2023 (1) TMI 310 - HC - Customs

Seeking release of the consignment - sale of goods after import - seeking cancellation of the previous bill of entry filed with the customs and permit the Petitioner to file a new bill of entry as per new consignee - levy of demurrage charges - HELD THAT - The situation in the present case is that though the out-of-charge process was undertaken by the importer way back in August 2022 the said importer has not paid the customs duty and taken clearance of the goods. In effect therefore he has abandoned the goods. The importer has also not paid the detention/demurrage charges and till date the goods are lying with the customs authority. The Petitioner has already received the original bill of entry and other documents from the Bank which would therefore show that the title of the goods has in fact passed to the Petitioner. A perusal of the judgment in Agrim Sampada 2004 (1) TMI 86 - HIGH COURT OF DELHI clearly shows that the original importer in the said case who had to make payment on cash against delivery basis had abandoned the same and under such circumstances the Court had held that the party similarly situated as the Petitioner is entitled to present the original bill of entry to the customs authority upon which the goods have to be cleared. The issue of payment of demurrage has been considered by several decisions of the Supreme Court and of this Court. On the question of demurrage the Supreme Court in INTERNATIONAL AIRPORTS AUTHORITY VERSUS GRAND SLAM INTERNATIONAL OF INDIA 1995 (2) TMI 70 - SUPREME COURT held that the demurrage would be liable to be charged even if there was fault on the part of the customs authority. Whether the demurrage would be liable to be paid by the Petitioner insofar as the customs duty and the interest? - HELD THAT - These circumstances would clearly show that until December 2022 the abandonment could not have been concluded by the Customs authorities at the importer s instance as the out-of-process charge had already been done. Therefore the customs authorities could not have presumed change in ownership till December 2022. If the goods are not released to the Petitioner the authorities would follow the procedure prescribed in law and recover the demurrage which they are obviously entitled to recover. However the Petitioner herein is seeking release of goods due to change in ownership of goods on the strength of the original documents having been released in its favour and the Importer having not cleared the goods. The short question that arises is whether the Petitioner can claim that it is not liable to pay any demurrage. The Petitioner shall pay the customs duty and interest - Insofar as the detention/demurrage charges are concerned since there is no explanation for the delay between September 2022 to December 2022 and the first representation itself was made on 3rd December 2022 the Petitioner would be liable to pay 50% of the detention/demurrage charges payable till 3rd December 2022 as also demurrage charges for the period from 3rd December 2022 till date - petition disposed off.

Summary

Issues Involved:
1. Release of consignment under Bill of Lading.
2. Cancellation of previous bill of entry and permission to file a new bill of entry.
3. Waiver of charges, interest, and penalties levied upon the consignment.
4. Liability for demurrage charges.

Issue-wise Detailed Analysis:

1. Release of consignment under Bill of Lading:
The Petitioner, a Singapore-based company, sought the release of a consignment under Bill of Lading No. HLCUTOR220708684 from the Respondent - Commissioner of Customs. The consignment was initially intended for M/s Earth Wire Private Limited, which failed to clear the goods by not paying the customs duty. The Petitioner argued that the importer abandoned the goods, and as the owner, the Petitioner should be allowed to clear the goods. The Court recognized that the importer had effectively abandoned the goods by not paying the customs duty and not clearing the goods. The ownership of the goods was deemed to have passed to the Petitioner, who had received all original documents from the bank. The Court referred to the judgment in Agrim Sampada v. Union of India, which supported the release of goods to the owner when the importer abandons them.

2. Cancellation of previous bill of entry and permission to file a new bill of entry:
The Petitioner sought the cancellation of the previous bill of entry filed in favor of M/s Earth Wire Private Limited and requested permission to file a new bill of entry as per the new consignee. The Court acknowledged that under Section 2(26) of the Customs Act, 1962, the definition of "importer" includes the owner or beneficial owner of the goods. Given that the title of the goods had passed to the Petitioner, the Court permitted the Petitioner to file a new bill of entry.

3. Waiver of charges, interest, and penalties levied upon the consignment:
The Petitioner requested the waiver of various charges, interest, and penalties levied upon the consignment. The Court held that the Petitioner was willing to pay the customs duty and interest but contested the imposition of demurrage charges. The Court directed the Petitioner to pay the customs duty and interest as assessed.

4. Liability for demurrage charges:
The Court examined the issue of demurrage charges in detail. The Petitioner argued that as per the judgment in Agrim Sampada, they should not be liable for demurrage charges. The Court reviewed several Supreme Court and High Court decisions on demurrage charges, including International Airports Authority of India v. M/s. Grand Slam International and Om Petro Chemicals v. Union of India. The Court concluded that if the importer is at fault, demurrage charges would be liable. In this case, the importer had processed the documents but failed to clear the goods. The Court held that the Petitioner would be liable to pay 50% of the demurrage charges up to 3rd December 2022, and full demurrage charges from 3rd December 2022 onwards. The Petitioner was directed to appear before the customs authority to quantify the exact amounts payable.

Conclusion:
The Court disposed of the petition with the following directions:
a) The Petitioner shall pay the customs duty and interest.
b) The Petitioner shall pay 50% of the demurrage charges till 3rd December 2022 and full charges thereafter.
c) The Petitioner's representative shall appear before the customs authority to quantify the payable amounts.
d) Remedies against the importer and customs authority are left open.
e) The Petitioner can clear the goods by paying demurrage charges under protest if they wish to challenge the order.

The petition was disposed of in these terms, with a copy of the order provided under the signature of the Court Master.