Guidelines for Ship
Breaking Units
The following Public Notice was issued by the
Commissioner of Customs (Import) New Customs House, Mumbai on 18th
May 2010.
[Customs Public Notice No. 19 dated 18th
May 2010]
1. Some of the important guidelines framed by the Hon’ble
Court in the above referred Writ Petition
2. Process for Anchoring
3. Process of Beaching
4. Boarding of the Vessel
5. Rummaging
6. Filing of Bill of Entry
7. Examination of Vessel
8. Assessment of Bill of Entry
9. Final Destruction of Wireless Equipment
Annexures
1. Refusal of NOC for Anchorage
2. Refusal of NOC for beaching after physical
examination of the vessel
3. List of documents to be submitted by the
importer to the Group AC for assessment of the Bill of Entry
4. Undertaking.
The import of Vessels and other floating
structures for breaking up (hereinafter called ‘Vessels’ or ‘Ships’) is
permitted under “Free Importability” as per the provisions of the Foreign Trade
Policy, 2009-2014. All ocean going vessels, whether Indian or Foreign Flag,
sold for scrapping purposes are treated as vessels imported into India and
shall be liable to customs duty under Heading No.89080000 of CTA, 1975 at the
rates prevailing as per provisions of Section 15 of the Customs Act, 1962.
2. The
Hon’ble Supreme Court, by the Order dated 17.02.2006
in the Writ Petition No 657/1995,
had constituted a Committee of Technical Experts (CTE) to study the entire
gamut of deficiencies in the infrastructure for carrying out the ship breaking
activities and to recommend the procedure to be followed in the case of Import
of such Vessels for breaking up. While delivering the Order dated 06.09.2007,
the Hon’ble Supreme Court pronounced that the
Government of India shall formulate a Comprehensive Code incorporating the
recommendations made by the Committee of Technical Experts (CTE) and until the
code comes into play, the recommendations of the CTE shall be operative by
virtue of this order and the Maritime Board, State Pollution Control Board,
Officials of the Customs Department, National Institute of Occupational Health
shall oversee the arrangement and implementation of the recommendations of CTE. The Collector of the
concerned District shall be associated when the actual dismantling takes place.
3. Some of the important guidelines framed by the Hon’ble
Court in the above referred Writ Petition are:
(i). The vessel owner or recycler should submit specified documents
well in advance of the arrival of the vessel for recycling for a desk review by
the Port Trust in consultation with State Pollution Control Board and Customs
department.
(ii) After the desk
review, a decision will be taken regarding permission for anchorage of the
vessel. In case, permission is refused by any of these three agencies, the
vessel owner would be entitled to both review and appeal.
(iii) Once a decision
is taken to accord permission for anchorage, instructions for safe anchorage
would be issued by the Port Trust.
(iv) At anchorage, the vessel would be boarded by representatives of
Customs Department / State Pollution Control Board / Explosives Dept / Atomic
Energy Research Board to verify the submissions / data provided for desk
review.
(v) After verification, beaching permission will
be given by Port Trust based on clearance granted by the above agencies. Here
again, review and appeal mechanism is suggested.
4. Even
though, this judgment was delivered with respect to the ship breaking
activities in Alang Port, Gujarat, the Hon’ble Supreme Court had specifically mentioned that such
mechanism shall also apply to other ship breaking activities in other coastal
states also.
5. After consulting all the stake holders,
including the officers of Customs from other sections, Maharashtra State
Pollution Control Board (MSPCB), Mumbai Port Trust (MbPT),
and the trade, the present practice of assessment of Bills of Entry for
clearance of vessels for breaking up is formulated and the present Public
Notice is issued in supercession of the existing
instructions.
6. Process for Anchoring
6.1 As per Para 3.1 of the Supreme Court’s order dated 06.09.2007, the
importer should submit the following documents well in advance of the arrival
of the vessel for desk review by the MbPT in consultation with MSPCB and
Customs Department :
a) Name of the Ship
b) IMO
Identification No.
c) Flag
d) Call Sign
e) Name of the
Master of the Ship and his nationality
f) List of the crew
g) GRT/NRT/LDT of
the ship with supporting documents
h) Ship
Registration Certificate
i) A report by the importer on his assessment
of hazardous wastes / hazardous substances on board of the vessel and with
regard to the structure of the ship, as far as practicable by reference to the
ship’s drawings, technical specifications, stores, manifest in consultation
with the ship builder, equipment manufacturers and others as appropriate. In the case of ships of special concern, in addition to
identification, the marking of all areas containing hazardous wastes /
substances, would also be necessary.
6.2 On
receipt of all the above mentioned documents from the importer, the
Superintendent of Customs, Preventive (General), under the jurisdictional
control of Commissioner of Customs (General), will undertake the desk review for granting N.O.C. for anchorage to MbPT. Such exercise
shall be completed within two
working days.
6.3 In
case, where there is no objection for anchorage, the Superintendent shall
forward NOC to the Docks Manager, MbPT for anchorage
in the prescribed format.
6.4 In
case of refusal for anchorage, the Superintendent, Preventive (General) shall forward the report in the
format as enclosed in Annexure “1” assigning specific reasons for such refusal
to the importer.
6.5 In
case the importer feels aggrieved by such refusal, he may file review application
within a period of five working days before the Assistant Commissioner / Deputy Commissioner,
Preventive (General), who shall dispose of such application within three
working days from the date of receipt of the application. The Assistant Commissioner
/ Deputy Commissioner, Preventive (General), may hear the importer or his
representative personally, if they so desire. In case no review application is
received within the prescribed time, the Superintendent, Preventive (General)
will forward the report of refusal for anchorage in the prescribed format to
the Docks Manager, MbPT.
6.6 The
Assistant Commissioner / Deputy Commissioner, Preventive (General) after going
through the merits of the case and after hearing the importer may uphold or
overrule the decision of the Superintendent, Preventive (General). In case the
Assistant Commissioner / Deputy Commissioner, Preventive (General) overrules
the decision of the Superintendent, then he shall communicate the same to the
Superintendent who shall in turn forward NOC to the Docks Manager, MbPT for anchorage in the prescribed format.
6.7 In
case the Assistant Commissioner / Deputy Commissioner, Preventive (General)
uphold the order of the Superintendent, he shall communicate the same to the Importer
assigning specific reasons for such refusal to the importer in the format given
at Annexure “1”.
6.8 In
case the importer feels aggrieved by the order of review passed by the
Assistant Commissioner / Deputy Commissioner, Preventive (General) he may file
an appeal within five working days before Joint / Additional Commissioner,
Preventive (General) who shall dispose of the same within a period of five
working days from the date of receipt of appeal. The Joint / Additional
Commissioner, Preventive (General) may hear the importer personally, if they so
desire.
6.9 In
case no further review application is received within the prescribed time, the
Superintendent, Preventive (General) will forward the report of refusal for
anchorage in the prescribed format to the Docks Manager, MbPT.
6.10 The
Joint Commissioner / Additional Commissioner, Preventive (General) after going
through the merits of the case and after hearing the importer may uphold or
overrule the decision of the Assistant / Deputy Commissioner, Preventive (General).
In case the Joint Commissioner / Additional Commissioner, Preventive (General)
overrules the decision of the Assistant / Deputy Commissioner, Preventive
(General), then he shall communicate the same to the Superintendent through the
Assistant / Deputy Commissioner, Preventive (General) and the Superintendent
shall in turn forward NOC to the Docks Manager, MbPT
for anchorage in the prescribed format.
6.11 In
case the Joint Commissioner / Additional Commissioner, Preventive (General)
upholds the order of the Assistant / Deputy Commissioner, Preventive (General)
for refusal for anchorage, he shall communicate the same to the Importer with
specific reasons. The Superintendent, Preventive (General) will forward the
report of refusal for anchorage in the prescribed format to the Docks Manager, MbPT.
6.12 In
all such cases, where NOC has been granted for anchoring, the final decision
shall be taken by the MbPT for granting of anchorage
to the vessel.
7. Process of
Beaching
7.1 The
modalities of beaching permission are discussed in Para 3.2 of Supreme Court
Order, referred at Para 3 above.
7.2 At
the Anchorage the ship will be boarded by the Superintendent of Customs,
Preventive (General) along with the Boarding Officer, under the jurisdictional
control of Commissioner of Customs (General), who will physically verify
the data provided and
submissions made by the importer, which was submitted for desk review
preferably along with representatives of other agencies, namely Maharashtra State
Pollution Control Board / Explosives Department / Atomic Energy Research Board.
The Superintendent, Preventive (General) shall be accompanied by the Boarding
Officer who performs his duties as proper officer under Section 30 of the
Customs Act,1962.
7.3 Boarding of the Vessel
1. In
the present case of import of vessels for breaking up, an additional copy of
the IGM shall be collected by the boarding officer, along with the original
copy of IGM. The IGM shall be verified for its correctness by the boarding
officer before grating entry inwards.
2. The
Boarding Officer will ascertain the quantity of oil on board the vessel. He may
seek the assistance of the Government approved surveyor who is generally
allowed to board the vessel along with the customs officials for verifying the
quantity of the fuel and oil by using the sounding method. If considered
necessary, an adequate and representative sample may be used for the
verification.
At the time of boarding of the vessel, the master of the
vessel has to submit a list of all the Wireless Radio Equipment on board the
vessel to the Boarding Officer. The Boarding Officer will then carry out search of the vessel and compare the said list
with the equipments found on board to verify the genuineness of the said list.
Thereafter, he shall assign running serial numbers to each of the equipments.
The said list shall then be signed by the Master of the vessel and by the
Boarding Officer, and be kept in the file maintained by the Preventive
(General) section along with other documents submitted to the Boarding Officer.
As Walkie Talkies are not permanent fixtures unlike
other radio / wireless equipment, the Master of the vessel shall bring all Walkie-Talkies declared in the list of Wireless Radio
equipments and submit them to the Boarding Officer. These, unless crucial /
essential, will then be destroyed in the presence of Master of the vessel and
two independent panchas, and a proper panchanama recording the proceedings drawn.
7.4 The Importer shall also submit the Gas Free and Fit for Hot
Working certificate in respect of oil cargo tanks and slop tanks to the
Superintendent, Preventive (General) for verification.
7.5 The Superintendent, Preventive (General) shall decide whether the
ship can be permitted for beaching or not.
The Superintendent, Preventive (General) on satisfying that
beaching permission can be given, will direct the Boarding Officer to grant the
Entry Inwards and shall prepare a report addressing the Assistant Commissioner
/ Deputy Commissioner, Assessing Group recommending NOC for beaching in the
prescribed format.
7.6 In case of refusal for beaching, the Superintendent, Preventive
(General) shall forward the
report in the format enclosed in Annexure “2” assigning specific reasons for
such refusal to the importer.
7.7 The
appeal mechanism in case of anchorage goes, mutatis mutandis, in this case
also.
In case of Appellate Authority upholding the refusal of
Beaching, no entry inwards shall be given by the Boarding Officer.
7.8 In the case of Nuclear Powered Ships, Desk review has to be
conducted by AERB and the officers from that organization has to board the
vessel for physical inspection
8. Rummaging
All vessels imported for the purpose of breaking should be
compulsorily rummaged under the supervision of the Superintendent (R&I)
9. Filing of Bill
of Entry
9.1 Once
the Entry Inwards is granted, the Importer may file the Bill of Entry.
Examination of Vessel
9.2 The Assessing Group will immediately give first check examination
to the Bill of Entry.
9.3 Later,
the Importer / C.H.A. shall approach the Docks appraising Department for
getting the vessels examined for first appraisement and for preparation of Local Invoice
for the inventoried items, as per examination order. The Vessel shall be
examined in the presence of the Assistant Commissioner / Deputy Commissioner,
Docks. Thereafter, the Docks Offices shall forward the Bill of Entry to the
Group.
Assessment of Bill of Entry
9.4 The
Assistant Commissioner / Deputy Commissioner, concerned Group shall pass the
Bill of Entry for generation of duty challan. The
duty will be calculated on the basis of the first check examination. The AC /
DC, concerned Group shall make amendments to the Bill of Entry wherever
necessary based on the examination report received. The Bill of Entry at this
point is not assessed from the valuation point of view. This measure is to
facilitate the trade so that beaching permission may be granted to the importer
immediately after the payment of duty. The importer has to pay the provisional
duty as per the challan generated and come back to
the AC / DC, Concerned Group who will then recall the Bill of Entry with the
comment that the Bill of Entry will be reassessed after the receipt of complete
set of documents from the importer as mentioned at Annexure "3" and
after the receipt of the Destruction Report. The Importer shall give an
Undertaking that they will carry out the destruction of the wireless equipment
and that they will pay the differential duty, if any. The Undertaking shall be
on a stamp paper in the format at annexure “4”, signed before the notary in the
presence of two witnesses.
9.5 Thereafter an NOC for Beaching will be granted by the Assistant
Commissioner / Deputy Commissioner, concerned Group in the prescribed format
which will be forwarded to the MbPT.
9.6 The
Importer will thereafter re-submit the Bill of Entry along with the documents
mentioned at Annexure “3” to the concerned Appraising Group for assessment of
the Bill of Entry with regard to value of the vessel within next ten working
days. In case of failure, the undertaking given as per Annexure “4” will be
enforced.
9.7 Ship
stores and POL carried in extra tanks aboard the ship would be assessed on
merits.
10. Final Destruction
of Wireless Equipment
10.1 After
the vessel is beached, the importer has to get the remaining wireless
equipments destroyed under the supervision of Superintendent of Customs,
Preventive (General) within the next five working days. While destroying these
equipments, the Superintendent shall compare the serial number in the Boarding
Officer’s report with the serial number marked physically by the Boarding
Officer. The declaration of the Captain should also be cross checked. The
destruction should be carried out in the presence of the representative of the
importer and two independent panchas, and a proper panchanama must be drawn.
10.2 The
destruction report in the prescribed format shall be signed by the Assistant
Commissioner / Deputy Commissioner, Preventive (General) which shall be
forwarded in a sealed cover to the Assessing Group. The Assessing Group will
now finally assess the bill of entry and forward the bill of entry to the Docks
with appropriate comments for granting final out of charge by the docks.
10.3 The Out of charge will finally be granted by the appropriate
officer at the Docks.
10.4 The Cutting Permission in the prescribed format will be finally
given by Assistant Commissioner / Deputy Commissioner, Preventive (General)
after the out of charge of the vessel.
10.5 The
above instructions shall also apply to all goods falling under Chapter 89 of
the Customs Tariff Act, 1975 and which were imported availing the benefit of
Notification No 21/2002-Cus, dtd 01.03.2002, with Sr.
No 352, 353, and 354 having condition mentioned at Sr.No
72, as amended and later the importer decided to break them up.
11. This
Public Notice will be operative with immediate effect.
12. The
contents of the notice may be brought to the knowledge of the constituent
members by the respective trade and CHA associations.
13. Any
difficulty encountered in the implementation of this Public Notice should be
immediately brought to the notice of the undersigned.
F.No. S / 1 - 46 / 2009 EDI
Annexures
1.
Refusal of NOC for Anchorage
2.
Refusal of NOC for beaching after physical examination of the
vessel
3.
List of documents to be submitted by the importer to the Group AC
for assessment of the Bill of Entry
4. Undertaking.
Annexure 1
Office of Commissioner of Customs (General)
New Custom House, Mumbai
F.No. Dt:
To
M/s_____________
Gentlemen
Sub: NOC for Anchorage of Vessel M.V___________
Please refer to your
letter dated ____________ regarding request for according No Objection for
Anchorage as provided under para 7 of the Public Notice___________
The documents
submitted by you have been scrutinized by the Department.
It is regretted to inform you that your request for granting
NOC for Anchorage is rejected on the following grounds.
1.
2.
3.
An appeal against this decision lies with ___________. The
appeal may be filed within the time period as mentioned in the Public Notice.
Yours Sincerely
Superintendent of Customs (P)
PSO (Admin). Mumbai.
Annexure 2
Office of Commissioner of Customs (General)
New Custom House, Mumbai
F.No. Dt:
To
M/s_____________
Gentlemen
Sub: NOC for Anchorage of Vessel M.V____________
Please refer to your
letter dated ____________ regarding request for according No Objection for Anchorage
as provided under para 7 of the Public Notice___________
The documents
submitted by you have been scrutinized by the Department.
It is regretted to inform you that your request for granting
NOC for Anchorage is rejected on the following grounds.
1.
2.
3.
An appeal against this decision lies with ___________. The
appeal may be filed within the time period as mentioned in the Public Notice.
Yours Sincerely
Superintendent of Customs (P)
PSO (Admin). Mumbai.
Annexure 3
List of documents to be submitted by the importer for assessment
1.
IEC Code
2.
Physical Delivery Certificate
3.
Notice of Readiness(NOR)
4.
Commercial Invoice certified by the
Bank.
5. Memorandum of Agreement, if any, duly signed in original
6. Original Survey Report of independent
surveyor. It covers ROB and others
7. Letter of Credit.
8. Bill / instruments of sale of proof of
transfer of ownership of the purchased
vessel.
9. Lloyds Register (for verification of
ownership, Weight Registration).
10. Copy of
Builders Certificate to establish LDT of the vessel.
11. Copy of International tonnage certificate
12.
Port worthiness certificate from
surveyor
13. Capacity plan and lead line
chart for draft of the ship showing details for loading of cargo with stability
and trim position effecting in Light Displacement Tonnage.
14. Registration Certificate of
the ship and last Port Clearance Certificate.
15. Inventory list of the ship's
property item with principal general ship's particulars and fittings and items
on board the ship including moveable gears, ship's stores inventories required
as per regulations and consumables including Remnant Oil Bunker, items etc.,
duly certified by the master of the vessel, at the time of allowing entry
inward for such vessel.
16. Payment receipts from seller /
buyer, for commission involved into transaction of sale, if any.
17. Possession Licence
from communication department for wireless equipments on board the vessel, if
any.
18. Permission/provision
if/as required under the Import Trade ControlAct.
19. I.T.C.
licence for clearance/possession of Dangerous drugs,
Narcotics, Tobacco and other prohibited items, if any, on board the vessel.
In addition to the
above, the Assistant Commissioner, Assessing Group should have in his possession
the set of documents given for Desk Review to be received from Superintendent,
Preventive (General) in sealed cover.
Annexure 4
(To be executed on Rs.100 non judicial Stamp Paper)
Know All Men By These Presents That I/we........................
.................................. (Name and Address of the Importer),
hereinafter called the “Importer” (which expression shall include its
successors/heirs, executors, administrators and legal representatives) am/are
held and firmly bound unto the President of India hereinafter called the
“President” (which expression shall include his successors and assigns) in the
sum of Rs................. (Value of Vessel in Rupees.)
to be paid to the President for which payment well and
truly to be made, I/we bind myself/ourselves, my/our successors, heirs,
executors, administrators and legal representatives firmly by these presents.
Sealed with my/our seal(s) this.......................... day
of...................19..........
Whereas
The Importer had filed a Bill of Entry No.___________ dt.___________ for clearance of Vessel _________ imported
for breaking up and paid the duty of Rs.__________ vide Challan
No. _______, dt____________
Whereas
As per Para 10.8 of the Standing Order No.__________, I/We hereby
undertake to
1. pay
the Differential duty if any.
2. carry
out the destruction of the remaining wireless equipment within the next five
working days.
3. produce
the remaining documents enumerated at Annexure 3 of the Public Notice no.
19/2010 within the next ten working days
4. that
in case of failure to satisfy the abovementioned conditions, the subject vessel
will become liable for appropriate action under the provisions of the Customs
Act, 1962
Now the condition of the above written undertakings such that –
If the importer within the said period as mentioned in the
abovementioned paragraph submits such documents and furnish such information as
may be called for by the Proper Officer, and upon the satisfaction of the
Proper Officer
Then the above written undertaking shall be void and of no effect
otherwise the same shall remain in full force and virtue.
And it is hereby agreed and declared by the importer as follows:-
1. This bond is given
under the orders of the Central Government for the performance of an act in
which the public are interested.
2. The President through
the in the manner laid down in sub-section (1) of Section 142 of the Customs
Act, 1962 without prejudice to any other mode of recovery.
The Schedule above referred to
(Particulars of the goods)
In witness whereof the importer has herein set and subscribed its
hands and seals the day, month and year first above written.
Signed
and Delivered by and
on behalf
of the importer
at........................
in the
presence of
1. ......................
2. .......................
Accepted
for and on behalf of the
President
of India
(Designation of Authorised Officer)
In the
presence of
1. ......................
2. ......................