Customs – Pilferage of seized goods kept in the custody of Customs Cargo Service Provider – Section 117 of the Customs Act & Regulation 5(6) & 12(8) of Handling of Cargo in Customs Area Regulations, 2009.
The petitioner – a public sector undertaking has container freight station at Dronagiri Rail Terminal close to Jawaharlal Nehru Port Trust. The said CFS is governed by the Handling of Cargo in Customs Area Regulations, 2009. It is recognised and given licence as Customs Cargo Service Provider.
The shipping bill dated 5.6.2013 was filed for export of stainless steel articles to Hong Kong. The container was given “Let Export Order” from the CFS of the appellant.
On 14.6.2013, the Customs Special Intelligence Branch found that the there were 12695 kgs of prohibited Sanders wood logs.
The said goods were seized, sealed in the container and kept in the custody of the appellant’s CFS on its indemnity undertaking.
On 14.8.2014, during surprise visit it was found that the seized goods kept in the custody of the appellant were stolen / pilfered.
On 16.3.2020, the show cause notice under Regulation 12(1) of 2009 Regulations was issued to indemnify value of goods at Rs.4,44,32,500/-.
By the order dated 18.4.2023, the notice was confirmed and penalty was also imposed.
According to the appellant, the liability to indemnify goods can only be passed in respect of damages of imported or exported goods
HELD that Regulation 5(6) has wide canvass to cover “storage” and also any event in regard to the goods during receipt, delivery, dispatch or otherwise handling of the goods. Moreover, the appellant had given undertaking to indemnify Customs. Similarly, the penalty of Rs.4,00,000 under Section 117 of the Customs Act is independent of the penalty for contravention of Regulations.
Judgment dated 6.12.2023 in Customs Appeal (L) No.33496 of 2023 with I.A. (L) No.33531 of 2023 of Container Corporation of India Ltd. Vs. Commissioner of Customs, Nhava Sheva.
