2008 (2) TMI 368 - HC - Customs

Appointment of custodian - power to appoint Custodian u/s. 45 of the Customs Act is an enabling power and it can be invoked by the Commissioner of Customs for multiple number of times. When the Commissioner has the power to appoint one Custodian, he can by invoking the same power also appoint another one - Insistence of the petitioner, therefore, that imported cargo, even the precious ones, should be first taken to their warehouse even for the purpose of segregation cannot be therefore accepted

Summary

Issues Involved:
1. Challenge to the appointment of Jaipur Gemstone Exchange as Custodian for precious cargo.
2. Allegation of monopoly creation in favor of Jaipur Gemstone Exchange.
3. Procedure for customs clearance of precious cargo.
4. Validity of the orders dated 2-1-2008 and 8/10-1-2008.

Detailed Analysis:

1. Challenge to the Appointment of Jaipur Gemstone Exchange as Custodian for Precious Cargo:
The petitioner did not directly challenge the appointment of respondent no. 5 (Jaipur Gemstone Exchange) as the Custodian for precious cargo, but questioned the procedure developed based on the deliberations held on 8-1-2008. The Customs Department had appointed Jaipur Gemstone Exchange as Custodian for precious cargo on 24-4-2007 under Section 45(1) of the Customs Act, 1962. The court observed that the Commissioner of Customs has the authority to appoint multiple custodians under Section 45(1) and can impose regulatory measures consistent with the Customs Act.

2. Allegation of Monopoly Creation in Favor of Jaipur Gemstone Exchange:
The petitioner argued that the Customs Department arbitrarily created a monopoly in favor of Jaipur Gemstone Exchange, depriving the petitioner of business. The petitioner claimed that importers preferred their cargo to be cleared through the petitioner. However, the court found that the petitioner's apprehension of a monopoly was unfounded. The procedure allowed importers to choose their preferred custodian for clearance, and the segregation of cargo at the airport was a practical measure, not a monopolistic practice.

3. Procedure for Customs Clearance of Precious Cargo:
The procedure developed in the joint meeting on 8-1-2008 required imported goods to be escorted from the aircraft to the warehouse of Jaipur Gemstone Exchange for segregation. Precious cargo would then be handed over to Jaipur Gemstone Exchange, and other cargo to the petitioner (RAJSICO). Importers could file a declaration if they preferred clearance through the petitioner, and the precious cargo would be shifted to the petitioner's warehouse without additional charges. The court found this procedure reasonable and not arbitrary.

4. Validity of the Orders Dated 2-1-2008 and 8/10-1-2008:
The court upheld the validity of the orders dated 2-1-2008 and 8/10-1-2008. The orders were found to be consistent with the Customs Act and aimed at efficient handling of precious cargo. The court emphasized that setting up a cargo system for precious items is a policy decision within the discretion of the Customs Commissioner, and judicial review under Article 226 of the Constitution does not extend to regulating such administrative decisions.

Conclusion:
The writ petition was dismissed with no order as to costs. The court found no merit in the petitioner's arguments and upheld the procedure and appointments made by the Customs Department. The decision emphasized the discretionary powers of the Commissioner of Customs in appointing custodians and regulating cargo clearance procedures.