The handling of cargo in the Customs area will always be the responsibility of the Custodian.
On Delhi International Airports Pvt. Ltd. c. Customs Commissioner (Appeals) [FINAL ORDER No. 51832 /2021 dated September 23, 2021], Delhi International Airports Pvt. Ltd (“The Appellant”) has filed the present grievance against the appeal order dated June 19, 2019 (” OIA ”) in which the sanction was imposed on the appellant for the withdrawal of a shipment of up to 700 Kgs from the Customs Area without presenting the Entry Invoice for it.
In fact, a shipment consisting of a package declared as machine parts weighing 700 kg shipped by M / s. Hartland Technologies Ltd., Hong Kong at M / s. Fern Grove Precision Concepts India, Noida via King Fisher Airlines and entered, but was removed from the import shed of the Air Cargo complex, IGI Airport, New Delhi without filling out the entry bill. The officers observed that the Commissioner of Customs (IMG) New Delhi had appointed the Appellant as custodian of the imported goods as of May 3, 2006 until the goods are released for domestic consumption or otherwise stored or transshipped in terms of the provisions of Customs. Said arrangement was regularized until March 16, 2014. However, Complainant through a concession agreement between Complainant and M / s,. Delhi Cargo Terminal Management India Pvt. Ltd. has appointed M / s. CELEBI will outsource its duty to upgrade, modernize, finance, operate, maintain and manage the existing cargo terminal at Delhi airport.
Consequently, the Department was of the opinion that M / s. CELEBI did not comply with its duty and did not comply with the provisions of the Laws and Rules, Notices of Regulations and orders issued by virtue of the same. Since the appellant was appointed custodian in accordance with the Customs surety, it was proposed to be indirectly responsible for all acts of M / s. CELEBI. Consequently, a notice of proof of cause was delivered to the Appellant and M / s dated March 13, 2015. CELEBI proposing that they be sentenced under the terms of the Customs Law, 1962 (“the Customs Law“).
Appellant contends that since Appellant has delivered daily cargo operations 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 cargo handling provisions in Customs Area Regulations, 2009 (“The HCCR”). Therefore, it can be M / s. CELEBI will only be responsible for the shipment of a weight of 700 Kgs to be withdrawn from the Customs Area without presenting the Entry Invoice for it. The sanction imposed on the appellant has been wrongly set. It is argued that the appellant cannot be held even indirectly responsible for the misconduct of M / s. CELEBI.
The honorable CESTAT, New Delhi considering Section 45 of the Customs Law argued that the mere reading of the Law makes it clear that the person who was approved by the competent Customs official to be the Custodian of the goods that are in customs zone is required for cargo handling in the Customs area as mentioned in Section 45 (2) (b) of the Customs Law until the goods are removed from the Customs zone. Pursuant to Section 45 (2) (b), the custodian has an obligation not to allow such property to be removed from the customs area except after proper permit. From the facts admitted it is clear that the approval of the Director of the Commissioner for Customs it was given in favor of the Appellant and not in favor of M / s. CELEBI. Allow Appellant to enter into concession agreement with M / s. CELEBI cannot be considered an approval as mentioned in article 45 of the Customs Law. Otherwise, too, it was the statutory mandate of the approved person to provide the custody bond that had been provided by the Appellant. the CESTAT entered into independently of the concession agreement, the foregoing fact is sufficient to sustain that the Custodian, as approved under Section 45, to date is the Appellant.
In addition, he argued that the CESTAT does not find any weakness or illegality when the Adjudicating Authority has sustained violations of the provisions of Section 141 of the Customs Law because of said admission. In addition, HCCR Rule 6 (2) restricts such contracting or subcontracting of Cargo handling functions. Even if the permission for subcontracting was granted to the Appellant, it was agreed that such permission would coincide with the custody of the Appellant and remained subject to compliance with the provisions of the Customs Law and the Rules and Regulations prepared by virtue of it. The provisions of the Customs Law and that the HCCR does not absolve the custodian of the responsibilities indicated in these Regulations to be observed by the Depositaries themselves, the CESTAT do not find any weakness with the contested order when simultaneously a sanction has also been imposed on the Appellant. Consequently, the order is confirmed.
(The author can be contacted at [email protected])
DISCLAIMER: Opinions expressed are strictly those of the author and A2Z Taxcorp LLP. The content of this article is for informational purposes only and for the reader’s personal non-commercial use. It does not constitute professional advice or a recommendation for a signature. Neither the author nor the firm and its affiliates accept any responsibility for any loss or damage of any kind arising from the information in this article or for actions taken on the basis of it. Furthermore, no part of our article or newsletter should be used for any purpose unless authorized in writing and we reserve the legal right for any infringement in the use of our article or newsletter without prior permission.
To read the official order, download the PDF shown below: