INTERNET AUCTION CUM TENDER AND SEALED TENDER OF CONFISCATED GOODS MEANT FOR EXPORT / IMPORT AND UNCLEARED CARGO BY CHENNAI CUSTOM HOUSE

Chennai Custom House will be launching auction cum tender of imported goods / goods meant for export (confiscated / uncleared) on the website chennaicustoms.org.

(I) Process of Registration of Bidders

(i) Auction will be open to bidders who are registered with the Customs in advance only.

(ii) Registered bidders will be able to access the auction site by using the user id and password.

(iii) The registration will be open to all persons / Companies / Firms who apply in the prescribed proforma attached herewith.

(iv) The application has to be filed with Superintendent, Internet Auction (WH), Custom House (Ground Floor), No.60, Rajaji Salai, Chennai 600001.

(v) All applications should be accompanied by a DD for Rs.5,000/- (Rs. five thousand only) in favour of “Commissioner of Customs, Chennai – Auction A/c” payable at Chennai. If the application is being handed-over in person, the amount may be handed-over in cash. The application form, Procedures and conditions of internet auction cum tender can be downloaded from the above website and the filled application form along with DD can be sent by Regd. Post to the Dy.Commissioner of Customs (Disposal), 60, Rajaji Salai, Chennai-1.

(vi) An acknowledgement will be issued by the Department. Immediately to the applicant.

(vii) A laminated registration card will be sent to all the applicants and user id and password also will be intimated to them.

(viii) As soon as the user id and password are received by the applicant, he will be required to change the ‘password’ in his own interest to ensure that no one else will be able to use it. The responsibility is with him to ensure secrecy of his password and if there is any misuse of this password, he will be solely responsible for any loss or damage.

(ix) Out of Rs.5,000/- paid at the time of application, Rs.4,900/- will be refundable at any time on request for cancellation of registration. The applicant should surrender the Bidder Registration Card. However, in case of any dues from the bidder, then the Customs reserve the right to adjust the amount towards the dues.

(II) Auction Process

(i) Auction will commence at a specified time on a specified date and will end at a specified time and on specified date which will be notified in advance on the website (www.chennaicustoms.org).

(ii) Even though efforts like advertisements in the newspapers about Internet auction & publicity in the related sites to Customs about auction details are being taken, bidders are requested to refer chennaicustoms.org only for auction/tender details.

(iii) The dates for inspection of the goods by the prospective bidders will be published in advance along with the details of the goods available for auction.

(iv) The bidding will start exactly at the time indicated in the auction notice or published in the website and will close exactly at the time indicated. No extension of end time will be allowed.

(v) The time indicated in the auction notice will be the system time of Customs which will be flashed on the auction page and no other time will be taken into account. Therefore, no dispute about closure time or opening time will be entertained and the time indicated in the auction page whether correct or incorrect, will be the time for the purpose of auction.

(vi) To explain the bidding process, a sample screen showing a few lots is displayed below.

(vii) Let us say the bidder has selected Lot No.2 for bidding. Once he selects Lot No.2, he will be presented with the screen given below.

(viii) The bidder can enter his bid in the box indicated and register the same by clicking on the ‘make bid’ option. The bidder can view the current highest bid which is indicated in the ‘current bid’ column.

(ix) Alternatively the bidder can opt for auto-bidding by which he can register the highest amount he is willing to pay and also the incremental value (minimum Rs.100/-) by which he would like the system to increment other/competitive bids.The system will then register his bid and automatically increment the other bids as and when they are placed till the highest bid indicated by him is reached. The auto bidding system is illustrated by the following example:-

(a) let us say, a bidder ‘x’ has given the highest bid of Rs.50,000/- for the lot by opting for an auto bid with an increment of Rs.1,000/- selected by him;

(b) if another bidder ‘y’ bids an amount of Rs.25,000/- for this lot, the system will give a message that “your bid is too low” and increment the bid by the increment indicated by the bidder ‘x’ who has opted for auto bidding. The screen will show the highest bid plus the incremental value the bidder ‘x’ has set and l show Rs.26,000 as current highest bid and give the bidder ‘y’ a message that he has been outbidded by the bidder ‘x’ who has opted for the autobid as in the following screen.

(c) If there is another bid for Rs.30,000/-, automatically the system will increment the bid by the incremental amount indicated by the bidder who has opted for auto increment option as above;

(d) this process will continue till any bidder bids for a higher amount than Rs.50,000/-;

(e) if no other person bids more than Rs.50,000/-, the auto increment bidder ‘x’ will be liable to pay the last current highest bid;

(f) thus, the bidder who chooses auto increment option, has the facility of indicating his willingness to pay maximum amount so that if there is no other higher bid, he does not have to participate in the auction;

(g) if the auto bidding increment is not opted for, the bidder will be required to indicate his bid which should be atleast Rs.100/- above the current highest bid;

(h) if there is already a auto increment bidding, as soon as the bidder completes bidding, the system will automatically increment and indicate the highest bid;

(i) the system also will give a message to the bidder that there is a bidder who has bid for auto increment and therefore, he has already been overbid and if he likes, he should again bid or set a auto increment bid and indicate the maximum amount he is willing to pay;

(j) in case the second bidder also opts for auto increment bidding and indicates the highest amount, the system will automatically over-bid him if his bidding is lower than the bidder who has already opted for auto increment bidding;

(k) however, if the amount indicated by the second bidder is higher than the first bidder who has bid for auto increment, the system will automatically over-bid the first auto increment bidder and indicate an amount which is higher than the increment amount indicated by the second bidder;

(l) at any given point of time, there will be only one bidder who has opted for the auto increment and whose amount will be the highest of all the amounts of those who have opted for the auto increment bidding;

(ix) It has been noticed that there is a time-lag between the time of bidding on the user screen and updation in the server. The time-lag may vary depending upon the speed of the modem and specifications of the computer. Therefore, the bidder may not see the result of his bid immediately. Hence, it is suggested that if a bidder is very keen to buy the product, he should set the maximum bid amount well in advance so that he does not lose out while attempting to bid at the last minute. Frequent usage of refresh option is also suggested.

(x) Once the auction time is over, the system will automatically shut out all the bidders and close the auction;

(xi) In addition, there is also an option to put in sealed tender on the internet auction. This option can be exercised only once by a bidder for each lot during the period of auction.

(xii) The sealed tender cannot be seen by any one including the auction administrator till the auction is over and reserve prices are fed into the system.

(xiii) The effort of the Department has been to replicate physical auction-cum-sealed tender process on the internet ofcourse without the requirement of physical presence of bidders, auctioneer, etc.

(xiv) Thereafter, the Department will examine the bidding amounts and in the case of the bids accepted, the bidders will receive communication by e-mail as well as by post about acceptance of their bidding.

xiv-a) At the time of examination of bid amounts, the highest bid will be considered for acceptance. When the tender submitted is higher than the maximum bid and auto bid limit then that tender will be considered. In case the auto-bid limit set by a bidder is higher than the tender then the incremental value specified in that auto bid will be applied to the tender. In the unlikely event of the maximum bid and physical tender/e-tender and physical tender/auto-bid limit and physical tender being equal then the concerned bidders will be required to submit one more sealed tender and the highest of these two will be considered.

(xv) Within 7 days of the receipt of the letter indicating acceptance of the bid by the Department or by the concerned CFS (in the case of Uncleared cargo), the bidders will be expected to pay the 10% EMD or the full bid amount according to their preference.

(xvi) In case only EMD is paid, delivery of the goods will be made only after the full amount is paid within the time limit specified in the conditions of sale.

(xvii) If the full amount is paid, a delivery order will be issued to the bidder to receive the goods. However, the delivery of goods will be subject to fulfillment of any regulations under Customs Act or any other act in force like Plant Quarantine, Port Health Officer, etc. and he should take delivery within the stipulated time.

(xviii) In case a bidder fails to pay EMD after his bid has been accepted, he will be black-listed and the deposit amount of Rs.4900/- will be forfeited by the Department He will be re-registered only if he compensates the Department for the loss suffered by the Department In case the goods are sold subsequently at a lower price, the re-registration will be considered on payment of the differential between the bid amount made by the debarred bidder and the new bidder with interest as calculated by the Department

(xix) For re-registration, fresh deposit will have to be made by the bidder.

(xx) The details & photograph of the defaulter - bidder will be flashed in all Custom Houses in India so that they will also not allow him to participate in the auctions conducted by them.

(xxi) The names and addresses of the bidders whose bids have been accepted will not be published on the website or during auction or at any time.

(xxii) The bidders will also be free to authorize another person to take delivery on payment of the full amount to the Department However, the person taking delivery should satisfy any regulatory requirement under Exim Policy or under any law being in force. However, if the other person authorized by him refuses to take delivery or fails to take delivery on payment of full bid amount, the bidder will be debarred from participating in future auction as proposed above.

(xxiii) In the list of accepted bids published on the website also, the Lot No. and the highest bid accepted only will be published.

(III) Sealed Tender Process

(i) To enable the bidders who are not familiar to participate in Internet auction, facilities of submitting a sealed tender to the Assistant Commissioner (Warehouse) one day prior to the date on which that bid is being put in internet auction cum tender;

(ii) The cover should be superscribed ‘Sealed Tender for Internet auction from date to date & lot no.

(iii) The tender should be accompanied by a DD for 10% of the bid amount as EMD.

(iv) The following details should be given in the sealed bid / tender:-

(a) Name & address of the bidder

(b) Bidder Regn. No. (not compulsory)

(c) Lot No. selected for bid

(d) Description of goods

(e) Amount of bid

(f) DD No., date & name of the bank on which drawn

Date:

Time:

Place: Signature (v) Tenders which do not contain all the details or not accompanied by DD shall be rejected summarily. Sealed tenders will be opened on the next working day after the end of internet auction for that month between 1100 hrs to 1200 hrs in the chamber of AC/DC (WH). Interested bidders can witness the tender opening.

(IV) Conditions of the Internet auction Cum tender for confiscated cargo and Uncleared Cargo.

The items offered for sale by internet auction cum tender can be seen in the list of lots published in the website of Chennai customs.

GENERAL CONDITIONS OF SALE

1. SELLER – Seller referred in these conditions of sale is, “Department of Customs through their officers AND/OR the Custodian. All payments are to be made in the form of demand draft payable at Chennai or cheque drawn on a bank located at Chennai. When payments are made by cheque, delivery will be made only after the cheque is cleared. The drawee details for the cheque/demand draft will be indicated in the bid acceptance letter.

2. AUCTIONEER – Chennai Custom House is facilitating virtual auction/auction on internet for the Custodians and the Customs department.

3. BIDDER – Any person/firm/company who has been registered by the Custom House as a bidder. Bidder must read the terms and conditions of the auction sale very carefully and then only place his signature on the application form.

4. Bidders are expected to adhere to the business ethics and necessary discipline.

5. Goods are being sold on AS IS and WHERE IS BASIS.

6. The lot or lots shall be removed in full by the bidder from the site with whatever faults and flaws in description or otherwise and no selection or sorting of the material will be allowed. Quantities, Quality, Sizes, measurements, numbers and weights stated are approximate.

7. Goods are sold on the assumption that the bidder has inspected the lot prior to bidding and knows what he is bidding for. No complaint shall be entertained after the lot is once knocked down in bidder’s favour.

8. Goods may be sold singly or by clubbing them in lots as suitable, convenient and advantageous in opinion of SELLER.

9. The timings of internet auction cum tender will be strictly adhered to. No extension of end time will be allowed under any circumstances.

10. Where specimen samples or photographs are shown it is clearly understood that the quality of the material inside the container/ boxes/ cartons/ bales / cases etc. may not necessarily be of exact quality, quantity, weight, size, dimensions, specifications, features etc.

11. Any lot or part thereof may be withdrawn from the sale at any time before it is actually physically delivered out of the campus without disclosing the reasons for such withdrawal. However, if any payment has been made it would be refunded without any interest.

12. Any lot or part thereof may be withdrawn from the proposed auction sale at any time before or even during the actual AUCTION for which SELLER need not assign any reason to potential bidders.

13. The highest bid for each lot shall be subject to confirmation by the SELLER. In the event of any dispute about the highest bid, the decision of the SELLER shall be final. Seller reserves the right to sell the lot to any bidder other than the highest bidder without assigning any reasons.

14. Subject to confirmation/subject to approval shall be decided on or before fifteen working days excluding the day of auction.

15. No Bidder shall after bidding pay an amount, which is less than the bid amount or retract a bid.

16. The seller need not inform the presence of tender for any particular lot to the bidders.

17. The biddershall pay Balance of the Bid amount between 10.00 Hr. and 18.00 Hrs. on working days as per the chart given below :

a) If a bid amount is less than Rs. 5 Lakhs – within 5 days from the date of confirmation/approval.

b) Above Rs. 5 Lakh to Rs. 10 Lakhs – within 10 days from the date of confirmation/approval.

c) Above Rs. 10 Lakhs to Rs. 15 Lakhs – Within 15 days from the date of confirmation/approval.

d) Above Rs. 15 Lakhs to Rs. 20 Lakhs within 20 days from the date of confirmation/approval.

e) Above Rs. 20 lakhs to Rs. 1 Crore – within 30 days from the date of confirmation/approval.

f) Rs. 1 Crore and above – Within 45 days from the date of confirmation/ approval.

18. If the successful bidder fails to make the payment and/or take delivery of the goods within the time limit prescribed then the SELLER reserves the right to offer the lot to the second highest bidder. The second highest bidder can either accept or refuse the offer and such refusal will not render him a defaulter. When the second highest bidder refuses to accept then the SELLER can auction the un-delivered material immediately or in the next auction without any intimation to the bidder and the EMD deposited if any, or the registration fee deposited by the bidder will be forfeited.

19. The Cost of material handling, i.e. de-stuffing etc. shall be borne by the bidder and payment has to be made to the SELLER at the rate prevailing at the time of taking delivery.

20. Delivery should be taken within 3 days (FREE PERIOD) from the last date for payment recorded herein above (Clause No. 24) and in any case within seven days.

21. All bids invited are for the net amount accruable to SELLER and relevant taxes, levies, etc. except Customs Duty shall be payable by the bidder and these taxes shall be treated as extra and are expected to be paid before taking delivery.

22. It is made clear that, all the taxes, i.e. State Excise Duty, Sales Tax, Octroi etc. shall be borne by the bidder. However, sales tax shall be paid to SELLER before taking the delivery of consignments.

23. DELIVERY OF LOTS: Within Ten days from the date of payment of bid amount in full during working hours failing which the total amount paid and items of lots will be forfeited without any further notice and purchaser will not have any claim over the items or on the amount paid.

24. The goods shall be lying in the premises after the conclusion of the bidding at the sole risk and cost of the bidder in all respects and the bidder should take the delivery at his own expenses at the earliest and in any case not later than the period prescribed above.

25. Goods are being sold on “As is and Where is basis” i.e on lot basis. Weights indicated OR quantities recorded in the catalogue are approximate. SELLER shall not take the responsibility with reference to weights and measurements and quantities, qualities etc. Bidders are participating for the lot which is offered. The decision of SELLER shall be final and binding in this regard.

26. SELLER reserves the right to modify and amend 'Terms and Conditions’ and announce the same at any time.

27. SELLER is not bound to accept the highest offer.

28. In case of any dispute, the same shall be referred to a single arbitrator, to be appointed by the SELLER and the Arbitration proceedings would be governed by ‘Arbitration and Conciliation Act’ 1996.

29. The fees and expenses towards arbitration proceedings shall be shared, equally, by the parties to the dispute and shall be paid in advance to the auctioneer. The jurisdiction for appearing against the award in a court, or any other proceedings under the Arbitration Act, shall be that of courts in CHENNAI City only.

EXPLANATORY NOTES:

1. After the first e-auction some bidders have brought to the notice of the Department that they faced some technical problems while bidding during the last minutes of e-auction. It has already been explained that bidding during the last minutes of e-auction may encounter certain unforeseen problems such as time-lag, heavy traffic, system/power failure at the user end etc. In order to avoid such problems and also not to lose out bidding, the bidders keen on buying any particular lot, are advised not to postpone the bidding to the last moment and to opt for e-tender and auto-bid options. These options are provided to overcome such technical difficulties. In the e-tender the bidders can quote the minimum price they are willing to pay for a particular lot. In the auto-bid option they can quote the maximum price they are willing to pay along with the incremental value which can be quoted as low as Rs.100/-. These options will provide enough flexibility so that they need not sit before the computer throughout the e-auction process and need not worry about the technical problems.

2. It has been noticed that bidders are informing the department after the close of e-auction session that they have committed some clerical errors while bidding due to over sight / urgency and they request the department to rectify. Clerical errors will be accepted so long as the department is informed within 2 hours after the closure of e-auction session. However the bidders should be careful while bidding on e-auction to ensure that there are no clerical errors. The bidders should note that such errors create confusion on the minds of other bidders and sometimes render the e-auction for that particular lot useless. Hence it is once again impressed that bidders should make sure that there are no errors in bidding. Any intimation after 2 hours of closure of e-auction will not be entertained under any circumstances.