OBJECTIVE With the fast growth of Indian trade across borders, the Government regulations have also become stringent in order to prevent illegal import or export of goods. It is crucial for the importers and exporters to abide by these regulations. In this webinar we will be learning about the powers of the Central Government to notify goods , the responsibilities of persons acquiring notified goods or selling specified goods and precautionary steps to be taken in order to be satisfied with the identity of the purchaser.

1. Prevention and Detection of
Illegal Import and Export of Goods
CA Divakar Vijayasarathy

2. Research Credits
 Gracelin Lita
 Harish Kumar
 CA Jugal Gala

3. Presentation Schema
Introduction
Prevention and
Detection of Illegal
import
Powers of CG to
Notify Goods
Intimation of Place
of Storage of
Notified goods
Precautions to be
taken while
Acquiring Notified
Goods
Maintenance of
Accounts by
Person holding
Notified Goods
Non-applicability
in case of Personal
Goods
Prevention and
Detection of Illegal
Export
Powers of CG to
Specify Goods
Specified Area
Intimation of
Storage of
Specified goods
Transport of
Specified Goods
Maintenance of
Accounts by
Person holding
Specified Goods
Reasonable Steps
to be taken by a
Seller of Specified
Goods

4. Introduction
4
The Central Government (“CG”) can exercise its powers vide Sec 11 to notify or specify
goods to prevent the illegal import or export of goods.
Certain responsibilities are listed out for the persons holding or acquiring such
notified goods or specified goods.
It is essential for the person selling or transferring specified goods to be satisfied of
the identity of the purchaser or transferee.
Therefore, it is important to understand the provisions with regard to the prevention of
illegal import or export of goods.

5. 5
Prevention and Detection of Illegal Imports
by way of Notified Goods
Rules hereinafter refers to Notified Goods
(Prevention of Illegal Import) Rules, 1969

6. Power of CG to Notify Goods – Sec 11B
6
it may , by notification in the Official Gazette specify goods of such class or description
to take special measures to check the illegal import, circulation or disposal of such goods or
facilitating detection of such goods,
where the CG is satisfied that it is necessary in the public interest,
Having regard to the magnitude of the illegal import of goods of any class or description,

7. Intimation of Place of Storage – Sec 11C
7
• A statement as specified under Rule 3 (discussed later) to
be delivered to the Proper Officer within 7 days from the
notified date and indicate the place where such goods are
stored
Person who owns, possesses or
controls notified goods on the date of
notification
• Before such acquisition: Intimation to Proper Officer of the
place where the goods are proposed to be kept.
• After acquisition: Intimation to the Proper Officer of
particulars of notified goods acquired.
Person who acquires notified goods
after the date of notification
• Intimation to Proper Officer of the place where the goods are
proposed to be shifted, before the goods are taken out of
the intimated place.
Shift of any notified goods to any
other place other than the intimated
place.
Notified goods are the goods specified by notification in the Official Gazette by the CG under Sec 11B (till date no
such goods have been notified)
Notified date is the date on which the notification in relation to goods of any description is issued by the CG

8. Contd.
8
• Every transaction related to such transfer or sale to be
evidenced by a voucher as per Rule 7 – Sec 11F
Notified goods sold or transferred
• Transport voucher prepared by the persons owning,
possessing or controlling such goods as prescribed in Rule 4
to be accompanied.
Notified goods taken from one place
to another (other than goods sold or
transferred)
No person shall store or keep notified goods at any place other than the intimated place after the
expiry of 7 days from the notified date.
In relation to notified goods owned, possessed, controlled or acquired, further statement on
notified goods acquired need not be given after the date of delivery of the statement as long as
the goods are stored at the intimated place

9. Particulars of Statement - Rule 3
9
Name and full business address of the person delivering the statement
Situation and description of the premises where the notified goods are stored or kept
Particulars of the notified goods as specified in Rule 9
Date of acquisition of notified goods
Name and address of the person from whom it was acquired
Such statement is to be duly signed by the person delivering it
Duplicate copy and original copy of the statement shall be delivered to
the Proper Officer
The Proper Officer after recording acknowledgement on the original copy,
shall return the original copy and retain the duplicate copy
The statement shall contain the following:

10. Particulars of Voucher – Rule 7
10
Name and full business address of the person selling or transferring the notified goods
Particulars of notified goods as specified in Rule 9
Name and full address of the person to whom such goods are sold or transferred
Time and date of sale or transfer
The voucher shall contain the following particulars:
The voucher shall be prepared in duplicate. The original copy and the duplicate
copy to be signed by the person who has prepared the same
The original copy has to be accompanied with the transport of such
goods
The duplicate copy to be retained by the person who has prepared the
same
All vouchers shall have consecutive serial numbers stamped on them
All vouchers shall be kept in the order of their serial number in the
form of a book

11. Particulars of Transport Voucher – Rule 4
11
Name of the owner of
notified goods.
Name of the notified
goods
Particulars of the
notified goods
Location of the premises
from where the notified
goods are being taken
out
Location of the premises
to where the notified
goods are being taken
Means of transport
Registration number of
the motor vehicle (not
needed if transported in
bus)
Route to be followed for
the transport of notified
goods
Time and date when the
transport of goods begins
and are likely to reach
the destination
The other requirements under Rule 7 relating to production of copies, etc. remains same for
Transport Voucher

12. Precautions to be taken while
Acquiring Notified Goods – Sec 11D
12
Any person acquiring any notified goods after the notified date (except by gift or
succession from any other individual in India) shall ensure the following
Such goods to be accompanied by the voucher mentioned in Sec
11F or a memorandum (explained later) referred in Sec 11G
If a person has himself imported any goods: An evidence showing
clearance of such goods by the Custom Authorities
If goods acquired from a person other than a dealer having a fixed
place of business: Reasonable steps to be taken as prescribed in
Rule 5 ensuring goods acquired were not illegally imported

13. Reasonable Steps to be taken – Rule 5
13
When notified goods acquired from a person other than a dealer having a fixed
place of business – the person acquiring shall satisfy himself as follows:
• The should have made an entry for the acquisition in the
accounts maintained under Sec 11E
• The said accounts shall be certified by a Gazetted Officer of
Customs
If notified goods acquired from
a hawker*
• The seller or transferor should have evidence of clearance of
such goods by the Customs authorities on payment of fine in
lieu of confiscation or permission from a Gazetted Officer of
Customs for the sale or transfer
• The above does not apply if the market price of the goods
acquired is less than two-thirds of the market price if they
were new and depreciated due to use
If notified goods were in
personal use by a person
*A person who travels about selling goods, typically advertising them by shouting

14. Maintenance of Accounts – Sec 11E
14
Every person who on or after the notified date, owns or possesses or controls notified goods
• Shall maintain a true and complete account of such goods as prescribed in Rule 6
• Make an entry in the account in relation to acquiring or parting with such goods along with
particulars of the person from whom it is acquired or in whose favour it was parted
• Such account shall be kept at the intimated place of such notified goods
If the person uses such notified goods for manufacture of any other goods
• Shall maintain a true and correct account of such goods used as prescribed in Rule 6
• Shall keep such account at the intimated place

15. Form of Accounts to be Maintained
under Sec 11E – Rule 6
15
Following particulars in respect of each acquisition or disposal to be maintained in a Register and
the pages of the register shall have consecutive serial number in respect of each transaction:
Name of the notified goods
Name and full business
address of the person from
whom notified goods have
been acquired or in whose
favor it has been parted
with
Serial number of the
voucher or memorandum
Particulars of notified
goods
Time and date of
acquisition or parting of
such notified goods

16. Non-Applicability in Certain Cases – Sec 11G
16
• To notified goods held in personal use of the person by
whom it is owned, possessed or controlled
• Kept in the residential premises of a person for his
personal use
Sec 11C (Intimation),11E
(Maintenance of books of
accounts),11F (transfer evidence
by voucher) shall not apply
• A memorandum with the particulars as specified in Rule 8
is to be issued to the purchaser or transferee
• Such goods shall be taken from one place to another with
such memorandum only
If notified goods held for
personal use are sold/transferred
for a valuable consideration

17. Particulars of Memorandum under Sec
11G – Rule 8
17
• Particulars of the notified goods.
• Name and full address of the person to whom the notified goods are sold or transferred.
• Time and date of sale or transfer.
• Name, full address and signature of the seller transferor.
• The particulars of the permission given by a Gazetted Officer of Customs authorizing sale or
transfer or the number and
• Date of the order passed evidencing clearance by Customs on payment of fine in lieu of
confiscation where the market price of the goods transferred or sold has not depreciated on
account of use to less than two-thirds of the market price, if they are new
The memorandum shall contain the following particulars

18. 18
Prevention and Detection of
Illegal Exports
Rules hereinafter refers to Specified Goods
(Prevention of Illegal Export) Rules, 1969

19. Particulars of Notified Goods – Rule 9
19
Description of the notified goods with the identifying particulars
• Serial number and batch number
• Patent number
• Make and brand
• Trademark
• Country of origin
jQuantity of the notified goods
Market price of the notified goods on the date of acquisition or sale.

20. Additional Particulars
In addition to description , additional identifying particulars have to be mentioned related to few items
Items Details
Watches Gents' or ladies'; hand-winding, automatic, quartz or electronic;size; shape;
with or without centre-second; calendar or not; rolled-gold, chrome,
stainless steel, palladium or plastic; luminous dial or not; type of numerals on
dial; combination type or not
watch movements model; number; calibre; type—hand-winding or automatic; calendar or not;
watch dials calibre; size
watch cases calibre; size; rolled-gold, chrome, stainless steel, palladium, or plastic;
synthetic yarn variety; denier;
metallised yarn variety; colour; length of yarn
fabrics and sarees variety of yarn; type of fabrics; colour;
knit-wear variety of yarn; gents', ladies' or children's size; colour; type;
fountain pens, ball-point pensmodel; colour;
perfumes quantity of contents per bottle/vial;
T.V. Sets model; colour or black and white; with or without remote control; screen
size; number of channels; combination type or not;
electronic calculators model; with or without printer; combination type or not;
Video cassette recorders,
video cassette players
model; with or without remote control; combination type or not;
Video cassette tapes model; playing time;
Zip fasteners length; teeth material; colour

21. Power of CG to Specify Goods – Sec 11I
21
Specify goods of such class or description on a specified date.
it may , by notification in the Official Gazette
to take special measures to check the illegal export or facilitating detection of goods which are
likely to be illegally exported,
where the CG is satisfied that it is necessary in the public interest,
Having regard to the magnitude of the illegal export of goods of any class or description,
Specified goods are goods of any description specified in the Notification issued by the
CG under Sec 11I (Not yet specified till date)

22. Intimation of Place of Storage – Sec 11J
22
• An intimation to be delivered to the Proper Officer
within 7 days from the specified date relating to the
specified goods and the place of storage of such
goods within the specified area
Person who owns, possesses or
controls on the specified date any
specified goods - market price of such
goods exceeds Rs.15,000
• Intimation to Proper Officer of the place where the
goods are proposed to be kept
Person who acquires after specified
date any specified goods within
specified area – market price of goods
acquired and goods of the same class
already held exceeds Rs.15,000
• Intimation to Proper Officer of the place where the
goods are proposed to be shifted, before the goods are
taken out of the intimated place
Person who intends to shift any
specified goods to any other place
other than the intimated place.
In relation to any specified goods, owned, possessed, controlled or acquired by him, he need not
furnish any further intimation as long as the goods are stored at the intimated place.
No person shall store or keep specified goods at any place other than the intimated place after
the expiry of 7 days from the specified date

23. Specified Area - Meaning
23
Specified area includes the
-Indian customs waters and
-such inland area not exceeding 100 kms in width from any coast or other border of India as
the CG may by notification specify in the Official Gazette having regard to the vulnerability of
that area to smuggling
However, if a part of any village, town or city falls within specified area, the whole of it shall be
deemed to be included in specified area without the limit of 100 kms

24. Transport of Specified Goods – Sec 11K
24
• To be accompanied by Transport voucher
Transport of specified goods
from or to a specified area or
loaded on an animal or
conveyance in such area
• For transport of specified goods within a village, town
or city , whose market price does not exceed Rs. 1000
on the date of transport
Non- Requirement of Transport
voucher
• The CG if satisfied that it is necessary in the public
interest, may specify different sums or different
regulations with regard to transport of specified goods
Powers of CG

25. Particulars of Transport Voucher – Rule 3
25
Name of the specified
goods
Names of the seller,
purchaser and owner
Location of the premises
from where the goods are
being taken out
Location of the premises to
where the goods are being
taken
Total net weight of the
goods
Time when the goods leave
the premises for transport

26. Additional Details
26
Means of transport
Registration number of the
motor vehicle ( not necessary
if transported in bus)
Route to be followed for the
transport
Time and date when the
specified goods are to be
taken from the city, town or
village
Time and date when the
goods are likely to reach the
destination
Transport voucher to include the following additional particulars if specified goods are
transported to another city, town or village.
The other requirements under Rule 7 of Import Rules with regard to Vouchers are to be
followed for Transport Voucher in case of exports also

27. Maintenance of Accounts – Sec 11L
27
Every person who on or after the specified date, owns or possesses or controls specified goods of a
market price exceeding Rs. 15,000
• Shall maintain a true and complete account of such goods as per Rule 4
• Make an entry in the account in relation to acquiring or parting with such goods along with
particulars of the person from whom it is acquired or in whose favor it was parted
• Such account shall be kept at the place of storage of such specified goods
If the person uses such specified goods for manufacture of any other goods
• Shall maintain a true and complete account of such goods used
• Shall keep such account at the intimated place

28. Verification by Proper Officer
28
were illegally exported and the person owning, possessing or controlling such goods has been
concerned with such illegal export
It shall be presumed unless the contrary is proved for such difference ,
Specified goods held by the person are lesser in quantity than the stock of goods shown in the
accounts,
If at the time of verification by the Proper Officer,

29. Form of accounts to be maintained – Rule 4
29
The following Particulars to be entered in a Register
• Name of the specified goods
• Name and full business address of the person from whom it is acquired or in whose favor it is
parted with
• Net weight of the specified goods
• Time and date of acquisition or parting
At the end of each day , closing balance of the acquisition, sale or disposal of specified goods to
be updated.
The pages of the registers should be serially numbered and entries to be made immediately after
acquisition, sale or disposal.

30. Steps to be taken by Persons Selling or
Transferring Specified Goods – Sec 11M
30
Except when payment is received by cheque drawn by purchaser
or transferee,
The seller or transferor has to get the sign and full postal address
of the person to whom such specified goods are sold or transferred,
in his copy of voucher to satisfy himself as to the identity of the
purchaser/transferee.
If at an inquiry made by the Proper Officer – the purchaser or transferee
is not readily traceable or is a fictitious person ,it shall be presumed
(unless the contrary is proved) that such goods have been illegally
exported the person who sold or transferred has been concerned with
the concerned illegal export.
The above shall not apply to petty sales if the aggregate
market price obtained by such petty sales of specified
goods, made in a day does not exceed Rs. 2,500.
Petty sale means sale at a price which does not exceed Rs.1000.

31. 31
Reasonable Steps to be taken – Rule 5
• From his personal knowledge
• From a certificate given by a person familiar to the
seller or transferor (Certificate to be retained for
production before the Proper Officer)
• From a Certificate issued under the Gold Control
Act,1968.
• From a Certificate issued by the Inspector of Central
excise within whose jurisdiction the purchaser or
transferee has his place of business (To be
countersigned by the seller from the Superintendent of
Central Excise)
Identity and address of
the purchaser or
transferee to be satisfied
by the seller or transferor

32. Thank You!
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