Customs Act, 1962 Section 35 — Restrictions on goods being water-borne

Overview

Section 35 of the Customs Act, 1962, regulates the movement of goods via waterways (i.e., being water-borne) for both import and export. It mandates that goods being transported by water to be landed from a vessel (imported goods) or shipped on a vessel (export goods) must be accompanied by a boat-note, a document that provides essential details about the goods. This ensures proper tracking and prevents unauthorized movement of goods, contributing to the overall security and revenue collection objectives of customs control.

Who Does This Apply To?

This section applies to:

• Importers: Individuals or businesses importing goods into India.
• Exporters: Individuals or businesses exporting goods from India.
• Vessel Operators/Agents: Those responsible for the vessels carrying imported or exported goods.
• Customs Officers: Specifically, the "proper officer" designated under the Customs Act.

How It Works

Here’s the step-by-step process governed by Section 35:

• Imported Goods:

  • No imported goods can be water-borne (transported by water from a vessel to be landed) without a boat-note. This note serves as a permit for the movement of the goods from the ship to the shore for customs clearance.

• Export Goods:

  • No export goods not accompanied by a shipping bill (which is a key export declaration document) can be water-borne for being shipped without a boat-note. The boat-note acts as authorization for the goods to be transported to the vessel.

• Boat-Note Requirement:

  • The boat-note must be in the format prescribed by the customs authorities. It contains details like the description of goods, quantity, name of the vessel, and the intended destination.

• Permissibility without Boat-Note:

  • The proviso allows for exceptions. The Central Board of Indirect Taxes and Customs (CBIC) can issue a general permission via notification in the Official Gazette, allowing specified goods or classes of goods to be water-borne without a boat-note.
  • Alternatively, the "proper officer" can grant special permission on a case-by-case basis for goods to be water-borne without a boat-note.

Important Conditions & Exceptions

• Condition 1: The boat-note is required for both import and export, creating a consistent process.
• Condition 2: The requirement for a shipping bill for export goods emphasizes the need for proper documentation and declaration before goods are allowed to be shipped.
• Exception: The proviso allows flexibility through general notifications or specific permissions from the proper officer, especially where the strict application of the boat-note requirement may be impractical or unnecessary.

Practical Example

Imagine ABC Exports, an Indian company, is exporting a consignment of textiles worth ₹5,00,000 to a buyer in Dubai. Before the goods can be loaded onto the vessel from the port, ABC Exports must:

1. File a shipping bill declaring the export.
2. Obtain a boat-note that includes details of the textiles (quantity, value, description), the name of the vessel ("MV Ocean Star"), and the destination (Dubai).
3. Present the boat-note to the customs officer at the jetty, authorizing the water-borne transfer of the textiles from the dock to the "MV Ocean Star."

If ABC Exports attempts to move the textiles to the vessel without the required boat-note (and after filing a shipping bill), the customs officer can prevent the shipment and impose penalties. However, if the CBIC had issued a general notification exempting textile exports from the boat-note requirement or if the proper officer grants special permission, ABC Exports could move the goods without it.

Key Amendments

No major amendments since enactment.