THE CUSTODIAN HAS NO OBLIGATION TO GIVE NOTICE TO IMPORTER BEFORE ACUTION OF UNCLEARED GOODS

[Mr. M. GOVINDARAJAN]

              Sec. 48 of the Customs Act deals with the procedure in case of goods not cleared, warehoused or transshipped within thirty days. It provides that if any goods brought into India from a place outside India are not cleared for home consumption or warehoused or transshipped within thirty days from the date of unloading there of at a custom station or within such further time the proper officer may allow or if the title to any imported goods is relinquished, such goods may, after notice to the importer and with the permission of the proper office be sold by the person having the custody thereof. Animals, perishable goods and hazardous goods may, with the permission of the proper officer, be sold at any time. Arms and ammunition may be sold at such time and place and in such manner as the Central Government may direct.

Sec. 150(1) of the Customs Act deals with the procedure for sale of goods and application of sale proceeds. It provides where any goods not being confiscated goods are to be sold under any provision of this Act, they shall, after notice to the owner thereof, be sold by public auction or by tender or with the consent of the owner or in any other manner.

The above said provisions provide that proper notice should be issued to the importer by the custodian. But Tribunal held in case of clearance of imports through courier agents notice is not required to issue notice to the importer. In this article the said case law is discussed in detail.

In 'Express Industry Council of India V. Commissioner of Customs (Airport), Mumbai' - 2010 (249) ELT 107 (Tri. Mumbai) 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 several reasons do not clear the goods imported by their clients through the courier mode, which were detained by the Customs Department and remain in its custody.  The appellants periodically collect together such goods and put the same up for auction after following the prescribed formalities and obtaining approval from Customs Department in respect of such auctions.

In one case the appellants forward a list containing shipments proposed to be included in auction to the Customs authorities giving the full details of the goods detained to be auctioned.  In the said letters the appellant specifically mentioned that the said list may be examined by the Department and the shipments, if any required, to be retained for the purpose of investigation and adjudication or court proceedings may be intimated to the appellants within the period of 15 days from the date of receipt of the said letters. No intimation has been received by the appellant from the Department. Further the Department issued a NOC for the proposed auction. A customs officer was also designated to be a witness at this auction.

The appellants have no direct link with the actual importer. They liase with the concerned courier company in respect of such detained goods. The appellant gave a notice to the concerned courier companies to clear the goods within 15 days otherwise the said goods would be auctioned. No reply has been received by the courier companies. The appellant gave an advertisement in the various newspapers. The said goods have been valued by an independent valuer as approved by the Department. The said auction was conducted in the presence of the duly designated officer of the Customs Department. A Bill of Entry was filed in the prescribed manner which was accepted by the Department and after processing the same, the Customs Department collected the customs duty and granted out of charge to the successful auction bidder in respect of the Bill of Entry concerning the said auctioned goods.

Later the Department issued a notice alleging that without taking no objection from the department the appellant sold the goods in auction. If is further alleged that the importer was willing to clear the same on payment.  The appellant replied. The duty demand was confirmed. The Assistant Commissioner in the original-in-order gave his findings that as per Board's Circular No.50/2005-Cus, dated 01.12.2005, the custodian is require to issue notice simultaneously to the consignee at his known address and the same shall be displaced on the custodian's notice board. In the instant case no notice has been issue to the consignee. The appellants disposed of the goods without having knowledge that the importers required to pay the said duty in pursuant to the order of the Settlement Commission.

The appellant filed an appeal before Commissioner (Appeals). In that appeal it was observed that that there was negligence in issuing no objection without verifying the records and by not informing the appellant about it order of the Settlement Commission. However Sections 48 and 150 of the Customs Act, 1962 deals with the procedure in case of goods not cleared, warehoused or transshipped within 30 days after unloading and procedure for sale of the goods and application of sale proceeds respectively provided that such goods can be sold only after giving notice to the importer. The said sections are binding on the appellants. The appellate authority held that the appellant failed to so at either stage. Notwithstanding the NOC given by the department the appellant ought to have informed the importer and the appeal was rejected.

The appellant filed the present appeal against the order of the Commissioner (Appeals). Before the Tribunal the appellant contended that Regulation 5 of the Courier Imports and Exports (Clearance) Regulations, 1998, is applicable on the appellants. Regulation 5(5) provides that any imported goods which are not taken clearance, shall be detained by the Customs and shall be disposed of after issuing a notice to the Authorized Courier after the expiry of a period of thirty days of the arrival of the said goods and the charges payable for storage and holding of such goods shall be payable by the Authorized Courier. The appellant contended that as per the said regulation the obligation of the appellant was to give notice only to the authorized courier not to the importer.

The Tribunal held 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. The Tribunal allowed the appeal.