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2022 (10) TMI 332 - AT - CustomsDemand of Customs Duty - goods allegedly pilfered from Customs Area bonded premises - defence taken by the appellant that the overall management and supervision of all imported warehousing including bonded warehouses, where the goods of importer were warehoused, was done by M/s. Asian Cargo Movers - violation of Regulation 5(1)(ii) read with Regulation 6(1)(i) of HCCAR, 2009 - levy of penalty under Regulation 12(8) read with Regulation 11 of the HCCAR, 2009 - HELD THAT - Admittedly, the imported packages have never been opened either by the Customs Authorities for inspection nor any sample was drawn. Simply based on the declaration of the importer the goods had been allowed to be warehoused by the Customs Authorities. The same were accepted without any inspection by the appellant being sealed packages/pallets. Further, admittedly, the appellant, pursuant to order for release of the goods, had offered sealed packages/pallets to the importer for delivery. However, the importerhave disputed the goods without any evidence of pilferage - The packages were admittedly opened for the first time by the Police Officer, wherein the packing material was found instead of Nutritional Supplements as purportedly imported. From the reports submitted by the local Commissioner appointed by the Hon ble High Court, it is evident that he visited the site and thereafter reported that no goods were in existence at the place - customs bonded premises. The Commissioner also indicated that the FIR has been lodged with the Police, which is under investigation. The conduct of the importer also to be dubious as initially he filed bill of entry for warehousing on 4.7.2016. Thereafter, after about 15 days, he has filed request for converting the warehousing bill of entry into a bill of entry for home consumption, which was allowed on 22.07.2016, still importer did not take the delivery and again requested on 1.8.2016 for reconversion of the bill of entry to that of warehouse, which was allowed on 02.08.2016 and immediately thereafter on 5.8.2016 intimated the Customs that he has found a buyer and requested that the goods may be allowed for third country export. Further, such request was repeated on 24.05.2017 stating that they have received purchase order from a buyer at Dubai. No case of pilferage is made out against the appellant - Appeal allowed.
Issues Involved
1. Liability of the appellant to pay customs duty along with interest on the allegedly pilfered goods. 2. Violation of Handling of Cargo in Customs Area Regulations, 2009 (HCCAR) by the appellant. 3. Potential suspension or revocation of the appellant's approval under Regulation 10 of HCCAR. 4. Liability of the appellant for penalty under Section 117 of the Customs Act, 1962. Detailed Analysis 1. Liability to Pay Customs Duty The core issue was whether the appellant, appointed as the custodian of the imported goods, was liable to pay customs duty and interest on goods that were allegedly pilfered from the customs area. The appellant argued that there was no evidence of pilferage while the goods were in their custody. The Tribunal noted that the imported packages were never opened or inspected by customs authorities or the appellant and were accepted based on the importer's declaration. The appellant offered the sealed packages for delivery, which the importer disputed without evidence of pilferage. The Tribunal found no evidence of pilferage from the police investigation or the local commissioner's report. Consequently, the Tribunal held that no case of pilferage was made out against the appellant, and thus, they were not liable to pay the customs duty. 2. Violation of HCCAR The Commissioner had observed that the appellant failed to safely keep the warehoused cargo, thus failing to meet obligations under Regulations 5 and 6 of HCCAR, 2009. The appellant contended that the overall management was handled by Asian Cargo Movers, and any shortcomings should be attributed to them. However, the Tribunal found that the appellant, as the custodian, was responsible for the safety of the goods. Despite this, since no evidence of pilferage was found, the Tribunal did not uphold the charge of violating HCCAR against the appellant. 3. Suspension or Revocation of Approval The Commissioner had proposed the suspension or revocation of the appellant's approval under Regulation 10 of HCCAR. The Tribunal noted that such preventive action requires sufficient reasons to believe that the damage would continue or likely to continue without immediate suspension. The Tribunal found no such case made out and thus dropped the proposal for suspension or revocation of the approval. 4. Liability for Penalty under Section 117 The Commissioner had imposed a penalty of Rs. 50,000 under Section 117 of the Customs Act, alleging violation of Sections 45 and 141. The appellant argued that they could not be blamed for shortages or deficiencies as they accepted and offered sealed packages without inspection. The Tribunal found that the appellant had acted in accordance with the regulations and offered the goods in the same condition as received. Since no evidence of pilferage was found, the Tribunal set aside the penalty imposed under Section 117. Conclusion The Tribunal concluded that no case of pilferage was made out against the appellant. The appeal was allowed, and the impugned order was set aside. The appellant was entitled to consequential benefits in accordance with the law. The Tribunal emphasized that the appellant, as a custodian, could not be held liable for the alleged pilferage without concrete evidence. The proposal for suspension or revocation of approval was also dropped due to the lack of sufficient reasons.
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