Section 3

Eligibility conditions and criteria for granting the AEO certificate

3.2 Legal Compliance:

3.2.1 There should be no show cause notice issued to them during last three financial years involving fraud, forgery, outright smuggling, clandestine removal of excisable goods or cases where Service Tax has been collected from customers but not deposited to the Government.

3.2.2 There should be no case wherein prosecution has been launched or is being contemplated against the applicant or its senior management.

3.2.3 If the ratio of disputed duty demanded or drawback demanded or sought to be denied, in all the show cause notices issued under the Customs Act, 1962 (other than those mentioned in Para 3.2.1 and 3.2.2) during the last three financial years, to the total duty paid and drawback claimed during the said period is more than ten percent, a review would be taken of the nature of cases and decision would be taken on issue or continuance of AEO status by AEO Programme Manager.

Explanation: for para 3.2.1, 3.2.2 and 3.2.3 above, the cases where the show cause notices have been dropped or decided in favour of the applicant by the adjudicating or appellate authorities will not be considered.

3.2.4 An applicant will also need to demonstrate that he has: i. procedures in place to identify and disclose any irregularities or errors to the Customs authorities or, where appropriate, other regulatory bodies. ii. taken appropriate remedial action when irregularities or errors are identified.

3.2.5 Once an error has been identified, the applicant is expected to take steps to ensure that they do not happen again or, at least, to ensure that they are immediately remedied if they do arise. Failure to take such steps could count against applicant.

¹[3.2.6 The details of the AEO applicants for legal complian ceasper para 3.2.1 will be hosted on CBEC Website (Home-> Departmental Officers-> Systems/ Home -> Public Information -> Indian AEO Programme), The field formation can directly respond to concerned office (viz. Zonal AEO Cell) with the requisite legal compliance information within 14 days of uploading the details.']

1. Amended Vide:- Circular No. 3/2018-Customs Dated 17/01/2018