Statutory Provisions:
The statutory provisions relating to Transit and Transhipment of goods are covered in sections 52 to 56 of the Customs Act. Exceptions to this chapter [Section 52]: The provisions of this chapter shall not apply to
(a) Baggage
(b) Goods imported by post and
(c) Stores
Transit of goods in the same vessel or air [Section 53]: Subject to the provisions of section 11 any goods imported in a conveyance and mentioned in the import manifest or the import report, as the case may be, as for transit in the same conveyance to any place outside India or any customs station may be allowed to be so transited without payment of duty.
Transhipment of goods without payment of duty [Section 54]: (1) Where any goods imported into a customs station are intended for transhipment, a bill of transhipment shall be presented to the proper officer in the prescribed form. Where the goods are being transferred under an international treaty or bilateral agreement between the Government of India and Government of a foreign country, a declaration for transhipment instead of a bill of transhipment shall be presented to the proper officer in the prescribed form.
(2) Subject to the provisions of sections 11, where any goods imported into a customs station are mentioned in the import manifest or the import report, as the case may be, as for transhipment to anyplace outside India, such goods may be allowed to be so transhipped without payment of duty.
(3) Where any goods imported into a customs station are mentioned in the import manifest or the Import report, as the case may be, as for transhipment:-
(a) to any major port as defined in the Indian Ports Act, 1908 (15 of 1908), or the customs airport at Mumbai, Calcutta, Delhi, or Chennai or any other custom port or customs airport which the board may, by notification in the Official Gazette, specify in this behalf, or
(b) to any other customs station and the proper officer is satisfied that the goods bonafide intended for transhipment to such customs station,
the proper officer may allow the goods to be transhipped without payment of duty, subject to such conditions as may be prescribed for the due arrival of such goods at the customs station to which transhipment is allowed.
Liability of duty on goods transited under section 53 or transhipped under section 54 [Section 55]: Where any goods are allowed to be transhipped under section 53 or transhipped under sub-section (3) of section 54 to any customs station, they shall, on their arrival at such station, be liable to duty and shall be entered in like manner as goods are entered on the first importation thereof and the provisions of this Act and any rules and regulations shall, so far as may be, apply in relation to such goods.
Transport of certain classes of goods subject to prescribed conditions [Section 56]: The provisions of sections 53 and 54 apply only to goods imported at an Indian customs port/airport and transmitted or transshipped to another Indian customs port/airport. They do not cover transport by land from one Indian land custom station to another Indian land customs station.
In the case of goods destined to foreign ports/airports/custom station, the problem had been specifically faced in the case where imported goods meant for Nepal landed at any Indian customs port/airport or land customs station. Such goods had to be transported by road or rail to Indian land customs station along the Indo Nepal Border and thereafter crossed over to the corresponding Nepalese customs station. Similarly there was rail traffic between West and East Pakistan before the latter was liberated and named Bangladesh. The movement across the Indian territory was found to be faster and cheaper compared to movement by sea around the Indian subcontinent. Such a situation is dealt with by section 56 of the Customs Act.
Section 56 specifically provides that Imported goods may be transported without payment of duty from one land customs station to another, and any goods may be transported from one part of India to another part through any foreign territory, subject to such conditions as may be prescribed for the due arrival of such goods at the place of destination.
In the first part there is a substantial exemption from customs duty. The second part technically amounts to export and subsequent re-import.