Procedure for sale of goods and application of sale proceeds [Section 150] :
There are two situations when the customs authorities can sell the goods of the importer or the exporter.
(1) When the goods are confiscated, in which case the goods become the absolute property of the Government. When such goods are sold, the entire sale proceeds accrue to the Government.
(2) Second, when the goods are not confiscated being the following circumstances:
– Imported goods, which are not cleared either for home consumption or for warehousing within the prescribed period of 30 days and such goods, are ordered to be sold under section 48 of the Act.
– Goods belonging to any defaulter of sums due to the Government under the control of an officer of customs ordered to be attached and thereafter sold under section142 (1)(b) of the Act for the satisfaction of the above dues.
– Where a Principal Commissioner/Commissioner of Customs order distraining any movable or immovable belonging to a defaulter of customs dues under the control of an officer of customs and if needed, authorising the sale of such property, if the dues are not paid within date of such distrainment for the satisfaction of the above dues. [Refer Section 142(1)(c)(ii)]
Section 150 covers a situation where the goods are not confiscated.(ie., circumstances which are stated in (2) above).
Where any goods not being confiscated goods are to be sold under any provisions of this Act, they shall, after notice to the owner thereof, be sold by public auction or by tender or with the consent of the owner in any other manner [Sub-section(1)].
The following conditions are to be fulfilled for selling the goods under this section:
1. The goods should not have been confiscated.
2. The provisions of the Act should allow sale of such goods.
3. Notice should be given to the owner before such sale.
4. Goods can be sold in the following manner:
– by public auction; or
– by tender; or
– in any other manner with the consent of the owner.
Sub-section (2) deals with application of sale proceeds. Such sale proceeds can be applied as below:
1. First, to the payment of the expenses of the sale;
2. Next, to the payment of the freight and other charges, if any, payable in respect of the goods sold, to the carrier, if notice of such charges has been given to the person having custody of the goods;
3. Next, to the payment of the duty, if any, on the goods sold;
4. Next, to the payment of the charges in respect of the goods sold due to the person having the custody of the goods;
5. Next, to the payment of any amount due from the owner of the goods to the Central Government under the provisions of this Act or any other law relating to customs.
The balance, if any, shall be paid to the owner of the goods.
Where it is not possible to pay the balance of sale proceeds, if any, to the owner of the goods within a period of 6 months from the date of sale of such goods (or such further period as the Principal Commissioner/Commissioner of Customs may allow), such balance of sale proceeds shall be paid to the Central Government [Proviso to section 150(1)].
An interesting feature of this section is that the legitimate dues of other persons such as auctioneer or carrier takes precedence over the duty payable under the Act.
The Board has issued instructions about the modalities of disposal of gold, which is seized or confiscated and ripe for disposal. The Board has nominated Branches of SBI at Mumbai, Delhi, Ahmedabad, Calcutta and Chennai. Under these instructions, the Customs department is responsible for delivery of gold of requisite purity along with assaying certificate, duly packed as per the trade practice. SBI is entitled to deduct its out of pocket expenses, sales tax and other taxes. But, no commission is to be paid to SBI for selling gold on behalf of Customs department. [CBEC Circular No. 16/2001-Cus, dated 9.3.2001]
Goods seized from applicant, in absence of a claim from any other person claiming to be owner, applicant was entitled to get the goods on redemption, if confiscation was ordered . The goods sold pending adjudication without giving a notice to the applicant . It was held that the applicant entitled for sales proceeds as laid down in Section 150 of Customs Act, 1962.
[IN RE : A. Mahesh Raj 2007 (214) E.L.T. 588 (Sett. Comm.)]