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2016 (11) TMI 464

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..... erestingly, the duty not to charge – when imposed by any customs official authorized to do so, is specifically subordinated to other laws (“subject to any other law for the time being in force”). Thus the powers under the Airports Authority Act, 1994. Identical power vests with the Central Government under the AAI Act to issue directions (Section 40). In the event DIAL is of the view that customs authorities’ directions to it to not charge demurrage are unwarranted, it can seek guidance and directions in that regard, from the Central Government. In these circumstances, the grievance that Regulation 6 can potentially render DIAL’s functioning unviable and result in losses to it, has to fail. Petition dismissed - decided against petitioner. - W. P. (C) 374/2014 - - - Dated:- 27-10-2016 - S. Ravindra Bhat And Deepa Sharma, JJ. For the Appellant : Sh. Atul Sharma and Sh. Sarojanand Jha, Advocates For the Respondents : Ms. Geeta Malhotra, Advocate ORDER Mr. Justice S. Ravindra Bhat 1. The petitioner ( DIAL hereafter) challenges Regulation 6(1)(1) of the Handling of Cargo in Customs Areas Regulations, 2009 [hereafter Cargo Regulations ] as ultra-vires the .....

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..... is argued that neither the provisions of the Customs Act, nor any provision of the AAI Act, authorize the framing of regulations empowering customs authorities to unilaterally direct waiver of demurrage charges. It is submitted that such power would seriously undermine the commercial and economic viability of operations under the Agreement because in each case, where consignments are disputed or questioned and involve decision on disputes as to valuation and payment of duty, the customs officials can potentially use their powers and direct DIAL not to recover any demurrage charges. 5. Reliance is placed on the decisions of the Supreme Court in International Airports Authority of India Ors. V. Grand Slam International Ors., (1995) 3 SCC 151 and Shipping Corporation of India Ltd. V. C.L. Jain Woolen Mills, 2001 (129) ELT 561 (SC), where it was observed that no provision existed in the Customs Act, empowering the customs department to direct the custodian of goods to waive demurrage charges on the goods. The petitioner also pointed out that this court in M/s Monika India Anr. V. Union of India Ors., 2012 (190) ECR 196 (Delhi) laid down that the custodian cannot be compelled .....

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..... ss model. The third respondent further points out that Regulation 6 of the Cargo Regulations provides for the responsibilities of Customs Cargo Service Provider and Regulation 6(1)(l) places an obligation upon the petitioners or their sub-contractors being proforma fourth respondent and/or Delhi Cargo Service Centre to not charge any rent or demurrage on goods seized or detained or confiscated. It is further stated by the third respondent that to ensure compliance of the provisions of the Customs Act and the provisions of allied legislations, consignments need to be investigated and those consignments detained by the customs or other investigating agencies, cannot be cleared during investigation particularly if such cases involve trade policy, human safety and security, security of state etc. and hence the impugned regulation was incorporated in the Cargo Regulations. Analysis and conclusions 9. Regulation 6(1)(l) of the Cargo Regulations is reproduced below for ease of reference: 6(1) The Customs Cargo Service provider shall- (a)-( o) ---------------------------------------------- (l) subject to any other law for the time being in force, shall not charge any r .....

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..... mported or export goods in a customs area, and the impugned regulation is as such an obligation cast upon the persons involved in the said activities. DIAL also urged that the regulations contravene Article 19(1)(g) inasmuch as it places a blanket ban on the charge of demurrage by the custodian of goods in case of detention, confiscation or seizure of goods by customs. However, such restriction is covered under the premise of Article 19 (6), by which reasonable restrictions in the interest of general public may be imposed on the right under Article 19(1)(g). Investigation being an integral part of working of the Customs Department, the consignments detained by the customs authorities or other investigating agencies, cannot be cleared during investigation particularly if such cases involve trade policy, human safety and security, security of state etc. It is with these considerations that the impugned regulation was included in the Cargo Regulations and it should be viewed in the light of the object with which it has been framed. To this extent, the court is in agreement with the third respondent. Therefore, the allegation that the impugned regulation violates Article 19(1)(g) does .....

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..... The Commissioner of Customs (Import General)/ third respondent a customs officer is bound by Section 151A of the Customs Act and hence, this court cannot issue directions restraining him from following the orders of the Central Board of Excise and Customs/second respondent i.e. constraining the former or any other officer on his behalf from issuing any letter/order/direction/advice/recommendation to the petitioner or its agents or concessionaire to waive the demurrage charges or not to charge the same under the impugned regulation. 16. DIAL s further argument was that in the event of directions under the regulations, compliance would result in commercial unviability, because its autonomy to charge fully or in part might eventually result in losses. In Grand Slam (supra), the Supreme Court had to deal with the same issue, but in the context of absence of Regulation 6 (1) and un-amended Section 142. The court observed as follows: 40. None of these provisions entitles the Collector of Customs to debar the collections of demurrage for the storage of imported goods. They do not entitle him to impose conditions upon the properties of ports or airports before they can be approv .....

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..... eir views. -Me Central Government can, if so advised, after giving to the Authority and the Boards of Trustees the opportunity of expressing their views, direct them, under the aforementioned provisions, not to levy demurrage charges for periods covered by detention certificates. 44. The goods of the first respondent in this appeal were stored, pending their clearance by the Customs authorities, at the Container Freight Station of the appellant, the Central Warehousing Corporation at Patparganj, Delhi. The Central Warehousing Corporation is established under the provisions of the Warehousing Corporations Act, 1962. The provisions of the Warehousing Corporations Act, are substantially similar to those of the International Airports Authority, 1971, and the Major Port Trusts Act, 1963. What has been said above in regard to the International Airports Authority applies as well to the Central Warehousing Corporation. 17. In the present case, the Court notices that the power to frame regulations is located in Section 42 (1) and (2) of the Airports Authority of India Act, 1994, which, by clause (d) (of sub-section [2]) provides the following specific regulation making power: .....

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