Guidelines for the valuation and disposal of seized, confiscated and time - expired goods
CBEC has identified that unrealistic fixation of price is the single most important reason for the delay in the disposal of uncleared, unclaimed, seized and confiscated goods, including time - expired warehoused goods. So Board has prescribed the procedure for the disposal.
The disposal by sale shall take place simultaneously through public auction and sealed tender right from the first time that the goods are offered for sale.
The auction-cum-tender shall be held every month
In each Customs Commissionerate there shall be a Joint Pricing Committee (JPC) responsible for the disposal of seized and confiscated goods
The JPC shall consist of Additional/Joint Commissioner in charge of Disposal, Deputy/Assistant Commissioner in charge of Disposal, Superintendent in charge of Disposal, Deputy/ Assistant Commissioner holding any other charge and Superintendent holding any other charge
The JPC shall determine the Fair Price of the goods to be disposed of through auction-cum- tender. The Fair Price is the best price at which the goods can be sold under normal conditions. It can be expected to be somewhat lower than the price at which goods of the same kind and in the same condition could be sold by the buyer in the wholesale market, the difference representing the profit which the buyer at the auction expects to make.
The book value of the goods shall have no bearing on the Fair Price.
The CIF value and applicable rate of duty should find a place in the valuation file only to serve as a comparison with the Fair Price arrived at with reference solely to the wholesale market price
There shall be no Reserve Price as distinct from Fair Price.
The highest bid in the auction-cum-tender shall be accepted by the JPC if the bid is more than, or equal to or close (not less than the Fair Price by 5% to 10%) to the Fair Price
The goods should not be withdrawn from auction-cum-tender on flimsy grounds, such as the possibility that the goods may fetch a slightly higher price in a subsequent auction
All post-auction/tender offers, even if these are for amounts higher than the successful bid, shall be strictly disregarded and not taken cognizance of in any manner.
In respect of complaints regarding determination of Fair Price and acceptance of bids in auction-cum-tender, the Commissioner shall immediately ascertain whether the prescribed procedure has been adhered to. The matter should not be referred for Vigilance scrutiny in a routine manner if the prescribed procedure has been followed
All Custom Houses shall immediately introduce e-auction, and physical auction shall be discontinued within 100 days of the issue of these instructions.
Government seems to have accepted reality after the seized goods godowns have become overfilled with goods that cannot be sold in the next hundred years. The officer who seized the goods must have overvalued them and no body is prepared to make a realistic valuation for a variety of reasons. A prudent businessman would always think of selling off and not just keeping goods for a better price. There are computers available in customs warehouses which are seized ten years ago. Today nobody would buy them even for a song and these are offered for sale at prices which would be ten times their market price.
Let us hope the Board's latest initiative will clear the junk in most of the Customs warehouses.
CIRCULAR NO. , Dated: February 20, 2006