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M/s Brij Kishore Toshniwal Versus Union of India, Commissioner of Customs, The Rajasthan Small Industries Corporation Ltd.

2016 (10) TMI 25 - RAJASTHAN HIGH COURT

Waiver of demurrage charges - business of rough gemstones, cutting and polishing thereof, trading in gemstones and export of finished gemstones - import of rough precious stone sapphire (yellow) and rough semi precious stone aquamarine - consignment of rough of yellow sapphire also contained, 224 gm yellow sapphire cut and polished, valued at ₹ 56,000/- at the rate of ₹ 50/- per carat - mistake on the part of staff of exporter - whether demurrage charges be demanded keeping in view t .....

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ty demurrage charges - petition dismissed - decided against petitioner. - D. B. Civil Writ Petition No. 4755/2001 - Dated:- 22-9-2016 - K. S. Jhaveri And Banwari Lal Sharma, JJ. Mr. Rahul Sharma for the petitioner Mr. R.P. Garg with Mr. Shubham Jain for the respondents ORDER 1. By way of this petition, the petitioner has prayed for the following relief (s) :- "(a) Issue an appropriate writ, order or direction quashing and setting aside annexure 23, 25 & 27 and directing the respondent n .....

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ion and this writ petition in favour of the petitioner. (d) Award any other relief, which is found just and proper in favour of the petitioner." 2. Counsel for the petitioner contended that the petitioner is a sole proprietorship firm of Shri Brij Kishore Toshniwal and is engaged in the business of rough gemstones, cutting and polishing thereof, trading in gemstones and export of finished gemstones. In the normal course of its business, the petitioner had placed order for import of rough pr .....

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s stone aquamarine weighing 1810.00 gm, total valued at ₹ 3,17,186/- CIF at the Air Cargo Complex, Jaipur. 3. However, on examination of the parcel, it was found that the rough of yellow sapphire also contained, 224 gm yellow sapphire cut and polished, which was valued at ₹ 56,000/- at the rate of ₹ 50/- per carat. However, the value of the balance quantity of rough sapphire and the rough aquamarine was found to be correct as declared in the bill of entry. Since the bill of ent .....

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Ltd. along with his letter dated 4.11.1996 to the Assistant Commissioner of Customs, Air Cargo Complex, Jaipur. 4. Counsel for the petitioner contended that in view of the decision of the Hon'ble Supreme Court in the case of Shipping Corporation of India Ltd. vs. C.L. Jain Woolen Mills; reported in 2001 (129) E.L.T.561 (SC), more particularly para 5, 7 & 8, which reads as under:- "5. The next question that arises for consideration which is a larger issue, namely if the customs autho .....

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mention, demurrage charges are levied for the place the goods occupy and for the period it remains not being released, on account of lack of customs clearance. It may be noticed at this stage that the customs authorities exercise its power under the provisions of the Customs Act whereas the claim of the Corporation who acts as a carrier is based upon the terms and conditions of the contract between the importer and the carrier. So far as the powers of the customs authorities are concerned, the s .....

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ept under the supervision of the proper officer. Section 45 provides for clearance of imported goods. The same provision may be extracted herein below in extenso : "Section 45. Restrictions on custody and removal of imported goods: (1) Save as otherwise provided in any law for the time being in force; all imported goods, unloaded in a customs area shall remain in the custody of such person as may be approved by the Commissioner of Customs until they are cleared for home consumption or are w .....

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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 car .....

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r of Customs or Assistant Commissioner of Customs. Under Chapter IX of the Act, the Deputy Commissioner or Assistant Commissioner of Customs may appoint public warehouses wherein dutiable goods may be deposited, as provided in Section 57 of the Act, Under Section 58, the Deputy Commissioner or Assistant Commissioner may even licence private warehouses wherein dutiable imported goods could be deposited. But all warehoused goods would be subject to the control of the proper officer of the customs .....

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t;warehouse" has been defined in Section 2(43) to mean a public warehouse appointed under Section 57 or a private warehouse licensed under Section 58. It is thus apparent from different provisions mentioned above that the customs authorities have full power and control over the imported goods and without the permission of the customs authorities, the goods cannot be cleared. But at the same time, there is no provision, in the Customs Act, conferring the power on the Customs Authorities to p .....

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s well as the Contract Act, since the claim of both, the Shipping Corporation and Container Corporation, charging demurrage for the space occupied for the goods, not being released, is on account of the contract between them. Under the Indian Bills of Lading Act, 1956, every consignee of goods, named in a Bill of Lading and every endorsee of a Bill of Lading, is vested with absolute right over the goods. The Bill of Lading is a well known mercantile document of title, which is transferred in the .....

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y if named herein) the carrier shall be at liberty at his discretion either to unpack the container(s) and to put the goods in safe on behalf of the merchant and at the merchant's risk and expense or to charge demurrage in accordance with the carrier's tariff applicable to the route over which the goods are carried. If unpacking the goods of container(s) is required for whatever reason and the contents cannot be identified as to the marks and numbers, cargo sweeping liquid residue and an .....

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of Lading defines 'Carrier's Tariff as follows: "Clause (2) - Carriers Tariff: The terms of the carrier's applicable tariff are incorporated herein and copies of the relevant provisions of the applicable tariff are obtainable from the carrier or the agents upon request. In the case of inconsistency between this Bill of Lading and the applicable tariff, this Bill of Lading shall prevail." Clause (14) confers a lien on the goods for all sums payable under the contract. The s .....

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the Carrier under the contract (including without limitation unpaid freight and dead freight upon any portion of the Goods covered by the Shipping Order granted in respect hereof which may not have been shipped) and the General Average contribution to whomsoever due and for the cost of recovering the same and for that purpose shall have the right to sell the Goods by public auction or private treaty without notice to the Merchant. The Merchant shall indemnify the Carrier against all and any cost .....

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nd who has stored the goods in his custody, the relationship is governed by the contract between the parties. Section 170 of the Indian Contract Act engraft 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 it until his dues are paid. But it is not necessary in the case in hand to examine the common law principle and the bai .....

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le the customs authorities to compel the carrier, not to charge demurrage charges, the moment a detention certificate is issued. It may be undoubtedly true that the customs authorities might have bonafide initiated the proceedings for confiscation of me goods which however, ultimately turned out to be unsuccessful and the Court held the same to be illegal. But that by itself, would not clothe the customs authorities with the power to direct the carrier who continues to retain a lien over the imp .....

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harges could not be levied on importer for the space his goods have occupied, since the contract between the importer and the proprietor of the space is in no way altered because of the orders issued by the customs authorities. The learned Additional Solicitor General, vehemently argued and pressed sub-Section 2(b) of Section 45 in support of his contention that the imported goods have to be dealt with in accordance with the permission in writing of the proper officer of the customs department a .....

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uot;otherwise dealt with" used in Section 45(2)(b), in the context in which it has been used, cannot be construed to mean, it authorises the customs officer to issue a detention certificate in respect of the imported goods, which would absolve the importer from paying the demurrage charges and which would prevent the proprietor of the space from levying any demurrage charges. Having scrutinized the power on the customs authorities to prevent the proprietor of the space from levying the demu .....

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his Court in Grand Slam and that of the Sanjeev Woolen Mills. In Sanjeev Woolen 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, t .....

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in that caqse even subsequent to the orders of the customs authorities on a suit being tiled by one of the partners of the importer-firm, an order of injunction was issued and, therefore, it was held that for that period, the importer would be liable for paying the demurrage and container charges. The judgment of this Court in Sanjeev Woolen Mills, therefore, was in relation to the peculiar facts and circumstances of the case and the Court had clearly observed that the order in question is meant .....

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f the High Court, the goods not having been released, the impugned order and direction dated 18-1-1999, cannot be held to be infirm in any manner. In the absence of any provision in the Customs Act, entitling the customs officer to prohibit 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 the de .....

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