Handling of cargo in Customs area will always be responsibility of the Custodian

  • Home
  • Handling of cargo in Customs area will always be responsibility of the Custodian

CA Bimal Jain | Oct 9, 2021 | Views 362194

Handling of cargo in Customs area will always be responsibility of the Custodian

Handling of cargo in Customs area will always be responsibility of the Custodian

In Delhi International Airports Pvt. Ltd. v. Commissioner of Customs (Appeals) [FINAL ORDER No. 51832 /2021 dated September 23, 2021], Delhi International Airports Pvt. Ltd (“the Appellant”) has filed the current appeal being aggrieved against Order-in Appeal dated June 19, 2019 (‘’OIA’’) in which the penalty was imposed on the Appellant for the removal of consignment as heavy as 700 Kgs from the Customs Area without filing the Bill of Entry for the same.

Factually, a consignment consisting of one package declared as machine parts weighing 700 kg shipped by M/s. Hartland Technologies Ltd., Hong Kong to M/s. Fern Grove Precision Concepts India, Noida through King Fisher Airlines and got entered but was got removed from the Import shed of Air Cargo complex, IGI Airport, New Delhi without filling Bill of Entry. The officers observed that Commissioner of Customs (IMG) New Delhi had appointed the Appellant as custodian of the imported goods with effect from May 03, 2006 until the goods are cleared for home consumption or are warehoused or are transshipped otherwise in terms of provisions of Customs. The said arrangement was regularised till March 16, 2014. However, the Appellant through concessional agreement between the Appellant and M/s,. Delhi Cargo Terminal Management India Pvt. Ltd. has appointed M/s. CELEBI to outsource its duty to upgrade, modernize, finance, operate, maintain and manage the existing cargo terminal at Delhi Airport.

The Department accordingly, opined that M/s. CELEBI failed to perform its duty and has also failed to abide by the provisions of Acts and Rules, Regulations Notifications and orders issued thereunder. Since the Appellant was otherwise appointed custodian under the Customs bond, it was proposed to be vicariously liable for all the acts of M/s. CELEBI. Accordingly, a show-cause notice dated March 13, 2015 was served upon the Appellant as well as M/s. CELEBI proposing the imposition of penalty on them under the provisions of the Customs Act, 1962 (the Customs Act).

It is submitted by the Appellant that since the Appellant has handed over day-today operation of cargo at Delhi Airport to M/s. CELEBI, it was M/s. CELEBI who was supposed to handle, manage cargo handling and storage of Import /export cargo at Delhi Airport in terms of provisions of Handling of Cargo in Customs Area Regulation, 2009 (“the HCCR”). Hence it can be M/s. CELEBI only to be held responsible for the consignment as heavy as that of 700 Kgs to be removed from the Customs Area without filing the Bill of Entry for the same. The penalty imposed upon the Appellant has wrongly been fixed. It is submitted that the Appellant cannot be held even vicariously liable for the faults of M/s. CELEBI.

The Hon’ble CESTAT, New Delhi considering the Section 45 of the Customs Act held that Bare perusal of the Act makes it clear that the person who approved by competent officer of Customs to be the Custodian of goods lying in customs area is duty bound for handling of cargo in the Customs area as mentioned in Section 45(2)(b)of the Customs Act till the goods are removed from the Customs area. As per Section 45(2)(b), the custodian is duty bound to not to permit such goods to be removed from the customs area except after proper permission. From the admitted facts, it is clear that approval of Principal of Commissioner of Customs was given in favour of Appellant and not in favour of M/s. CELEBI. Permitting the Appellant to enter into concessional agreement with M/s. CELEBI cannot be considered as approval as is mentioned in Section 45 of the Customs Act. Otherwise also, it was the statutory mandate for the person so approved to furnish the custodian bond which Appellant had furnished. The CESTAT held irrespective of the concessional agreement, the above fact is sufficient to hold that Custodian as is approved under Section 45 till date is the Appellant.

Further, held that the CESTAT do not find any infirmity nor any illegality when Adjudicating Authority has held violations of provisions of Section 141 of the Customs Act on account of said admission. Further, Rule 6(2) of HCCR restricts such contracting or outsourcing of Cargo handling functions. Even if the permission for outsourcing was given to the Appellant, the said permission was agreed to be coterminous with custodianship of the Appellant and was held subject to fulfillment of provisions of the Customs Act and the Rules and Regulations made thereunder. The provisions of the Customs Act and that of the HCCR do not absolve the custodian of the responsibilities as mentioned in these Regulations to be observed by the Custodians itself, the CESTAT do not find any infirmity with the order under challenge where simultaneously penalty has been imposed upon the Appellant as well. The order is accordingly, upheld.

(Author can be reached at [email protected])

DISCLAIMER: The views expressed are strictly of the author and A2Z Taxcorp LLP. The contents of this article are solely for informational purpose and for the reader’s personal non-commercial use. It does not constitute professional advice or recommendation of firm. Neither the author nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon. Further, no portion of our article or newsletter should be used for any purpose(s) unless authorized in writing and we reserve a legal right for any infringement on usage of our article or newsletter without prior permission.

To Read Official Order Download PDF Given Below :

Join Studycafe's What's App Group or Telegram Channel for Latest Updates on Income Tax, GST, Companies Act, Judgements and CA, CS, ICWA, and MUCH MORE!"

Author Bio

My Recent Articles

HC Raps revenue for failing to act on a transitional-credit claim despite directions Quashed Service tax demand on movie exhibitor under the category of Business Support Service HC: Sets aside clarificatory circular taking away assesse’s substantive right by denying exemption on fish meal Income Tax deduction allowed by Karnataka High Court on loss suffered by assessee on Foreign Rate Fluctuation Initiation of Assessment Proceedings can’t be done if no incriminating material seized at time search View All Posts

Leave a Reply

Your email address will not be published. Required fields are marked *