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VOLUME I (GENERAL)
CHAPTER - SIX
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Therefore, it is quicker and at times cheaper to have cargo of a standard shape and size which is easy to
handle and stack. But it is not always possible to have cargo of convenient shape, size and weight, which
would facilitate easy handling. To overcome this difficulty, consignments of cargo are generally stuffed
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into a large metal-box , which is much more convenient to handle, stack, load/unload and transport, than
the conventional cargo. Such metal box is termed a Unit Load which in transportation usually means a
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Container.
EVOLUTION
In response to cost cutting and time saving requirements of modern trade, the so-called
containerisation has evolved during
transport in the year 1949 when John Wollan sent a box of sports goods across Irish Sea. The White
pass and Yukon route introduced deep sea container traffic from Canada and the worlds first fully
integrated container service came into being from the year 1955. The worlds largest container shipping
A modified version of containerisation took shape in the year 1968. It is known as `Lighter
Aboard Ship or LASH. In the `lash system, lighters are loaded on the shore with cargo and then floated
out to the ship waiting off-shore. The ship hands the lighters on board with its own crane (Gantry crane)
and stacks them there high like containers. At the port of arrival the lighters are unloaded and floated to
the shore. This saves both port costs as well as time spent in waiting for empty berth for the vessel.
What is a container
As mentioned earlier, a Container is simply a metal-box. It is no more complex than a truck body,
a railway freight van or a ships hold. Standard sizes for containers are 40, 20, or 10 feet long, 8 ft. wide
and 8ft. in height. Some Containers have open tops or sides for easy loading of special cargo. Liquids are
generally carried in boiler-shaped tanks surrounded by rectangular frame-work. Other Containers are
insulated or refrigerated and are constructed according to International Standards and inspected by
Insurance Companies.
The container traffic started in India only about the year 1973. Due to the obvious advantages, it
revolutionarised the cargo traffic at Sea ports to such an extent that the major ports had to undergo huge
infrastructural changes to suit themselves to container traffic. The advantages of containerised cargo
traffic are that the ships take less time for loading/unloading and hence can make many voyages. Thus,
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the landing cost is reduced, there is faster and more reliable delivery of the cargo for the consignee as
also greater protection to cargo against damage, pilferage & contamination as the containers in use are
mode of corrugated steel.
There are different types and sizes of Containers that can be summarized as below(1) Dry Containers
(2) Tank Containers
(3) Reefer Containers
(4) Open Top Containers
(5) Flat Containers etc.
The containers are of ISO standard and are normally 20ft x 8ft x 8 1/2 ft or 40ft x 8 1/2ft x 9 1/2ft.
The containers are mainly identified by four letter alphabets like APLU, ICSO, TEXU etc.,
followed by 6 to 8 numeric digits. These marks and numbers are assigned by an International body
regulating the registration of Containers of all the Shipping lines sand are affixed on the sides of the
Container.
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The Containers can be referred to as FCL,LCL or SOC Containers. The descriptions of the same
are as follows:
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(1) FCL Container or Full Container Load -- when the Container is stuffed with cargo belonging to
(2) LCL Container or Less Container Load -- when the Container is stuffed with more than one
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(3) SOC Container or Shippers Own Container-- The Containers normally belong to Shipping
Companies or the Freight Forwarders. Sometimes private parties may also have their own
containers for their special type of cargo. Such containers are called SOC Containers.
The main usage of the container is to act as packing material for Imported / Export cargo. On
unloading of Import Cargo or loading of Export cargo or otherwise, the containers are re-exported out of
India. In other words, the containers are not used for home consumption in India.
IMPORT OF CONTAINERS
The Govt. of India, vide Notification. No. 97/79 dt.2.5.1979, have exempted containers from
payment of Customs import Duty provided they are re-exported out of India. The Notification. No. 104/94
dt.16.3.1994 issued in this regard is as follows: In exercise of the powers conferred by sub-section (1) of Section 25 of the Customs Act, 1962 (52
of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do,
hereby exempts containers which are of durable nature, falling within the First Schedule to the Customs
Tariff Act, 1975 (51 of 1975), when imported into India, from(a) the whole of the Duty of Customs leviable thereon under the said First Schedule; and
(b) the whole of the Additional Duty leviable thereon under Section 3 of the said Customs Tariff
Act:
Provided that the importer, by execution of a bond in such form and for such sum as may be
specified by the Assistant Commissioner of Customs, binds himself to re-export the said containers within
six months from the date of their importation and to furnish documentary evidence thereof to the
satisfaction of the said Assistant Commissioner, and to pay the duty leviable thereon in the event of the
importers failure to do so:
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Provided further that in any particular case, the aforesaid period of six months may, on sufficient
cause being shown, be extended by the said Assistant Commissioner for such further period, as he may
deem fit.
[ M. F., D.R., Notification. No. 104/94 dt.16.3.1994 ]
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culminate into Show Cause cum Duty Demand Notice for recovery of duty, imposition of fine, penalty etc.
For the sake of convenience, all work related to the movement & accountability of the containers
should be centralised in a designated section, preferably nominated as Container Cell, in respective
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Custom Houses.
One of the conditions in Notification No. 104/94 is that the containers shall be re-exported within
six months from the date of their importation. For the purpose of fulfillment of this condition and the work
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relating to acceptance and cancellation of bonds, the following procedure should be observed:
The Steamer Agents/Owners of containers should execute a general continuity Guarantee/Bond
(without Bank Guarantee) undertaking to re-export all the containers imported by them and binding
themselves to pay appropriate duty & penalty, if any, in case of their failure to re-export the containers
within the stipulated period. The Ministry, vide letter F.No. 450/11/88 Cus.IV dated 5.11.1998, has
directed that the Assistant Commissioner may grant an extension beyond six month upto further 3 months
for the special reasons to be recorded in writing. The extension beyond 9 months should not be granted
as a matter of routine. However, in case of genuine difficulty, further extension of a period not exceeding
by six months at a time may be granted by the Commissioner of Customs on merits of each case for the
reasons to be recorded in writing.
As per the existing practice, the clearance of containers, weather empty or loaded, intended for
temporary admission, is to be allowed without requirement of filing a formal Bill of Entry for each container
separately. The party concerned should intimate to the Customs, the number & identification particulars of
the containers to be moved outside the Customs area. The Bond for such movement could be either for a
specific individual consignment of containers or a general bond covering a larger number of containers as
requested by the party.
As regards the amount of Bond to be taken for permitting such containers to be moved out of the
Customs area temporarily, it has been noticed that different practices are being followed in the different
Custom Houses. It is hereby clarified that the amount of Bond should not exceed the Customs Duty
leviable on such container in case these were not to be re-exported within the stipulated time. As a thumb
rule it is suggested that the Bond amount may be taken as Rs.20,000/- for a 20 feet non-reefer container
& the amount may be taken on pro-rata basis for different lengths of non-reefer containers.
In case of default however, duty would be leviable on actual calculations based on the value of
the containers and the rate of duty.
[ Ministrys letter F. No. 434/17/94-Cus IV dt.16.5.1994 ]
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Rs.2,00,000/-
Rs.3,50,000/-
Rs.3,00,000/-
Rs.4,00,000/-
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After acceptance of the Bond, intimation has to be issued to the Shipping Agent indicating the file
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The movement of loaded containers is required to be under proper control of Customs. The
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Ministry, vide circular No. 80 / 95-Cus-IV dt.6.7.1995, has directed that in order to ensure security &
safeguard against tampering, the containers should be sealed with tamperproof bottle seals & that the
cost of such seals should be recovered from the agents. Additionally, Para 6 of the Goods Imported
(Condition of Transhipment) Regulations, 1995, lays down that the imported goods transferred must be
sealed.
However, there is no need to put tamperproof bottle seals for Import loaded containers,
As regards movement of goods to Inland Stations, The Board, vide letter F.No. 434/17/94-Cus IV
of 18.5.94, has clarified that where any imported goods are moved under Bond to inland destinations, the
amount of Bond guarantee should not exceed the Customs duty leviable on the goods.
The FCL cargo meant for dry ports (i.e. ICDs) will be shown on separate sheet called Submanifest sheet in the main IGM.
The movement of containerised cargo (import to ICDs/CFS) is actually transhipment & the same
is allowed subject to observance of conditions as prescribed in Goods Imported (Conditions of
Transhipment) Regulations, 1995 issued vide Notifn. No. 67/95 Cus NT dt. 28.9.95. ( Please refer to
Chapter Transit & Transhipment of this Manual for the said Notification ).
It is the view of the Board that the purpose of putting the seal on containerised cargo is to ensure
foremost the security of the cargo contained therein. Hence, the seal used for the purpose should be such
that it provides total security and which cannot be broken or even tampered with easily. Further, in case
of any tampering the same should be easily detectable by the Customs.
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3.
In this regard, the Board has examined the seals presently in use by the Department and also
certain seals available in the market. It is seen that the tamper proof bottle seals presently under use
appear to meet the objective of security and also safeguard against tampering.
4.
In view of the aforestated facts I am directed to say that the Board desires that suitable
instructions may be issued to the concerned officers under your charge for ensuring containerised cargo
is henceforth sealed only with tamper proof bottle seals.
[ Boards Circular No. 80/95 dt.6.7.1995 in F. No. 434/16/94-Cus.IV ]
M/s. Indian Freight Container Manufacturers Association has represented to Government of India
that a huge dumping of empty containers into the system is affecting the off take of containers
manufactured in the country because of lack of monitoring of the requirement to re-export the imported
Containers within six months. Moreover, extension beyond six months is granted by Customs from time to
time routinely. Ministry of Commerce has requested that in addition to close monitoring bank guarantee
be taken for Import of Containers.
On the issue of clearance of containerised cargo and re-export of marine containers, the attention
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2.
is drawn to Boards earlier circular No. 434/17/94-Cus. IV, dated 16th May, 1994. The Notification No.
104/94 as amended by Notification No. 101/95 dated 20.5.1995 exempts the freight containers of durable
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nature from payment of whole of the duty of customs and the whole of additional duty payable provided
the containers are re-exported within six months for which a bond is executed may not be given routinely.
3.
It has been observed that as and when request for extension beyond 6 months period is received,
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the Customs Houses are routinely granting such extensions. This casual approach leads to the possibility
of use of such containers for domestic trade in addition to affecting the domestic industry engaged in
manufacturing of marine containers.
4.
It has been felt that there is need to exercise more effective control over the clearance of marine
freight containers and their subsequent re-export Separate account may be kept and bonds taken for
import of loaded Containers and empty Containers. The re-export bonds for clearance of containers
should be regularly monitored. The demands in terms of bond should be issued immediately on expiry of
six months. The Assistant Commissioner may grant an extraction beyond 6 months upto further 3 months
In case the goods are required to be detained for detailed examination, investigation, etc., the
goods should be destuffed from the container and stored in any warehouse. The Containers should be
released so that the shipping agents can fulfill their commitment of re-exporting the container within six
months of their import.
[ Boards Circular No. 83/98-Cus. dated 5th November, 1998 in F. No. 450/53/98-Cus. IV ]
Movement of containers within port area & outlying areas & clearance of goods contained therein
On arrival of a vessel in the port and after berthing, the containers are unloaded under the
general supervision of the Customs Section Officers. The Steamer Agent files IGM alongwith the list of
containers brought by the vessel in the Import Deptt. The container list is then forwarded by the Import
Deptt. to the container cell where the same is entered in the Shipping agent wise Container Register. The
containers meant for clearance at the same port, are moved by the Port Trust through authorised
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transporters to the nominated areas earmarked, shipping agentwise, in the docks/outlying area of docks.
The Preventive Officer posted at the Gate shall verify as to whether the seals are intact and then allow
the containers to move out of Docks to outlying areas of the docks. If the seal is broken / tampered with
the matter shall be reported to the Asst./ Dy. Commissioner / Docks for necessary action. The Preventive
Officer posted at the storage yard, on arrival of the container, shall check as to whether the seals are
intact and enter the particulars in a prescribed register maintained at the Gate and shall allow the
container to enter inside the storage yard. Discrepancy, if noticed, should be brought to the notice of
Asstt./ Dy. Commissioner/ Docks for necessary action. In such container yards, as and when the
importers / C.H.A. approach the Port Trust authorities and Customs with Bill of Entry, the container in
which the cargo is carried, shall be destuffed. The goods shall then be examined and the same are
cleared on payment of duty or on execution of Bond for warehousing etc. as per usual procedures. The
F.C.L. containers along with Imported goods can also be permitted by the Container Cell to be taken to
factory premises of the Importers, after Customs examination and out of charge. The steamer agents /
importers can store empty containers in Private storage yards for which no permission from Customs is
required to be obtained. Similarly empty containers from private storage yards / Docks can be moved,
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without permission from Customs, by Steamer Agents to Exporters premises for stuffing of Export cargo.
Supervision of stuffing the containers with Export cargo at the Exporters premises has to be
done under the supervision of Appraising staff (Customs) / Supdt. Central Excise, as the case may, be
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and thereafter duly sealed by them. However, stuffing of containers with Export cargo at the Customs
Areas declared for this purpose in the Docks and other places, shall be done under the supervision of the
Preventive Staff.
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As regards Export cargo stuffed containers received from ICDs to Dock area, the Preventive staff
posted in the Docks are required to verify the seals and allow shipment thereof if the seals are found
intact.
As proof of Export of the containers, the Steamer Agents have to submit a list of containers
shipped under one Port Clearance, to the Container Cell.
The number of containers so exported under one Port Clearance is to be co-related to their
imports under various I.G.M.s by the various Steamer Agents. Since this scrutiny of one Port Clearance
with reference to several I.G.M.s and verification thereof containerwise involves time and effort, the
Steamer Agents are required to prepare and submit monthly statement of containers exported under each
Port Clearance I.G.M. wise, in the following proforma:
Statement regarding export of containers during month of . . . . . . .
Particulars of total numbers of Containers (both loaded and empty) imported by Vessel . . . . . . . .
. . . . . . . . . . . .. . . . VOY . . . . . . . . . . . . . . . . IGM . . . . . . . . . . . . dated . . . . . . . . . . . . . . and exported.
Sl. No.
Container Number
Size
Exported by Vessel*
..................
( *Attach copy of EGM & list of empty Containers duly certified by Section Officer / Boarding Officer )
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As regards the empty containers which do not figure in the EGM, all the Section Officers are
required to certify the tally sheets of the Stevedores for the loading of empty containers as a proof of
export so that the same can be submitted by them to the Export Department with the respective EGMs to
fulfill the condition of submission of proof regarding re-export.
Superintendent ( P )
(1) Processing of Bond documents
(2) Attending to Correspondence with Steamer Agents
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(3) Scrutiny of applications received for permission for taking containers out of Docks limit.
(4) Scrutiny of applications for Transhipment permissions and endorsing T.P. permits and I.G.M. /
SMTP copies.
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(5) Attending to grievances of representatives of Steamer Agents regarding difficulties in filing the
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(8) Overall supervision of the staff and work in the Container Cell.
Preventive Officer
(1) Maintaining I.G.M. wise and Steamer Agents wise register for Import of Containers.
(2) Posting of Port Clearance particulars of re-exported containers in I.G.M. register.
(3) Taking out fresh balance of non re-exported containers for issuing reminders/demand notices.
containers.
(4) Issuing reminders to steamer Agents for accounting balance of imported but non-re exported
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