Know your Customs Checks of Clients by CHAs – CHA License Guidelines
[CBEC Circular No. 09 dated 8th April 2010]
Subject:
Issue of Custom House Agent License – Reference from field formations.
It has been brought to the
notice of the Board by certain field formations that they are facing difficulties
in issuance of Custom House Agents (CHA) License for eligible persons and in
implementation of the Custom House Agents Licensing Regulations (CHALR), 2004.
2. These issues were examined by the Board in consultation with
customs field formations and in the Board meeting. Further, a meeting was also
held with the Chief Commissioners of Customs having jurisdiction over major
Custom Houses. Accordingly the following decisions have been taken on the
issues listed below:-
(i) Minimum number of CHAs required in a Customs
station:
3. Regulation 4 of the CHALR, 2004 provides the process of issue of
CHA licences whereby the Commissioner of Customs may
invite applications for the grant of such number of licences
as assessed by him, to act as Customs House Agents in a customs station. The
CHALR, 2004 do not provide for any restrictions on the number of CHAs. Board is of the view that, ideally, no restriction
should be placed on the number of CHAs operating in the Custom Houses and the
market forces should govern the number of proficient and qualified persons
required to carry out the job of CHA commensurate with the volume of import /
export cargo. The Board also did not find any justification in prescribing a
turnover based criteria for ascertainment of the number of CHA licenses
required to be issued at a particular Custom House / Station, in as much as the
practice of undertaking CHA services on the basis of Form ‘C’ intimation was
already in vogue and would render such exercise meaningless. The Board, therefore,
has decided against fixing a numeric criterion governing the number of CHA
licenses being issued. Board has also decided that the examination under
Regulation 8 shall be conducted on an annual basis instead of twice a year, by
suitably amending the sub-regulation (1) to Regulation 8.
(ii) Employment of person by a CHA:
4. In the present scheme of CHALR, 2004 under regulation 19(1), the
Custom House Agent may employ any person who shall have a minimum educational
qualification of 10+2 School education. However, appointment of such person
shall be made only after obtaining approval of the Deputy Commissioner /
Assistant Commissioner (DC/AC) designated by the Commissioner of Customs, who
shall take into consideration the antecedents and character of the person as
provided in regulation 19(2) of CHALR, 2004. In this regard, Board has decided
that the DC/AC concerned, may ensure that individuals involved in any
fraudulent activity (i.e., individuals suspended or blacklisted or denied
permission to work in any section of the Custom House) shall not be allowed to
be employed by a CHA for transacting business with Customs. Necessary
undertaking in this regard may also be taken from the CHA at the time of
submission of application giving details of the person who are proposed to be
employed by them.
4.2. CHALR, 2004 do not provide for any restriction on the number of
persons a CHA can employ as it would depend upon the workload and requirements
of a CHA. However, under the regulation 19(3), any person employed by CHA is
required to appear through an examination conducted by DC/AC designated or a
Committee of officers to ascertain the adequacy of the knowledge of such
persons about the provisions of the Customs Act, 1962 before they are granted
‘G’ Card. Hence, it is reiterated that it is only those persons who have
qualified themselves in the examination conducted under regulation 19(3) and
who have been authorized by CHA in terms of regulation 19(5) alone are allowed
to sign the declarations filed before Customs for transacting the work at any
Custom station. Those persons who have not qualified in the examination but who
are still in employment with CHA are being given ‘H’ card for assisting the CHA
in his work. However, the Commissioner of Customs in a Custom House / Station
shall undertake an annual review of such ‘H’ Cardholders with each CHA to
ensure that discredited individuals are not being allowed to work as ‘H’
Cardholders. The examination under Regulation 19(3) shall also be conducted by Commissionerate of Customs on annual basis.
(iii) Suspension or revocation against CHAs operating on ‘C’ form
intimation basis:
5.1. CHALR, 2004 provide a facility for the CHAs who have been issued a
license from a particular customs station to operate under Form ‘C’ intimation
at another customs station. In case of such CHAs, who are found to have
violated any provision of the CHALR, 2004 at any customs station, it is
clarified that the suspension action against CHA’s operations may be taken by
the Commissioner of Customs at the station who issued the CHA license and such
action would either be limited to a particular customs station where a
violation has been noticed or action against the CHA in general, applicable at
all customs stations where the CHA operates, depending upon the gravity and
seriousness of the violation. Where the CHA licence
is suspended, all ‘G’ and ‘H’ cards issued in respect of that licence would become non-operational.
5.2. Further, it is also clarified that the Commissioner of Customs at a
customs station who had authorised a CHA to operate on ‘C’ form intimation,
should inform the details of violations to the Commissioner of Customs at the
customs station from where the CHA licence was issued
for such CHA, so that necessary action for suspension or revocation of CHA licence, could be initiated by him. This would avoid
duplication and ensure uniformity in adjudication of a case against a CHA in
suspension or revocation proceedings by the Customs field formations. However,
the Commissioner of Customs, who had authorised a CHA to operate on ‘C’ form
intimation at a customs station, may take action in deserving cases under
regulation 21 of CHALR, 2004 for prohibiting the working of such defaulting CHA
in any section of the Custom House/Customs Station.
(iv) Know Your Customs (KYC) norms for identification of
clients by CHAs:
6. In the context of increasing number of offences involving
various modus-operandi such as misuse of export promotion schemes, fraudulent availment of export incentives and duty evasion by bogus
IEC holders etc., it has been decided by the Board to put in place the “Know
Your Customer (KYC)” guidelines for CHAs so that they are not used
intentionally or unintentionally by importers / exporters who indulge in
fraudulent activities. Accordingly, Regulation 13 of CHALR, 2004, has been
suitably amended to provide that certain obligations on the CHAs to verify the
antecedent, correctness of Import Export Code (IEC) Number, identity of his
client and the functioning of his client in the declared address by using
reliable, independent, authentic documents, data or information. In this
regard, a detailed guideline on the list of documents to be verified and
obtained from the client/ customer is enclosed in the Annexure. It would also
be obligatory for the client/ customer to furnish to the CHA, a photograph of
himself/herself in the case of an individual and those of the authorised
signatory in respect of other forms of organizations such as company/ trusts
etc., and any two of the listed documents in the annexure.
(v) Time limit for completion of suspension proceedings against CHA
licensee under regulation 22:
7.1. The present procedure prescribed for
completion of regular suspension proceedings takes a long time since it
involves inquiry proceedings, and there is no time limit prescribed for
completion of such proceedings. Hence, it has been decided by the Board to
prescribe an overall time limit of nine months from the date of receipt of
offence report, by prescribing time limits at various stages of issue of Show
Cause Notice, submission of inquiry report by the Deputy Commissioner of
Customs or Assistant Commissioner of Customs recording his findings on the
issue of suspension of CHA license, and for passing of an order by the
Commissioner of Customs. Suitable changes have been made in the present time
limit of forty five days for reply by CHA to the notice of suspension, sixty
days time for representation against the report of AC/DC on the grounds not
accepted by CHA, by reducing the time to thirty days in both the cases under
the Regulations.
7.2. In cases where immediate suspension action
against a CHA is required to be taken by a Commissioner of Customs under
regulation 20(2), there is no need for following the procedure prescribed under
Regulation 22 since such an action is taken immediately and only in justified
cases depending upon the seriousness or gravity of offence. However, it has
been decided by the Board that a ‘post-decisional hearing’ should be given in
all such cases so that errors apparent, if any, can be corrected and an
opportunity for personal hearing is given to the aggrieved party. Further,
Board has also prescribed certain time limits in cases warranting immediate
suspension under Regulation 20(2). Accordingly, the investigating authority
shall furnish its report to the Commissioner of Customs who had issued the CHA
license (Licensing authority), within thirty days of the detection of an
offence. The Licensing authority shall take necessary immediate suspension
action within fifteen days of the receipt of the report of the investigating
authority. A post-decisional hearing shall be granted to the party within
fifteen days from the date of his suspension. The Commissioner of Customs
concerned shall issue an Adjudication Order, where it is possible to do so,
within fifteen days from the date of personal hearing so granted by him.
(vi) CHA licenses in respect of individuals who had passed the
examination under CHALR, 1984:
8.1. The issue of granting CHA license in respect of persons who had
already passed the written and oral examinations held under Regulation 9
examination of Customs House Agents Licensing Regulations (CHALR), 1984 and are
yet to be considered for issue of CHA license, was examined by the Board. On
this issue, the Board in its earlier meeting had held that with the
introduction of CHALR, 2004, there was no generalized case for grant of CHA licence to such applicants having passed Regulation 9
examination under CHALR, 1984 as the requirements of educational qualification
and also examination curriculum were different in the two regulations.
Considering the hardships experienced by such persons and in order to remedy
the situation by providing one time opportunity to qualify them for grant of
CHA license, It has been decided by the Board to conduct written examination
for these persons on the following additional subjects: (a) The Patents Act,
1970 and Indian Copy Right Act; 1957 (b) Central Excise Act, 1944 (c) export
promotion schemes (d) Procedure on appeal and revision petition (e) Prevention
of Corruption Act, 1988 and (f) online filing of electronic Customs
declarations, (g) Narcotic Drugs and Psychotropic Substances Act, 1985 and (h)
Foreign Exchange Management Act, 1999. The aforesaid examination would be conducted
by the Directorate General of Inspection after giving due notice to these
candidates. Accordingly, persons who qualify in the aforesaid examination shall
be deemed to have passed under the Regulation 8 of Customs House Agents
Licensing Regulations, 2004, and would be considered for grant of CHA license
in terms of Regulations 9 of CHALR, 2004 by the concerned Commissionerate
from where they had earlier passed the CHA examination held under CHALR, 1984.
8.2. Board also took note of the fact that these candidates had passed
the CHA examination held under CHALR, 1984 based on the qualification
prevailing at that relevant point of time, and that a precedent existed wherein
a dispensation was prescribed vide Board’s Circular No.48/2000-Customs dated
22.5.2000 for a specific period. Accordingly it was also decided by the Board
that in case of Regulation 9 examination passed candidates under the CHALR,
1984, the relaxation provided in respect of educational qualifications vide Board’s Circular No. 48/2000-Customs shall be extended
on similar basis.
9. The aforesaid decisions of the Board involving change in the
CHALR, 2004, has been implemented by issue of Notification No.30/2010-Customs
(NT) dated 8.4.2010.
10. These instructions may be brought to the notice of the trade
by issuing suitable Trade / Public Notices. Suitable Standing
orders/instructions may be issued for the guidance of the field officers.
11. Difficulties faced, if any, in implementation of this Circular,
changes made in the CHALR, 2004 may be brought to the notice of the Board
immediately.
Annexure
Client/ Customer Identification Procedure
Features to
be verified and documents to be obtained from clients/ customers
|
S.No |
Form of organisation |
Features to be verified |
Documents to be obtained |
|
1 |
Individual |
(i) Legal name and any
other names used (ii) Present and Permanent address, in full,
complete and correct. |
(i) Passport (ii) PAN card (iii) Voter’s Identity card (iv) Driving licence (v) Bank account statement (vi) Ration card Note: Any two of the documents listed above,
which provides client/ customer information to the satisfaction of the CHA
will suffice. |
|
2 |
Company |
(i) Name of the company (ii) principal place of business (iii) mailing address of the company (iv) telephone, fax
number, e-mail address. |
(i) Certificate of
incorporation (ii) Memorandum of Association (iii) Articles of Association (iv) Power of Attorney granted to its managers,
officers or employees to transact business on its behalf (v) Copy of PAN allotment letter (vi) Copy of telephone bill |
|
3 |
Partnership firm |
(i) Legal name (ii) Permanent address, in full, complete and
correct. (iii) Name of all partners and their addresses, in
full complete and correct. (iv) telephone, fax
number, e-mail address of the firm and partners. |
(i) Registration
certificate, if registered (ii) Partnership deed (iii) Power of Attorney granted to a partner or
an employee of the firm to transact business on its behalf (iv) Any officially valid document identifying
the partners and the person holding the Power of Attorney and their addresses (v) Telephone bill in the name of firm/ partners |
|
4 |
Trusts, Foundations |
(i) Name of trustees, settlers,
beneficiaries and signatories (ii) Name and address of the founder, the
managers, Directors and the beneficiaries, in full, complete and correct. (iii) Telephone and fax number, e-mail address of
the trust, founder and trustees. |
(i) Certificate of
Registration, if registered (ii) Power of Attorney granted to transact
business on its behalf (iii) Any officially valid document to identify
the trustees, settlers, beneficiaries and those holding the Power of
Attorney, founders/ managers/ directors and their addresses (iv) Resolution of the managing body of the
foundation/ association (v) Telephone bill |
F.No.502/5/2008-Cus.VI