TMI Blog2012 (8) TMI 1109X X X X Extracts X X X X X X X X Extracts X X X X ..... s directing them to clear the subject consignment of about 582 MTs of Stainless Steel Angles of the petitioner on payment of levy of duty as permissible in law but without payment of demurrages, rent, penalty or interest or any other charges on this account. (iii) In alternate and without prejudice to the above and subject to all the rights and contentions, this Hon ble Court be pleased to issue writ of Mandamus or any other appropriate writ, order or direction directing respondents, its officials to clear the above referred goods of Stainless Steel Angles of the quantity of about 582 MT of the petitioner on payment of duty as leviable and permissible in law and on payment of rent which have been calculated by the officials of respondent No. 4 of the amount of about 22 lacs (Approximately) on the subject goods as per their letter dated 23rd May, 2006 (Annexure P-8) read with letter dated 12th June, 2006 (Annexure P-9) and on calculating the rent upto date, in the manner as referred to therein, subject to waiver of the said amount by respondent Nos. 2 4 and without payment of any penalty/interest or any other amounts. 2. The facts giving rise to the present petition are t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by an order dated 9-8-1989. The Revenue did not carry the matter any further. The said order, therefore, attained finality. 4. In respect of the other consignment of 217.853 metric tonnes, a show cause notice dated 10-12-1982 came to be issued to the petitioner. During the course of the said proceedings, the petitioner drew the attention of the adjudicating authority to the above order passed by the Board on 21-9-1982 in relation to the first consignment and requested that the adjudication proceedings be dropped. The adjudicating authority, however, did not accede to such request and by an order dated 16-3-1982 held that import was unlawful and directed confiscation of the goods with option to redeem the same on payment of ₹ 10 lacs. Penalty of ₹ 1 lac also came to be imposed. The said order of the adjudicating authority came to be challenged by the petitioner before the Delhi High Court in Civil Writ Petition No. 200/1983. In the said petition, the petitioner also challenged the increase in the rate of duty from 60% to 300% ad valorem with retrospective effect from 1-1-1981. Alternatively it was prayed in case the levy is held to be lawful retrospectively, the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it is a case of rent and the maximum is ₹ 44,61,600/- and equal amount of penalty is being claimed for total goods of both parties, that is, for 1200 metric tonnes (approximately). The amount of rent was calculated on the quantity of about 1200 metric tonnes which also represented the quantity imported by another importer namely, Jain Shudh Vanaspati Ltd. Insofar as the petitioner is concerned the total quantity imported by it was 582 metric tonnes. However, no bifurcation was provided to the petitioner despite request made by the petitioner vide letter dated 2-5-2006. Subsequently, the petitioner received a letter dated 12/13-6-2006 in reply to the letter dated 2-5-2006 computing demurrage at ₹ 47.77 crores for the total quantity of 1200 metric tonnes. It was also stated in the said letter that in case the petitioner desired waiver of the charges, it should approach the Ministry of Shipping. The petitioner made separate representations dated 11-9-2006 to the Hon ble Minister for Shipping, Road Transport and Highways as well as to the Respondent No. 4, Kandla Port Trust. Since nothing was heard from the respondents, the petitioner by a letter dated 18-6-2007, reminded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Delhi High Court being WPC No. 200/82, the petitioner had filed an application bearing CA No. 11959/98 for impleading the Kandla Port Trust as party and had claimed various reliefs including a direction to the Kandla Port Trust to clear the goods of the petitioner without payment of any amount of demurrage/pending charges. It is submitted that the prayers made by the petitioner were not entertained and that the factum of liability for payment of demurrage charges in relation to the goods/consignment was within the clear knowledge of the petitioner. It is contended that what has been charged to the petitioner is demurrage and other incidental charges and the nature of charge was within the knowledge of the petitioner since almost 25 years. The petitioner was aggrieved by and dissatisfied with the nature of charges and as such challenged the same before the Delhi High Court in the year 1988. It is further averred that on the consignment being landed in the transit area, for the reasons known to the petitioner, since the same was not shifted/taken by the petitioner though requested, had to be put in the present place. The goods stored continued to be in the transit area of the po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21-9-1982, which was brought to the notice of the adjudicating authority, in the proceedings in relation to the second consignment, the adjudicating authority in utter defiance of the law laid down by the Apex Court in Union of India v. Kamlakshi Finance Corporation Ltd., AIR 1992 SC 711 = 1991 (55) E.L.T. 433 (S.C.), did not follow the decision of the Board and confirmed the show cause notice. Under the circumstances, during the said period, the goods in question had been kept at the port or warehoused without any default on the part of the petitioner and as such no amount of damages or rent was payable by the petitioner. 8.1 Referring to the affidavit dated 8th May, 2008 filed by the petitioner in support of the petition, it was submitted that in fact the bills of entry were filed for warehousing and not for seeking clearance of goods for home consumption. Once the goods were warehoused, it was not permissible for the Kandla Port Trust to recover demurrages from the petitioner. If at all, the petitioner would be liable to pay only rent. Attention was invited to Annexure P-8, dated 23-5-2006 at Page 130 as well as the calculation sheet showing rental charges at Page 131, to sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therein had not committed any illegality in importing the goods in question, it cannot ordinarily be saddled with the liability to pay demurrage. 8.4 The decision of the Delhi High Court in Agrim Sampada Ltd. v. Union of India, 2004 (168) E.L.T. 15 (Del.), was relied upon wherein the Court placing reliance upon its earlier decision in Om Petro Chemicals (supra) held that as the petitioner had not committed any illegality in importing the goods in question, it could not be saddled with the liability of payment of the demurrage and that it was the Customs Department which should be directed to bear the demurrage. Reliance was also placed on the decision of the Punjab and Haryana High Court in Patiala Castings Private Limited v. Union of India, 2003 (156) E.L.T. 458 (P H), the decision of the Calcutta High Court in Donald Macarthy (P) Ltd. v. Union of India, 1997 (89) E.L.T. 53 (Cal.), the decision of the Calcutta High Court in Kumar Trading Co. LLC v. Union of India, 2007 (132) E.L.T. 578 (Cal.), the decision of the Madras High Court in Anuma Precision Tool Pvt. Ltd. v. Collector of Customs, Madras, 2000 (121) E.L.T. 309 (Mad.), the decision of the Andhra Pradesh High Court in S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ult. 9.1 Referring to the documents annexed at annexure P-8 to the petition, it was submitted that the same are fabricated documents which have been filed with a view to mislead the Court. It was urged that after going through the records in relation to the present petitioner available with the said respondent, the documents annexed at annexure P-8 have not been found. The said documents are not authenticated by the respondent Trust nor do the same appear to be any authenticated document of the Trust. It was argued that no demand for rent had ever been made to the petitioner and that the petitioner, right from the beginning was aware that it was liable to pay demurrage charges for the storage of its goods within the area of the port trust. It was vehemently contended that since the goods were lying in the transit area and were not warehoused, the petitioner is liable to pay demurrages and not rent as claimed by it. It was pointed out that in fact the goods of the petitioner continued to remain on the transit area of the port and since the amount levied upon the petitioner was not paid, in the light of the provisions of the Customs Act and the Major Ports Trust Act, which permit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to bear the demurrage charges. Under the circumstances, in the absence of any averments to that effect, such contention which has been advanced only during the course of arguments has not been dealt with in the affidavit in reply filed on behalf of the third respondent. It was argued that such contention having been raised only during the course of arguments, without corresponding prayers in the petition, the petitioner is not entitled to the grant of such relief. 11. After the matter was heard, the learned counsel for the petitioner tendered written submissions wherein it has, inter alia, been contended that admittedly bills for warehousing were filed; that the goods were warehoused is not disputed during the course of hearing and that it is not disputed that the same were warehoused on 11th October, 1982. It is also submitted that the first parcel was not cleared on the strength of the order-in-appeal on 21st September, 1982 for the reason that huge demurrage was claimed by the respondent authorities and the prayer in the writ petition before the Delhi High Court was also for non-payment of the demurrages by the petitioner. 12. Before adverting to the merits of the rival co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d restrained the Customs authorities from auctioning, alienating or selling the consignments of stainless steel angles in question and request was made the goods should not be auctioned and that the demand be reworked on the basis of warehousing charges with effect from 11-10-1982. It was also requested that demurrage/warehousing charges to the tune of 90% be waived. 13. It appears that pursuant to the aforesaid demand notice raised by the fourth respondent, the petitioner filed an application in the proceedings of C.W.P. No. 200 of 1983 before the Delhi High Court for impleading the Kandla Port Trust as a respondent in the said proceedings and sought quashing of the demand contained in the communication of the fourth respondent. It was also prayed that the fourth respondent viz., the Kandla Port Trust, be directed to clear the goods of the petitioner without payment of any amount of demurrages/bonding charges. Thus, the notice dated 2nd November, 1998 issued by the Kandla Port Trust calling upon the petitioner to pay demurrage charges for the period up till 30th September, 1998 was challenged before the Delhi High Court in the said proceedings. While disposing of the petition, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petition. 17. The main contention raised by the learned counsel for the petitioner is to the effect that the goods in question have been warehoused with effect from 11th October, 1982 and therefore, if at all, the petitioner is liable to pay charges to the fourth respondent, it would be liable to pay only warehousing charges and not demurrages as claimed by the fourth respondent. The basis of such submission is the bills of entry for warehousing, copies whereof have been annexed at annexure P-13 and P-14. In this regard, it may be noted that the fourth respondent has categorically denied that the goods have been warehoused and its specific stand is that the consignment was landed in the transit area and was not shifted and that the goods continued to be stored in the transit shed within the Port Area of the Kandla Port Trust and are occupying valuable commercial space in the transit area of the port. Thus, as to whether the goods have been warehoused or were lying in the transit area is a disputed question of fact which cannot be adjudicated in a writ petition under Article 226 of the Constitution. It may further be noted that under Section 45 of the Act, there are restriction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h respondent can recover only warehousing charges and not demurrages. 18. It may also be pertinent to note that the relief claimed in the petition is mainly against the fourth respondent, Kandla Port Trust. Insofar as the demand of demurrages and other charges by the Kandla Port Trust is concerned, the issue has been settled by the Supreme Court way back in the year 1995, in International Airports Authority of India v. Grand Slam International (supra), wherein the Court after considering its earlier decisions in this regard has held that an authority created under the statute even if is a custodian of the imported goods because of the provisions of the Customs Act, 1962, would be entitled to charge demurrages for the imported goods in its custody and make the importer or consignee liable for the same even for the period during which he/it was unable to clear the goods from the customs area due to fault on the part of the customs authorities or of other authorities who might have issued detention certificates owning such fault. In the present case, admittedly no such detention certificate has been issued by the Customs authorities owning such fault. Besides, irrespective of the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may be recalled that against the order of the adjudicating authority in relation to the second consignment the petitioner had approached the Delhi High Court by way of a writ petition, wherein the Court had granted interim relief restraining the customs authorities from disposing of the goods. Also, the Port Trust did attempt to put the subject goods for auction, but was not granted necessary permission by the Customs authorities in the light of the stay granted by the High Court. At this juncture reference may be made to the decision of the Supreme Court in the case of Sun Export Corporation v. Board of Trustees of the Port of Bombay, (1998) 1 SCC 142 = 1997 (96) E.L.T. 3 (S.C.), wherein it has been held thus : 15. We do not find any merit in the submission of Mr. Tripathi that the Port Trust could have put the goods in question to sale to offset the demurrage since they had a lien over those goods before making any claim on the appellants. The goods, as already noticed, stood confiscated by the Customs authority vide order dated 28-2-1976 under Section 111(d) of the Customs Act, 1962 read with Section 3(2) of the Imports and Exports (Control) Act, 1947. The option to redeem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tody of the fourth respondent on account of the default on the part of the Customs authorities and that therefore, the Customs Authorities are liable to pay demurrages. Similarly, no relief to the effect that the Customs authorities be held liable for payment of demurrages in respect of the subject goods on the ground that it is on account of their default that the goods have been detained has been claimed. At this juncture it may be apposite to refer to the decision of the Supreme Court in State of Orissa v. Mamata Mohanty, (2011) 3 SCC 436, wherein it has been held thus : Relief not claimed - cannot be granted 55. Pleadings and particulars are required to enable the court to decide the rights of the parties in the trial. Thus, the pleadings are more to help the court in narrowing the controversy involved and to inform the parties concerned to the question in issue, so that the parties may adduce appropriate evidence on the said issue. It is a settled legal proposition that as a rule relief not founded on the pleadings should not be granted . Therefore, a decision of a case cannot be based on grounds outside the pleadings of the parties. The pleadings and issues are to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Customs authorities. Under the circumstances, in the absence of any such controversy being raised, none of the said decisions would be applicable to the facts of the present case. 23. It may also be noted that as regards the first consignment of 364.292 metric tonnes, despite the fact that vide order-in-original dated 12th August, 1982 the petitioner was given an option to redeem the subject goods upon payment of redemption fine of ₹ 20 lacs, the petitioner did not opt for the same. Thereafter, though the appeal preferred by the Department against the order passed by the Board in favour of the petitioner came to be dismissed on 9th August, 1989, for reasons best known to the petitioner, it did not take any steps to get the subject goods released and remained indolent and negligent. It was only after CESTAT decided the appeal of the petitioner in respect of the second consignment that the petitioner woke up from its deep slumber and for the first time in the year 2006, after a delay of about seventeen years, sought to get the goods released. Under the circumstances, insofar as the first consignment is concerned, with effect from 9th August, 1989, there was no valid reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of CESTAT, the petitioner by a communication dated 2nd May, 2006, had requested the Kandla Port Trust to recompute the amount payable to it which was followed by representations made to the Ministry of Shipping as well as to the Board. Thereafter, the petitioner filed the present petition some time in July, 2007. By an order dated 9th October, 2007, this Court had granted interim relief to the effect that goods if not sold should not be sold. The said interim relief came to be continued from time to time and was ultimately confirmed. Under the circumstances, from the said date also, the goods have been lying in the custody of the fourth respondent on account of the present petition filed by the petitioner and the interim relief granted therein. Therefore, the delay in getting the goods released for the period between filing the present petition till its disposal also cannot be attributed to the respondents. 25. To summarize : (i) In the light of the decision of the Supreme Court in the case of International Airports Authority of India v. Grand Slam International (supra), the petitioner is liable to pay demurrages to the Respondent No. 4-Kandla Port Trust. Consequen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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