TMI Blog2009 (9) TMI 122X X X X Extracts X X X X X X X X Extracts X X X X ..... g, is not maintainable. - - 39229 of 2004 - - - Dated:- 18-9-2009 - Shri Hari Radhakrishnan, for the Petitioner. Shri Thirumavalavan, for the Respondent. [Order]. - What is sought for in this Writ Petition is a mandamus, directing the respondents 1 and 2 to pay the demurrage charges till the date of clearance of the goods covered under Bill of Entry No. 34129, dated 30-6-1997. 2. The petitioner company imported Bearing Seamless Tubes of SAE 52100 grade from Germany valued at USD 310/MT and filed Bill of Entry No. 34129, dated 30-6-1997, before the respondents and sought for clearance of the said goods under Duty Exemption Entitlement Scheme (DEES) with duty benefit and additional duty of 15% as per Customs Notification No. 79/95. But, the second respondent rejected the contention of the petitioner company and passed Order-in-Original, dated 27-9-1997, by enhancing the value of the goods to USD 1800/MT. 3. Aggrieved over the said order, the petitioner preferred an appeal on 3-10-1997 before the Commissioner of Customs (Appeals), who, by his Order-in-Appeal, dated 9-10-1997, set aside the order dated 27-9-1997 and held that the value determined by the petitioner und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od of maximum of 90 days as per the scale of rates of Chennai Port Trust and, accordingly demanded demurrage charges of Rs. 88,98,989.50 till 21-10-2004. Under the said circumstances, the petitioner has filed this Writ Petition. 8. Respondents have filed a counter, stating the factual position, as stated above, and contending inter alia as follows: 8.1 The petitioner company had imported 82,293 Kgs. of Bearing Seamless Tubes and filed a Bill of Entry No. 34129 on 30-6-1997 with a declared value of DM 42134 C F. Originally, the petitioner had claimed assessment under Duty Exemption Entitlement Certificate, which was rejected by the Department on the ground that nexus was not established between export and import products. The petitioner later agreed to clear the goods on merits and on payment of duty. The Bill of Entry was assessed after enhancement of the declared value of USD 310/MT to USD 1800/MT, which was the record value of identical goods imported from Japan and accordingly an order was passed by the second respondent. The goods which arrived by the Vessel M.V. Attica, Rotation No. 592/97 Line No. 6, are still available in the Port without being cleared by the petitioner. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ged the enhancement of value for assessment of customs duty and he did not agree to it, the subject issue was gone through various appellate legal courses, which are available both to the petitioner and to the Department under the provisions of the Customs Act. Therefore, the allegation levelled by the petitioner against the second respondent is not tenable in law. The mater relating to condonation of demurrage charges is purely dealt with by the Chennai Port Trust, with which the respondents have no concern. The allegation that the delay was caused by the second respondent and that led to the liability of the petitioner to pay demurrage charges to Chennai Port Trust is absolutely not tenable. The delay is mainly attributable to the petitioner and also the delays, which are caused at different appellate stages, are inevitable in this case, as the petitioner and the Department had chosen to seek the remedies provided under the Act. Therefore, the Department is not liable for payment of demurrage on behalf of the petitioner, who is primarily responsible for all the delays, on account of which demurrage charges have mounted up to Rs. 88,98,989/-. As such, this Writ Petition is liable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in SLP No. 5671 of 1995. The owner of the goods having failed in his attempt to get the goods released, notwithstanding the orders of the High Court in CWP No. 1604 of 1991 [1995 (79) E.L.T. 197 (Del.).], filed an application for initiating a contempt proceeding, which was registered as CCP No. 120 of 1995. The High Court however came to hold that the authorities cannot be held to be guilty of disobeying the orders of the Court and accordingly, dismissed the contempt petition. While dismissing the contempt petition, the learned Judge, granted liberty to the owner to move the Division Bench of the High Court for appropriate directions regarding payment of demurrage/detention charges. Pursuant to the aforesaid observations in the contempt proceedings, an application being filed by the owner, the same was registered as CM No. 4829 of 1996. That application was disposed of by the Division Bench of the Delhi High Court by order dated 18-1-1999. The Division Bench, while disposing of the petition, came to hold that the entitlement of the carrier of the goods to charge demurrage charges and if so, whether the Customs Authorities would be liable to pay the same or not is not required to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o prohibit the owner of the space, where the imported goods have been stored from levying the demurrage charges, levy of demurrage charges for non-release of the goods is in accordance with the terms and conditions of the contract and as such would be a valid levy. The conclusion of the High Court to the effect that the detention of the goods by the Customs Authorities was illegal and such illegal detention prevented the importer from releasing the goods, the Customs Authorities would be bound to bear the demurrage charges in the absence of any provision in the Customs Act, absolving the Customs Authorities from that liability. Section 45(2)(b) of the Customs Act cannot be construed to have clothed the Customs Authorities with the necessary powers, so as to absolve them of the liability of paying, the demurrage charges. In the aforesaid premises, we see no infirmity with the directions given by the Delhi High Court on 18-1-1999. The goods in question, having already been directed to be released, without the payment of the demurrage charges, the importer must have got the goods released. Having regard to the fact situation of the present case, it would be meet and proper for us to d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsible for the situation, to bear the burden for paying port charges. The Customs authorities having accepted the order of the CEGAT dated 29-6-1999 and having issued Certificate for clearance of the goods dated 5-10-1999 should own the responsibility of paying detention and storage charges for the goods from 16-10-1996. It will be totally unjust and unreasonable on the part of the Customs authorities to contend : "Let the petitioner Company pay storage and demurrage charges first and then they may initiate legal action against the Customs authorities seeking reimbursement of those charges, if they are so entitled and advised." Customs authorities are statutory/public authorities and the reasonableness of their actions is required to be tested on the touchstone of postulates of reasonableness and non-arbitrariness flowing from Article 14 of the Constitution of India. Therefore, the stand taken by the learned Senior Standing Counsel for the Central Government appearing for the respondents 1 to 3 Customs authorities in that regard is not tenable." "15. Keeping in mind the various decisions of the Supreme Court referred to above, particularly the decisions of the Supreme Court in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on them." (vi) Nanavati Speciality Chemicals Pvt. Ltd. v. Union of India Ors., 2008 (11) BOMLR 2831: "Once the matter is admitted under Article 226 in support of contractual obligations and pending for long period in High Court, the Court can consider undisputed portion of facts under Article 226." 10. On the other hand, learned counsel for the Department would submit that the decision cited by the learned counsel for the petitioner in Shipping Corporation of India's case is applicable to the goods, which are wrongly detained by the customs authorities, which is not the case here, and hence the said decision is not applicable to the case on hand. He relied upon the following decisions: (i) Vidyt Metallics Ltd. v. Board of Trustees of the Port of Mumbai, 2006 (206) E.L.T. 131 (Bom.): "15...There is no case of mala fide pleaded in the petition nor the same is argued before me. Thus the provisions of Section 155 of the Act will apply with full force. Though the view-taken by the various Division Benches is not in conformity with the view taken by this Court, however, in the light of the fact that the judgment of the Division Bench of this Court which is holding the field ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Customs authorities inasmuch as a part of the delay was on account of samples of the goods having to be tested by NML in accordance with a lawful and well established procedure and the rest of the delay was on account of re-test of samples by two other agencies at the instance of the importers themselves. On these facts, it is not possible to hold that the Customs authorities occasioned demurrage. Hence no liability can be fastened on the Department to compensate the appellant for the demurrage. Admittedly, the demurrage charges were paid to the Port Trust (said to be the custodian of the goods during the relevant period) and it is up to the Port Trust to consider any application of the importer for refund of such charges. The refund claim filed with the Customs Department was only liable to be rejected as not maintainable. It is noticed that the lower authorities rejected the claim as Lime-barred as if they would have allowed the claim, had it been within the period of 6 months from the date of payment of demurrage charges. Obviously, the authorities have acted under a grossly erroneous perception, but, woefully enough, the Department has not chosen to challenge their orders. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings prevented release of the goods of the petitioner for over five years since passing of the final order by the CEGAT for no fault of the petitioner, as such the Customs Department should be directed to bear the warehousing charges payable to CWC." "16. The Apex Court in the case of Board of Trustees of the Port of Bombay v. I.G. Supplying Co. reported in AIR 1977 SC 1622, has held that even though the delay in clearing the goods was not due to negligence of the importer for which he could be held responsible, yet he cannot avoid the payment of demurrage as the rates imposed are under the authority of law, the validity of which cannot be questioned. The Apex Court has reiterated the above proposition of law in the later decisions in the case of International Airport Authority of India v. Grand Slam International, 1995 (77) E.L.T. 753 and in the case of Trustees of Port of Madras v. Nagavedu Lungi Co., 1995 (80) E.L.T. 241. In this view of the matter, we are of the opinion that the delay in clearance of the goods cannot be attributed to the Customs Department and the petitioner cannot be absolved of their obligation to pay the demurrage charges payable on the goods impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... request by the appellants. So, when the said request made by the respondent was under consideration by the authorities, it was unfair for the respondent to approach the writ court. At the same lime, it was also not the case of the respondent that there was an inordinate delay in considering his request by the appellants. In such circumstances, the learned single Judge ought to have primarily looked into the maintainability of the Writ Petition itself. Instead, he ordered release of the goods, which, in our view, is not justiciable." 11. I have heard the learned counsel for the parties and also gone through the records, coupled with the authorities. 12. The whole controversy in this case arose at the time when the petitioner sought for assessment of the imported goods viz., Bearing Seamless Tubes under Duty Exemption Entitlement Certificate (DEEC), which was rejected by the respondents/Department on the ground that nexus was not established between export and import products. Later, the petitioner agreed to clear the goods on merit and on payment of duty. When the petitioner presented the Bill of Entry, dated 30-6-1997, to the respondents, declaring the value of the said goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Customs authorities for payment of demurrage charges. In other words, without challenging the order passed by the Traffic Manager and without bringing the matter to the notice of the Customs authorities, the petitioner has directly approached this Court by filing this Writ Petition, for a direction to the Customs authorities to pay the demurrage charges till the clearance of the goods covered under the Bill of Entry No. 34129, dated 30-6-1997. What was all sought for by the petitioner before the Customs authorities was the Detention Certificate, which was issued, pursuant to the direction of this Court. 16. It is a well settled proposition of law that 'writ of mandamus' lies on the principle "request and denial", which means, there should be a request by an individual and subsequent denial by the statutory authorities. In this case, though a request was made by the petitioner to the Port authorities and the same was rejected, the petitioner had not challenged the said order of rejection. Instead, he filed this writ petition, seeking for a direction to the Customs authorities, which, strictly speaking, is not maintainable. 17. However, since the respondents have stated i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are wrongly detained by the Customs authorities, they are liable to pay the demurrage charges to the Port Trust authorities and, thereafter, the Port Trust authorities may consider for waiver of demurrage charges, if the Department makes an application. 23. In this case, as the fault, as admitted, is on the Department for wrongly detaining the goods from 30-6-1997 to 4-8-2004, in my considered opinion, the Department alone has to pay the demurrage charges for the said period. For the rest of the period i.e., from 5-8-2004 till the date of clearance of the goods, the petitioner is liable. 24. For the foregoing reasons and the conclusion arrived at, the relief sought for in this Writ Petition cannot be granted in its entirety. The claim, of the petitioner in respect of the demurrage charges is allowed only for the period from 30-6-1997 to 4-8-2004. As such, the petitioner is directed to pay the demurrage charges for the rest of the period i.e., from 5-8-2004 till the date of clearance of the goods. As already stated above, the Department shall pay the demurrage charges for the period of detention of the goods i.e., from 30-6-1997 to 4-8-2004. On realisation of the entire ..... X X X X Extracts X X X X X X X X Extracts X X X X
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