TaxTMI 
TaxTMI 
TaxTMI 
The Hon'ble CESTAT, Principal Bench, New Delhi, in Concor Versus Principal Commissioner of Customs Imports ICD TKD-New Delhi - 2026 (4) TMI 21 - CESTAT NEW DELHI held that a custodian cannot be held liable to pay customs duty for allegedly pilfered or substituted goods if there is no evidence that the container seals were broken or tampered with while in their custody.
Facts:
- M/s Container Corporation of India Limited (CONCOR) acts as a custodian for imported goods at Inland Container Depots (ICD) and Container Freight Stations (CFS) under Section 45 of the Customs Act, 1962.
- CONCOR submitted an Inventory Report seeking a final No Objection Certificate (NOC) to dispose of five unclaimed containers.
- The inventory report described the goods inside the containers as 'cement blocks,' whereas the Customs Import General Manifest (IGM) declared high-value items such as N-5 face masks, aluminum ingots, and zinc ingots.
- Citing this discrepancy, the adjudicating authority issued a Show Cause Notice (SCN) and confirmed a duty demand of Rs. 51,80,776/-, along with penalties of Rs. 5,10,000/- and Rs. 2,00,000/- against CONCOR.
- The revenue department alleged that CONCOR failed to maintain effective custody, making them liable for the pilfered/substituted goods under Section 45(3) of the Act.
Issues:
- Whether the custodian (CONCOR) is liable to pay customs duty under Section 45(3) of the Customs Act, 1962, for the alleged pilferage or substitution of imported goods?
Held:
The Hon'ble CESTAT, Principal Bench, New Delhi, in Concor Versus Principal Commissioner of Customs Imports ICD TKD-New Delhi - 2026 (4) TMI 21 - CESTAT NEW DELHI held as under:
- The Tribunal observed that masters of vessels, port trusts, and custodians receive sealed containers strictly on a 'said to contain' basis.
- As long as the container's seal remains intact, the custodian cannot know the actual contents and cannot be held responsible if the contents differ from the declared documents.
- Joint examination reports previously signed by customs officers and CONCOR representatives confirmed the presence of cement blocks but did not indicate that the container seals were broken, tampered with, or substituted.
- The Tribunal ruled that without concrete evidence showing the seals were broken while the containers were in CONCOR's custody, it cannot be established that the goods were pilfered or substituted by them.
- Consequently, the duty demand and the imposed penalties against CONCOR cannot be sustained. The appeal was allowed, and the impugned order was set aside.
Relevant Sections:
- Section 45 of the Customs Act, 1962: Restrictions on custody and removal of imported goods.
- Section 45(3) of the Customs Act, 1962: Notwithstanding anything contained in any law for the time being in force, if any imported goods are pilfered after unloading thereof in a customs area while in the custody of a person referred to in sub-section (1), that person shall be liable to pay duty on such goods.