Customs Act, 1962 Section 60 — Permission for removal of goods for deposit in warehouse
Customs Act, 1962 · Permission for removal of goods for deposit in warehouse
Plain-English Explanation
Overview
Section 60 of the Customs Act, 1962 deals with the permission to move goods from a customs station to a warehouse. It essentially lays down the procedure for obtaining authorization to transport imported goods that have been assessed but not yet cleared for home consumption to a licensed warehouse. This facilitates businesses by allowing them to defer payment of duties and taxes until the goods are actually required.
Who Does This Apply To?
This section applies to:
- Importers: Those who import goods into India and intend to store them in a licensed warehouse.
- Customs Officers (Proper Officer): Specifically, the officer authorized to grant permission for the removal of goods for warehousing.
- Warehouse Owners/Operators: Although not directly mentioned, they are indirectly affected as goods can only be deposited if permission under this section is granted.
How It Works
The process laid out in Section 60 is as follows:
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Compliance with Section 59: The importer must first comply with the provisions of Section 59 of the Customs Act, 1962. This section deals with the assessment of duty on the imported goods. This involves presenting the goods, submitting the necessary documents, and having the duty liability determined by the proper officer. Crucially, it includes the execution of a bond securing the duty amount.
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Order from Proper Officer: Once Section 59 is satisfied, the proper officer can issue an order permitting the removal of the goods from the customs station for deposit in a warehouse. The officer may (it is not mandatory) grant this permission.
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Electronic Permission: The proviso to sub-section (1) allows for the order to be made electronically through the customs automated system. This is based on a risk evaluation process, utilizing appropriate selection criteria to identify goods and importers that may require closer scrutiny.
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Deposit in Warehouse: After obtaining the order, the goods must be deposited in the warehouse in the prescribed manner. The manner of deposit is detailed in other regulations/circulars and will usually involve presenting the removal order to the warehouse authority and keeping proper records of the deposited goods.
Important Conditions & Exceptions
- Condition 1: The goods must be deposited in a licensed warehouse. Storing goods in an unauthorized location will be a violation of the Act.
- Condition 2: The order under Section 60(1) is only for removal to a warehouse, not clearance for home consumption. Further procedures are needed to clear the goods for home use, which will include paying the assessed duties.
- Exception: If the goods are deemed "risky" based on the customs' automated risk management system, the proper officer may physically examine them, despite the assessment under Section 59 being complete.
Practical Example
ABC Importers imports a consignment of electronic components valued at INR 5,00,000. After submitting the necessary documents, the Customs officer assesses the import duty at INR 1,50,000 under Section 59. ABC Importers executes a bond for the duty amount. Since ABC Importers does not immediately need the components, they wish to store them in a licensed warehouse to defer the duty payment. They apply to the proper officer for permission under Section 60. If the officer is satisfied that all requirements of Section 59 have been met, and the risk assessment allows it (or after a physical check if required), they will issue an order permitting the removal of the goods to the designated warehouse. ABC Importers then transports the components to the warehouse as per the prescribed procedure.
Key Amendments
No major amendments since enactment.
No case laws found for this provision yet.
Browse all case laws →Frequently Asked Questions
Under what circumstances can a 'proper officer' permit the removal of goods from a customs station for deposit in a warehouse according to Section 60 of the Customs Act, 1962?
The 'proper officer' can permit removal under Section 60(1) only after the conditions stipulated in Section 59 (relating to the execution of a bond and payment of duties) have been satisfied. This permission allows the transfer of goods from the customs station to a designated warehouse, facilitating deferred duty payment and storage.
Can permission for goods removal under Section 60(1) be granted electronically? What factors influence this?
Yes, the proviso to Section 60(1) explicitly allows for electronic permission via the customs automated system. This is contingent upon risk evaluation through selection criteria determined by the customs authorities. The system analyzes various risk factors to expedite the process for low-risk consignments.
What happens if the goods aren't deposited in the warehouse in the prescribed manner after an order is made under Section 60(1)?
Section 60(2) mandates that goods, after permission is granted, must be deposited in a warehouse as prescribed by relevant rules and regulations. Failure to comply with the prescribed manner of deposit could result in penalties, including but not limited to, fines, seizure of goods, and cancellation of the warehousing license for the involved warehouse operator.
Does Section 60 specify a time limit within which the goods must be deposited in the warehouse after permission is granted?
While Section 60 itself doesn't define a specific timeframe, related regulations and notifications issued by the CBIC (Central Board of Indirect Taxes and Customs) generally stipulate time limits for transferring goods to a warehouse. Exceeding these limits without valid justification can lead to penalties or cancellation of the permission granted under Section 60(1).
What are the practical implications of Section 60 for businesses involved in importing and warehousing goods?
Section 60 streamlines the process of moving imported goods to a warehouse, offering businesses greater flexibility in managing their inventory and deferring duty payments. Compliance with Section 59 is crucial for obtaining the necessary permission for goods removal under Section 60(1), leading to efficient supply chain management.
How do Customs Automated Systems and Risk Management affect the application of Section 60?
The Customs Automated System, as referred to in the proviso to Section 60(1), uses risk management techniques to expedite clearance for compliant importers. Consignments deemed low-risk may receive automated permission for warehouse deposit, thereby significantly reducing processing times and facilitating faster movement of goods.
Where can I find the 'manner' for depositing goods in a warehouse, as referenced in Section 60(2)?
The 'manner' for depositing goods in a warehouse after obtaining permission under Section 60(1) is primarily detailed in the Warehousing Regulations, 2016 and related Circulars issued by the CBIC. These regulations prescribe procedures regarding transportation, handling, documentation, and storage within the licensed warehouse.
Key Conditions & Requirements
| Condition | Details |
|---|---|
| Compliance with Section 59 | Goods must first comply with the provisions outlined in Section 59 of the Customs Act, 1962 before removal for warehousing is permitted. |
| Order from Proper Officer Required | Removal for deposit in a warehouse requires an order from the designated 'proper officer' within the customs department. |
| Electronic Order via Automated System | The removal order may also be issued electronically through the customs automated system, based on risk evaluation. |
| Risk Evaluation for Electronic Orders | Electronic orders are based on risk evaluation using appropriate selection criteria, ensuring targeted oversight. |
| Prescribed Manner of Deposit | Goods must be deposited in the warehouse according to the manner prescribed by relevant regulations or rules. |
| Purpose is Deposit in Warehouse | The permitted removal is specifically for the purpose of depositing the goods in a designated warehouse. |
Amendment History
Substituted for section 60 (w.e.f. 14-5-2016) by section 127 of the Finance Act, 2016 (28 of 2016). Earlier section 60 was amended by Act 55 of 1991, sec. 5 and sec. 6 (w.e.f. 23-12-1991) and by Act 32 of 1994, sec. 60(5) (w.e.f. 13-5-1994). Section 60, before substitution by the Finance Act, 2016, stood as under: "
Permission for deposit of goods in a warehouse.-When the provisions of section 59 have been complied with in respect of any goods, the proper officer may make an order permitting the deposit of the goods in a warehouse."
Inserted by section 82 (w.e.f. 29-3-2018) of Finance Act, 2018 (13 of 2018).