CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL NEW DELHI.
PRINCIPAL BENCH – COURT NO.III
Customs Appeal No.51733 of 2022 (SM)
[Arising out of Order-in-Appeal No.CC(A) CUS/D-II/ICD-TKD/1411/2019-20 dated 27.02.2020 passed by the Commissioner of Customs (Appeals), New Customs House, New Delhi]
M/s. Container Corporation of India Ltd.,
VERSUS
Commissioner of Customs (Appeals)
APPEARANCE:
Shri Rahul Mishra, Advocate for the appellant.
Shri Vishwa Jeet Saharan, Authorised Representative for the respondent.
CORAM:
HON’BLE MS. BINU TAMTA, MEMBER (JUDICIAL)
FINAL ORDER NO.50092 /2025
DATE OF HEARING:17.01.2025 DATE OF DECISION:28.01.2025
BINU TAMTA:
- M/s Container Corporation of India Ltd. has challenged the order-in appeal CC(A)CUS/D-II/ICD-TKD/1411/2019-20 dated 27.02.2020
confirming the duty demand along with interest and penalty by virtue of Section 45 of the Customs Act, 1962 read with Handling of Cargo in Customs Areas Regulations, 2009.
- Intelligence was gathered that two Containers containing mis-declared and restricted goods belonging to M/s. Shanker Impex were lying in ICD, Tughlakabad, New Delhi since June, 2010. On examination/investigation by the DRI, it was revealed that two Containers bearing No.GLDU 7380644 and CLHU 8304336 were lying in ICD, Tughlakabad for over three years. Bill of Entry 2092589 dated 25.06.2010 was filed against Container No. GLDU7380644 but no “out of charge” was given. The appellant informed vide letter dated 27.06.2013 that during joint survey of the container, the same was found empty and an FIR was lodged with the jurisdictional police authorities. On examining the contents of Container No. CLHU 8304336, it was found to contain cylinders filled with Refrigerant 22 Chlorodifluoromethane, Refrigerant 22 Monochlorodifluoromethane and SSG 22 Chlorodifluoromethane gas. The impugned goods required import license for import of SSG 22 Gas classifiable under chapter heading 903 4490 of the Customs Tariff Act, 1975 is an ozone depleting substance covered under the Montréal protocol. The goods were, accordingly seized under Section 110 of the Act vide seizure memo dated 14.11.2013.
- Statementof Shri Vijayraghavan, Director of M/s. Professional Impex
(P) Limited (CHA) admitted that the documents pertaining to Container No.
GLDU 7380644 were given for clearance but at the time of filing the BE, they were not aware of the fact that import of refrigerant gas in cylinder requires NOC/Permission from the Controller of Explosive.
- Statement of Rohit Sakhuja, (actual person behind the import) was recorded on 26.08.2013 and 21.10.2013 under Section 108 of the Act, where he admitted that he was informed by Shri Vijayraghavan that the shed officer raised the objection in respect of the goods in Container No. GLDU 7380644 pertaining to BE No. 2092589 that refrigerant gas in cylinders required NOC/Approval from Chief Controller of Explosive and that they applied for NOC, which was rejected. He also admitted that they had ordered for refrigerant Gas 410 but by mistake, the shipper had exported R- 22 gas cylinders in the two containers.
- Show cause notice dated 18.12.2013 was issued under Section 124 of the Act,demanding customs duty amounting to 5,54,566 along with interest and penalty of Rs.1,00,000/- from the appellant among other persons under Section 28 and Section 45 of the Act read with the Regulations, 2009. On adjudication, the Adjudicating Authority held that the goods are liable for confiscation under Section 111 (d) of the Act. Since the goods have been removed from CONCOR Warehouse during their custody, in terms of Section 45 of the Act read with rule 6(1)of the Regulations and therefore they are liable to pay duty along with penalty on the goods pilfered. The appeal filed by the appellant was dismissed by the impugned order and hence the present appeal before this Tribunal.
- Heard Shri Rahul Mishra, learned counsel for the appellant and Shri Vishwa Jeet Saharan, learned Authorised Representative for the respondent.
- The learned Counsel for the appellant submitted that the Container
GLDU 7380644 was examined in a joint survey and was found empty,
however, the copy of the said joint survey report has not been provided to them. Secondly, the goods are in proper deployment of CISF as an independent agency to save the goods in the premises at ICD, TKD. He further submitted that there is no evidence that the containers had the goods declared or as alleged when it was handed over to the appellant after its landing to ICD, TKD. There is also no evidence that the seal of the said container was missing or tampered with that as it was when it was sealed for export from the port.
- The learned Authorised Representativereiterated the findings of the Authorities below and also submitted that on the arrival of the container in the ICD, the fact of seal being not there or broken is to be checked by the custodian, and there is no evidence that the container was received without the seal or seal being broken when it was brought in the custody of the custodian. He submitted that there is ample evidence to prove that pilferage or loss of cargo did take place while it was in the custody of the appellant. They cannot shift the blame on CISF as in terms of section 45 of the Act and the Regulations the liability to discharge the duty is fastened on the custodian. He also submitted that mis-declaration of the goods have been fully investigated and the modus operandi of using dummy importer M/s. Shanker Impex for misdeclaring description and value of goods while the real importers Rohit Sakhuja and Ajit Singh Chadha stayed behind the bars for running the illegal He, accordingly, prayed that the appeal filed may be rejected and the impugned order may be affirmed.
- The basic issue to be considered is whether the appellant can be heldliable for payment of customs duty and penalty under the provisions of
Section 45 of the Act read with Regulation 6. For considering the said issue, reference is invited to a recent decision of the Delhi High Court in Container Corporation of India versus The Commissioner of Customs , where the learned Division Bench upheld the order of the Tribunal dated 10.10.2023 holding that the goods got pilfered and container seal found tampered when the goods were not still cleared. It was held that as per Section 45, the custodian is burdened with the responsibility of safe custody of imported goods, unless and until the goods are cleared either for home consumption or for being warehoused. The observations made by the Delhi High Court are quoted here in below:-
“9. As is manifest from a plain reading of Section 45(2)(b) of the Customs Act, 1962, the custodian is duty bound to not permit such goods to be removed from the customs area, except under and in accordance with the written permission of proper officer or otherwise dealt with Section 45(3) of the Act provides that the custodian of the imported goods having been in custody is liable to pay duty in case they are pilfered while in custody. “Imported Goods” are defined in Section 2 (25) as goods brought into India from a place outside. `HCCAR’, provides for a comprehensive mechanism for handling of goods in a customs area and also prescribes the conditions and responsibilities of the persons handling in import and export cargo in Inland Container Depot. Regulation 6 thereof specifically lays down the responsibilities of Customs Cargo Service Provider. Regulation 6(1)(f) lays down that such service provider shall not permit the goods to be removed from the customs area except under and in accordance with the permission in writing of the Superintendent of Customs or Appraiser. Regulation 6(i) provides that Customs Cargo Service Provider shall be responsible for the safety and security of the imported and export goods under its custody. As per Regulation 6(j) Customs Cargo Service Provider shall be liable to pay duty on goods pilfered after entry thereof in the customs area.
- Admittedly, appellant is a Customs Cargo Service Provider. Admittedly, the goods in question had entered the customs area as defined under the Act and were
placed in the custody of the appellant. Undisputedly, the container was initially sealed with the customs seal of 594385, which was later found to have been replaced with seal No. 344378, with goods pilfered, while the container was in the safe custody of the appellant. In terms of Section 45 of the Act and the ‘HCCAR’, being the custodian of imported goods, appellant was burdened with the responsibility of safe custody of the imported goods. Appellant cannot escape such burden by shifting its responsibility upon the CISF and has therefore been rightly held liable to pay customs duty and penalty as prescribed under Section 45(3) of the Act and Regulation 6(1)(j) of HCCAR, 2009.”
- In view of the law laid down as above by the jurisdictional High Court, whichis binding, it is necessary to examine the facts of the present After the first check was ordered by the appraising officer, the shed officer had raised the objection in respect of the goods contained in the container in question that import of Refrigerant Gas in cylinders requires NOC/Approval from the Chief Controller of Explosives, which is evident of the fact that the impugned goods arrived in the said container and were pilfered while in the custody of the appellant. I also accept the submissions of the learned Authorised Representative that no evidence has been placed on record by the appellant that when the goods arrived in their custody the container was without any seal or the seal was broken. The plea taken by the appellant that the goods were in deployment of CISF has already been dealt by the Delhi High Court to say that the appellant cannot escape such burden by shifting its responsibility upon the CISF. The appellant has been held to be the custodian of the imported goods and, therefore, in terms of Section 45 of the Act read with Regulation 6, they are liable to pay the customs duty and penalty as ordered by the Adjudicating Authority.
- On the issue of time limit as prescribed under Section 28 of the Act, it is seen that the appellant videtheir letter dated 27.06.2013 had informed the Department that the container was found empty during the joint survey for which, FIR has been lodged. Taking the date of the said letter, the show cause notice issued on 18.12.2013 is well within the time.
- No interference is called for in imposition of penalty under Section 117 of the Act as it was the responsibility of the appellant to keep the goodsin safe and secure condition so long as they remain in their custody. Here, the goods have been pilfered while they were in the custody of the appellant.
- I therefore, do not find any reason to interfere with the impugned order, which is hereby affirmed. The appeal is, accordingly dismissed as devoid of any merits.
[Order pronounced on 28th January, 2025.]
(Binu Tamta) Member (Judicial)
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