LIFE CYCLE OF IMPORT AND EXPORT CONTAINER

WITH CARGO
INTRODUCTION TO LOGISTICS
INDUSTRY
LOGISTICS IS THE ART AND SCIENCE OF MANAGEMENT, ENGINEERING
AND TECHNICAL ACTIVITIES CONCERNED WITH REQUIREMENTS, DESIGN
AND SUPPLYING, MAINTAINING RESOURCES TO SUPPORT OBJECTIVES,
PLANS AND OPERATION.

The international freight market has a wealth and variety of transport providers to meet the
needs of international trading companies which transact business on a worldwide basis. The
terminology used to identify those companies that move freight around the world can be
confusing. Most commonly known as freight forwarders, this name hardly describes the
depth and range of services provided by the sector. Multimodal transport operator, global
logistics manager, Non Vessel Owning Common Carrier (NVOCC), integrator, supply
chain manager and information broker are some of the more recent terms used in an effort to
market the product. Freight forwarders have become more sophisticated and aware of their
customers needs. They have recognised that international transport solutions are achieved
not in isolation but in partnership with the customer. Against a background of global trade
and electronic communications, the forwarding industry operates at all levels in the transport
chain, providing a valuable service to companies large and small.

Who are Freight Forwarders? The different types of freight forwarding companies
can be broadly divided into three categories:

Local companies - These are generally small single office companies which tend to deal
with customers in the local area, or operate at a seaport or airport concentrating on particular
types of traffic.

National companies - Many forwarders have offices in the major ports and airports
throughout the country as well as in the largest industrial towns. They may also have
warehousing or handling depots from where they operate their own services. Such companies
will often have agents or correspondents overseas in the markets with which they operate.

International companies - The truly international company will have its own offices
overseas and offer a wide range of worldwide services. You should note that these divisions
are identified for ease of understanding.
INTRODUCTION TO COMPANY

TOMS SHIPPING
 Toms Shipping Private Limited is a shipping agency incorporated in 2011 and head
quartered at Mumbai, India and operating at all other major ports of India. TSPL offers total
logistics services worldwide. Our personalized services, extensive knowledge of freight
forwarding logistics is comparable to the best in the industry. Our highly personalized,
detailed and dedicated services level our client to choose us as the best solution for logistics
needs. Our strong agent network and close connections to all corners of the globe enables us
to cater to the needs of all our customers.
In 2015 Toms Shipping was appointed as the general agent in India for WFF Shipping LLC

SERVICES

Tramp-steamer agency:
A joint venture with Tristar Logistics (I) Pvt. Ltd. handling vessels in Gujarat, Mumbai,
JNPT and ports on the Kerala Coast including Kochi and Kollam.Handling over 200 vessel
calls annually at the above Indian ports.

Shipping and logistics:

Representing Vegastar LLC Dubai as General Agents in India for their cargo booking and
forwarding activities. Also providing logistics support for them in their tank container
business, including slot booking for its Ocean Transportation.

Through our principles we offer the following services:

Shipping Agency
Ship Supply Services
Crew Sign On/Off services
Ship Spare clearances and delivery
Technical/Mechanical assistance
Medical assistance
On-board Surveys
Dry Docking Services

Freight forwarding:

Air Freight Forwarding:

We offer air freight forwarding and clearing services from all major airports in India.
Sea Freight Forwarding:
We offer sea freight forwarding and clearing services at all major sea Ports in India. We offer
services for both Full Container Load (F.C.L) as well as Loose Container Load (L.C.L)
cargoes.
Transportation division:
Operating a trailer fleet of 16 vehicles and primarily conducting transportation for various
freight forwarders and transportation of empty containers of various Shipping Lines,
transporting 1800 teus per month.

CUSTOM CLEARING:

Import Consignments:
Formalities on import customs clearance includes - filing of import documents electronically,
Bill of Entry, IGM and Line number, Documentation in import clearance, Examination
procedures of imported goods, value appraisement / assessment procedures under import
clearance, Import Pass Out procedures, Delivery order by carrier etc.
We as your customs broker can assist you and file the necessary documents for import
clearance procedures. Before arrival of your goods, you can keep ready of all pertaining
documents required for import clearance.

Documents required include:

Bill of Lading or Airway bill, commercial invoice, packing list, Cargo Arrival Notice, Freight
certificate, purchase order or LC and other specific documents for your goods.Delays in filing
of documents leads to delay in clearances and losing the free days offered thereby leading to
financial losses; we track the arrival of consignments for you ensure timely filing of
documents and clearances.
We oversee and monitor your consignment at every stage staring from arrival, filing of
documents, inspection, and payment of customs duties to taking the delivery of the cargo.

Export Consignments:
Cargo pick up from the shipper's factory is the beginning of the export cycle. The goods read
for export is moved to airport, sea port or container freight station and unloads in to the
respective yard of shipping carrier.

Documents required include:

Invoice, Packing list, SDF declaration form, Letter of Credit and Purchase Order.
As customs brokers we help you file your documents on ICE GATE and generate the unique
Shipping Bill no and move your cargo for export clearances after clearance it is then moved
to the port, The cargo is then handed over to the designated carrier for export.
WAREHOUSING:

Warehousing Facilities for Export & Import goods:

Our Warehousing Facilities provide logistics support to all our Export as well as Import
customers. We offers ware housing & logistics services to diverse group of clients.
We operate warehouses across the country with a storage capacity. These services include
food grain warehouses, industrial warehousing, custom bonded warehouses, inland clearance
depots and air cargo complexes.
Apart from storage and handling, we offers services in the area of clearing & forwarding,
handling & transportation, procurement & distribution, disinfestation services, fumigation
services, consultancy services.

Palletising & Packaging Services for Export & Import Goods

We offer state of the art palletising and packaging services. We use superior quality pallets
and packaging materials to ensure complete safety of the goods.

PROFESSIONAL TRAINING:
Have created an infrastructure at own site to carry out fire fighting training for Marine
personnel as well as workmen and staff working in various marine container handling
facilities like Container Freight Stations and Depots. We also carry out various other training
and refresher courses authorised by the DG Shipping.

As a NVOCC organization

TSPL take pleasure to introduce them as an Agent of WFF Shipping LLC in India as an
NVOCC. TSPL are having services to Gulf & Iranian ports and can offer the best freight
from Nhava Sheva, Mundra, Delhi, Ludhiana, Hazira to the below destinations. TSPL have
20HD and 40 HC containers available with them.

TOMS Shipping wishes to extend relations not only on the grounds of Service Provider but
as partners which will mutually benefit both the organizations.

TSPL assure you that they will do all that is required to win the confidence of your company
with our good and economical services.

They have services from NHAVA SHEVA, MUNDRA, DELHI, LUDHIANA, HAZIRA for
the below destinations for Imports as well as Exports bookings.

JEBEL ALI

SHARJAH

ABU DHABI
BANDAR ABBAS

BANDAR IMAM KHOMEINI

BUSHEHR

KHORRAMSHAHR

TSPL are already handling Export shipments for other Export houses and would be glad to
assist for any queries. Looking for a positive response from your side and assure you of our
best services all the time.

All acronyms relating to project:

LTS Lay Time Saved

EDI Electronic Data Interchange

BTU British thermal unit

FOB Free on Board

ISO International Standard Organisation

ATA Actual Time of Arrival

DOT Department of Transportation

ICC International Chamber of Commerce

BST British Summer Time

RPM Revolutions per Minute

ETD Estimated Time of Departure

PST Pacific Standard Time

LNG Liquefied Natural Gas

IATA International Air Transport Association

ETA Estimated Time of Arrival

ETD Estimated Time of Departure

EIR Equipment Interchange Receipt

DDU Delivery Duty Unpaid

DDP Delivery Duty Paid

CIF Cost, Insurance and Freight

CFR- Cost and Freight

CIP Carriage and Insurance Paid

FCA Free Carrier

FAS Free Alongside

B/L Bill of Lading

CHA Custom House Agent

GP General Purpose

HC High Cube

FTA Free Trade Agreement

RESEARCH METHODOLOGY
 CONTAINER INFORMATION

INTRODUCTION & GENERAL INFORMATION

General Purpose Container

GENERAL PURPOSE (GP) CONTAINER 20' 40'

HIGH CUBE (HC) GENERAL PURPOSE CONTAINER 40'

HIGH CUBE (HC) GENERAL PURPOSE CONTAINER 45'

Hardtop Container

HARDTOP CONTAINER 20' 40'

HIGH CUBE HARDTOP CONTAINER 40'

ROOF AND DOOR OPENINGS OF HARDTOP CONTAINERS 20' 40'

Open Top Container

OPEN TOP CONTAINER 20' 40'

HIGH CUBE OPEN TOP CONTAINER 40'

ROOF AND DOOR OPENINGS OF OPEN TOP CONTAINERS 20' 40'

STEEL-FLOOR CONTAINER - ALL TYPES

Platforms / Flats

FLATRACK 20'

HIGH CUBE FLATRACK 40'

PLATFORM (Collapsed Flatrack) 20' 40'

 Reefer Container

REFRIGERATED CONTAINER 20'

HIGH CUBE REFRIGERATED CONTAINER 40'

CONTROLLED ATMOSPHERE

TANK CONTAINER 20'

Reefer containers are bottom air delivery units designed to distribute chilled air from the
floor, via specific T-shaped decking, with the advantage of producing a consistent and
uniform flow of air across the entire shipment, powerful enough to ensure a perfect air
exchange with the goods.

The powerful refrigeration units can maintain or lower the temperature your shipment, even
in the most difficult conditions. Each unit is also equipped to warm up the goods for those
shipments where required, with the ability to maintain temperatures up to 35C when
required, regardless of outside temps.
Controlling the temperature
1. Frozen mode: temperature control is accurately achieved through the return air.
2. Chilled mode: temperature control is accurately achieved through the supply air flow.
 CARGO
Cargo are goods or produce being conveyed generally for commercial gain by ship, boat
or aircraft, although the term is now often extended to cover all types of freight, including
that carried by train, van, truck or intermodal container.

DIFFERENT TYPES OF CARGOS:

General:
General cargo are goods that must be loaded individually, and not in intermodal containers
nor in bulk as with oil or grain. Ships that carry this sort of cargo are called general cargo
ships. The term break bulk derives from the phrase breaking bulk the extraction of a portion
of the cargo of a ship or the beginning of the unloading process from the ship's holds. These
goods may not be in shipping containers. Break bulk cargo is transported in bags, boxes,
crates, drums, or barrels. Unit loads of items secured to a pallet or skid are also used

Over dimensional cargo:

ODC or Over Dimensional Cargo is a cargo that protrudes outside the loading deck of the
vehicle transporting the cargo. If a truck with loading platform length of 20 feet is loaded
with cargo like TMT bars of length 22 feet, then the TMT bars qualifies as Over-Dimension
Cargo. If the same TMT bars were loaded on a vehicle with platform length of 22+ feet, it
would have been classified as Normal Cargo rather than ODC. This definition of ODC is to
resist industry from transporting Normal Cargo unnecessarily as ODC for small economic
benefits compromising road users safety. As discussed in our other article, What are the
costs associated with ODC? the government imposes fine on the carriage of ODC, hence
incentivizing the industry to refrain from taking unnecessary risks and using larger vehicles
to transport these loads.

Hazardous cargo:
Dangerous goods are materials or items with hazardous properties which, if not properly
controlled, present a potential hazard to human health and safety, infrastructure and/ or their
means of transport.

The transportation of dangerous goods is controlled and governed by a variety of different

regulatory regimes, operating at both the national and international levels. Prominent
regulatory frameworks for the transportation of dangerous goods include the United Nations
Recommendations on the Transport of Dangerous Goods, ICAOs Technical Instructions,
IATAs Dangerous Goods Regulations and the IMOs International Maritime Dangerous
Goods Code. Collectively, these regulatory regimes mandate the means by which dangerous
goods are to be handled, packaged, labelled and transported.

Classification of dangerous goods is broken down into nine classes according to the type of
danger materials or items present as follows:
CLASS 1 EXPLOSIVES:
Explosives are materials or items which have the ability to rapidly conflagrate or detonate as
a consequence of chemical reaction.

Sub-Divisions
Division 1.1: Substances and articles which have a mass explosion hazard

Division 1.2: Substances and articles which have a projection hazard but not a mass
explosion hazard

Division 1.3: Substances and articles which have a fire hazard and either a minor blast hazard
or a minor projection hazard or both

Division 1.4: Substances and articles which present no significant hazard; only a small hazard
in the event of ignition or initiation during transport with any effects largely confined to the
package

Division 1.5: Very insensitive substances which have a mass explosion hazard

Division 1.6: Extremely insensitive articles which do not have a mass explosion hazard

Commonly transported explosives: Ammunition/cartridges, fireworks, flares,

blasting caps, fuse.

CLASS 2 GASES:
Gases are defined by dangerous goods regulations as substances which have a vapour
pressure of 300 kPa or greater at 50c or which are completely gaseous at 20c at standard
atmospheric pressure, and items containing these substances. The class encompasses
compressed gases, liquefied gases, dissolved gases, refrigerated liquefied gases, mixtures of
one or more gases with one or more vapours of substances of other classes, articles charged
with a gas and aerosols.

Sub-Divisions
Division 2.1: Flammable gases

Division 2.2: Non-flammable, non-toxic gases

Division 2.3: Toxic gases

Commonly Transported Gases: Aerosols, Fire extinguishers, Nitrogen / nitrogen

compounds, Natural gas, Petroleum gases

CLASS 3 FLAMMABLE LIQUIDS:

Flammable liquids are defined by dangerous goods regulations as liquids, mixtures of liquids
or liquids containing solids in solution or suspension which give off a flammable vapour
(have a flash point) at temperatures of not more than 60-65C, liquids offered for transport at
temperatures at or above their flash point or substances transported at elevated temperatures
in a liquid state and which give off a flammable vapour at a temperature at or below the
maximum transport temperature.

Sub-Divisions: No subdivisions
Commonly Transported Flammable Liquids: Acetone / acetone oils, Paints /
varnishes, Alcohols, Perfumery products, Gasoline / Petrol

CLASS 4 FLAMMABLE SOLIDS; SUBSTANCES LIABLE TO

SPONTANEOUS COMBUSTION; SUBSTANCES WHICH EMIT
FLAMMABLE GASES WHEN IN CONTACT WITH WATER
Flammable solids are materials which, under conditions encountered in transport, are readily
combustible or may cause or contribute to fire through friction, self-reactive substances
which are liable to undergo a strongly exothermic reaction or solid desensitized explosives.

Sub-Divisions
Division 4.1: Flammable solids

Division 4.2: Substances liable to spontaneous combustion

Division 4.3: Substances which, in contact with water, emit flammable gases

Commonly Transported Flammable Solids; Spontaneous Combustibles;

Dangerous When Wet Materials: Alkali metals, Metal powders, Sodium batteries,
Firelighters, Matches

CLASS 5 OXIDIZING SUBSTANCES; ORGANIC PEROXIDES:

Oxidizers are defined by dangerous goods regulations as substances which may cause or
contribute to combustion, generally by yielding oxygen as a result of a redox chemical
reaction. Organic peroxides are substances which may be considered derivatives of hydrogen
peroxide where one or both hydrogen atoms of the chemical structure have been replaced by
organic radicals.

Sub-Divisions
Division 5.1: Oxidizing substances

Division 5.1: Organic peroxides

Commonly Transported Oxidizers; Organic Peroxides: Chemical oxygen

generators, Ammonium nitrate fertilizers, Chlorates, Nitrates, and Permanganates
CLASS 6 TOXIC SUBSTANCES; INFECTIOUS SUBSTANCES:
Toxic substances are those which are liable either to cause death or serious injury or to harm
human health if swallowed, inhaled or by skin contact. Infectious substances are those which
are known or can be reasonably expected to contain pathogens.

Sub-Divisions
Division 6.1: Toxic substances

Division 6.2: Infectious substances

Commonly Transported Toxic Substances; Infectious Substances:

Medical/Biomedical waste, Clinical waste, Alkaloids, Acids, Cyanides

CLASS 7 RADIOACTIVE MATERIAL:

Dangerous goods regulations define radioactive material as any material containing
radionuclides where both the activity concentration and the total activity exceed certain pre-
defined values. A radionuclide is an atom with an unstable nucleus and which consequently is
subject to radioactive decay.

Sub-Divisions: No subdivisions
Commonly Transported Radioactive Material: Radioactive ores, Medical
isotopes, Depleted uranium / depleted uranium products, Uranium hexafluoride, Enriched
Uranium

CLASS 8 CORROSIVES:
Corrosives are substances which by chemical action degrade or disintegrate other materials
upon contact.

Sub-Divisions: No subdivisions
Commonly Transported Corrosives: Acids, Batteries, Dyes, Flux, Paints

CLASS 9 MISCELLANEOUS DANGEROUS GOODS:

Miscellaneous dangerous goods are substances and articles which during transport present a
danger or hazard not covered by other classes. This class encompasses, but is not limited to,
environmentally hazardous substances, substances that are transported at elevated
temperatures, miscellaneous articles and substances, genetically modified organisms and
micro-organisms and (depending on the method of transport) magnetized materials and
aviation regulated substances.

Sub-Divisions:
No subdivisions.
Commonly Transported Miscellaneous Dangerous Goods: Dry ice / solid
carbon dioxide, Expandable polymeric beads / polystyrene beads, Ammonium nitrate
fertilizers, Fuel cell engines, internal combustion engines

MATERIALS FOR LAYING UNDER CARGO (BEDDING)

Before cargo is stowed in a container, it must be decided whether or not it can be placed
directly on the container floor. The cargo can be loaded without special bedding if the cargo
itself stands safely, the container floor is not damaged by the cargo and the weight restriction
per running metre is not exceeded. Examples for cargo without bedding are cartons, light
cases or pallets.

1) Pellets
2) Anti-slip material
3) Square timber and strong plants
4) Steel girders

FILLING MATERIAL
A very simple and useful method for securing cargo against sliding forwards or sideways is
to fill the space in the container with stowage material. It is important that the container wall
or the cargo opposite is strong enough to withstand the forces transferred.

1) Airbags
2) Timber

LASHING MATERIAL
Lashing materials are used to secure cargo. They prevent horizontal movements, cargo
tipping and bouncing. There are different terms and definitions for the strength of lashing
material. The breaking load is the load lengthwise at which a rope tears. It is not permitted to
load a securing element with this weight. A securing factor has thus been introduced. This
securing factor depends on the type of lashing material and its use. The breaking load divided
by the securing factor yields the Maximum Securing Load (MSL). The MSL is normally
given in the data specification or directly on the lashing material. In addition to the MSL, the
load must be reduced if the lashing material is passed over sharp corners. Different lashing
materials have different elastic strength. Different types of lashing materials must thus not be
used to secure the same item of cargo. If various lashing materials are used, when there are
movements, the cargo will be held first with the lashing material with the lowest elasticity.
This lashing material will first break and the other lashings will then also no longer be able to
take the entire load. Lashing materials can be mixed if the different materials are used in
different lashing directions.

1) Fibre ropes
2) Nylon belts
3) Steel strapping (signode)
4) Steel wire, turnbuckles, shackles and wire clips
5) Chains

TERMS USED IN SHIPPING (INCO TERMS):

RULES FOR ANY MODE OF TRANSPORT

EXW Ex Works

EXW means that a buyer incurs the risks for bringing the goods to their final
destination. Either the seller does not load the goods on collecting vehicles and does not
clear them for export, or if the seller does load the goods, he does so at buyer's risk and cost.
If the parties agree that the seller should be responsible for the loading of the goods on
departure and to bear the risk and all costs of such loading, this must be made clear by adding
explicit wording to this effect in the contract of sale.

There is no obligation for the seller to make a contract of carriage, but there is also no
obligation for the buyer to arrange one either - the buyer may sell the goods on to their own
customer for collection from the original seller's warehouse. However, in common practice
the buyer arranges the collection of the freight from the designated location, and is
responsible for clearing the goods through Customs. The buyer is also responsible for
completing all the export documentation, although the seller does have an obligation to obtain
information and documents at the buyer's request and cost.

These documentary requirements may result in two principal issues. Firstly, the stipulation
for the buyer to complete the export declaration can be an issue in certain jurisdictions where
the customs regulations require the declarant to be either an individual or corporation resident
within the jurisdiction. If the buyer is based outside of the customs jurisdiction they will be
unable to clear the goods for export, meaning that the goods may be declared in the name of
the seller by the buyer, even though the export formalities are the buyer's responsibility under
the EXW term.

Secondly, most jurisdictions require companies to provide proof of export for tax purposes.
In an EXW shipment, the buyer is under no obligation to provide such proof to the seller, or
indeed to even export the goods.
FCA Free Carrier

A free carrier is a trade term designating the location the seller is to deliver goods. Most
often, the destination is a named airport, terminal or other place where carrier operates. In
many respects this Incoterm has replaced FOB in modern usage, although the critical point at
which the risk passes moves from loading aboard the vessel to the named place. It should also
be noted that the chosen place of delivery affects the obligations of loading and unloading the
goods at that place.

If delivery occurs at the seller's premises, or at any other location that is under the seller's
control, the seller is responsible for loading the goods on to the buyer's carrier. However, if
delivery occurs at any other place, the seller is deemed to have delivered the goods once their
transport has arrived at the named place; the buyer is responsible for both unloading the
goods and loading them onto their own carrier.

CPT Carriage Paid To

CPT replaces the C&F (cost and freight) term for all shipping modes outside of non-
containerized sea freight. The seller pays for the carriage of the goods up to the named
place of destination. However, the goods are considered to be delivered when the goods
have been handed over to the first or main carrier, so that the risk transfers to buyer upon
handing goods over to that carrier at the place of shipment in the country of Export. The
seller is responsible for origin costs including export clearance and freight costs for carriage
to the named place of destination. If the buyer requires the seller to obtain insurance, the
Incoterm CIP should be considered instead.

CIP Carriage and Insurance Paid to

CIP is a commercial term indicating that seller delivers goods to a carrier or to another person
nominated by seller, at a place mutually agreed upon by buyer and seller, and that seller pays
freight and insurance charges to transport the goods to specified destination. This term is
broadly similar to the above CPT term, with the exception that the seller is required to
obtain insurance for the goods while in transit. CIP requires the seller to insure the goods
for 110% of the contract value under at least the minimum cover of the Institute Cargo
Clauses of the Institute of London Underwriters, or any similar set of clauses. The policy
should be in the same currency as the contract, and should allow the buyer, the seller, and
anyone else with an insurable interest in the goods to be able to make a claim.

CIP can be used for all modes of transport, whereas the Incoterm CIF should only be used
for non-containerized sea-freight.'

DAT Delivered At Terminal

This Incoterm requires that the seller delivers the goods, unloaded, at the named terminal.
The seller covers all the costs of transport (export fees, carriage, unloading from main carrier
at destination port and destination port charges) and assumes all risk until arrival at the
destination port or terminal.

The terminal can be a Port, Airport, or inland freight interchange, but must be a facility with
the capability to receive the shipment. If the seller is not able to organize unloading, they
should consider shipping under DAP terms instead.

All charges after unloading (for example, Import duty, taxes, customs and on-carriage) are to
be borne by buyer. However, it is important to note that any delay or demurrage charges at
the terminal will generally be for the seller's account.

DAP Delivered At Place

Incoterms 2010 defines DAP as 'Delivered at Place' - the seller delivers when the goods are
placed at the disposal of the buyer on the arriving means of transport ready for unloading at
the named place of destination. Under DAP terms, the risk passes from seller to buyer from
the point of destination mentioned in the contract of delivery.

Once goods are ready for shipment, the necessary packing is carried out by the seller at his
own cost, so that the goods reach their final destination safely. All necessary legal formalities
in the exporting country are completed by the seller at his own cost and risk to clear the
goods for export.

After arrival of the goods in the country of destination, the customs clearance in the
importing country needs to be completed by the buyer at his own cost and risk, including all
customs duties and taxes. However, as with DAT terms any delay or demurrage charges are
to be borne by the seller.

Under DAP terms, all carriage expenses with any terminal expenses are paid by seller up to
the agreed destination point. The necessary unloading cost at final destination has to be borne
by buyer under DAP terms.

DDP Delivered Duty Paid

Seller is responsible for delivering the goods to the named place in the country of the buyer,
and pays all costs in bringing the goods to the destination including import duties and taxes.
The seller is not responsible for unloading. This term is often used in place of the non-
Incoterm "Free in Store (FIS)". This term places the maximum obligations on the seller and
minimum obligations on the buyer. No risk or responsibility is transferred to the buyer until
delivery of the goods at the named place of destination.

The most important consideration for DDP terms is that the seller is responsible for clearing
the goods through customs in the buyer's country, including both paying the duties and taxes,
and obtaining the necessary authorizations and registrations from the authorities in that
country. Unless the rules and regulations in the buyer's country are very well understood,
DDP terms can be a very big risk both in terms of delays and in unforeseen extra costs, and
should be used with caution.

RULES FOR SEA AND INLAND WATERWAY TRANSPORT

Free on Board Shipping (FOB):

The buyer takes delivery of goods being shipped to it by a supplier once goods leave
suppliers shipping dock. Since buyer takes ownership at the point of departure from
suppliers shipping dock, the supplier should record a sale at that point.

Cost and Freight (CFR):

The seller pays for the carriage of the goods up to the named port of destination. Risk
transfers to buyer when the goods have been loaded on board the ship in the country of
Export. The Shipper is responsible for origin costs including export clearance and freight
costs for carriage to named port. The shipper is not responsible for delivery to the final
destination from the port (generally the buyer's facilities), or for buying insurance. CFR
requires seller to pay costs and freight necessary to transport goods to named port of
destination.

Cost, Insurance and Freight (CIF):

This term is broadly similar to the above CFR term, with the exception that the seller is
required to obtain insurance for the goods while in transit to the named port of destination. It
is trade term requiring seller to arrange for the carriage of goods by sea to port of destination,
and provide the buyer with documents necessary to obtain goods from carrier.

Free Alongside (FAS):

The seller delivers when the goods are placed alongside the buyer's vessel at the named port
of shipment. This means that the buyer has to bear all costs and risks of loss of or damage to
the goods from that moment. The FAS term requires the seller to clear the goods for export,
which is a reversal from previous Incoterms versions that required the buyer to arrange for
export clearance. It is trade term requiring the seller to deliver goods to a named port
alongside a vessel designated by the buyer.

PREVIOUS TERMS FROM INCOTERMS 2000 ELIMINATED FROM

INCOTERMS 2010
DAF Delivered at frontier

DES Delivered Ex ship

DEQ Delivered Ex Quay

DDU Delivery duty unpaid

CUSTOMS CLEARANCE PROCEDURE FOR EXPORTS
For clearance of export goods, the export or his agents have to undertake the following
formalities:

(a) Registration:

1. The exporters have to obtain PAN based Business Identification Number(BIN) from the
Directorate General of Foreign Trade prior to filing of shipping bill for clearance of export
goods. Under the EDI System, PAN based BIN is received by the Customs System from the
DGFT online. The exporters are also required to register authorised foreign exchange dealer
code (through which export proceeds are expected to be realised) and open a current account
in the designated bank for credit of any drawback incentive.

2. Whenever a new Airline, Shipping Line, Steamer Agent, port or airport comes into
operation, they are required to be registered into the Customs System. Whenever, electronic
processing of shipping bill etc. is held up on account of non-registration of these entities, the
same is to be brought to the notice of Assistant/Deputy Commissioner in-charge of EDI
System for registering the new entity in the system.

(b) Registration in the case of export under export promotion schemes:

3. All the exporters intending to export under the export promotion scheme need to get their
licences/DEEC book etc. registered at the Customs Station. For such registration, original
documents are required.

(c) Processing of Shipping Bill-Non-EDI:

4. under manual system, shipping bills or, as the case may be, bills of export are required to
be filed in format as prescribed in the Shipping Bill and Bill of Export (Form) regulations,
1991. The bills of export are being used if clearance of export goods is taken at the Land
Customs Stations. Different forms of shipping bill/bill of export have been prescribed for
export of duty free goods, export of dutiable goods and export under drawback etc.

5. Shipping Bills are required to be filed along with all original documents such as invoice,
AR-4, packing list etc. The assessing officer in the Export Department checks the value of the
goods, classification under Drawback schedule in case of Drawback Shipping Bills, rate of
duty/cess where applicable, exportability of goods under EXIM policy and other laws in
force. The DEEC/DEPB Shipping bills are processed in the DEEC group. In case of DEEC
Shipping bills, the assessing officer verifies that the description of the goods declared in the
shipping bill and invoice match with the description of the resultant product as given in the
DEEC book. If the assessing officer has any doubts regarding value, description of goods, he
may call for samples of the goods from the docks. He may also call for any other information
required by him for processing of shipping bill. He may assess the shipping bill after visual
inspection of the sample or may send it for test and pass the shipping bill provisionally.
6. Once, the shipping bill is passed by the Export Department, the exporter or his agent
presents the goods to the shed appraiser (export) in docks for examination. The shed
appraiser may mark the document to a Custom officer for examining the goods. The
examination is carried out under the supervision of the shed appraiser (export). If the
description and other particulars of the goods are found to be as declared, the shed appraiser
gives a let export order, after which the exporter may contact the preventive superintendent
for supervising the loading of goods on to the vessel.

7. In case the examining staffs in the docks finds some discrepancy in the goods, they may
mark the shipping bill back to export department/DEEC group with their observations as well
as sample of goods, if needed. The export department re-considers the case and decide
whether export can be allowed, or amendment in description, value etc. is required before
export and whether any other action is required to be taken under the Customs Act, 1962 for
mis-declaration of description of value etc.

(d) Processing of Shipping Bill-EDI:

8. Under EDI System, declarations in prescribed format are to be filed through the Service
Centres of Customs. A checklist is generated for verification of data by the exporter/CHA.
After verification, the data is submitted to the System by the Service Centre operator and the
System generates a Shipping Bill Number, which is endorsed on the printed checklist and
returned to the exporter. For export items which are subject to export cess, the TR-6 challans
for cess is printed and given by the Service Centre to the exporter immediately after
submission of shipping bill. The cess can be paid on the strength of the challan at the
designated bank. No copy of shipping bill is made available to exporter at this stage.

(e) Octroi procedure, Quota Allocation and Other certification for Export Goods:

9. The quota allocation label is required to be pasted on the export invoice. The allocation
number of AEPC is to be entered in the system at the time of shipping bill entry. The quota
certification of export invoice needs to be submitted to Customs along-with other original
documents at the time of examination of the export cargo. For determining the validity date
of the quota, the relevant date needs to be the date on which the full consignment is presented
to the Customs for examination and duly recorded in the Computer System. In EDI System at
Delhi Air cargo, the quota information is automatically verified from the
AEPC/TEXPROCIL system.

10. Since the shipping bill is generated only after the 'let export order' is given by Customs,
the exporter may make use of export invoice or such other document as required by the
Octroi authorities for the purpose of Octroi exemption.
(f) Arrival of Goods at Docks:

11. The goods brought for the purpose of examination and subsequent 'let export' is allowed
entry to the Dock on the strength of the checklist and other declarations filed by the exporter
in the Service centre. The Port authorities have to endorse the quantity of goods actually
received on the reverse of the Check List.

(g) System Appraisal of Shipping Bills:

12. In many cases the Shipping Bill is processed by the system on the basis of declarations
made by the exporters without any human intervention. In other cases where the Shipping
Bill is processed on screen by the Customs Officer, he may call for the samples, if required
for confirming the declared value or for checking classification under the Drawback
Schedule. He may also give any special instructions for examination of goods, if felt
necessary.

(h) Status of Shipping Bill:

13. The exporter can check up with the query counter at the Service Centre whether the
Shipping Bill submitted by them in the system has been cleared or not, before the goods are
brought into the Docks for examination and export. In case any query is raised, the same is
required to be replied through the service center or in case of CHAs having EDI connectivity
through their respective terminals. The Customs officer may pass the Shipping Bill after all
the queries have been satisfactorily replied to.

(i) Customs Examination of Export Cargo:

14. After the receipt of the goods in the dock, the exporter may contact the Customs Officer
designated for the purpose present the check list with the endorsement of Port Authority and
other declarations as aforesaid along with all original documents such as, Invoice and
Packing list, AR-4, etc. Customs Officer may verify the quantity of the goods actually
received and enter into the system and thereafter mark the Electronic Shipping Bill and also
hand over all original documents to the Dock Appraiser of the Dock who many assign a
Customs Officer for the examination and intimate the officers name and the packages to be
examined, if any, on the check list and return it to the exporter or his agent.

15. The Customs Officer may inspect the shipment along with the Dock Appraiser. The
Customs Officer enters the examination report in the system. He then marks the Electronic
Bill along with all original documents and checklist to the Dock Appraiser. If the Dock
Appraiser is satisfied that the particulars entered in the system conform to the description
given in the original documents and as seen in the physical examination, he may proceed to
allow "let export" for the shipment and inform the exporter or his agent.
(j) Variation between the Declaration & Physical Examination:

16. The check list and the declaration along with all original documents are retained by the
Appraiser concerned. In case of any variation between the declaration in the Shipping Bill
and physical documents/examination report, the Appraiser may mark the Electronic Shipping
Bill to the Assistant Commissioner of Customs (Exports). He may also forward the physical
documents to Assistant Commissioner of Customs and instruct the exporter or his agent to
meet the Assistant Commissioner of Customs for settlement of dispute. In case the exporter
agrees with the views of the Department, the Shipping Bill needs to be processed
accordingly. Where, however, the exporter disputes the view of the Department principles of
natural justice is required to be followed before finalisation of the issue.

(k) Stuffing / Loading of Goods in Containers

17. The exporter or his agent should hand over the exporter copy of the shipping bill duly
signed by the Appraiser permitting "Let Export" to the steamer agent who may then approach
the proper officer (Preventive Officer) for allowing the shipment. In case of container cargo
the stuffing of container at Dock is dome under Preventive Supervision. Loading of both
containerized and bulk cargo is done under Preventive Supervision. The Customs Preventive
Superintendent may enter the particulars of packages actually stuffed in to the container; the
bottle seal number particulars of loading of cargo container on board into the system and
endorse these details on the exporter copy of the shipping bill presented to him by the steamer
agent. If there is a difference in the quantity/number of packages stuffed in the
containers/goods loaded on vessel the Superintendent may put a remark on the shipping bill
in the system and that shipping bill requires amendment or changed quantity. Such shipping
bill also may not be taken up for the purpose of sanction of Drawback/DEEC logging, till the
shipping bill is suitably amended for the changed quantity. The Customs Preventive Officer
supervising the loading of container and general cargo in to the vessel may give "Shipped on
Board" endorsement on the exporters copy of the shipping bill.

(l) Drawing of Samples:

18. Where the Appraiser Dock (export) orders for samples to be drawn and tested, the
Customs Officer may proceed to draw two samples from the consignment and enter the
particulars thereof along with details of the testing agency in the ICES system. There is no
separate register for recording dates of samples drawn. Three copies of the test memo are
prepared by the Customs Officer and are signed by the Customs Officer and Appraising
Officer on behalf of Customs and the exporter or his agent. The disposals of the three copies
of the test memo are as follows: -
Original to be sent along with the sample to the test agency.
Duplicate Customs copy to be retained with the 2nd sample.
Triplicate Exporters copy.
19. The Assistant Commissioner, if he considers necessary, may also order for sample to be
drawn for purpose other than testing such as visual inspection and verification of description,
market value inquiry, etc.

(m) Amendments:

20. Any correction/amendments in the checklist generated after filing of declaration can be
made at the service center, provided, the documents have not yet been submitted in the
system and the shipping bill number has not been generated. Where corrections are required
to be made after the generation of the shipping bill No. or after the goods have been brought
into the Export Dock, amendments is carried out in the following manners.
If the goods have not yet been allowed "let export" amendments may be permitted by
the Assistant Commissioner (Exports).
Where the "Let Export" order has already been given, amendments may be permitted
only by the Additional/Joint Commissioner, Custom House, in charge of export
section.

21. In both the cases, after the permission for amendments has been granted, the Assistant
Commissioner may approve the amendments on the system on behalf of the Joint
Commissioner. Where the print out of the Shipping Bill has already been generated, the
exporter may first surrender all copies of the shipping bill to the Dock Appraiser for
cancellation before amendment is approved on the system.

(n) Export of Goods under Claim for Drawback:

22. After actual export of the goods, the Drawback claim is processed through EDI system
by the officers of Drawback Branch on first come first served basis. There is no need for
filing separate drawback claims. The status of the shipping bills and sanction of DBK claim
can be ascertained from the query counter set up at the service center. If any query has been
raised or deficiency noticed, the same is shown on the terminal. A print out of the query may
be obtained by the authorized person of the exporter from the service center. The exporters
are required to reply to such queries through the service center. The claim will come in queue
of the EDI systems only after reply to queries are entered by the Service Center.

23. All the claims sanctioned on a particular day are enumerated in a scroll and transferred
to the Bank through the system. The bank credits the drawback amount in the respective
accounts of the exporters. Bank may send a fortnightly statement to the exporters of such
credits made in their accounts.

24. The Steamer Agent/Shipping Line may transfer electronically the EGM to the Customs
EDI system so that the physical export of the goods is confirmed, to enable the Customs to
sanction the drawback claims.
(o) Generation of Shipping Bills:

25. After the "let export" order is given on the system by the Appraiser, the Shipping Bill is
generated by the system in two copies i.e., one Customs copy, one exporters copy (E.P. copy
is generated after submission of EGM). After obtaining the print out the appraiser obtains the
signatures of the Customs Officer on the examination report and the representative of the
CHA on both copies of the shipping bill and examination report. The Appraiser thereafter
signs & stamps both the copies of the shipping bill at the specified place.

26. The Appraiser also signs and stamps the original & duplicate copy of SDF. Customs
copy of shipping bill and original copy of the SDF is retained along with the original
declarations by the Appraiser and forwarded to Export Department of the Custom House. He
may return the exporter copy and the second copy of the SDF to the exporter or his agent.

27. As regards the AEPC quota and other certifications, these are retained along with the
shipping bill in the dock after the shipping bill is generated by the system. At the time of
examination, apart from checking that the goods are covered by the quota certifications, the
details of the quota entered into the system needs to be checked.

(p) Export General Manifest:

28. All the shipping lines/agents need to furnish the Export General Manifests, Shipping
Bill wise, to the Customs electronically within 7 days from the date of sailing of the vessel.

29. Apart from lodging the EGM electronically the shipping lines need to continue to file
manual EGMs along with the exporter copy of the shipping bills as per the present practice in
the export department. The manual EGMs need to be entered in the register at the Export
Department and the Shipping lines may obtain acknowledgements indicating the date and
time at which the EGMs were received by the Export Department.

30. The above is the general procedure for export under EDI Systems. However special
procedures exist for specified schemes, details of which may be obtained from the Public
Notice/Standing Orders issued by the respective Commissionerates.
EXPORT WORK FLOW
 Order/Booking Received

Shipping Line issues CRO

Cntr. pickup from Depot with Seal

Cntr. taken to CFS/Factory for

stuffing

Form 13 Collection

Container Taken to Port for Loading

Pre-gate
Registration & Driver License Checking

Generating Truck Events and EIR

Pre Advise

Terminal in gate
Checking Truck No.

Physical Gate in

Checking Physical Details of Container by Gate Checker

Inside terminal
Receive customs

Receive custom advance list & stow entry

Container on-board
In case of reefer container, Equipment interchange receipt (EIR) is generated at pre-gate,
while interchange is done inside terminal. Further, offloading & checking the temperature is
done as well. The empty truck is left out, while loaded container is processed as shown above
(inside terminal procedure).

Form 13

Form 13 is the document/application for gate entry onto the port with specific vessel
details.
DOCUMENTATION
 1. Commercial invoice (sample)

A commercial invoice is a customs document. It is used as a customs declaration provided by

the person or corporation that is exporting an item across international borders. Although
there is no standard format, the document must include a few specific pieces of information
such as the parties involved in the shipping transaction, the goods being transported, the
country of manufacture, and Harmonized System codes for those goods. A commercial
invoice must often include a statement certifying that the invoice is true, and a signature.
A commercial invoice is used to calculate tariffs, international commercial terms (like the
Cost in a CIF) and is commonly used for customs purposes.
Commercial invoices are in European countries not normally for payment. The
definitive invoice for payment usually has only the words "invoice". This invoice can also be
used as a commercial invoice if additional information is disclosed.
2. A bill of lading (sometimes abbreviated as B/L or BoL)

Is a document issued by a carrier (or his agent) to acknowledge receipt of cargo for shipment.
In British English the term relates to ship transport only and in American English to any type
of transportation of goods.
A bill of lading must be negotiable, and serves three main functions:

It is a conclusive receipt, i.e. an acknowledgement that the goods have been loaded; and
It contains or evidences the terms of the contract of carriage; and
It serves as a document of title to the goods, subject to the nemo dat rule.
Bills of lading are one of three crucial documents used in international trade to ensure
that exporters receive payment and importers receive the merchandise. The other two
documents are a policy of insurance and an invoice. Whereas a bill of lading is negotiable,
both a policy and an invoice are assignable.
3. Consular invoice (Sample)

A document certifying shipment of goods and shows information such as consignor,

consignee and value of the shipment.A consular invoice can be obtained through a consular
representative of the country you're shipping to.The consular invoice is required by some
countries to facilitate customs and collection of taxes.
4. Certificate of Origin

A Certificate of Origin (CO) is an important international trade document confirming that the
goods in a particular shipment have been wholly obtained, produced, manufactured or
processed in a particular country.
There are 2 major types of CO:

Preferential CO: Issued to cover eligible exports for preferential tariff exemption or reduction
under free trade agreements (FTA).

Non-preferential CO: issued for goods which do not enjoy preferential treatment.

COs may be requested by importing countries' Customs Departments, importers, freight

forwarders or banks (for letter of credit clearance).
5. Inspection certification

When shipping high-value products or when you are dealing with a very conscientious
customer, an inspection certificate might be requested. An inspection certificate provides
proof that what you are shipping is, in fact, what the customer ordered, and is also of good
quality. If a customer requests this document, agree to it -- but see that they cover the
administrative and inspection fee. Also, ask them to recommend an independent inspection
agency to perform the review at your end.
6. Dock receipt and warehouse receipt

Document issued by a shipping company to acknowledge that goods have been received for
shipment. Dock receipt transfers the accountability for the safe custody of the cargo from the
shipper to the carrier, and serves as the basis for preparing the bill of lading.

A warehouse receipt is a document that provides proof of ownership of commodities that are
stored in a warehouse, vault, or depository for safekeeping.

Warehouse receipts may be negotiable or non-negotiable. Negotiable warehouse receipts

allow transfer of ownership of that commodity without having to deliver the physical
commodity.
7. Insurance certificate

There are three types of insurance documents:

(a) Insurance Policy: The insurance policy sets out all the terms and conditions of the contract
between the insurer and insured.
(b) Certificate of Insurance: It is an evidence of insurance but does not set out the terms and
conditions of insurance. It is also known as Cover Note.
(c) Insurance Brokers Note: It indicates insurance has been made pending issuance of policy
or certificate. However, it is not considered to be evidence of contract of insurance.
WHEN AND WHY TO INSURE

Before shipment of goods, exporter has to insure to goods. Date of coverage in insurance
policy should always be earlier of the date of shipment of goods, then only insurance covers
totally. Banks insist the date of insurance to be earlier to the date of shipment of goods, at the
time of negotiation of documents. Any person who has insurable interest in the goods only
can insure. Exporter is said to have interest in the safe arrival of goods. Equally, its loss,
damage or detention will prejudice exporter. When the cargo is sent on CIF basis, exporter
invariably takes marine insurance, as it is his duty to cover the risk. Till ownership in goods
is transferred, in his own interest, exporter has to take the coverage. There is no obligation to
the exporter to take insurance, after transfer of ownership. Still, it will be wise for the
exporter to take adequate insurance policy till the goods reach the end of voyage. Here are the
reasons:
(A) Importers insurance may be inadequate.
(B) In case of insolvency of the importer, claim amount may go to the benefit of the
importers creditors and exporter would not receive the payment.
(C) Foreign exchange problems could complicate the remittance of insurance claim amount
to the exporter.

HOW TO INSURE:

There are two ways to insure. First, take insurance policy as and when shipment is made.
Those exporters, who make shipment now and then, do this. The second and common mode
is to take open policy. Under open policy, the exporter does not have to take insurance
contract, every time, as and when shipment is made. He pays insurance premium, in advance,
one year. The insurance company undertakes to indemnify the insured up to the amount of
the policy. Shipment of goods to the extent of the policy amount is covered. A brief
declaration by the exporter about the basic facts of shipment would do. A great volume in
exports business prefers this method for the following obvious advantages:
(a) Exporter enjoys automatic and continuous protection. Even if there is delay in declaration
or exporter has overlooked to submit declaration, the shipment is covered provided the delay
and oversight are not intentional.
(b) Trouble of taking insurance policy, each time, is avoided.
(c) Exporter will have prior knowledge of the premium amount and so exporter can quote
competitive rate for this exports.
(d) Better relationship between the exporter and insurance company will be developed, so
better advice would be available. As the insurance company understands the requirements in
a better way, the insurance company can develop tailor-made protection to the exporter.

8. Export license

9. Export packing list

IMPORT WORK FLOW
SHIPPING LINE

Declare vessel at port

Obtain Rotation No. from

Customs prior 15 days of vessel
arrival

Vessel registration in
PCS

VIA Registration

Payment to Port for

Berth Hire/Port
Handling

Light Dues Payment to

Customs

Filing of IGM 24 Hrs.

Prior Vessel Berthing

Submit Advance list

of Containers to Port
 FREIGHT FORWARDERS

Delivery Order Required

for Customs Exam Only

Receive OBL. Letter to

CFS Terminal for
Customs Check

Delivery Order
Delivery Order Required
Required for Final
for Final Delivery
Delivery

CY CFS
Delivery Delivery

OBL Guarantee Bond Xerox Copy of Bill OBL Duly

duly/discharged of Entry with Endorsed with
Endorsed with For Container
Detention Free Customs Detention Free
Value Period
Period Endorsement.
(For CY delivery Detention Scales
Detention Scales Receipt of Import
after Free Time Containers) Duty Payment
after Free Time

Collect - Cashier Stamp Duty Assessment Collect - Cashier

Ocean Freight, THC, Container Sum CIF cargo value + Customs Ocean Freight,
Detention, Ancillary Charges. Duty. Assess Stamp Duty THC, Container
Receipt the same. (0.10%) and Stamp on delivery Detention, Ancillary
order Charges.
Collect admin charges as per Receipt the same.
Issue Delivery Instructions on tariff. Maintain Xerox copy of D
Issue Delivery
OBL with xerox copy for O and Bill of entry and Duty
Instructions on
records. Receipt.
OBL with xerox
Update Seaworld System and
copy for Issue Container
Register with Stamp Duty
Issue Container Return Letter records. Destuffing
(Limited Validity date) to Letter (Limited
Storage Yard to accept Empty
Return. Validity date) to
Monthly summary of stamp duty CFS Terminal
assessment from system
Periodic Enhancement of Stamp
Duty Prepayment
 PROCEDURE FOR CLEARANCE OF IMPORTED GOODS
Bill of Entry - Cargo Declaration:
Goods imported in a vessel/aircraft attract customs duty and unless these are not meant for
customs clearance at the port/airport of arrival by particular vessel/aircraft and are intended
for transit by the same vessel/aircraft or transhipment to another customs station or to any
place outside India, detailed customs clearance formalities of the landed goods have to be
followed by the importers. In regard to the transit goods, so long as these are mentioned in
import report/IGM for transit to any place outside, Customs allows transit without payment of
duty. Similarly for goods brought in by particular vessel/aircraft for transhipment to another
customs station detailed customs clearance formalities at the port/airport of landing are not
prescribed and simple transhipment procedure has to be followed by the carrier and the
concerned agencies. The customs clearance formalities have to be complied with by the
importer after arrival of the goods at the other customs station. There could also be cases of
transhipment of the goods after unloading to a port outside India.

For other goods which are offloaded importers have the option to clear the goods for home
consumption after payment of the duties leviable or to clear them for warehousing without
immediate discharge of the duties leviable in terms of the warehousing provisions built in the
Customs Act. Every importer is required to file in terms of the Section 46 an entry (which is
called Bill of entry) for home consumption or warehousing in the form, as prescribed by
regulations.

If the goods are cleared through the EDI system no formal Bill of Entry is filed as it is
generated in the computer system, but the importer is required to file a cargo declaration
having prescribed particulars required for The Bill of entry, where filed, is to be submitted in
a set, different copies meant for different purposes and also given different colour scheme,
and on the body of the bill of entry the purpose for which it will be used is generally
mentioned in the non-EDI declaration. The importer clearing the goods for domestic
consumption has to file bill of entry in four copies; original and duplicate are meant for
customs, third copy for the importer and the fourth copy is meant for the bank for making
remittances.
In the non-EDI system along with the bill of entry filed by the importer or his representative
the following documents are also generally required:-

Signed invoice
Packing list
Bill of Lading or Delivery Order/Airway Bill
GATT declaration form duly filled in
Importers/CHAs declaration
License wherever necessary
Letter of Credit/Bank Draft/wherever necessary
Insurance document
Industrial License, if required
 Test report in case of chemicals
Adhoc exemption order
Catalogue, Technical write up, Literature in case of machineries, spares or
chemicals as may be applicable
Separately split up value of spares, components machineries
Certificate of Origin, if preferential rate of duty is claimed
No Commission declaration
While filing the bill of entry and giving various particulars as prescribed therein the
correctness of the information given has also to be certified by the importer in the form a
declaration at the foot of the bill of entry and any mis-declaration/incorrect declaration has
legal consequences, and due precautions should be taken by importer while signing these
declarations. Under the EDI system, the importer does not submit documents as such for
assessment but submits declarations in electronic format containing all the relevant
information to the Service Centre. A signed paper copy of the declaration is taken by the
service centre operator for non-reputability of the declaration. A checklist is generated for
verification of data by the importer/CHA. After verification, the data is submitted to the
system by the Service Centre Operator and system then generates a B/E Number, which is
endorsed on the printed checklist and returned to the importer/CHA. No original documents
are taken at this stage. Original documents are taken at the time of examination. The
importer/CHA also needs to sign on the final document after Customs clearance. The first
stage for processing a bill of entry is what is termed the noting of the bill of entry, vis--vis,
the IGM filed by the carrier. In the non-EDI system the importer has to get the bill of entry
noted in the concerned unit which checks the consignment sought to be cleared having been
manifested in the particular vessel and a bill of entry number is generated and indicated on all
copies. After noting the bill of entry gets sent to the appraising section of the Custom House
for assessment functions, payment of duty etc. In the EDI system, the Steamer Agents get the
manifest filed through EDI or by using the service centre of the Custom House and the noting
aspect is checked by the system itself which also generates bill of entry number.

After noting/registration of the Bill of entry, it is forwarded manually or electronically to the

concerned Appraising Group in the Custom House dealing with the commodity sought to be
cleared. Appraising Wing of the Custom House has a number of Groups dealing with
earmarked commodities falling under different Chapter Headings of the Customs Tariff and
they take up further scrutiny for assessment, import permissibility etc. angle.

Assessment:
The basic function of the assessing officer in the appraising groups is to determine the duty
liability taking due note of any exemptions or benefits claimed under different export
promotion schemes. They have also to check whether there are any restrictions or
prohibitions on the goods imported and if they require any permission or license or permit
etc., and if so whether these are forthcoming. Assessment of duty essentially involves proper
classification of the goods imported in the customs tariff having due regard to the rules of
interpretations, chapter and sections notes etc., and determining the duty liability. It also
involves correct determination of value where the goods are assessable on ad valorem basis.
The assessing officer has to take note of the invoice and other declarations submitted along
with the bill of entry to support the valuation claim, and adjudge whether the transaction
value method and the invoice value claimed for the basis of assessment is acceptable, or
value needs to be predetermined having due regard to the provisions of Section 14 and the
valuation rules issued thereunder, the case law and various instructions on the subject. He
also takes note of the contemporaneous values and other information on valuation available
with the custom house.

Where the appraising officer is not very clear about the description of the goods from the
document or as some doubts about the proper classification which may be possible only to
determine after detailed examination of the nature of the goods or testing of its samples, he
may give an examination order in advance of finalisation of assessment including order for
drawing of representative sample. This is done generally on the reverse of the original copy
of the bill of entry which is presented by the authorized agent of the importer to the
appraising staff posted in the Docks/Air Cargo Complexes where the goods are examined in
the presence of importers representative.

On receipt of the examination report the appraising officers in the group assesses the bill of
entry. He indicates the final classification and valuation in the bill of entry indicating
separately the various duties such as basic, countervailing, anti-dumping, safeguard duties
etc. that may be leviable. Thereafter the bill of entry goes to Assistant Commissioner/Deputy
Commissioner for confirmation depending upon certain value limits and sent to comprise
who calculates the duty amount taking into account the rate of exchange at the relevant date
as provide under section 14 of the customs act.

After the assessment and calculation of the duty liability the importers representative has to
deposit the duty calculated with the treasury or the nominated banks, where after he can go
and seek delivery of the goods from the custodians.

Where the goods have already been examined for finalization of classification or valuation no
further examination/checking by the dock appraising staff is required at the time of giving
delivery and the goods can be taken delivery after taking appropriate orders and payment of
dues to the custodians, if any.

In most cases, the appraising officer assesses the goods on the basis of information and
details furnished to the importer in the bill of entry, invoice and other related documents
including catalogue, write-up etc. He also determines whether the goods are permissible for
import or there is any restriction. He may allow payment of duty and delivery of the goods on
what is called second check basis in case there are no restriction. In this method, the duties as
determined and calculated are paid in the Custom House and appropriate order is given on the
reverse of the duplicate copy of the bill of entry and the importer or his agent after paying the
duty submits the goods for examination in the import sheds in the docks, to the examining
staff. If the goods are found to be as declared and no other discrepancies are detected, the
importer or his agent can clear the goods after the shed appraiser gives out of charge order.
Wherever the importer is not satisfied with the classification, rate of duty or valuation as may
be determined by the appraising officer, he can seek an assessment order. An appeal against
the assessment order can be made to appropriate appellate authority within the time limits and
in the manner prescribed.

EDI Assessment:
In the EDI system of handling of the documents/declarations for taking import clearances as
mentioned earlier the cargo declaration is transferred to the assessing officer in the groups
electronically.

The assessing officer processes the cargo declaration on screen with regard to all the
parameters as given above for manual process. However in EDI system, all the calculations
are done by the system itself. In addition, the system also supplies useful information for
calculation of duty, for example, when a particular exemption notification is accepted, the
system itself gives the extent of exemption under that notification and calculates the duty
accordingly. Similarly, it automatically applies relevant rate of exchange in force while
calculating. Thus no comprise is required in EDI system. If assessing officer needs any
clarification from the importer, he may raise a query. The query is printed at the service
centre and the party replies to the query through the service centre.

After assessment, a copy of the assessed bill of entry is printed in the service centre. Under
EDI, documents are normally examined at the time of examination of the goods. Final bill of
entry is printed after out of charge is given by the Custom Officer.

In EDI system, in certain cases, the facility of system appraisal is available. Under this
process, the declaration of importer is taken as correct and the system itself calculates duty
which is paid by the importer. In such case, no assessing officer is involved.

Also, a facility of telephone enquiry is provided in certain major Customs stations through
which the status of documents filed through EDI systems could be ascertained through the
telephone. If any query is raised, the same may be printed through fax in the office of
importer/exporter/CHA.

Examination of Goods:
All imported goods are required to be examined for verification of correctness of description
given in the bill of entry. However, a part of the consignment is selected on random selection
basis and is examined. In case the importer does not have complete information with him at
the time of import, he may request for examination of the goods before assessing the duty
liability or, if the Customs Appraiser/Assistant Commissioner feels the goods are required to
be examined before assessment, the goods are examined prior to assessment. This is called
First Appraisement. The importer has to request for first check examination at the time of
filing the bill of entry or at data entry stage. The reason for seeking First Appraisement is also
required to be given. On original copy of the bill of entry, the Customs Appraiser records the
examination order and returns the bill of entry to the importer/CHA with the direction for
examination, which is to take it to the import shed for examination of the goods in the shed.
Shed Appraiser/Dock examiner examines the goods as per examination order and records his
findings. In case group has called for samples, he forwards sealed samples to the group. The
importer is to bring back the said bill of entry to the assessing officer for assessing the duty.
Appraiser assesses the bill of entry. It is countersigned by Assistant/Deputy Commissioner if
the Value is more than 1 lakh INR.

The goods can also be examined subsequent to assessment and payment of duty. This is
called Second Appraisement. Most of the consignments are cleared on second appraisement
basis. It is to be noted that whole of the consignment is not examined. Only those packages
which are selected on random selection basis are examined in the sheds.

Under the EDI system, the bill of entry, after assessment by the group or first appraisement,
as the case may be, need to be presented at the counter for registration for examination in the
import shed. A declaration for correctness of entries and genuineness of the original
documents needs to be made at this stage. After registration, the B/E is passed on to the shed
Appraiser for examination of the goods. Along-with the B/E, the CHA is to present all the
necessary documents. After completing examination of the goods, the Shed Appraiser enters
the report in System and transfers first appraisement B/E to the group and gives 'out of
charge' in case of already assessed B/E. Thereupon, the system prints Bill of Entry and order
of clearance (in triplicate). All these copies carry the examination report, order of clearance
number and name of Shed Appraiser. The two copies each of B/E and the order are to be
returned to the CHA/Importer, after the Appraiser signs them. One copy of the order is
attached to the Customs copy of B/E and retained by the Shed Appraiser.

Green Channel facility:

Some major importers have been given the green channel clearance facility. It means
clearance of goods is done without routine examination of the goods. They have to make a
declaration in the declaration form at the time of filing of bill of entry. The appraisement is
done as per normal procedure except that there would be no physical examination of the
goods. Only marks and number are to be checked in such cases. However, in rare cases, if
there are specific doubts regarding description or quantity of the goods, physical examination
may be ordered by the senior officers/investigation wing like SIIB.

Execution of bonds:
Wherever necessary, for availing duty free assessment or concessional assessment under
different schemes and notifications, execution of end use bonds with Bank Guarantee or other
surety is required to be furnished. These have to be executed in prescribed forms before the
assessing appraiser.
Payment of Duty:
The duty can be paid in the designated banks or through TR-6 challans. Different Custom
Houses have authorised different banks for payment of duty. It is necessary to check the
name of the bank and the branch before depositing the duty. Bank endorses the payment
particulars in challan which is submitted to the Customs.

Amendment of Bill of Entry:

Whenever mistakes are noticed after submission of documents, amendments to the entry is
carried out with the approval of Deputy/Assistant Commissioner. The request for amendment
may be submitted with the supporting documents. For example, if the amendment of
container number is required, a letter from shipping agent is required. Amendment in
document may be permitted after the goods have been given out of charge i.e. goods have
been cleared on sufficient proof being shown to the Deputy/Assistant Commissioner.

Prior Entry for Bill of Entry:

For faster clearance of the goods, provision has been made in section 46 of the Act, to allow
filing of bill of entry prior to arrival of goods. This bill of entry is valid if vessel/aircraft
carrying the goods arrive within 30 days from the date of presentation of bill of entry.
The importer is to file 5 copies of the bill of entry and the fifth copy is called Advance Noting
copy. The importer has to declare that the vessel/aircraft is due within 30 days and they have
to present the bill of entry for final noting as soon as the IGM is filed. Advance noting is
available to all imports except for into bond bill of entry and also during the special period.

Mother Vessel/Feeder vessel:

Often in case of goods coming by container ships they are transferred at an intermediate port
(like Ceylon) from mother vessel to smaller vessels called feeder vessels. At the time of
filing of advance noting B/E, the importer does not know as to which vessel will finally bring
the goods to Indian port. In such cases, the name of mother vessel may be filled in on the
basis of the bill of lading. On arrival of the feeder vessel, the bill of entry may be amended to
mention names of both mother vessel and feeder vessel.

Specialised Schemes:
The imports of goods are made under specialised schemes like DEEC or EOU etc. The
importer in such cases is required to execute bonds with the Customs authorities for
fulfilment of conditions of respective notifications. If the importer fails to fulfil the
conditions, he has to pay the duty leviable on those goods. The amount of bond would be
equal to the amount of duty leviable on the imported goods. The bank guarantee is also
required along with the bond. However, the amount of bank guarantee depends upon the
status of the importer like Super Star Trading House/Trading House etc.
Bill of Entry for Bond/Warehousing and home consumption:
A separate form of bill of entry is used for clearance of goods for warehousing. All
documents as required to be attached with a Bill of Entry for home consumption are also
required to be filed with bill of entry for warehousing. The bill of entry is assessed in the
same manner and duty payable is determined. However, since duty is not required to be paid
at the time of warehousing of the goods, the purpose of assessing the goods at this stage is to
secure the duty in case the goods do not reach the warehouse. The duty is paid at the time of
ex-bond clearance of goods for which an ex-bond bill of entry is filed. The rate of duty
applicable to imported goods cleared from a warehouse is the rate in-force on the date on
which the goods are actually removed from the warehouse.

Ancillary work:

References:
1. http://www.tomsshiplog.com/
2. https://en.wikipedia.org/wiki/Break_bulk_cargo
3. https://nimbuslogistics.in/project-logistics/odc/what-is-over-dimensional-cargo-also-
known-as-odc/
4. http://www.dgiglobal.com/classes
5. http://agriexchange.apeda.gov.in/Ready%20Reckoner/EXPORT_DOCUMENTATION.as
px
6. http://howtoexportimport.com/Types-of-Insurance-Documents--484.aspx
7. http://www.dov.gov.in/newsite3/clearance_procedure.asp#
8.