The imported goods are allowed to be cleared for home consumption by the Customs, if there are no restrictions or prohibitions, the assessment formalities have been completed and the duty leviable has been paid by the importers. It is often noticed that the importer files the bill of entry but does not clear the goods due to various reasons such as financial problems, lack of demand for the goods, etc. Such goods are called 'uncleared goods'. In some cases, the importer does not even come forward to file the bill of entry for clearance of goods. Such goods are known as 'unclaimed goods'.

2.        In terms of the provisions of the Customs Act, 1962, the duty is leviable on imported goods, regardless of whether they are cleared by the importers or not. Similarly, dues of other agencies, such as, carriers and custodians for carriage and storage of goods respectively, may also arise. Where the importers do not come forward to make payment of such dues, the Customs duty and other dues can be recovered by selling the unclaimed/uncleared goods.

Procedure for sale of unclaimed/uncleared goods:

4.        For sale of such unclaimed/uncleared goods, the custodian first identifies the goods which are lying uncleared for more than 30 days. He then prepares an inventory of such goods and sends it to the Customs for their 'no objection'. The Customs scrutinizes the list of consignments forwarded by the custodians and withdraws the items which are the subject matter of any investigation/adjudication or court proceedings. The goods prohibited for import, are also withdrawn from the auction as these are subject to adjudication proceedings and goods may get absolutely confiscated. Once goods are confiscated, the ownership is transferred to the Government and the Customs becomes responsible for disposal of such goods. Disposal of certain items such as drugs/pharmaceuticals, chemicals, foodstuffs, insecticides, fertilizers, etc., also requires clearance from the respective authorities regulating import of these items.

5.        Once 'no objection' for disposal is received from the Customs, the custodian gets the fair price of the goods determined by Customs. The price approved by the Customs (inclusive of duty leviable) generally forms the basis of 'reserve price' for the purpose of auction of the goods.

6.        After fixation of reserve price, the custodians arrange public auctions which are held in the presence of proper officer of Customs. In the event of the goods not being disposed of at the 'reserve price' (or within the permissible margin) in the first auction, the 'reserve price' is reduced according to prescribed scale in the subsequent auctions. In case, efforts to sell the goods through public auction fail, these are sold through tender.

7.        Once the goods are sold, the Customs duty on the goods is calculated. For calculation of Customs duty, the sale proceeds from sale of unclaimed/uncleared goods is taken as cum duty price (value + duty) and customs duty is calculated working backwards on the price realised.

Apportionment of sale proceeds of goods:

8.        On the unclaimed/uncleared goods, liabilities towards Customs duty as well as carrier's charges and storage charges arise, which are to be recovered from the sale proceeds. In addition, sales expenses incurred on sale of such goods are to be recovered. In most of the cases, the sale proceeds of such goods may not be sufficient to meet liabilities of all the agencies. In such cases, question arises as to which liability is to be met first. To take care of such a situation, provisions have been made in section 150(2) of the Customs Act. The sale proceeds of any such sale of unclaimed/uncleared goods is to be applied in following manner:-

(a)	first, to the payment of the expenses of the sale,
(b)	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 custodians.
(c)	next to the payment of the duty, if any, on the goods sold,
(d)	next to the payment of the charges in respect of the goods sold due to the person having the custody of the goods,
(e)	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,

After making above-said payments, if any balance remains, that is to be paid to the owner of the goods.