CCSP operator penalized for pilferage of seized cigarettes from container custody facility

CESTAT Mumbai upheld customs authorities' action against a CCSP operator whose facility experienced pilferage of seized cigarette sticks from container custody. The tribunal found violations of HCCAR Regulations 5(1)(i)(n), 6(1)(f), and 6(1)(i) due to inadequate security measures allowing unauthorized access and removal of customs-seized goods. Penalty under HCCAR Regulation 12(8) and Section 117 of Customs Act was sustained. Recovery demand for pilfered goods' value was deemed valid under HCCAR and Section 142. The 15-day suspension order became infructuous as the period had expired during appeal proceedings. Appeal dismissed with tribunal confirming CCSP's failure to fulfill custodial obligations and security responsibilities.

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Issues Involved:
1. Validity of suspension of approval for operation as CCSP.
2. Confirmation of demand of Rs.2,22,67,440/- as the value of pilfered goods.
3. Violation of obligations under HCCAR and imposition of penalties.

Summary:

1. Validity of Suspension of Approval for Operation as CCSP:
The Tribunal examined the case in detail, noting that the Commissioner of Customs (General) ordered the suspension of the appellant's approval for operating as a Customs Cargo Service Provider (CCSP) for 15 days. The suspension was based on violations of Handling of Cargo in Customs Areas Regulations (HCCAR), 2019, and the Customs Act, 1962. The Tribunal upheld the suspension, finding it legally valid under HCCAR. However, since the suspension period had already expired, the order was deemed non-implementable.

2. Confirmation of Demand of Rs.2,22,67,440/- as the Value of Pilfered Goods:
The Tribunal found that the appellants were responsible for the pilferage of 23,32,800 cigarette sticks from a seized container kept in their custody. The seized goods were considered "imported goods" under the Customs Act, 1962, and the appellants were liable to indemnify the government for the loss. The demand for Rs.2,22,67,440/- was confirmed as valid under Regulation 5(6) of HCCAR and Section 142 of the Customs Act, 1962.

3. Violation of Obligations under HCCAR and Imposition of Penalties:
The Tribunal determined that the appellants violated several obligations under HCCAR, including failing to provide adequate security and allowing unauthorized access, which led to the pilferage of seized goods. The Tribunal upheld the imposition of penalties under Regulation 12(8) of HCCAR and Section 117 of the Customs Act, 1962. The penalties were deemed appropriate given the appellants' failure to fulfill their responsibilities as a custodian and CCSP.

Conclusion:
The appeal filed by the appellants was dismissed, and the miscellaneous application was disposed of. The Tribunal found no infirmity in the impugned order, confirming the suspension, demand for the value of pilfered goods, and imposition of penalties.

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