Appeal by Container Freight Station dismissed

The Madras High Court has dismissed an appeal by a Container Freight Station, challenging the the order of Customs, Excise and Service Tax Appellate Tribunal, suspending custodianship vested with the firm after a container with red sanders in its custody was found unauthorisedly removed.
Chandra Container Freight Station (CFS) and Terminal operators Private Limited was involved in removal of a red sanders seized container worth about Rs one crore.
The division bench, comprising Justices V.Ramasubramanian and T Mathivanan, which dismissed the appeal yesterday said the action of the Commissioner of Customs was fully justified in invoking provisions of Regulation 11(2) of Handling of Cargo in Customs Area Regulations, 2009 (HCCAR 2009).

The company was appointed by the Commissioner of Customs as custodian for import and export of goods as per Customs Act, 1962.
The Directorate of Revenue Intelligence, on information, seized a consignment of red sanders, prohibited for export, sent by a plastic granules dealing company through a shipping agent from Chennai to Malaysia on December 13, 2014 worth about Rs 1,19 crore.
The container was sent to custody of Chandra CFS. Again on information, the previous consignment of red sanders shipped to Malaysia by the granules company was recalled and was also handed over to Chandra CFS.

On December 19, 2014, the container recalled from Malaysia was removed unauthorizedly from custodianship of CFS. A criminal case in this regard was also lodged and a case registered. The same day, a container trailer lorry was seized.

In this connection, the Commissioner of Customs on December 23, 2014 passed an order suspending custodianship vested with Chandra CFS with immediate effect.
The company then challenged the order with the Commissioner of Customs and also before CESTAT, both of which dismissed the petition and appeal.
Chandra CFS then moved the HC. They contended that no notice was given and it violated the principles of natural Justice.
The bench said as per HCCAR rules, the custodian is responsible for securing transit of goods from the customs area to any other such area at the same place or any other customs station. The appellant had not complied with the rules and so a show cause notice was issued on February 5, 2015, seeking an explanation on why the seized container should not be confiscated and penalty should not be imposed.

"We find that the action of the Commissioner of Customs was fully justified in invoking the provisions of regulation," the bench said and directed the Commissioner of Customs to complete the investigation and pass orders in the above matter preferably within three months.