2009 (8) TMI 441 - AT - Customs

Courier Import- the appellant has been appointed as custodian under the provisions of the Customs Act to regulate import-export of courier shipments and in this position have been instrumental in facilitating courier import-export clearances. Several courier companies for various reasons do not clear the goods imported by their clients (the importers) through the courier mode. Such goods imported through the courier mode are invariably detained by the Customs departments and remain in the custody of the Customs department, the appellants periodically collect together such goods and put the same up for auction after following the prescribed procedure and obtaining customs approval in respect of such auctions. Held that-, I find that the appellants have followed the procedure laid down for auction as per the provisions of Custom laws and after duly following the said procedure, the appellants have auctioned the impugned goods. On the other hand, the department having the knowledge of that in the case of goods in question a litigation is pending before the Settlement Commission and knowing that the said facts, issued a No Objection Certificate to the appellants and oscillate their liability on the appellant which is not permitted as per law. In these terms, the impugned order set aside. The appeal is allowed with consequential relief, if any.

Summary

Issues:
- Appeal against demand confirmed by Commissioner (Appeals)
- Disposal of goods by appellant without department's no objection
- Alleged negligence in issuing notice to consignee and informing appellant about Settlement Commission's order
- Applicability of Customs Act provisions on sale of uncleared goods
- Compliance with Courier Imports and Exports Regulations

Analysis:

Issue 1: Appeal against demand confirmed by Commissioner (Appeals)
The appellant appealed against the demand of Rs.2,15,868 confirmed by the Commissioner (Appeals). The appellant acted as a custodian under the Customs Act for courier shipments and conducted auctions for detained goods imported through courier mode. The dispute arose when the appellant sold goods without taking a no objection certificate from the Customs department, leading to the demand notice.

Issue 2: Disposal of goods by appellant without department's no objection
The Customs department alleged that the appellant disposed of goods without obtaining a no objection certificate, which was a requirement as per Board's Circular. The appellant argued that they followed the auction procedure under Customs laws and had no obligation to inform the importer directly about the sale of goods. The department's negligence in issuing the no objection certificate was also highlighted.

Issue 3: Alleged negligence in issuing notice to consignee and informing appellant about Settlement Commission's order
The Asst. Commissioner found negligence on the appellant's part for not issuing notices to the consignee and failing to inform about the Settlement Commission's order regarding duty payment. The appellant's defense was based on the contention that they fulfilled their obligations by informing the courier company, not the importer directly.

Issue 4: Applicability of Customs Act provisions on sale of uncleared goods
The order-in-appeal emphasized the importance of Sections 48 and 150 of the Customs Act, 1962, which outline procedures for goods not cleared within a specified period. The appellant's argument that departmental circulars were not binding on them was rejected, as they were obligated to follow the Customs Act provisions, including giving notice to the importer before selling uncleared goods.

Issue 5: Compliance with Courier Imports and Exports Regulations
The appellant relied on Regulation 5 of the Courier Imports and Exports (Clearance) Regulations, 1998, which stated that notice was only required to be given to the authorized courier, not the importer. The Tribunal found that the appellant had followed the auction procedure as per Customs laws and set aside the demand notice, noting that the department's issuance of a No Objection Certificate despite pending litigation was not permissible under the law.

In conclusion, the Tribunal allowed the appeal, providing consequential relief to the appellant, as they were found to have followed the prescribed auction procedures under Customs laws, and the department's actions were deemed improper given the circumstances of the case.