Category: Custom

During an investigation pertaining to M/s Oppo Mobiles India Private Limited (hereinafter referred to as ‘Oppo India’), a subsidiary company of “Guangdong Oppo Mobile Telecommunications Corporation Ltd”, China (hereinafter referred to as ‘Oppo China’), the Directorate of Revenue Intelligence (DRI) has detected Customs duty evasion of around Rs 4,389 crore. Oppo India is engaged in the business of manufacturing, assembling, wholesale trading, distribution of mobile handsets and accessories thereof, across India. Oppo India deals in various brands of mobile phones, including Oppo, OnePlus and Realme.

During the course of investigation, searches were conducted by DRI at the office premises of Oppo India and residences of its key management employees, which led to the recovery of incriminating evidence indicating wilful mis-declaration in the description of certain items imported by Oppo India for use in the manufacture of mobile phones. This mis-declaration resulted in wrongful availment of ineligible duty exemption benefits by Oppo India amounting to Rs 2,981 crore. Among others, senior management employees and domestic suppliers of Oppo India were questioned, who in their voluntary statements accepted the submission of wrongful description before the Customs Authorities at the time of import.

Investigation also revealed that Oppo India had remitted / made provisions for payment of ‘Royalty’ and ‘Licence Fee’ to various multinational companies, including those based in China, in lieu of use of proprietary technology/brand/IPR license etc. The said ‘Royalty’ and ‘Licence Fees’ paid by Oppo India were not being added in the transaction value of the goods imported by them, in violation of Section 14 of the Customs Act, 1962, read with Rule 10 of the Customs Valuation (Determination of Value of Imported Goods) Rules 2007. The alleged duty evasion by M/s Oppo India on this account is Rs. 1,408 crore.

A sum of Rs 450 crore has been voluntarily deposited by Oppo India, as partial differential Customs duty short paid by them.

After completion of the investigation, a Show Cause Notice has been issued to Oppo India demanding Customs duty amounting to Rs. 4,389 crore. The said Notice also proposes relevant penalties on Oppo India, its employees and Oppo China, under the provisions of the Customs Act, 1962.

Acting on specific intelligence, the officers of Directorate of Revenue Intelligence (DRI) unraveled two cases of Cocaine seizures at the Hyderabad International Airport in a late-night operation on 1^st May 2022.

Two air passengers i.e., a male Tanzanian national, travelling from Cape Town to Hyderabad via Dubai on a Business Visa and a lady passenger from Angola, with itinerary Angola – Mozambique – Lusaka – Dubai – Hyderabad on a Tourist Visa were apprehended by DRI on suspicion of them carrying narcotic substances on 1^st May 2022.

A total of 8 kg of Cocaine, each passenger carrying 4 kg, were seized from the passengers from the packets concealed in the false bottom of their trolley bags. The estimated value of the seized Cocaine in the illicit market is Rs. 80 crore.

The instances of smuggling drugs through Air have increased with easing restrictions on air travel and increased passenger traffic. While Indian Customs have facilitated the clearances smoothly, the alert officers have busted the drug smuggling syndicates and nabbed carriers on multiple occasions across the country. Ingenious ways of transporting the contraband have been noticed by way of laminating drugs finely into their baggage which are almost invisible to the naked eye or by concealment in shampoos and food items or at times the passenger becomes body carrier by ingesting drugs in laminated capsules.

Multiple cases involving seizure of Cocaine concealed in the form of pills ingested by air passengers have been booked by the DRI in the last four months. In two such cases booked in Mumbai during March and April 2022, a total of 2.42 kg of Cocaine was found concealed in pills ingested by two passengers.

In April 2022, 1.15 kg of Cocaine concealed in pills ingested by a passenger was seized at Hyderabad, and in another case one kg of Cocaine was seized at Bengaluru in August 2021. Apart from Mumbai and Hyderabad, seizures of Cocaine have also been affected at other airports also.

Sustained efforts of DRI has led to seizure of more than 350 kg of Cocaine, estimated to be worth Rs. 3,500 crore in illicit market, across the country after January, 2021. This includes a big haul of about 303 kg of Cocaine, seized from a containerised cargo at Tuticorin Port.

Shri Vivek Johri, Chairman, Central Board of Indirect Taxes and Customs (CBIC), presented a set of Time Release Studies (TRS) conducted by the department.

TRS are essentially a performance measurement tool for assessing the cargo clearance process of the international trade, as recommended by the World Trade Organization (WTO) under the Trade Facilitation Agreement (TFA) and the World Customs Organization (WCO). It adopts average cargo release time, i.e. the time taken from the arrival of the cargo at the customs station to its eventual release for import or export, as the case may be.

The National Time Release Study (NTRS) 2022 covered 15 major Customs formations, including four port categories – seaports, air cargo complexes (ACCs), inland container depot (ICDs) and integrated check posts (ICPs), which handle about 80 percent of the bills of entry (imports documents) and 70 percent of the shipping bills (export documents) and is based on the sample period between 1st – 7th January 2022.  

The NTRS 2022 has reported further improvement in the average cargo release time for all the four port categories in 2022 over corresponding period of the previous year: by 2 percent for ICPs to significantly higher 16 percent for ACCs. For the sea cargo cleared through the sea port or inland container depots average release time has improved by 12 percent. With this improvement, the ICPs have achieved the National Trade Facilitation Action Plan (NTFAP) target release time to be achieved by 2023, whereas the other three port categories have reached 75 percent of NTFAP target.

NTRS 2022 and the Custom House level Time Release Studies, which have been conducted using the same data set, obtained from the customs automated system and following the same methodology, have found strong affirmation for the four-fold ‘path to promptness’ , namely:

advance filing of import documents enabling pre-arrival processing,risk based facilitation of cargo,benefits of trusted client program – Authorized Economic Operators, andDirect Port Delivery (DPD) facility.

 

In case of Exports, the Study noted that the documentary clearance of export consignments, measured by the time taken from arrival of the  goods at the customs station to grant of Let Export Order has been significantly minimized, ranging from 4:04 hours in the case of ACCs to 47:41 hours in the case of ICDs. This time is within the differential NTFAP target for the four port categories. However, the studies have found that on account of various logistics processes, the time taken in the eventual export after the regulatory clearance, takes long time – accounting from 60 percent of the total time in the case of integrated check post to 92 percent in the case of air cargo.

 

It may be mentioned that JNCH was the first major Custom House to initiate annual TRS beginning in 2017, and NTRS 2022 shows that the average import cargo release time has been halved since then.

 

NTRS 2022 and local TRSs have also made certain recommendations to further reduce the average release time targets to meet the targets set out in the NTFAP and improve the trade facilitative eco-system in the country. 

 

Copy of the NTRS 2022 is available on the CBIC website [cbic.gov.in] and other Time Release Studies are being made available on the websites of the respective formations.