2018 (7) TMI 1020 - HC - Customs

Release of imported cargo - imported goods not cleared within 30 days from the date of unloading thereof at a port - The petitioner claims that they have paid the entire customs duty and penalty, and the containers along with the cargo are being held in the custody of the first respondent and therefore, prays for direction - Section 48 of Customs Act - Held that - The said provision deals with procedure in case of goods not cleared to warehoused or transhipped within 30 days after unloading. If the goods are not cleared within the said time period, the title to the imported goods gets relinquished and such goods, may after notice to the importer and with the permission of the officer, be sold by the petitioner having custody thereof - It is not in dispute that the goods were not cleared within the 30 days period and no attempts were made by the petitioner to clear the goods for over one and half years. Therefore, the respondents were fully justified in invoking Section 48 of the Act. The facts disclose that the petitioner had imported goods in 96 containers of which, 41 have been cleared at different points of time for which, duty and all other charges have been paid by the petitioner. Therefore, it may not be a case where there is total lack of bona-fide on the part of the petitioner. It is no doubt true that one and half years had lapsed and the containers were lying in the Container Freight Station. Consequently, the second respondent lost other business opportunities. However, if the petitioner chooses to clear the cargo upon permission being granted by the first respondent, it goes without saying that the petitioner should not only pay the customs duty and other levies payable under the Act, but also is bound to clear the entire dues to the second respondent, which is all inclusive. This writ petition is disposed of by permitting the petitioner to approach the first respondent Department within a period of one week from the date of receipt of a copy of this order and request to grant permission to pay the highest bid amount as realised in the auction.

Summary

Issues Involved:
1. Release of cargo covered under five bills of entry.
2. Payment of customs duty and penalty by the petitioner.
3. Auction of the goods by the respondents.
4. Compliance with Section 48 of the Customs Act, 1962.
5. Third-party interest in the auctioned goods.
6. Payment of storage charges to the second respondent.

Detailed Analysis:

1. Release of Cargo Covered Under Five Bills of Entry:
The petitioner sought a Writ of Mandamus to direct the respondents to release cargo covered under five bills of entry, which were imported and stuffed into 36 containers. The petitioner claimed to have paid the entire customs duty and penalty, and the containers were held in the custody of the first respondent.

2. Payment of Customs Duty and Penalty by the Petitioner:
The petitioner imported used rubber tyres from Australia and filed five bills of entry. Due to financial crisis, they were unable to pay customs duty on time, resulting in the containers being held by the second respondent. The petitioner later arranged for the payment of customs duty amounting to ?5,18,642/- including a penalty of ?5,000/- on 08.03.2018, and requested the release of the containers.

3. Auction of the Goods by the Respondents:
Despite the petitioner’s payment, the respondents proceeded with the auction of the goods without issuing any notice to the petitioner. The petitioner argued that the auction was conducted without following the mandatory procedure under Section 48 of the Customs Act, 1962, thus vitiating the auction process.

4. Compliance with Section 48 of the Customs Act, 1962:
The respondents contended that they followed the procedure under Section 48, which mandates notice to the importer and permission from the Department before disposing of uncleared goods. The petitioner received multiple notices and email communications but failed to clear the consignments. Therefore, the respondents were justified in invoking Section 48.

5. Third-Party Interest in the Auctioned Goods:
The respondents argued that the auction had been concluded, and third-party interest had been created, making it impossible to set aside the auction. However, the court held that the Customs Department retains the power to hand over the cargo either to the highest bidder or the actual importer, as the cargo remains under customs custody.

6. Payment of Storage Charges to the Second Respondent:
The petitioner was informed about the accumulation of ground rent/storage charges and was requested to clear the goods. The petitioner expressed readiness to pay the storage charges and other dues. The court noted that the petitioner had cleared 41 out of 96 containers earlier, indicating some bona fide on their part. The petitioner was directed to pay all dues, including customs duty and storage charges, in one single lot for the release of the remaining containers.

Conclusion:
The writ petition was disposed of by permitting the petitioner to approach the first respondent within a week to request permission to pay the highest bid amount realized in the auction, along with all charges and levies payable to the second respondent and other departments. The petitioner was required to clear all dues and remove the containers in one single lot. The court emphasized that no finality had been reached in the auction proceedings concerning the Customs Department, and the petitioner’s request was to be considered accordingly. No costs were imposed, and the connected miscellaneous petition was closed.