of the Customs Act, 1962?
The 'Board' refers to the Central Board of Indirect Taxes and Customs (CBIC), constituted under the Central Boards of Revenue Act, 1963, as stated in Section 2(6). The Board is the apex body responsible for the administration of customs, central excise, service tax, and GST, and plays a crucial role in policy formulation, supervision, and enforcement of customs laws and regulations in India. Its role is critical in governance and revenue collection.
What are 'coastal goods' as defined in Section 2(7) of the Customs Act, 1962, and how do they differ from imported goods?
According to Section 2(7), 'coastal goods' are goods, other than imported goods, transported in a vessel from one port in India to another. The key difference is that coastal goods are not imported; they are goods of Indian origin being transported within India's coastal territory. This distinction is important as coastal goods are subject to different regulations and procedures compared to imported goods, often involving simplified documentation and clearance processes under the Coastal Goods Rules.
What is the scope of 'customs area' as defined under Section 2(11) of the Customs Act, 1962?
The 'customs area,' as defined in Section 2(11), encompasses the area of a customs station or a warehouse, including any area where imported or export goods are ordinarily kept before customs clearance. This definition is broad and aims to cover all places where customs authorities exercise jurisdiction and control over goods subject to customs regulations. This includes ports, airports, land customs stations, and warehouses.
How does Section 2 of the Customs Act, 1962, define a 'customs station' and what locations are considered as such?
Section 2(13) defines a 'customs station' as any customs port, customs airport, international courier terminal, or foreign post office. These are designated locations where customs officers are stationed to oversee the import and export of goods, collect duties, and enforce customs laws. The definition ensures that all points of entry and exit for goods subject to customs control are clearly identified.
Key Conditions & Requirements
| Condition | Details |
|---|---|
| Adjudicating Authority definition and exclusions | Defines authority competent to pass orders/decisions, excluding the Board, Commissioner (Appeals), and Appellate Tribunal. |
| Assessment includes duty, tax and other factors | Assessment means determining dutiability and the amount of duty, tax, cess payable, considering tariff classification, value, exemptions, quantity, origin, and other specific factors. |
| Beneficial Owner definition | Defines the beneficial owner as someone on whose behalf goods are imported/exported or who exercises effective control. |
| Coastal goods definition. | Coastal goods are goods, other than imported goods, transported in a vessel from one port in India to another. |
| Customs Area definition. | Customs area includes a customs station or a warehouse area where goods are kept before clearance. |
| Dutiable goods means duty has not been paid | Dutiable goods are any goods that are chargeable to duty, but on which duty has not yet been paid. |
| Exporter definition includes beneficial owner | Exporter includes any owner, beneficial owner or any person holding themselves out to be the exporter. |
| Definition of Export | Export means taking goods out of India to a place outside of India. |
Amendment History
Substituted (w.e.f.11-10-1982) by s. 50 and Fifth Schedule of the Finance (No.2) Act, 1980 (44 of 1980).
Substituted (w.e.f.26-05-1995) by s. 51(i) of the Finance Act, 1995 (22 of 1995) for"Collector(Appeals)"
Substituted (w.e.f. 14-5-2003) by s. 104 of the Finance Act, 2003 (32 of 2003). for "Gold(Control)"
Substituted (w.e.f. 29-3-2018) by s.58 of the Finance Act, 2018 (13 of 2018). Clause (2) before substitution, stood as under: '(2) "assessment" includes provisional assessment, self-assessment, re-assessment and any assessment in which the duty assessed is nil;' Earlier to substitution by Act 8 of 2011, section 36, (w.e.f. 8-4-2011), clause (2) read: '(2)b"assessment" includes provisional assessment , reassessment and any order of assessment in which the duty assessed is nil;'.
Inserted (w.e.f. 31-3-2017) by s. 89 of the Finance Act, 2017 (7 of 2017).
Substituted (w.e.f. 1-1-1964) by s. 5(2) of Central Boards of Revenue Act, 1963 (54 of 1963).
Substituted (w.e.f. 29-3-2018) by s. 58 of the Finance Act, 2018 (13 of 2018) for"Central Board of Excise and Customs"
Substituted by Act 22 of 1995, section 51(ii), for clause (7A)(w.e.f. 26-5-1995). Earlier clause 7(A) was inserted by Act 44 of 1980, section 50 and Fifth Schedule, Part I-1(b).
Inserted (w.e.f. 28-03-2021) s. 89 of Finance Act 2021 (13 of 2021).
Substituted by Act 22 of 1995, section 51(ii), for clause (8) (w.e.f. 26-5-1995). Earlier clause (8) was substituted by Act 18 0f 1992, section 109(1) (w.e.f.14-5-1992).
Substituted (w.e.f. 6-8-2014) for the words "Commissioner of Customs" by s. 78 of the Finance (No. 2) Act, 2014 (25 of 2014). Earlier the words"Commissioner of Customs" were substituted by Act 22 of 1995, section 50, for the words"Collector of Customs" (w.e.f.26-5-1995).
Inserted (w.e.f. 28-5-2012) by s. 120 of the Finance Act, 2012 (23 of 2012).
Inserted (w.e.f. 1-7-2017 vide Notification No. 25/2017-Cus ., dated 28-6-2017) by s. 2 of the Taxation Laws (Amendment) Act, 2017 (18 of 2017).
Inserted (w.e.f. 13-5-1983) by s. 46 of the Finance Act, 1983 (11 of 1983).
Substituted (w.e.f. 31-3-2017) by s. 89 of the Finance Act, 2017 (7 of 2017) for the words"customs airport".
Omitted"in the case of goods imported or to be exported by post, the entry referred to in section 82 or" by by s. 89 of the Finance Act, 2017 (7 of 2017) (w.e.f. 31-3-2017) .
Substituted (w.e.f. 31-3-2017) by s. 89 of the Finance Act, 2017 (7 of 2017) for the words"any owner".
Inserted (w.e.f. 31-3-2017) by s. 89 of the Finance Act, 2017 (7 of 2017).
Inserted (w.e.f. 20-9-1991) by s. 9 of the Central Excises and Customs Laws (Amendment) Act, 1991 (40 of 1991).
Now"Central Excise Act".
Substituted (w.e.f. 29-3-2018) by s. 56 of the Finance Act, 2018 (13 of 2018) for the words"import manifest".
Substituted (w.e.f. 31-3-2017) by s. 89 of the Finance Act, 2017 (7 of 2017) for the words"any owner".
Substituted (w.e.f. 1-7-1978) by s. 2 of Customs, Central Excises and Salt and Central Boards of Revenue (Amendment) Act, 1978 (25 of 1978).
Substituted (w.e.f. 29-3-2018) by s. 58 of the Finance Act, 2018 (13 of 2018) for"contiguous zone of India under section 5"
Inserted by Finance Act, 2017 (7 of 2017), section 89, (w.e.f. 31.03.2017)
To be inserted (from a date to be notified) by s. 30 read with Schedule to the National Tax Tribunal Act, 2005 (49 of 2005).
Inserted (w.e.f. 29-3-2018) by s. 58 of the Finance Act, 2018 (13 of 2018).
Inserted (w.e.f. 31-3-2017) by s. 89 of the Finance Act, 2017 (7 of 2017).
Substituted (w.e.f. 6-8-2014) for the words"Commissioner of Customs" by s. 78 of the Finance (No.2) Act, 2014 (25 of 2014).
Inserted by s. 86 of Finance Act 2022 (6 of 2022).
Substituted (w.e.f. 10-10-2007 vide Notification No. 93/2007-Cus. (N.T.), dated 10-9-2007) by s. 94 of the Finance Act, 2007 (22 of 2007).
Substituted (w.e.f. 14-5-2016) by s. 116 (i) of the Finance Act, 2016 (28 of 2016) for '(43)"warehouse" means a public warehouse appointed under section 57 or a private warehouse licensed under section 58'
Omitted (w.e.f. 14-5-2016) by s. 116 of the Finance Act, 2016 (28 of 2016). Clause 45 before omission stood as under; '(45)"warehousing station" means a place declared as a warehousing station under section 9.'