SELF ASSESSMENT ON BASIS OF ‘RISK MANAGEMENT SYSTEM’ (RMS)
One major step is being taken to move in the direction of implementing international best practices in customs
clearance. A ‘Risk Management System’ for customs clearance of import and export cargo has been introduced.
The details of scheme are contained in MF(DR) circular No. 43/2005-Cus dated 24-11-2005 – see also CC,
Bangalore-I PN 88/2006 dated 31-7-2006 (201 ELT T5). Initially, the scheme will be introduced in Air Cargo
Complex, Sahar Mumbai and then it will be introduced in other customs houses in phases. Under Risk
Management System (RMS), only high risk cargo is selected for examination. Thesystem provides for special
customs clearance for Accredited Clients having good track record and meet specified criteria.
The scheme proposes to do away with existing system of routine assessments and concurrent audit. Goods will
be normally cleared on basis of self assessment of importer. Bill of Entry submitted electronically will be
transmitted to RMS. The RMS will process the data and produce an electronic output. This output will determine
whether the Bill of Entry will be taken up for appraisement/examination or be cleared after payment of duty
without any assessment and examination. Any change is system will require prior approval of Commissioner
of Customs and after recording reasons. Focus will be on quality assessment, examination and post clearance
audit of Bills of Entry selected by the Risk Concurrent audit will be replaced by Post Clearance Audit on Bill of
Entry selected by the Risk Management System. Subsequently, demand can be raised even if goods have been
cleared from customs
No change in Custom Act and Rules – The scheme is being introduced without making any change in
Customs Act or Rules, the basic procedures of sanctions and approvals remain unaltered and hence is not
similar to scheme of self-assessment under Central Excise, where clearances are effected by assessee without
supervision or presence of excise inspectors. Scope of the scheme is also very limited.
Scheme open only to ‘Accredited Clients’ – The scheme is limited to only ‘Accredited Clients’ as defined in
MF(DR) circular No. 42/2005-Cus dated 24-11-2005. They should have imported goods valued at Rs. 10 crores in
previous financial year or paid duty more than Rs. one crore. In case of importers who are central excise, they
should have paid at least Rs. one crore of duty through PLA in previous financial year. They should have filed at
least 25 Bills of Entry in the previous financial year.
Person who had received any show cause notice in last three financial years is ineligible – In order to ensure
that scope of the scheme remains limited (and the scheme fails), it is provided that no case should be pending
against them. Even show cause notice invoking penal provisions should not have been issued against them is
last three financial years. Such importers can be probably counted on fingers. If this condition is insisted upon,
the scheme is stillborn and will be a non-starter
Application for getting accreditation – Importers desirous of availing the facility of ‘Accredited Client’ has
to make application for registration in form given in MF(DR) circular No. 42/2005-Cus dated 24-11-2005. Application has to be accompanied by a CA certificate that the accounting system of applicant is as per accounting
standards prescribed by ICAI.
Decision regarding ACP status within 30 days – In case of status holders, Customs will communicate
decision on conferring ACP status Accredited Client under Risk Management System of customs clearance,
within 30 days from receipt of application by customs.
Risk management division in systems directorate – A risk management division has been created in Systems
Directorate. Risk Management Committees will be constituted at National level and Local level – MF(DR)
circular No. 23/2007-Cus dated 28-6-2007.