Transit and transhipment of import cargo – An Introduction:

A conveyance may not carry goods intended for a particular customs station only. It may carry goods intended for other Indian ports and other foreign ports. There are two distinct possibilities :

(a) The conveyance may not call at all other Indian ports/customs stations and foreign ports for which it carries goods.

(b) The conveyance may call at all other Indian ports/customs stations and foreign ports for which it carries goods.

In the case of the former, the goods will have to be transferred to any other conveyance onward carriage to the destination. This is called transhipment. This will cover both goods intended for Indian ports and foreign ports.

In the latter situation, the goods will continue to be carried by the same conveyance. This is called transit of goods.

In both the situations, import duty is not collected on the goods even though the liability has already accrued. It would be necessary to ensure that

(a) in the case of goods intended for Indian ports, the goods have actually to be conveyed to the Indian port of destination and appropriate duty of customs is collected thereupon;

(b) in the case of goods intended for foreign ports, the goods are actually conveyed out of India and are not landed in any Indian customs station.

In case of Kumar Trading Co. LLC v. UOI 2001 (132) E.L.T. 578 (Cal.), imported containers containing ball bearings in transit to Nepal in terms of Indo-Nepal Treaty unlawfully and without jurisdiction detained by Customs at Calcutta for three years on a mere apprehension that the goods may be diverted for home consumption in India, till finally re-export to foreign supplier permitted. Finally it was re-exported after 3 years. The court held that demurrage and other port charges till the date of permitting re-export is to be paid by Customs department, as they have done the fault.