TMI Blog2012 (4) TMI 235X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner submitted their reply to show cause notice dated 29th August, 1991, only on 5th March, 1992. Even if the petitioner was relying upon and wanted a copy of the test report by SASMIRA, the delay is not justified - The action of the customs authorities cannot be substantially faulted, once they had issued detention certificates in 1993, except to the extent of passing of the adverse assessment order - Contention of petitioner that none of the partners were willing to bear and pay the demurrage charges as there was no certainty when, how and who would be entitled to sell the goods and how the profits would be distributed cannot be accepted - If the petitioner had made payment of reduced demurrage charges on the basis of the detention certificates, the position may have been different - the petitioner had failed to take delivery of the consignment even after order dated 23rd April, 1993 and in such circumstances it is not viable for respondent- custom to pay the demurrage or container charges - writ petition dismissed - Writ Petition (Civil) Nos. 17976-77/2004 - - - Dated:- 23-2-2012 - MR. JUSTICE SANJEEV KHANNA, MR. JUSTICE R.V. EASWAR, JJ. For Appellant: Mr. Rajiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ASMIRA Association, affiliated and linked to the Ministry of Textiles. As per the said report, the imported material was synthetic waste soft quality and accordingly in conformity with the declaration in the bills of entry. The contention of the petitioner is that this delay was occasioned because the samples were wrongly, at first instance itself, not sent to SASMIRA. This contention, however, is not supported on the basis of any notification or circular etc. Notification no. 7139, wherein SASMIRA was notified as a competent testing center was issued on 17th July, 1995. 6. The petitioner had filed Writ Petition (C) No. 3277/1992 in this Court, against the customs authorities, seeking direction against them to withdraw the show cause notice and further direction to clear the goods for home consumption. On an interim application, on 5th February, 1993, the High Court passed the following order:- C.W.3277 and C.M. No. 6115/1992 The goods arrived in February/March, 1991 are still lying and have not been released to the petitioner. The appeal in Sanjeev Woolen Mills is stated to be pending before the C.E.G.A.T., whose decision is awaited by the respondents so as to apply the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or of Customs in accordance with law. Since prima facie 3 reports produced on record before, are in favour of the petitioner, we direct that the sample be taken within 2 weeks from today and the goods be released forthwith on furnishing P.D. Bonds and by also granting Detention certificate to the petitioner. In case the Collector of Customs finds that Customs duty redemption duty are payable by the petitioner, learned counsel states that the petitioner undertakes to pay the same subject to the right of the petitioner to appeal. With this order the Writ Petition stands disposed of. 9. It is clear from the said order that six reports had been received. Three reports were in favour of the petitioner and one report was in favour of the respondent Revenue and about two reports there was a dispute. The customs authorities were not satisfied with the method of taking samples and made a request for drawing of fresh samples. The customs authorities were permitted to draw fresh samples in the manner indicated. However, keeping in view the fact that there were three reports in favour of the petitioner, the goods were directed to be released forthwith on furnishing of provisional duty bon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Commissioner of Customs for the period 22nd March, 1991 to 29th May, 1991. There is no dispute that the Detention certificates for the said period were issued. 13. In the meanwhile, inter-se dispute and differences arose between the partners of Monika India. The Container Corporation of India and the Shipping Corporation of India, inspite of detention certificates had reservations and were not agreeable to complete/entire waiver of container charges/demurrage charges. A number of applications were filed by the petitioner, erstwhile partner, and were disposed of vide order dated 16th February, 1994. The said order reads as under:- CMs 5340, 6295, 7530, 7005 and 7116/93 On consideration of the matter we are of the opinion that only order which can be passed today, after the writ was disposed of on 23.04.1993 would to make it clear that the P.D. Bond which is to be furnished by the petitioner should be the satisfaction of the Assistant Collector of Customs Delhi. After the order dated 24.04.1993 one of the partners, who takes to be a partner on whose behalf also P.D. Bond was furnished has come by way of an application saying that the bond furnished by the petitioner firm is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Division Bench of this Court on 24th August, 1995, with the following observations: C.W. No. 3057/1995 In this case the petitioner had imported certain goods and the bills of entry were filed way back in 1991. Respondents 1 and 2 are demanding demurrage charges. It is the contention of the petitioner that goods were wrongfully detained by the Customs Department and that for the fault of the Customs Department the petitioner should not be cause to suffer. As we see the prayers, the petitioner seeks release of the consignment by waiving demurrage charges. This would perhaps be not permissible in view of the decision of the Supreme Court in International Airport Authority of India Vs. M/s Grand Slam International Others JT 1995 (2) SC 452. In this view of the matter Mr. Jaitley wishes to amend the petition. We are however, of the view that it would be better for the petitioner to file fresh petition stating the claim against the Customs Department. So the request of the claim could be granted. We dismissed the petition. 16. The petitioner thereafter filed Writ Petition (Civil) No. 3916/1995, impleading the customs department as a party, with the following prayers: (a) I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion and the duty demands were confirmed and penalties were imposed. It was held that the goods imported were not synthetic waste soft quality. The said order was set aside by the Customs, Excise and Services Tax Appellate Tribunal vide order dated 6th February, 2004. The tribunal recorded that the core issue was whether or not the imported consignment was synthetic waste soft quality. Reference was made to the test reports of different laboratories and observed that the burden was on the customs authorities to come to a positive finding that the goods imported were not synthetic waste. At best, it was observed that the evidence on record would show that the goods might not be synthetic waste but this was not sufficient. It was further noted that the findings recorded in several test reports indicated that the goods were synthetic wastes soft quality. The operative portion of the finding and the reasoning given by the tribunal is reproduced below:- 8. In terms of the Customs law and procedure, the burden is on the customs department to come to a positive finding to the effect that the imported goods are not synthetic waste but good quality or virgin quality material, such as synt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng as under:- 7. Before examining the correctness of the rival submissions, one thing is crystal clear that the relationship between the importer and the carrier of goods in whose favour the Bill of Lading has been consigned and who has stored the goods in his custody, is governed by the contract between the parties. Section 170 of the Indian Contract Act engrafts the principle of bailee's lien, namely, if somebody has received the articles on being delivered to him and is required to store the same until cleared for which he might have borne the expenses, he has a right to detain them until his dues are paid. But it is not necessary in the case in hand to examine the common law principle and the bailee's lien inasmuch as the very terms of the contract and the provisions of the Bill of Lading, unequivocally conferred power on the appellant to retain the goods, until the dues are paid. Such rights accruing in favour of the appellant cannot be nullified by issuance of a certificate of detention by the Customs Authorities unless for such issuance of detention certificate any provisions of the Customs Act authorise. We had not been shown any provisions of the Customs Act which would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e provisions of the Customs Act, we are unable to find out any provision which can be remotely construed to have conferred power on the Customs Authorities to prevent the proprietor of the space from levying the demurrage charges and, thereby absolving the importer of the goods from payment of the same. In fact the majority decision in Grand Slam International case clearly comes to the aforesaid conclusion with which we respectfully agree. 8. We have also examined the decision of this Court in Union of India v. Sanjeev Woollen Mills and we do not find any apparent inconsistency between the decisions of this Court in Grand Slam and that of Sanjeev Woollen Mills. In Sanjeev Woollen Mills the imported goods were synthetic waste (soft quality), though the Customs Authorities detained the same, being of the opinion that they were prime fibre of higher value and not soft waste. On account of non-release, the imported goods incurred heavy demurrage charges but the Customs Authorities themselves gave an undertaking before the High Court that in the event the goods are found to be synthetic waste, then the Revenue itself would bear the entire demurrage and container charges. Further the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at 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 direct Shipping Corporation and Container Corporation, if an application is filed by the Customs Authorities to waive the demurrage charges. The appeal is disposed of accordingly. 22. The aforesaid paragraphs are clear. It been held by the Supreme Court that the customs authorities can issue a detention certificate but they cannot compel the carrier/shipping line or the Container Corporation of India to waive off or not charge demurrage/container charges. The importer would be liable to pay demurrage charges in case any space was occupied by the imported goods and issue of detention certificate ipso facto does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... each case on merits. Learned counsel for the petitioner has also relied upon a judgment of Single Judge of this Court in Agrim Sampada (supra), which is a judgment, which has again relied on Om Petro Chemicals (supra). 25. Revenue has pointed out that the decision in the case of Om Petro Chemicals (supra) has been made subject matter of challenge before Supreme Court and has been stayed. The respondent No. 5 has relied on an order passed by a Division Bench of this Court in WP(C) No. 2235/2002, Yang Ming Marine Transport Corporation Anr. Vs. Commissioner of Customs Ors., dated on 31st May, 2002, and the order passed by the Supreme Court in appeal filed by Yang Ming Marine Transport Corporation. Reliance has also been placed on an order passed by a Division Bench of this Court in Modern Overseas vs. Union of India (2006) (204) ELT 218 (Del.). 26. Respondents have relied upon decision of a Single Judge of this Court in Narain International vs. UOI Ors., in WP(C) No. 777/1992, decided on 1st October, 2007, and the order passed in appeal bearing LPA No. 1319/2007, dismissing the appeal against the Single Judge s order. 27. On examination of the aforesaid decisions, the follo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtificates. (vi) There was delay of about 5 years in passing the adjudication order and only on 30th December, 2000, the Commissioner passed an order imposing a total penalty of Rs.25 lakhs on the petitioner and its partners and a redemption fine of Rs.7,50,000/- was imposed. (vii) The Chief Commissioner had ordered unconditional release of goods in the case of M/s Sanjeev Woolen Mills on 11th August, 1995. Despite the imported goods being identical, an adverse order was passed by the Commissioner in the case of the petitioner. (viii) There is no justification or reason for the customs authorities to differentiate between the consignments imported by M/s Sanjeev Woolen Mills and the petitioner. (ix) Department proceedings have been initiated against the customs officers for their malafide conduct and wrongful action in the case of M/s Sanjeev Woolen Mills. The same officers were involved and were responsible for detaining the goods in the case of the petitioner. (x) Customs authorities despite favourable test reports kept on insisting that the goods imported by the petitioner were not Synthetic wastes soft quality but staple fibre. Orders, passed in WP(C) No. 3277/1992, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the provisional duty bond. This explains the delay and reluctance on the part of the petitioner to take delivery of the consignment, as someone had to bear and pay reduced demurrage charges etc. It appears that none of the partners were willing to bear and pay the demurrage charges etc. as there was no certainty when, how and who would be entitled to sell the goods and how the profits or the sale consideration would be distributed. Court orders on inter se disputes between the parties were passed subsequently. (v) Probabilities indicate that the petitioner did not take advantage of the order dated 23rd April, 1993 on account of inter-se disputes between the parties. There was reluctance on behalf of partners of the petitioner firm. (vi) Writ petition (Civil) No. 3057/1995 was filed by the petitioner against Shipping Corporation of India and Container Corporation of India and not against the customs authorities. The Customs authorities had already issued detention certificates and therefore no prayer or direction was required against them. The writ petition was dismissed with the observations made in the order dated 24th August, 1995, relying upon the decision in the Grand Sl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would bear and pay demurrage charges in case the goods were found to be synthetic waste soft quality. Secondly, in the said case, customs authorities had failed to release the goods in spite of the order of unconditional release passed by the Chief Commissioner. In the present case, detention certificates were issued by the customs authorities. 30. We must deal with one contention of the petitioner separately. The petitioner has vehemently submitted that delivery of the consignment on the payment of reduced demurrage charges was not taken after the issue of detention certificates, as it was not economically viable. It was submitted that the reduced demurrage charges should be entirely borne and paid by the customs authorities as they had wrongly detained the consignment. 31. It is not possible to agree with the said contention for the reasons set out above in paragraph 29. Specific reference is required to be made to the disputes inter se the partners. This apart, the allegation that the reduced demurrage charges exceeded the market value of the consignment in India is a mere ipse dixit. As noticed above, the petitioner had filed W. P. (C) No. 3277/1992 and an order dated 23rd ..... X X X X Extracts X X X X X X X X Extracts X X X X
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