Clearance of Imported Goods

In one line

Chapter VII is the process by which imported goods stop being under customs control and become the importer's to take away. Precisely: section 44 excludes baggage and postal goods from the chapter; section 45 places unloaded goods in approved custody; section 46 requires the bill of entry; section 47 is the order for clearance for home consumption; section 48 deals with goods not cleared within thirty days; and section 49 permits storage pending clearance.

Why clearance is a formal act rather than a physical one

Because a great many legal consequences hang on a single moment, and the Act needs that moment to be identifiable from a document rather than inferred from where a container happens to be.

Before the order under section 47, the goods are "imported goods" within section 2(25); they are in the custody of an approved person under section 45; the importer may relinquish title under section 23(2); abatement under section 22 and remission under section 23(1) remain available; and pilferage is the custodian's problem under section 45(3) rather than the importer's under section 13.

After it, the goods cease to be imported goods, because section 2(25) expressly excludes goods cleared for home consumption. Relinquishment is no longer possible. The powers which attach to goods in a customs area fall away. What the department retains is the recovery machinery of section 28 and the confiscation provisions where a ground had already attached.

That is why the order matters more than the physical movement, and it is the point a good answer on this topic makes first.

The provisions

Section 44 provides that the provisions of Chapter VII shall not apply to baggage and goods imported by post, which are dealt with separately in Chapter XI.

Section 45, restrictions on custody and removal of imported goods. All imported goods unloaded in a customs area shall remain in the custody of such person as may be approved by the Principal Commissioner or Commissioner of Customs until they are cleared for home consumption or are warehoused or are transhipped in accordance with the Act.

Section 45(2) imposes duties on that custodian. He shall keep a record of the goods and send a copy to the proper officer, and shall not permit the goods to be removed from the customs area or otherwise dealt with except under and in accordance with the written permission of the proper officer.

Section 45(3) is the provision that makes custody meaningful. Notwithstanding anything contained in any law for the time being in force, if any imported goods are pilfered after unloading in a customs area while in the custody of the custodian, that person shall be liable to pay duty on such goods at the rate prevailing on the date of delivery of the arrival manifest or import manifest or import report to the proper officer. Read with section 13, under which the importer is not liable for goods pilfered before clearance, the pair allocates the loss to whoever had the goods.