Disposal of Red Sanders seized by DRI and Customs field formations - Customs - Instruction No.12/2025

Instruction No.12/2025-Customs F.No 711/34/2011-Commr.(Inv .- Cus.)Pt-IV-Part(2) Government of India Ministry of Finance Department of Revenue Central Board of Indirect Taxes Customs (Investigation- Customs) 10th floor, Tower-2, Jeevan Bharti Building, 124 Connaught Circus New Delhi- 110001 Date 22.05.2025 To, All the Principal Chief Commissioners/Chief Commissioners of Customs/ Customs (Preventive), All the Principal Chief Commissioners/ Chief Commissioners of CGST and Customs, The Principal Director General, Directorate General of Revenue Intelligence, The Webmaster, CBIC. Madam/Sir, Subject: Disposal of Red Sanders seized by DRI and Customs field formations-reg. The Disposal Manual 2019 lays down the responsibilities of the Custodian/Warehouse in-charge and the Disposal units in the Customs field formations regarding custody of the seized goods and further process of disposal of such goods. These seized goods include goods seized by DRI. The Manual also provides that on account of having notional custody, the custodian shall safeguard the interest of the Government in respect of confiscated goods left with the Port Trusts or other agencies. 2. It has been observed that in many cases, Red Sanders seized by DRI and field formations are pending disposal, resulting in grievances from the Port Trusts or other agencies including custodians of ICDs/CFSs, where the seized goods are kept. A doubt also persists whether field formations are required to undertake the disposal of Red Sanders seized by DRI, due to disposal process taken up by DRI in the past. 3. In view to streamline and expedite the disposal process, it is to clarify that the disposal of Red Sanders seized by DRI should also be undertaken by the Disposal units of the jurisdictional Customs field formations, as is being done in case of all other seized goods. 4. For guidance of the field formations, procedure to be followed for disposal of Red Sanders has already been informed vide this office letter of even no. dated 17.04.2025 (copy enclosed as Annexure A) . However, as there is separate allocation of quota by DGFT for disposal of Red Sanders by export for DRI and Customs formations, the Customs field formation, in respect of DRI seizures, should obtain authorization from DRI in the format as per Annexure-B (copy enclosed), for use at the time of filing of Shipping Bill for export. 5. It is also reiterated that before undertaking disposal through export, it needs to be ensured that guidelines laid in MoEFCC OM F.No 3-1/2019 WL (Part-2) (Volume-1) dt. 12 .09.2022 on export of Red Sanders ( Annexure-A, page-17 ) are scrupulously adhered to. Enclosed: (i) Annexure - A (ii) Annexure - B Yours sincerely, (Varun Yadav) Deputy Commissioner (Investigation-Customs), CBIC, New Delhi. Email ID: [email protected] ANNEXURE A Government of India Ministry of Finance Department of Revenue Central Board of Indirect Taxes Customs (Investigation- Customs) 10th floor, Tower-2, Jeevan Bharti Building, 124 Connaught Circus New Delhi- 110001 Date: __. 04.2025 To, All Principal Chief Commissioners/Chief Commissioners of Customs/ Customs (Preventive), All Principal Chief Commissioners/ Chief Commissioners of CGST and Customs, The Principal Director General, Directorate General of Revenue Intelligence, Madam/Sir, Subject: Disposal of seized/confiscated Red Sanders-reg. The undersigned is directed to draw your kind attention to Ministry of Environment Forest and Climate Change (MoEFCC) OM F.No 3-1/2019 WL (Part- 2) (Volume-1) dt. 12 .09.2022 and DGFT Notification No. 50/2015-20 dated 27.12.2022 amending the policy condition of Red Sanders under Chapter 44 of ITC (HS),2018, Schedule - 2 (Export Policy) vide which Customs and DRI have been allocated quantity of 1907.365 MT 3857.564 MT of Red Sanders respectively for disposal by way of export from seized confiscated sources (copies enclosed). Earlier in 2013, DRI had been allocated quantity of 1200 MT for export. 2. Further, regarding domestic disposal, Hon ble SC s order dt. 29.10.2004 in I.A. 981 in I.A. 458 in W.P. (Civil) No. 202 of 1995 T.N Godavarman Thirumulpad Vs Union of India Ors in 2004 had held that Customs Department and Border Security Force are at liberty to take appropriate action under the provisions of Customs Act, 1962 for confiscation and disposal of the timber and timber products and recovery of fines/penalties in all the States/UTs except North-Eastern States of Arunachal Pradesh, Assam, Manipur Meghalaya, Mizoram, Nagaland and Tripura. However, such confiscated timber and timber products should be disposed off through open auction/sealed tender through the respective state Forest department and the sale proceeds, after deducting the expenses, should be deposited with the concerned Central Government Department. 3. MoEFCC had issued letter dt. 30.04.21 addressed to Pr. Secretaries (Forest) to all States/UT s desiring compliance with the directions of Hon ble SC s enabling judgement and referring to MoEFCC s letter dt. 11.08.2014 wherein inter-alia it was informed that DRI and BSF may like to take necessary action as per orders of Hon ble apex court. The letter from MoEFCC had also been circulated, to all Customs field formations and DRI for necessary action vide this office letter dt. 04.06.2021 (copies enclosed). 4. It is noticed that there has been little traction on ground in terms of actual disposal of seized and confiscated Red Sanders. Active interdiction by Customs/DRI has led to ever burgeoning stocks of seized/confiscated red sanders, taking up valuable storage space incurring recurring security and storage expenditures, depreciation in quality and value over time by natural ageing/rot and are also prone to mischief such as chance of substitution by inferior quality woods. 5. The steps generally to be followed for export/disposal of Red sanders are enclosed as Annexure-A for ready reference. Moreover, before undertaking disposal through export, it needs to be ensured that guidelines laid in MoEFCC OM F.No 3-1/2019 WL (Part-2) (Volume-1) dt. 12 .09.2022 on export of Red Sanders are scrupulously adhered to. In case of any difficulty, Customs field formations may also approach concerned ZU s of DRI. 6. A detailed SOP for obtaining NoC export license from DGFT, Survey and Utilization Division (SU) of MoEFCC and CITESMA before exporting Red Sanders and a flowchart for domestic disposal to be carried out in conjunction with State Forest Department shared by Trichy (Preventive) Zone are also enclosed for ready reference. 7. In view of foregoing, Customs field formations and DRI are hereby requested to take immediate steps for initiating appropriate and proactive action for disposal. Yours sincerely, (Varun Yadav) Deputy Commissioner (Investigation-Customs), CBIC, New Delhi. Encl: As above. Annexure A General steps to be followed for export/disposal of Red Sanders i. Custom formation to engage public agencies like Public Sector Undertakings (PSUs)/State Trading Corporation (STC)/State Trading Enterprises (STE s) for undertaking the export process. ii. Allocation of seized/confiscated Red Sanders lots to PSU/STC/STE for disposal. iii. Grading of confiscated Red Sanders by PSU/STC/STE (either through forest department or tender process). iv. Floating of Tender by PSU/STC/STE inviting bids for export of Red Sanders. Bids so received are opened by PSU/STC/STE and summarized on specified technical parameters. v. PSU/STC/STE submits the Technical Bids along with the summary to Technical Evaluation Committee constituted for the purpose by the Customs formations/DRI. vi. Upon approval of Technical Bids, price bids are opened and tabulated by PSU/STC/STE and submitted to Customs formations/DRI for finalization. vii. Price bids are finalized by a Reserve Price Committee. viii. Upon finalization of price bids, PSU/STC/STE issues LOA to foreign buyers. ix. PSU/STC/STE applies to Customs formations/DRI for issuance of Certificate of Origin. x. Upon receipt of CoO, PSU/STC/STE applies to Directorate General of Foreign Trade (DGFT), New Delhi for issue of Export License. xi. DGFT upon receipt of applications, processes the same and forwards it to Ministry of Environment Forest and Climate Change (MoEFCC). MoEFCC after processing the same, sends same to CITES for NOC. xii. After granting of NOC, CITES sends it back to MoEFCC. xiii. MoEFCC finally sends its NOC to DGFT, New Delhi. xiv. DGFT, New Delhi issues necessary instructions to Jt. DGFT of the concerned State for issuance of Export License. xv. Upon receipt of Export License, PSU/STE approaches buyer to complete the export formalities and receive the final payment. xvi. PSU/STC/STE remits the money to Customs formations/DRI after making necessary deductions. F. No. 711/34/2011-Cus (AS) Pt.IV Government of India Ministry of Finance Department of Revenue Central Board of Indirect Taxes Customs (Investigation - Customs) 10th Floor, Tower-2, Jeevan Bharti Building, Parliament Street, New Delhi-110001. Tel. 011-21400625 Email ID: [email protected] Dated: .05.2021 To, All Principal Chief Commissioners/ Chief Commissioners of Customs/Customs (Preventive), All Principal Chief Commissioners/ Chief Commissioners of Customs Central Excise, The Director General, DRI. Madam/ Sir, Sub: Disposal of Red Sanders-reg. It is informed that Board has been making continuous deliberations in the matter of disposal of seized/ confiscated Red Sanders lying with various field formations of Customs taking up the matter with MoEF CC and DGFT. 2. In this regard, I am directed to forward MoEF CC instructions issued vide F.No. 3- 1/2019 WL (Part-3) dated 30.04.2021 in the matter for necessary action at your end. Yours Sincerely, (Suraj Kumar Gupta) Joint Commissioner (Inv .- Cus) CBIC, New Delhi Encl: as above.