TMI Blog2020 (5) TMI 476X X X X Extracts X X X X X X X X Extracts X X X X ..... Regulations, 2009. Regulation 6(1)(l)of the Handling of Cargo in Customs Area Regulations, 2009 mandates that the Customs Cargo Service provider shall subject to any other law for the time being in force, shall not charge any rent or demurrage on the goods seized or detained or confiscated by the Superintendent of Customs or Appraiser or Inspector of Customs or Preventive officer or examining officer, as the case may be - As per Regulation 6(1)(l) of the Handling of Cargo in Customs Area Regulations, 2009, a Customs Cargo Service Provider which includes the Air Port Authority of India cannot charge any rent or demurrage on the seized or detained or confiscated goods by the Superintendent of Customs or Appraiser or Inspector of Customs or Preventive officer or examining officer, as the case may be. This was perhaps framed in line with Public Notice No.111 of 1985 dated 29.07.1985 of Bombay Customs House. The Superintendent of Customs or the Appraiser or the Inspector of Customs or the preventive officer or examining officer as the case may be can exercise the power to recommend waiver of demurrage and other charges that are chargeable by the custodian of the goods in whose pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Cargo Complex during the relevant period due to alleged arrest of the officers. In absence of the officers to receive the transshipment application, there could have been total disruption and no application was received which perhaps may have led to the delay - If there were no proper officers or there were only few officers to handle the workload due to alleged arrest and the delay in receiving the transshipment application for being processed by the 1st respondent should not be at the cost of the petitioner. If indeed there was a complete breakdown due to alleged arrest and resulted in disruption of the operations at the Air Cargo Complex, the petitioner should be compensated as such delay cannot be attributed by the petitioner. This would require proper facts being established by the petitioner. This aspect would require proper verification - Issue is therefore left open for the petitioner to establish that Customs Department is liable to compensate the petitioner - Petition allowed by way of remand. - W.P.No.6225 of 2010 and M.P.No.1 of 2010 - - - Dated:- 19-5-2020 - HON'BLE MR. JUSTICE C.SARAVANAN For Petitioner: Mr. Hari Radhakrishnan For R1 R2: Mr. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting the transshipment formalities and as a result of which there was delay and therefore the petitioner has been visited with additional burden of transshipment and demurrage charges by the Airport Authority of India (hereinafter referred as AAI) represented by 3rd / 4th respondent. 9. It is stated that the Customs Department refused to take applications pending and the goods were allowed to be trannsshipped only from 30.11.2009 to 05.01.2010. 10. The petitioner therefore requested the 1st and 2nd respondents to issue of Detention Certificate to claim waiver / remission from payment of demurrage charges from the 3rd/4th respondent at the earliest. 11. The petitioner submits that it sent a representation dated 11.12.2009 to the 2nd respondent, to permit transshipment of the imported cargo. In the said letter, the petitioner had specifically complained that it transshipment cargo has been stopped and that they are incurring huge demurrage charges in the hands of the 4th respondent. 12. The 2nd respondent by its letter dated 14.12.2009 merely queried the reasons for bringing the subject cargo to Chennai Airport instead of taking directly to Trivandrum. 13. The petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equest of the petitioner for issue of Detention Certificate . Under these circumstances, W.P.No.3317 of 2010 was withdrawn and thereafter, the present Writ Petition was filed. 21. The 3rd respondent vide separate letter dated 19.03.2010 also rejected the request of the petitioner to waiver of demurrage charges on the ground that the Customs Department had not informed that the consignment was detained by them. The petitioner has not challenged the said order. 22. During the course of the hearing, for the 1st time, the learned counsel for the petitioner submitted that during the same period, 9 out of 11 customs officers who were serving at the Chennai Air Cargo Complex and handling transshipment of cargo were arrested and 8 of them were middle level officials and there was a complete disruption of the activities on account of arrest. 23. It is further submitted that couple of dealers were also arrested who were allegedly in cohorts with some of the arrested officers who had facilitated evasion of Customs duty and that the CBI had raided the residence of some of these officials and recovered a sum of ₹ 17 lakhs of unaccounted cash and 25 lakhs worth jewellery apart fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the request by the 3rd and the 4th respondents. 29. The learned counsel for the 1st and the 2nd respondents submitted that even if there was a delay on the part of the Customs Authority, though which is not the case here, the petitioner was guilty of not filing the transshipment application in time and there is no evidence to substantiate the delay and therefore the petitioner cannot claim any waiver from payment of demurrage and detention charges. 30. It was further submitted that it was however open for the petitioner to approach the 3rd and the 4th respondents for waiver in accordance with provisions of the Airports Authority of India (Storage and Processing of Cargo, Courier and Express Goods and Postal Mail) Regulations, 2003. The said application was also rejected by the 3rd / 4th respondent which fact has been suppressed in this Writ Petition. 31. He drew my attention to paragraph 37 of the decision in Mumbai Port Trust Vs. Shri Lakshmi Steels, 2017 (352) E.L.T.401 (S.C), wherein, the Hon ble Supreme Court held that it is the importer alone is liable to pay the demurrage charges. It is submitted that Regulation 6 of the Handling of Cargo in Customs Area Regu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consignee and is not been returned within the allotted time. It is a private arrangement/ contract between the liner and the consignee. 39. For instance, if a period of 3 days is provided for return of an empty import container to the steamship liner or carrier as the case may be and the consignee takes more than three days to return this container, the steamship/carrier may charge for such Detention. 40. As far as transshipment of imported cargo is concerned, it is governed by Chapter VIII of the Customs Act, 1952. As per Section 54(3) of the said Act, a proper officer may allow the goods to be transshipped, without payment of duty, subject to such condition as may be prescribed for the new arrival of such goods at the Customs station to which transshipment is allowed. 41. The Airport Authority of India and Port Authorities have been appointed as custodians of imported goods under Section 45 of the Customs Act, 1962. Over a period of time, private operators have been allowed to be operated as custodians to decongest the ports and airports. 42. An elaborate procedure has been prescribed for being followed by custodians of the goods appointed under Section 45 of the Cus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to ICDs/ CFSs / Airports / ACCs in hinterland by road. The permit will be valid for one year from the date of issue initially and shall be renewed every three years subsequently. (The Paragraph No.2(i) was amended vide Central Board of Excise Customs Circular dated 13.07.2000.) (ii) The transshipment of import cargo will be governed by the provisions of Chapter VIII of the Customs Act, 1962 and the Goods Imported (Conditions of Transshipment) Regulations, 1995. (iii) The cargo to be trannsshipped should have been manifested as for transshipment in the incoming international carrier who has landed the cargo. In respect of console cargo where the Master Airway Bill does not show the final destination, the Airlines filing transshipment application should keep a copy of both Master Airway Bill and House Airway Bill to indicate that the particular consignment sought for transshipment is for other inland customs Airport/ICD/CFS/ACC. (iv) The custodian should execute a suitable running bond with a bank guarantee for an amount approved by Commissioner of Customs concerned for proper accountal of cargo. The amount will be debited from this bond when the transship ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (j) weight gross/net; and (k) details of container/palletised vehicle on which the cargo consignment is to be carried. (ix) After scrutiny of T.P. application the T.P. Officer will issue Customs Bottle Seal and hand it over to the Customs Officer supervising the loading of the cargo in container/truck T.P. Officer will mention Sl.No. of Customs Bottle Seal on all copies of transshipment applications. (x) On getting the transshipment permission the custodian/airlines will shift the goods from AAI warehouse to the make-up area earmarked for the purpose of palletisation/containerisation or shift the goods from their warehouse into the container/truck within the premises of the warehouse under the supervision of the Customs Officer posted for the purpose. After loading of the goods, the Customs Officer will seal the container/truck with Customs Bottle Seal and endorse all T.P. copies are as : Supervised the loading of ..No. of packages on container/ truck No. . destined to . airport/ACC/CFS/ICD and sealed with Customs Bottle Seal No. on (date) covered by Transshipment Permit No. Name and Signature of Customs Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be required to bear the expenditure on cost recovery basis over the preventive staff to be provided exclusively for this purpose. 3. You are requested to issue a suitable Public Notice incorporating the above provisions. Difficulties, if any, in implementing the above procedure may kindly be brought to the notice of the Board at an early date. Sd/- (C.P.Goyal) Sr. Technical Officer (TU) 45. Transshipment is allowed subject to the condition that the declarant, i.e the person in charge of the conveyance of the imported cargo or his agent makes an application with the proper officer of the custom for permission to transship the imported goods. However, permission has to be granted by the 1st respondent. 46. Airlines or the carrier or its agent is required to pay application fee for transshipment of imported goods under the aforesaid Rules. Such transshipment is subject to permission in writing of the Commissioner of Customs. 47. Certificate for waiver of demurrage referred to as Detention Certificate is being now issued by the customs authorities to an importer to claim waiver from demurrage for the Port. 48. Only after appropriate permissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lations, 2003. 55. The Airports Authority of India (Storage and Processing of Cargo, Courier and Express Goods and Postal Mail) Regulations, 2003 fixes the charges for processing of the Cargo and also formulates policy for waiver of such demurrage charges. 56. The expression Terminal Storage and Processing Charges has been defined in Regulation 2(zc). It means the charges to be levied or collected by the authority or any authorised cargo handling agency for use of cargo terminal facilities, audit services and other expenses incurred including loading and unloading, storage and warehouse or processing cargo goods etc. and includes electricity charges, insurance premium, security charges, terminal charges electronic data interchange and electronic data interchange service centre charges, Value-Added Network service charges, charges for heavy cargo, and cargo requiring special care such as hazardous, perishable, live animals, valuable and express cargoes et cetera and license fee. 57. The expression Transshipment Cargo has been defined in Regulation 2(zd), to mean cargo which is unloaded from one carrier and loaded or intended to be loaded on the same or another carrier o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s specified hereunder are authorised to sanction, in consultation with the Finance and Accounts Department, remission/waiver of demurrage charges regarding Cargo Operation. 10.1.2 10.1.10 Demurrage charges shall not be waived where: (a) Any fine/penalty/personal penalty/warning is imposed by the Customs Authority. (b) Delay arose by reason of dispute in the assessable value or for revalidating or correcting the licence in ordinary course of appraisal. 65. The authority namely AAI can thus grant waiver/ remission of demurrage charges in consultation with the Finance and Accounts Department and grant regarding cargo operation. However, to grant such relief it relies on customs documents. 66. The procedure for issue of Detention Certificate was contained in Public Notice No. 111 of 1985 dated 29.07.1985 of the Bombay Custom House. Issue of Detention Certificate was an innovation by the Customs Authorities. This was introduced much prior to Handling of Cargo in Custom Areas Regulations, 2009. Though a copy of the Public Notice No.111 of 1985 is not traceable, para 2 of the said Public has been reproduced by the Hon ble Supreme Court in BOARD OF TRU ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e value in terms of Section 14 of the Customs Act. 67. Regulation 6(1)(l)of the Handling of Cargo in Customs Area Regulations, 2009 mandates that the Customs Cargo Service provider shall subject to any other law for the time being in force, shall not charge any rent or demurrage on the goods seized or detained or confiscated by the Superintendent of Customs or Appraiser or Inspector of Customs or Preventive officer or examining officer, as the case may be. 68. As per Regulation 6(1)(l) of the Handling of Cargo in Customs Area Regulations, 2009, a Customs Cargo Service Provider which includes the Air Port Authority of India cannot charge any rent or demurrage on the seized or detained or confiscated goods by the Superintendent of Customs or Appraiser or Inspector of Customs or Preventive officer or examining officer, as the case may be. This was perhaps framed in line with Public Notice No.111 of 1985 dated 29.07.1985 of Bombay Customs House. 69. The petitioner is insisting for the detention certificate from the 1st respondent so that the 3rd and the 4th respondents can be persuaded to not to charge any rent or demurrage on the imported goods which transshipment from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Section 45 of the Customs Act and held as follows:- 41. None of these provisions entitles the Collector of Customs to debar the collection of demurrage for the storage of imported goods. They do not entitle him to impose conditions upon the proprietors of ports or airports before they can be approved as customs ports or customs airports. Section 45 provides that all imported goods imported in a customs area must remain in the custody of the person who has been approved by the Collector of Customs until they are cleared and such person is obliged not to permit them to be removed from the customs area or otherwise dealt with except under and in accordance with the permission of the Customs Officer. Section 45 does not state that such person shall not be entitled to recover charges from the importer for such period as the Customs Authorities direct. 42. The purpose of the Customs Act on the one hand and the Major Port Trusts Act and the International Airports Authority Act on the other hand are different. The former deals with the collection of customs duties on imported goods. The latter deals with the maintenance of seaports and airports, the facilities to be provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... empowered under sub-section (1) of Section 45 of the Customs Act, 1962 to approve persons to be custodians of imported goods in customs areas until they are cleared as provided for therein, while approving the International Airports Authority of India to be the custodian of such imported goods in the customs area of Indira Gandhi International Airport, New Delhi and Central Warehousing Corporation to be the custodians of such imported goods received at the customs area-the Container Freight Station, CWC Complex, Pragati Maidan, New Delhi, by issue of public notice or otherwise in that regard, if by such notice or otherwise directs such custodians not to collect custody charges from the consignees of such goods- the Cargo , because of detention certificates issued by him or his delegatee, will not be acting within the powers conferred upon him under the Act, its Rules or its Regulations and hence directions given by the Customs Collector or his delegatees to release the goods of importers or consignees without collecting demurrage charges from them cannot be enforced by courts either against IAAI or CWC. This Court clearly held that Section 45 of the Customs Act did not, in any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, these Regulations cannot in any manner affect the right of the Port Trust. We are, therefore, of the view that the High Court erred in holding that the law settled by this Court in a catena of judgments referred to above was no longer applicable in view of the 2009 Regulations. Reliance placed by the Union of India on Section 128 of the Major Port Trusts Act is totally misplaced. This provision only deals with the right of the Central Government to collect customs duties. It does not deal with the rights of the Port Trust to collect rates including demurrage. 36. The next issue which arises is whether any direction could be issued to the DRI/Customs Authorities to pay the demurrage charges to the Port Trust and the detention charges to the shipping line. 37. We have already referred to a number of decisions wherein the law has been clearly laid down that even if the importer is not at fault, it is the importer alone who is liable to pay the demurrage charges. As far as detention charges are concerned, this is a private contract between the importer and the carrier i.e. shipping line. The DRI/Customs Authorities can be directed to pay the demurrage/detention char ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal Mail) Regulations, 2003. 83. In fact, such certificate need not be confined to the circumstances specified in Public Notice No.111 of 1985 dated 29.07.1985 of the Bombay Custom House alone. It can be issued in appropriate case to cover the circumstances specified in the Policy of the Airport Authority as per Regulation 6 of the Airport Authority of India (Storage and Processing of Cargo, Courier and Express Goods and Postal Mail) Regulations, 2003 as was noted in Trip Communication Pvt. Ltd. (cited supra) by the Delhi High Court. 84. As far as the present case is concerned, since none of the circumstances noted by the Delhi High Court in Trip Communication Private Limited Vs. Union of India are attracted, the question of the 1st respondent issuing such certificate to the petitioner for the petitioner to claim waiver does not arise. Therefore, to that extent the 1st respondent was justified in denying Detention Certificate to the petitioner. 85. Though, it is not the case of the abuse by the officers of the Customs, there are sufficient indications to show that there was a complete disruption of service at the Air Cargo Complex during the relevant period due to al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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