Hyderabad: The Customs Risk Management System (RMS), developed to balance trade facilitation and enforcement, is under scrutiny following repeated instances of importers bypassing checks by misdeclaring goods.
A recent case at the Inland Container Depot (ICD), Sanathnagar, revealed how cosmetic products –subject to drug regulatory clearance – were declared under unrelated categories, allowing them to avoid RMS scrutiny and pass customs clearance without the required approvals.
On Dec 4, 2024, the Directorate of Revenue Intelligence (DRI) intercepted a container shipped from China via Dubai by a Hyderabad-based firm. Though declared as general merchandise, inspection revealed it contained cosmetic items. The importer did not obtain clearance from the Central Drugs Standard Control Organisation (CDSCO). The goods were seized under a panchanama. The consignments came through Nhava Sheva Port of Mumbai and reached Sanathnagar Inland Container Depot at Hyderabad only to get cleared.
Officials involved claimed that the Risk Management System did not flag the consignment and, therefore, the goods passed without additional checks. The RMS, an automated system, prioritises high-risk consignments based on declared content. By misdeclaring sensitive goods such as cosmetics as general items, importers circumvent scrutiny, and officials take refuge in the system’s non-intervention.
A probe by DRI revealed that the Dubai-based exporter of the confiscated container is owned by the same person who controls the importing firm in Hyderabad. The case raised concerns about repeated misuse of self-declaration and the failure of RMS to detect manipulated documentation.
Similar trends have emerged elsewhere. Recently, the Special Intelligence and Investigation Branch of Chennai Customs seized multiple containers of misdeclared items, including cosmetics, toys, and footwear, valued at over 26.4 crore.
Following the Hyderabad incident, the principal commissioner of Customs transferred four officials from ICD, Sanathnagar, including an assistant commissioner, two superintendents, and an inspector.