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2015 (10) TMI 2131

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....er of Customs, Noida-respondent no.3 detained the goods and did not clear them nor levied any customs duty and, on the other hand, sent the sample for a live test to Central Revenue Control Laboratory, New Delhi (CRCL) on 6th September, 2014. Since the testing of the sample was expected to take some time, the petitioner vide letters dated 16th September, 2014 and 19th September, 2014 requested the Commissioner of Customs, Noida and the Deputy Commissioner of Customs, Noida-respondent nos.2 and 3 respectively praying for clearance of the goods on provisional assessment against test bonds as per the instructions issued by the Central Board of Customs. The petitioner alleges that no orders were passed on these applications nor goods were released on provisional assessment. The petitioner, thereafter, filed an application dated 22nd September, 2014 under Section 49 of the Act for storage of imported goods in a warehouse pending clearance. No orders was passed by respondent no.3 on this application. In the meanwhile, CRCL submitted its report indicating that the goods, which was sought to be imported were hazardous in nature as it contained waste constituents. Based on this report, resp....

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....formally raising a demand of Rs. 7.60 crores. Since the petitioner refused to pay demurrage charges contending that the same was not payable as there was no fault on their part, the petitioner, accordingly, filed the present writ petition in March, 2015 praying for the following reliefs: "A. Issue a writ, order or direction in the nature of mandamus commanding Respondents No.2 & 3 to ensure release of imported goods namely Carbon Black Feed Stock imported against Bill of Entry No.6572055 dated 27.8.2014, 6595305 dated 30.83.2014 and 6595308 dated 30.8.2014, without demand/payment of any amount by the Petitioner towards demurrage charges demanded by Respondent No.4 for the period during which the imported goods remained under detention pending examination by Respondent No.3, the custody of goods having been given to Respondent No.4, solely for the convenience of Respondent No.3 without any agreement with the Petitioner; B. Issue an appropriate writ, order or direction directing the Respondents No.2 & 3 to compensate the Petitioner with an amount of Rs. 2,02,05,640/- which is quantified on the basis of container detention charges of Rs. 2,02,05,640/- demanded by the owner of the ....

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....d that the goods in question were neither seized nor detained nor confiscated by the custom authorities and that before clearance they only sought clarification from the MOEF as to whether the goods were hazardous in nature. It was submitted that immediately upon receiving the clarification, the duty was assessed and the goods were detached and the importer was permitted to remove the goods. The learned counsel contended that they have no concern with the matter with regard to levy of demurrage charges and that the mater is between the petitioner and respondent no.4. Sri A.K. Verma, the learned counsel for the respondent no.4 contended that respondent no.4 is entitled to charge demurrage from the importer, namely, the petitioner and the charging section is Section 45 of the Act. It was contended that the respondent is the Customs Cargo Service Provider and under clause 5 of the Regulations of 2009, the respondents has provided various facilities. The learned counsel contended that the moment the goods lands in their customs area, the same is under their supervision till the goods are cleared and, consequently, demurrage charges are payable after the expiry of free period, which in....

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..... (2) The person having custody of any imported goods in a customs area, whether under the provisions of sub-section (1) or under any law for the time being in force, - (a) shall keep a record of such goods and send a copy thereof to the proper officer; (b) shall not permit such goods to be removed from the customs area or otherwise dealt with, except under and in accordance with the permission in writing of the proper officer. [(3) Notwithstanding anything contained in any law for the time being in force, if any imported goods are pilfered after unloading thereof in a customs area while in the custody of a person referred to in sub-section (1), that person shall be liable to pay duty on such goods at the rate prevailing on the date of delivery of an import manifest or, as the case may be, an import report to the proper officer under section 30 for the arrival of the conveyance in which the said goods were carried.]" Under the aforesaid provision the imported goods would remain in the custody of the person approved by the Commissioner of Customs until they are cleared for home consumption or are warehoused or are transhipped in accordance with the provisions of Chapter VII....

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.... "demurrage" has not been defined under the Act but the same has been defined under Regulation 2(g) of the International Airports Authority (Storage and Processing of Goods) Regulation, 1980, which has been issued in exercise of the powers conferred to sub-Section (1) of Section 37 of the International Airports Authority Act as the rate or amount payable to the airport by a shipper or consignee or carrier for not removing the cargo within the time allowed. Similar definition has also been given in the Port Trust of Madras Act, 1905, wherein the Supreme Court in Trustees of Port of Madras Vs. M/s Aminchand Pyarelal and others, 1976 (1) SCR 72 held that the word demurrage merely signifies a charge, which may be levied on goods after expiration of free days. The Supreme Court in Shipping Corporation of India Ltd. Vs. C.L. Jain Woolen Mills and others, 2002 (5) SCC 345 held that demurrage charges are levied for the place the goods occupy and for the period they remain not released on account of lack of customs clearance. Section 45(2) of the Act has been interpreted in International Airports Authority of India Vs. M/s Grand Slam International and others, 1995 (77) ELT 753. The Supreme....

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....ted that the custodian would not charge any rent/demurrage charge on the goods detained by the customs department under the Act. The appointment of respondent no.4 was renewed by an order dated 18th May, 2011 as a customs cargo service provider again in the exercise of the power conferred under Section 45 of the Act read with Handling of Cargo in Customs Area Regulation, 2009. Clause (2), (3), (4) and (6) are relevant for the purpose of the case, which are extracted hereunder: "(2) The Customs Cargo service provider (Custodian) shall abide by all the conditions as mentioned in the earlier Public Notice No.07/2006-Cus. Dated 19.04.2006 and shall observe all the rules and regulations prescribed under Customs Act, 1962. (3) The applicant shall undertake to comply with the provisions and abide by all the provisions of the Act and the rules, regulations, notifications and orders issued there under. (4) The Customs Cargo Service Provider shall abide and shall carry and discharge all the responsibilities assigned under Regulation 6 of the Handling of Cargo in Customs Areas Regulations-2009 as amended vide Notification No.96/10-cus(NT) dated 12.11.2010. (6) The Customs Cargo Servic....

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....of the appointment order of respondent no.4 read with Regulation 6(l) of the Regulations of 2009. Reliance by respondent no.4 on the decision in the case of International Airports Authority of India (supra), Shipping Corporation of India (supra), Trustees of Port of Madras (supra) is misplaced, inasmuch as the said decisions are not applicable. At this stage, we may state that the International Airport Authority of India and Trustees of Port of Madras were charging demurrage charges on the basis of Rules and Regulations framed under the Act by which they were being governed. The Supreme Court in that scenario held that there was no embargo upon the custodian, namely International Airport Authority and Trustees of Port of Madras to recover demurrage charges under Regulation 2(g) of the Regulations framed under the Regulations of 1980 and the bye-laws framed under the Port Trust Act. In the instant case, respondent no.4 has been appointed as the custodian under Section 45 of the Act read with Regulations of 2009. Clause 6(l) of the Regulations of 2009 prohibits the service provider, namely, respondent no.4 to charge demurrage charges on the goods seized or detained or confiscated by....

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....he petitioner. If the request of the petitioner was not permissible, the said application should have been rejected. Since no orders were passed on the petitioners application, the contention of the respondents as depicted in paragraph 14 and 15 of the counter affidavit clearly appears to be a afterthought. By not passing an order, the competent authority was refusing to exercise its powers which has been granted to him under the Act. By not passing any order, the authority may not have acted malafidely but definitely, his action was not bonafide. It is common knowledge that demurrage charges are exorbitantly high as compared to the rates fixed under Section 63 of the Act where charges of public warehouse is far less. Demurrage charges are levied and are high in order to ensure quick clearance of the cargo from the customs area. They are always fixed in such a way that they would make it unprofitable for exporters/ importers to use the customs area as a warehouse. It is further necessary to levy high rates of demurrage charges to avoid congestion of free movement of loading and unloading of the goods in the customs area. Consequently, permitting the cargo to remain in the customs ....