Customs Act, 1962 Section 58a — Licensing of special warehouses
Customs Act, 1962 · Licensing of special warehouses
Plain-English Explanation
Overview
Section 58A of the Customs Act, 1962, allows the Principal Commissioner of Customs or Commissioner of Customs to license special warehouses for storing dutiable goods. These special warehouses offer an added layer of security, with access strictly controlled by customs officials. This section ensures the safe and secure storage of specific goods deemed to require extra vigilance.
Who Does This Apply To?
This section primarily applies to:
- Importers of dutiable goods that require specialized storage.
- Warehouse operators seeking to obtain a license to operate a special warehouse.
- Customs officers responsible for granting licenses and overseeing the operation of special warehouses.
- The Central Board of Indirect Taxes and Customs (CBIC) as they are empowered to specify the class of goods to be stored in these special warehouses.
How It Works
Here’s a step-by-step explanation of how Section 58A operates:
- Licensing: The Principal Commissioner of Customs or Commissioner of Customs can grant a license for a special warehouse. This is subject to conditions as may be prescribed. These conditions are generally specified in related rules and regulations.
- Security: Once licensed, the special warehouse must be locked by the proper officer (a designated customs official).
- Access Control: No one can enter the warehouse or remove goods without the proper officer's explicit permission. This ensures tight control over the movement of dutiable goods.
- Goods Specification: The Board (CBIC) can, via notification in the Official Gazette, determine which class of goods are permitted to be stored in such special warehouses. This allows the government to target high-value or sensitive goods requiring heightened security.
Important Conditions & Exceptions
- Condition 1: The license granted is subject to prescribed conditions. These conditions usually relate to the security of the warehouse, the maintenance of records, and compliance with customs regulations. Expect stringent record-keeping requirements to ensure all goods are accounted for.
- Condition 2: The warehousing regulations will detail the precise documentation needed to deposit and remove goods. This includes customs declarations, invoices, and any other documents deemed necessary by the customs authorities.
- Exception: While access is generally restricted, the proper officer can grant permission to enter and remove goods. This exception allows legitimate business operations to continue while maintaining customs control.
Practical Example
Imagine a company, "Secure Imports Ltd," imports high-value electronic components that are particularly susceptible to theft. Due to their value and susceptibility to theft, the CBIC has designated these components as goods suitable for storage in a special warehouse. Secure Imports Ltd. needs to store these components before they are cleared for domestic sale.
To comply, Secure Imports Ltd. applies to the Commissioner of Customs for a license to operate a special warehouse at their premises. After inspection and upon fulfilling the prescribed conditions, the license is granted. Now, when the electronic components arrive at the port, they are transported directly to Secure Imports Ltd.'s special warehouse. The warehouse is locked by the proper officer, and no one can access the goods or remove them without that officer's permission. When Secure Imports Ltd. needs to clear a batch of components for sale, they must obtain permission from the proper officer, who will then unlock the warehouse for the removal under supervision.
Key Amendments
No major amendments since enactment.
No case laws found for this provision yet.
Browse all case laws →Frequently Asked Questions
Who is authorized to license special warehouses under Section 58A of the Customs Act, 1962?
The Principal Commissioner of Customs or Commissioner of Customs is authorized to license special warehouses under Section 58A(1), subject to prescribed conditions. These special warehouses are for depositing dutiable goods and require the proper officer to lock the warehouse. Access and removal of goods are restricted without the proper officer's permission.
What are 'special warehouses' under Section 58A of the Customs Act, 1962, and what is their purpose?
Special warehouses, as licensed under Section 58A(1), are facilities specifically designated for the storage of dutiable goods. Their primary purpose is to provide a secure location for these goods, under customs control, until they are either cleared for home consumption, re-exported, or utilized as permitted under customs regulations. A key feature is the requirement for locking by a proper officer and controlled access.
What types of goods can be deposited in a special warehouse licensed under Section 58A of the Customs Act, 1962?
While Section 58A(1) generally refers to 'dutiable goods,' the specific class of goods that *must* be deposited in a special warehouse is determined by the Board through notifications published in the Official Gazette, as per Section 58A(2). Therefore, not all dutiable goods are necessarily stored in special warehouses; it depends on the Board's specific directives.
What conditions must be met to obtain a license for a special warehouse under Section 58A of the Customs Act, 1962?
Section 58A(1) states that the Principal Commissioner or Commissioner of Customs may grant licenses 'subject to such conditions as may be prescribed.' These conditions are detailed in relevant Customs regulations and notifications, and typically involve security requirements, infrastructural specifications, operational procedures, and compliance with customs supervision. Specific conditions can vary based on the type of goods to be stored.
What are the operational restrictions associated with special warehouses licensed under Section 58A of the Customs Act, 1962?
Section 58A(1) explicitly states that no person can enter the warehouse or remove any goods without the permission of the proper officer. This creates a high level of customs control over the goods stored. This aims to prevent any unauthorized removal or manipulation of the dutiable goods before duty is paid or other formalities are completed.
Are there any penalties for violating the provisions related to special warehouses under Section 58A of the Customs Act, 1962?
While Section 58A itself doesn't specify penalties, violations of the operational restrictions (like unauthorized access or removal of goods) would attract penalties under other relevant sections of the Customs Act, 1962. These may include penalties for improper removal of goods (Section 111), confiscation of goods (Section 124), and penalties for offenses (Section 135).
How do I find the notifications issued by the Board specifying the class of goods to be deposited in special warehouses under Section 58A(2) of the Customs Act, 1962?
Notifications issued by the Board under Section 58A(2), specifying the class of goods, are published in the Official Gazette. These can be accessed through government websites dedicated to publishing gazette notifications, as well as through legal research databases and platforms that compile and index Indian legislation and related notifications. Check CBIC (Central Board of Indirect Taxes and Customs) website for related notifications.
Key Conditions & Requirements
| Condition | Details |
|---|---|
| Licensing Authority | The Principal Commissioner of Customs or Commissioner of Customs is authorized to issue licenses for special warehouses. |
| Prescribed Conditions | The licensing is subject to conditions as may be prescribed (presumably by rules or regulations). |
| Permitted Goods | Dutiable goods, as defined under the Customs Act, can be deposited in the special warehouse. |
| Official Lock and Key | The special warehouse must be locked by a proper officer of Customs. |
| Restricted Access | No person can enter the warehouse or remove goods without permission from the proper officer. |
| Board's Power to Specify Goods | The Board (Central Board of Indirect Taxes and Customs) can specify, via notification, the class of goods that must be deposited in these warehouses. |
| Special Warehouse Type | Warehouse designated as "special" implying enhanced security or handling requirements. |
| No explicit penalties | The section doesn't explicitly specify any penalties but violations can result in license revocation or penalties from other sections. |
Amendment History
Section 58, 58A and 58B substituted for section 58 (w.e.f. 14-5-2016) by section 125 of the Finance Act, 2016 (28 of 2016). Earlier section 58 was amended by section 5 of Act 55 of 1991 (w.e.f. 23-12-1991); by section 50 of Act 22 of 1995 (w.e.f. 26-5-1995) and by section 100 of Act 27 of 1999 (w.e.f. 11-5-1999). Section 58, before substitution by the Finance Act, 2016, stood as under: "
Licensing of private warehouses. - (1) At any warehousing station, the Assistant Commissioner of Customs or Deputy Commissioner of Customs may license private warehouses wherein dutiable goods imported by or on behalf of the licensee, or any other imported goods in respect of which facilities for deposit in a public warehouse are not available, may be deposited. (2) The Assistant Commissioner of Customs or Deputy Commissioner of Customs may cancel a licence granted under sub-section (1) - (a) by giving one month's notice in writing to the licensee; or (b) If the licensee has contravened any provision of this Act or the rules or regulations or committed breach of any of the conditions of the licence : Provided that before any licence is cancelled under clause (b), the licensee shall be given a reasonable opportunity of being heard. (3) Pending an enquiry whether a licence granted under sub -section (1) should be cancelled under clause (b) of sub -section (2), the Assistant Commissioner of Customs or Deputy Commissioner of Customs may suspend the licence."