2016 (6) TMI 266 - AT - Customs

Liability of port trust to pay duty on Import of LAM coke - not accounted for in the Customs area by the custodian and in the custody of the appellant port - Held that - there is no evidence brought on record by the appellant that any insurance survey was done by any agency or whether any remission of duty under Sec 23 of the Customs Act 1962 was claimed by the appellant. Imported goods lying in the Customs area in the custody of the appellant can only be cleared on payment of duty and can not be handed over to an importer by taking shelter of Sec 42 & 43 of the Major Port Trust Act 1963. The observations made by the first appellate authority that there is no evidence on record that the goods, for which duty has been demanded are lost or destroyed. Accordingly the quantity not accounted for by the custodian has to be treated as pilfered under Sec 23 of the Customs Act 1962 and Custodian is responsible for paying duty on such unaccounted imported goods under Sec 45(3) of the Customs Act 1962. Accordingly, no reason found to interfere with the orders passed by the first appellant authority & the same is required to be upheld. - Decided against the appellant

Summary

Issues involved:
Duty demand for unaccounted imported goods in custody of custodian. Interpretation of Customs Act 1962 regarding custodian's liability for unaccounted goods. Application of Major Port Trust Act 1963 provisions.

Analysis:
The appellant filed an appeal against the order upholding a demand for duty, interest, and penalty under the Customs Act 1962. The case involved the import of LAM Coke, where a quantity remained unaccounted for in the custody of the custodian. The appellant argued that the unaccounted quantity was washed away in a super cyclone. The custodian contended that under Sec 45(3) of the Customs Act, they were responsible for unaccounted goods until cleared by the importer. The first appellate authority upheld the demand, emphasizing the custodian's duty to pay duty on unaccounted goods.

The first appellate authority's findings highlighted the custodian's responsibilities under the Major Port Trust Act 1963 and the Customs Act 1962. The authority noted that the custodian's liability was not absolved based on the goods being stored in open spaces. The custodian failed to prove loss or destruction of the imported goods, leading to the conclusion that the unaccounted quantity was pilfered. The custodian's argument regarding the responsibility for open space storage was deemed untenable. The authority referred to relevant sections of the Customs Act, emphasizing the custodian's duty to keep records and seek permission for goods' removal.

The appellate tribunal dismissed the appeal, affirming the first appellate authority's decision. It reiterated that the custodian was liable to pay duty on unaccounted imported goods under Sec 45(3) of the Customs Act. The tribunal emphasized that the custodian could not evade duty payment by citing provisions of the Major Port Trust Act. Lack of evidence regarding loss or destruction of goods led to the conclusion that the unaccounted quantity was pilfered, necessitating duty payment by the custodian. The tribunal upheld the first appellate authority's order, emphasizing the custodian's responsibility for unaccounted imported goods until cleared for home consumption.

In conclusion, the judgment clarified the custodian's obligations under the Customs Act and Major Port Trust Act, emphasizing the duty to pay for unaccounted imported goods. The decision highlighted the custodian's liability for pilfered goods and upheld the demand for duty on the unaccounted quantity. The tribunal's ruling underscored the importance of fulfilling custodial duties and paying duty on imported goods until properly cleared, dismissing the appellant's appeal.