Transshipment of Cargo

A Brief on ‘Transshipment Procedure’ in Air Cargo Complex, Chennai

1. Introduction:

1.1 A number of ports, airports, Inland Container Depots (ICD), Container Freight Stations (CFS) having Customs clearance facilities have been developed in the country to reduce congestion at the gateway ports/airports and to allow importers and exporters to take Customs clearance of imported and export goods at their door steps. The objectives of bringing the Customs facility to door step of importing community and decongesting the gateway ports/ airports requires the movement of imported cargo or export cargo between a port/airport and other ports/airports, ICDs/CFSs in India or a port/airport abroad.

1.2 As per the Customs Act, 1962 duty becomes payable immediately after imported goods are landed at a port or airport. To avoid payment of duty at the port of landing in cases where goods are to be carried to another port/airport or ICD/CFS or to a port/airport abroad, the Customs Act, 1962 provides a facility of transshipment of cargo without payment of duty. The goods can be transshipped from one port/airport to another port/airport/ICD/CFS either by vessel, air, rail or road or by combination of more than one such mode of transport.

1.3 The procedure for transshipment provided in Section 54 of the Customs Act, 1962 is applicable for imported cargo only. The imported cargo unloaded at a port is allowed to be transshipped to another port/ICD/CFS or a port abroad, if the cargo is mentioned in the import manifest for such transshipment. In regard to export cargo cleared from a port/ACC or ICD/CFS and exported through some gateway port/airport, a similar procedure is being followed to allow carriage of Customs cleared export cargo from port/airport/ICD/CFSs to another port/airport.

2. Transshipment of cargo by air:

2.1 A detailed procedure has been prescribed for transshipment by air of (i) imported cargo between two airports in India, (ii) international transshipped cargo (Foreign to Foreign), and (iii) export of cargo tendered at one Customs airport for export from another Customs airport. The movement of cargo between the gateway airport and inland airport is allowed in Indian Airlines flights and also in private sector airlines flights.

2.2 Transshipment of cargo from a gateway airport to an inland airport: (i) On arrival of flight, the transshipment cargo should be segregated in custodian’s premises. (ii) For transshipment of cargo, the carrier/ console agent is required to file an application for transshipment of cargo, consigned to another airport as indicated in HAWB. Cargo Transfer Manifest (CTM) prepared by the carrier/consol agent, as the case may be, shall itself be treated as application for transshipment. Separate CTMs may be prepared destination-wise. Such transshipment should be approved by the Proper Officer.

(iii) The cargo mentioned in the CTM needs to be escorted by the Preventive Officer from the warehouse of the custodian to the warehouse of receiving airlines which acknowledges the same. The concerned airlines/custodian warehouse should have double locking arrangement, one key of which will be with the airlines/custodian and the other with Customs, for storage of transshipment cargo. No physical examination needs to be conducted, except on specific intelligence, for allowing transshipment and only marks and numbers of cargo need to be verified.

(iv) The receiving airlines should prepare its cargo manifest and transshipment be allowed under Customs supervision. The value of transshipped cargo should be debited from the Transshipment Bond.

(v) Customs at destination airport will acknowledge the receipt of the cargo and send back the acknowledgement manifest through the carrier. The carrier should produce such acknowledgement at the originating airport within 10 days of transshipment. On the basis of such acknowledgement the Transshipment Bond would be re-credited.

(vi) The usual procedure for Customs clearance of cargo shall be adopted at the destination airport.

2.3 International transshipped cargo (Foreign to Foreign):

(i) On the arrival of flight, the transshipment cargo meant for destination abroad should be segregated in the Custodian’s premises.

(ii) The carrier is required to file application for transshipment of cargo and CTM prepared by the airlines shall be treated as application for transshipment. Such transshipment should be approved by the Proper Officer.

(iii) Cargo mentioned in CTM need to be escorted by the Preventive Officer from the warehouse of custodian to the export terminal. No physical examination needs to be conducted, except on specific intelligence, and only marks and numbers of cargo need to be verified. Such cargo may be exported with other export cargo.

2.4 Export of cargo tendered at one Customs airport for export from another Customs airport:

(i) Shipping Bill shall be filed at the originating Customs station and “Let Export Order” should be given by the Customs at the same station. Transshipment Permit (TP) should be prepared by the airlines/ carrier and approved by the proper officer. TP should be sent alongwith the cargo and Transshipment Bond shall be debited for the value of cargo.

(ii) On arrival at the gateway airport, the cargo should be taken to the warehouse of the domestic airlines/custodian in a clearly identified area. The warehouse should have double locking arrangement, one key of which will be with the airlines/custodian and the other with Customs. The Customs officers in charge of warehouse should verify the details of the packages with the TP, Airway Bill, etc. The domestic airlines may prepare the CTM airlines-wise which shall be certified by the Export Freight Officer (EFO).

(iii) Cargo should be shifted to the transshipment warehouse in the export terminal of custodian and acknowledgement obtained. No examination of such cargo should normally be done at gateway airport, except on credible intelligence or information.

(iv) When the aircraft is ready for loading, the airlines should seek permission from the EFO for loading. The load plan prepared by the airlines should be signed by the Airlines, EFO and the custodian.

(v) Cargo should be loaded in the aircraft under Customs supervision.

(vi) Copy of manifest signed by the EFO and Airway Bill along with copy of Shipping Bill should be sent by the airlines to the originating station within 30 days of transshipment. Transshipment Bond shall be re-credited at originating airport.

(vii) In case the transshipment is by bonded truck, the marks and numbers of the packages shall be verified with the details in the transshipment permission and the bonded truck sealed with bottle seal in the presence of the Preventive Officer.

(viii) If transshipment of cargo is also desired at some intermediate Customs airport, carrier/ airlines should give advance intimation to intermediary airport. Customs at intermediary airport would supervise the movement of cargo and endorse the same on Transshipment Permit. The concerned airlines/custodian warehouse should have double locking arrangement, one key of which will be with the Airlines / custodian and the other with Customs, for storage of transhipment cargo. The loading of such cargo again would be under the supervision of Customs Officer.

2.5 If the cargo transhipped under the provisions of the Customs Act, 1962 is not unloaded at the place of destination in India, or if the quantity unloaded is short of the quantity to be unloaded at that destination, and if the failure to unload or the deficiency is not accounted for, then the person-in-charge of the conveyance shall be liable for penal action as per the provisions of Customs Act, 1962. [Refer Circular No.6/2007-Cus., dated 27-1-2007]

2.6 Airlines/ other carriers having annual transshipment volume above 2500 MT to/from any airport would be exempt from Bank Guarantee for carriage of goods on transshipment. [Refer Circular No.24/2006-Cus., dated 25-8-2006]

3. Bonded trucking facility:

3.1 With a view to supplement the existing facility and provide adequate flexibility to the trade in the choice of modes of transport, movement of imported cargo in containers / trucks has been allowed between airports/ACCs and airports/ACCs/CFSs/ICDs as per the following procedure:

(i) On the basis of the request made by the trade and in terms of Section 45(1) of the Customs Act, 1962 the Commissioner of Customs will appoint the airlines or their duly approved agents or the custodians of gateway airport/ACCs or the custodians of destination ICDs/CFSs/airports/ACCs as the custodian of all cargoes to be transshipped under bonded cargo trucking facility from airport/ACCs to ICDs/CFSs/airports/ACCs in hinterland by road. The permit will be valid for one year from the date of issue initially and shall be renewed every three years subsequently.

(ii) Transshipment of imported cargo is governed by the provisions of Chapter VIII of the Customs Act, 1962 and the Goods Imported (Conditions of Transshipment) Regulations, 1995.

(iii) The imported cargo should be manifested for transshipment. In respect of consol cargo where the Master Airway Bill does not show the final destination, the airlines filing transshipment application should keep a copy of both Master Airway Bill and House Airway Bill to indicate that the particular consignment sought for transshipment is for an inland Customs airport/ICD/CFS/ACC.

(iv) For proper accountal of cargo the custodian should execute a suitable running bond with a bank guarantee for an amount approved by Commissioner of Customs concerned. The amount will be debited from this bond when the transshipment cargo is taken by the custodian and it will be credited when the proof of handing over of the cargo to Customs at final destination is produced. The custodian will be responsible for any shortage or pilferage of the cargo.

(v) The custodian will submit a list of trucks together will registration numbers to be used for movement of each transshipment cargo. The trucks so deployed for transport should be specially secured to avoid pilferage of cargo and have provision of affixing of Customs “Bottle Seals”.

(vi) The airlines/custodian should have a transshipment warehouse within the Airport Apron area so that the goods on unloading can be shifted to the transshipment warehouse without having to be moved outside the Airport area. The concerned airlines/custodian warehouse should have double locking arrangement, one key of which will be with the airlines/custodian and the other with Customs, for storage of transhipment cargo. Preventive Officers will be posted at the airlines/custodian warehouse on cost recovery basis.

(vii) If the airlines/custodian does not have a transshipment warehouse, the import cargo for transshipment duly passed with transshipment application will be received by them from the Airport Authority of India’s (AAI) custody to their make-up area specially earmarked for the purpose of palletisation/containerisation on the same day under Customs supervision and if for any reason the goods cannot be transshipped immediately, the same should be handed over to AAI.

(viii) The custodian appointed and deciding to transship the cargo will present transshipment application (5 copies) alongwith the copy of Airway Bill (both Master Airway Bill and House Airway Bill, wherever applicable) to the Customs Officer in charge of transshipment clearance. The original transshipment copy must be affixed with Rs.20 stamp as T.P fees. The transshipment application should contain details such as (a) name and address of the importer; (b) name and address of the exporter; (c) country of origin; (d) airport of destination; (e) flight no. and date; (f) IGM no. and date; (g) description of goods; (h) value of the goods; (i) No. of packages; (j) weight gross/net; and (k) details of container/palletised vehicle on which the cargo consignment is to be carried.

(ix) After scrutiny of T.P. application the T.P. Officer will issue Customs Bottle Seal and hand it over to the Customs Officer supervising the loading of the cargo in container/truck. The T.P. Officer will mention S.No. of Customs Bottle Seal on all copies of transshipment application.

(x) On getting the transshipment permission the custodian/airlines will shift the goods from AAI warehouse to the make-up area earmarked for the purpose of palletisation/containerisation or shift the goods from their warehouse into the container/truck within the premises of the warehouse under the supervision of the Customs Officer posted for the purpose. After loading of the goods, the Customs Officer will seal the container/truck with Customs Bottle Seal and under his name and signature endorse all T.P. copies as : “Supervised the loading of …………………..No. of packages on container / truck No. …………………. destined to ………………. airport/ACC/CFS/ICD and sealed with Customs Bottle Seal No. ………………… on ………………… (date) covered by Transshipment Permit No. ……………………..” (xi) Original copy of T.P. application will be forwarded to the Import Freight Officer (IFO) of Customs at the airport/ACC/CFS of destination. Duplicate copy will be retained by T.P. Officer. Triplicate copy of T.P. application will be handed over to the airlines/custodian. The Quadruplicate copy will remain with the Customs Officer posted in the airlines/custodian warehouse and supervising the loading of cargo. The Quintuplicate copy will be sent in sealed cover alongwith the truck/container to IFO of Customs at the airport/ACC/CFS/ICD

of destination who will retain it after verification of cargo.

(xii) The IFO of Customs at the airport/ACC/CFS/ICD of destination will check the Customs Bottle Seal and description of packages as per T.P. copy and tally the packages with the copies of the manifest received to ensure that the packages are in good condition. The safety and security of the packages is the responsibility of the custodian and in case of any damage at the time of in transit, it should be clearly indicated in all copies of manifest and attested by custodian. The IFO at the airport/ACC/CFS/ICD of destination after receiving the cargo shall under his name and signature give a suitable endorsement on the original T.P. copy, as given below, and retain the T.P. copy sent with the truck for record. “Checked Customs Bottle Seal and packages as per T.P. application No. ……………….. dated……………….arrived on Container/Truck No………………….on ……………………(date).

(xiii) The endorsed original T.P. copy will be presented by the airlines/custodian as evidence of handling over of the cargo to the transshipment officer at the ACC/airport from where the transshipment permission was granted. On receiving such endorsed T.P. copy the transshipment officer will close the entry in the register.

(xiv) The airlines/custodian shall make necessary arrangements at the airport/ACC/ICD/CFS of destination to remove the cargo and deposit the same with custodians appointed under Section 45 of the Customs Act, 1962, under Customs supervision.

(xv) The airlines/custodian shall produce the evidence of handling over of the cargo at the inland airport/ACC/CFS/ICD of destination within 30 days from the dispatch of goods / failing which suitable action will be taken. (xvi) The airlines/custodian will be required to bear the expenditure on cost recovery basis over the preventive staff to be provided exclusively for this purpose.

3.2 The movement of unaccompanied baggage from airports/ACCs to ICDs/CFSs/Airports/ACCs shall be allowed by the bonded trucks.

3.3 The procedure of bonded trucking facility is available for movement of imported cargo both by containers and trucks. [Refer Circulars No. 69/1999-Cus., dated 6-10-1999; and No.6/2007-Cus., dated 22-1-2007]

4. Carriage of domestic cargo on international flights:

4.1 Air India, Indian Airlines and private domestic private airlines are permitted to carry domestic cargo between domestic airports on their international flights subject to the fulfillment of the following conditions: (i) Separate space shall be assigned by the airlines or custodian in the cargo complex/area of the airport for receipt and storage of domestic cargo till these are delivered or dispatched.

(ii) Domestic cargo will be received by the airlines in the designated area during the normal working hours of Customs at the respective airport.

(iii) The containers/Unit Load Devices (ULDs) used to carry the domestic or international cargo shall be clearly marked or coloured or strapped, for identification, distinction at the time of loading/ unloading, transportation.

(iv) Domestic tags shall be prepared for identification of the domestic cargo with separate colour coding.

(v) Loading or unloading of domestic cargo in any international flight/ aircraft shall be carried under the supervision of Customs officers.

(vi) Domestic and international cargo will be loaded separately, and shall be carried in hold area onboard the aircraft distinctly identifying these cargoes.

(vii) On arrival of the domestic cargo, at the destination airport, the airlines shall make necessary arrangements to deliver the domestic cargo.

(viii) In respect of transhipment of international cargo, airlines shall be required to execute necessary bond and bank guarantee unless exempted on account of fulfilling the specified threshold limit of annual transshipment volume. In addition, prescribed transshipment procedure shall be strictly adhered to. Accordingly, no separate bond or bank guarantee shall be required in respect of domestic cargo.

(ix) In case of any violation of the prescribed conditions or any other regulations providing for the manner in which the imported goods/ export goods shall be received, stored, delivered or otherwise handled in a Customs area, necessary action may be taken against the person including withdrawal of the facility and imposition of penalty under the Handling of Cargo in Customs Areas Regulations, 2009. [Refer Circulars No. 78/2001-Cus., dated 7-12-2001; No.45/2005-Cus., dated 24-11-2005; No.6/2007-Cus., dated 22.01.2007; and No.4/2010-Cus., dated 15-2-2010]

5. Movement of domestic courier bags on domestic segments of international flights:

5.1 The movement of domestic courier bags on domestic sector of international flights of all the airlines is permitted subject to following conditions:

(i) The Courier company must be registered with Customs.

(ii) The packages/bags of domestic courier should be clearly and identifiably differentiated from the International Courier bags/packets by printing in bold “DOMESTIC COURIER”.

(iii) The domestic courier bags should be kept in separate pallets and should be stored in the separately marked domestic bins/containers on the aircraft.

(iv) At the place of embarkation the domestic courier company will submit “goods declaration” ,indicating the number of bags, number of packages in bags, content of packages, to the on board courier or person in-charge of the aircraft with a copy to the Escort Officer of Customs.

(v) At the place of disembarkation/ arrival, the cargo manifest will be filed by person in-charge of the aircraft or on-board courier, as the case may be, with the proper officer of Customs. In case on board courier is not accompanying the courier consignment, the responsibility to file the cargo manifest with the proper officer of Customs will vest with the person in charge of the aircraft.

(vi) The copy of the declaration submitted to escort officer of Customs will be handed over by the Escort Officer to the Customs Officer at the disembarking airport, for carrying out the checks and verifications, if so required.

(vii) If the courier consignment is accompanied by “on board courier”, they will not be allowed to carry any courier bags on board the aircraft as hand baggage.

6. Transshipment from gateway port to SEZ:

6.1 The procedure for transhipment of cargo from gateway port to Special Economic Zones (SEZs) is laid down under Special Economic Zones Rules, 2006. Broadly, the procedure is the fifth copy of the registered or assessed Bill of Entry filed by an importer in SEZ is to be submitted to Customs officer at the port of import, and is itself treated as permission for transfer of goods to SEZ. No separate documents or transshipment bond is required to be filed, and the transshipment permission is stamped on the fifth copy of the Bill of Entry. The SEZ importer shall submit fifth copy of Bill of Entry bearing endorsement of the authorized officer that the goods have been received in SEZ to the Customs Officer in charge of the airport or port or inland container depot or land Customs station or post office or public or private bonded warehouse, as the case may be, failing which the officer in charge of such airport or port or inland container depot or land Customs station or post office or public or private bonded warehouse, as the case may be, shall write to the Specified Officer for raising demand of applicable duty from the SEZ importer. Similar procedure for export goods is prescribed under the SEZ Rules, 2006.

7. Timely issuance of transshipment permits:

7.1 Filing of transshipment applications and issuance of Transshipment Permits on Saturdays is allowed.

7.2 Transshipment permits would not be denied if the goods imported at a Customs station are manifested for being transshipped to any port/airport or any ICD/CFS, except in case of a specific intelligence about mis-declaration of goods in the IGM or presence of contrabands in the container. Even in such cases, before detaining any such container at the gateway port, permission from Joint/Additional Commissioner shall be obtained in writing. The Commissioners are required to look into this aspect personally and ensure that such permits are issued smoothly and in a hassle-free manner. [Refer Circulars No. 46/2002-Cus., dated 29-7-2002 and No.90/2002-Cus., dated 19-12-2002.][Refer Circulars No.47/96-Cus., dated 16-9-1996; No.57/98-Cus., dated 4-8-1998; No. 31/99-Cus., dated 27-5-1999; No.69/99-Cus., dated 6-10-1999; No.34/2000-Cus., dated 3-5- 2000; No.56/2000-Cus., dated 5-7-2000; No.61/2000-Cus., dated 13-7-2000; No.75/2001- Cus., dated 5-12-2001; No.78/2001-Cus., dated 7-12-2001; No.15/2002-Cus., dated 25-2- 2002; No.18/2002-Cus., dated 13-3-2002; No.46/2002-Cus., dated 29-7-2002; No.90/2002- Cus., dated 19-12-2002; No. 61/2003-Cus., dated 18-7-2003; No.87/2003-Cus., dated 6-10- 2003; No.52/2004-Cus., dated 7-10-2004; No.45/2005-Cus., dated 24-11-2005; No.46/2005- Cus., dated 24-11-2005; No.47/2005-Cus., dated 24-11-2005; No.24/2006-Cus., dated 25-8- 2006; No.6/2007-Cus., dated 22-1-2007; No.14/2007-Cus., dated 16-3-2007; No.31/2005- Cus., dated 25-7-2007; and No.4/2010-Cus., dated 15-2-2010]

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