Goods lying in Customs bonded Warehouses can’t be considered Assets of Corporate Debtor: NCLAT [Read Order]

The National Company Law Appellate Tribunal (NCLAT), New Delhi held that goods lying in the Customs bonded warehouses cannot be considered assets of the Corporate Debtor.

The Respondent,  claims that the Corporate Debtor Company imported materials presently lying in customs bonded warehouses at specific locations for construction and building the ships. These ships were further to be exported after the completion of manufacturing. Hence, the Corporate Debtor Company availed its benefit under the Export Promotion Capital Goods Scheme (EPCG Scheme) (the Notification 12/2012 dated March 17, 2012) and other related schemes/notifications. Consequently, the Corporate Debtor was provided with a license under the EPCG Scheme concerning the Material.

The Corporate Debtor had abandoned the imported goods in the Customs warehouses for several years and failed to pay the import duty and other charges and had not taken any steps to take possession of those goods for several years.

The coram of Justice M. Venugopal, Mr. V. P. Singh,  and Dr. Ashok Kumar Mishra held that the importer had lost his right to the imported goods. Consequently, the Customs Authorities are fully empowered under Section 72 of the Act to sell those goods to recover the government dues. The Liquidator has no right to take into possession over those goods for which the Corporate Debtor’s title is deemed relinquished by implication of law. Even before initiating the CIRP, the Corporate Debtor Company could not have secured the possession of the imported goods except by paying the customs duty. The Resolution Professional/Liquidator, who virtually represents the Company, cannot stand on a better footing than the Corporate Debtor itself.

The NCLAT further held that by submission of Claim in response to the Notice issued by the Liquidator, it cannot be presumed that the Custom Dept. had relinquished its right over the property and submitted to the jurisdiction of the Liquidator.

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