2010 (10) TMI 91 - HC - Customs

Demurrage charges - prayers in this writ petition - for a direction to the Airports Authority of India ( AAI ) not to charge any demurrage charges or in the alternative direct the Customs Department to pay the demurrage charges accrued on the goods of the Petitioner to the AAI - Held that - If the Petitioner s grievance is that the demurrage charges accrued only on account of the failure of the Customs department it would be open to the Petitioner thereafter to seek appropriate remedies as may be available to it in accordance with law - petition is dismissed

Summary

Issues Involved:
1. Legality of AAI's retention of lien under repealed regulations.
2. Responsibility of Customs Department in issuing detention certificates and bearing demurrage charges.
3. Obligation of AAI to offer waiver of demurrage charges.

Issue-wise Detailed Analysis:

1. Legality of AAI's Retention of Lien Under Repealed Regulations:

The petitioner argued that the Airports Authority of India (AAI) relied on the International Airports Authority (Storage and Processing of Goods) Regulations, 1993, which were framed under the repealed International Airports Authority Act, 1971. The petitioner contended that with the repeal of the IAAI Act and the enactment of the Airports Authority of India Act, 1994, the 1993 Regulations also stood repealed and could not justify AAI's retention of lien. The petitioner cited Section 24 of the General Clauses Act, 1897, which is applicable only when there is no savings clause in the repealing Act.

The court, however, accepted the submission of AAI's counsel that under Section 24 of the General Clauses Act, the 1993 Regulations continued to be applicable and should be treated as having been enacted under Section 42 of the 1994 Act read with Section 46(1) thereof until the 2003 Regulations came into force. The court referenced the Supreme Court's decision in Chief Inspector of Mines v. K.C. Thapar, explaining that rules and regulations do not lose their character as rules and regulations even if they are to be treated as if contained in the Act.

2. Responsibility of Customs Department in Issuing Detention Certificates and Bearing Demurrage Charges:

The petitioner contended that the Customs Department was responsible for the delay in issuing the detention certificate, and therefore, should bear the liability for demurrage charges. The petitioner relied on the decision in Gaurisons v. International Airport Authority of India and other cases to argue that the Customs Department should pay the demurrage charges due to their delay.

However, the court found that the liability of the importer or exporter to pay demurrage charges does not shift to any other authority, regardless of the reasons for the accumulation of such charges. The court cited decisions in Shipping Corporation of India v. C.L. Jain Woolen Mills and International Airport Authority v. Grand Slam International, which held that demurrage charges must be paid by the consignee to the AAI. The court also referenced Om Shankar Biyani v. Board of Trustees, Port of Calcutta, where it was held that storage charges are due even if the lien is exercised for non-payment of such charges.

3. Obligation of AAI to Offer Waiver of Demurrage Charges:

The petitioner argued that AAI was obligated to offer an 80% waiver of demurrage charges according to certain circulars. The petitioner claimed that AAI's insistence on full payment of demurrage charges compelled them to approach the court.

The court noted that the petitioner had requested complete waiver of demurrage charges in their letter dated 27th August 2001 and did not demand an 80% waiver at that stage. The court observed that exporters are usually aware of the prevailing demurrage charges and typically pay them directly to AAI. The court found no evidence that the petitioner offered to pay any portion of the demurrage charges, indicating that the petitioner was not prepared to pay any charges and instead decided to contest the demand.

Conclusion:

The court dismissed the writ petition, holding that the petitioner must pay the demurrage charges to AAI. The court clarified that if the petitioner requests a waiver of 80% of the demurrage charges within two weeks, AAI should consider the request on its merits and communicate a decision within two weeks thereafter. The petitioner may seek appropriate remedies against the Customs Department if they believe the demurrage charges accrued due to the department's failure.