The Delhi High Court has held that customs cargo service providers are responsible for security of imported and export goods under its custody.
The bench of Justice Yashwant Varma and Justice Ravinder Dudeja has observed that the container was initially sealed with the customs seal of 594385, which was later found to have been replaced with seal No. 344378, with goods pilfered, while the container was in the safe custody of the appellant-Container Corporation.
In terms of Section 45 and the Handling of Cargo in Customs Area Regulations (HCCAR), being the custodian of imported goods, the appellant was burdened with the responsibility of safe custody of the imported goods. Appellant cannot escape such burden by shifting its responsibility upon the CISF and has therefore been rightly held liable to pay customs duty and penalty as prescribed under Section 45(3) of the Act and Regulation 6(1)(j) of HCCAR, 2009.
Background
The appellant, Container Corporation has challenged the final order rendered by Customs Excise & Service Tax Appellate Tribunal (CESTAT) and which has affirmed the imposition of duty and penalty on the appellant in terms of Section 45 of the Customs Act, 1962 read with Regulation 6 of Handling of Cargo in Customs Area Regulations, 2009.
M/s. Pico Trading Co. had filed a Bill of Entry or clearance of goods imported in a container. The goods were declared as “steep glass bowl” and “deep cut glass bowl” with declared valued of Rs. 8,12,745.6/-.
Based on the specific intelligence, the container was examined on 02.11.2011/03.11.2011, in the presence of independent witnesses/Panchas, and the Proprietor of M/s. Pico Trading Co. and the representative of the CHA and on examination, it was found that in addition to declared goods, there were 45 other different kinds of branded products including ladies purses, branded liquor etc., the total value of which was assessed. The container containing the goods was sealed with the Customs Seal No. 594385 and was then seized and handed over to the appellant for safe custody.
The container was later inspected on 01.06.2012, when it was found to be affixed with the seal of 344378. Appellant was then asked to explain the change of seal. Appellant feigned ignorance and made a request for joint survey of the container, which was done on 15.10.2012. During joint survey, the container was found to contain goods worth only Rs. 2,35,000/-, while the rest of the goods were pilfered. Appellant then lodged an FIR with the police reporting loss/theft of the goods from the container.
A Show Cause Notice was issued to the appellant. Commissioner, Customs imposed customs duty on the pilfered goods in terms of Section 45 of the Customs Act read with Regulation 6 of HCCAR and levied a penalty of Rs. 1,00,000 on the appellant under Section 117 of the Customs Act.
The appellant appeal against the order of Commissioner of Customs was dismissed by the CESTAT.
Arguments
The appellant contended that it was not a party to the Panchnama and security of the container was the prime responsibility of the CISF deployed at ICD Tughlaqabad. Section 45 of the Customs Act is not applicable, inasmuch as, the payment of duty under the provision is related to cases of unloading of imported goods in the Customs Area and not in case where the goods have been seized by the Customs Officers.
Relevant Provisions
Section 45(2)(b) of the Customs Act, 1962, the custodian is duty bound to not permit such goods to be removed from the customs area, except under and in accordance with the written permission of proper officer or otherwise dealt with.
Section 45(3) provides that the custodian of the imported goods having been in custody is liable to pay duty in case they are pilfered while in custody. “Imported Goods” are defined in Section 2 (25) as goods brought into India from a place outside.
`HCCAR’, provides for a comprehensive mechanism for handling of goods in a customs area and also prescribes the conditions and responsibilities of the persons handling in import and export cargo in Inland Container Depot (ICD).
Regulation 6 specifically lays down the responsibilities of Customs Cargo Service Provider.
Regulation 6(1)(f) lays down that such service providers shall not permit the goods to be removed from the customs area except under and in accordance with the permission in writing of the Superintendent of Customs or Appraiser.
Regulation 6(i) provides that Customs Cargo Service Provider shall be responsible for the safety and security of the imported and export goods under its custody.
As per Regulation 6(j) Customs Cargo Service Provider shall be liable to pay duty on goods pilfered after entry thereof in the customs area.
Read More: Customs Tariff Act | CBIC Notifies New Definition Of ‘Laboratory Chemicals’
Conclusion
The court while dismissing the appeal upheld the CESTAT’s order.
Case Title: Container Corporation Of India V/S The Commissioner Of Customs
Citation: CUSAA 53/2024
Counsel for the Petitioner: Mr. Rishi K. Awasthi
Counsel for the Respondent: Mr. Aakash Srivastava
