TMI Blog2021 (3) TMI 443X X X X Extracts X X X X X X X X Extracts X X X X ..... the detention cum demurrage waiver certificates dated 10th November, 2020 and 16th November, 2020 issued by respondent No.3. The only obstacle now to the release of the goods of the petitioner is respondent No.4 and its principal who have taken the stand that they are not customs cargo services provider and therefore the 2009 Regulations are not applicable to them. The detention cum demurrage waiver certificate dated 16th November, 2020 is not in terms of Regulation 10(1)(l) of the 2018 Regulations and in any case it is not bound by the same - Stand of respondent No.4 is that its principal had entered into a contract with the petitioner by way of the bill of lading dated 4th June, 2020; therefore petitioner being in a contractual relationship with the principal is bound by the terms of the contract which includes payment of detention charges for use of the containers. It has also taken the stand that it is not bound by the detention cum demurrage waiver certificate dated 16th November, 2020 of respondent No.3 because of the contract and also because the said certificate is not in terms of the 2018 Regulations. The issue boils down to a conflict between the 2018 Regulations w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s for Respondent Nos.1,2,3 and 6 to 11. Mr. Prathamesh Kamat, Advocate for Respondent No.4. JUDGEMENT AND ORDER : (Per Ujjal Bhuyan, J.) Heard Mr. Ashwin Gopakumar, learned counsel for the petitioner; Mr. Anil C. Singh, learned Additional Solicitor General for respondent Nos.1,2,3 and 6 to 11; and Mr. Prathamesh Kamat, learned counsel for respondent No.4. 2. This petition has been filed under Article 226 of the Constitution of India seeking the following reliefs :- a. For a direction to the respondents to strictly implement and enforce the detention cum demurrage waiver certificate dated 16th November, 2020 annexed to the writ petition as Ex.Q. b. For a direction to the respondents to allow, facilitate, oversee and ensure clearance of the imported goods of the petitioner for home consumption by taking appropriate action against respondent Nos.4 and 5. c. For a direction to respondent No.1 to conduct an inquiry into the various acts of omissions and commissions by respondent Nos.6 to 11. d. For a direction to respondent Nos.2 to 11 to compensate the loss sustained by the petitioner for their unlawful action; e. Awarding of cost to the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10. In the reply affidavit customs authorities stated that the Bill of Entry No.8389492 dated 6th August, 2020 filed by the petitioner was adjudicated by the Additional Commissioner of Customs, Nhava Sheva on 4th September, 2020. The adjudicating authority rejected the value of the imported goods declared by the petitioner and re-determined the same at ₹ 2.63 crores with a fine of ₹ 8 lakhs under section 125 of the Customs Act, 1962 (briefly the Customs Act , hereinafter) besides imposing penalty of ₹ 80,000/- under section 112(a) of the Customs Act. Though copy of the order of the adjudicating authority was not annexed to the reply affidavit, it was stated that the bill of entry was finally assessed on 9th September, 2020. 11. Later on a copy of the order-in-original was placed before the court showing the date of order in original as 4th September, 2020. 12. On 29th September, 2020 this court noted that the order-in-original dated 4th September, 2020 was issued on 24th September, 2020. It was further noted that the goods had been confiscated though option was given to the petitioner to redeem the goods on payment of redemption fine and penalty. 13. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t sufficient to reject it as evidence of value. In the absence of any evidence, price quoted in Platts cannot be the sole basis to enhance declared price. Therefore, he concluded that the transaction value was enhanced arbitrarily without any evidence on record and that he did not find any merit in the enhanced value. In the circumstances he held that value of the imported goods declared in the bill of entry merited acceptance. He therefore rejected the enhancement of value and accepted the invoice value, ordering the goods to be released as such. Since the main allegation of under valuation did not survive, the other aspects were not gone into. Joint Commissioner of Customs further observed that request for waiver of demurrage was required to be addressed by the jurisdictional Commissioner of Customs to whom a copy of the order-in-original dated 6th November, 2020 was endorsed for doing the needful. 18. On 6th November, 2020 itself petitioner submitted representation to the Principal Chief Commissioner of Customs, i.e. respondent No.2 requesting the said authority to urgently issue detention certificate(s) in accordance with Regulation 10 of the Sea Cargo Manifest and Transhipm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mported goods of the petitioner were lying not to charge any rent or demurrage on the said goods for the period from 7th August, 2020 to the date of issuance of the detention certificate(s). 22. Following the above representation, respondent No.3 issued detention cum demurrage waiver certificates dated 16th November, 2020 addressed to respondent Nos.4 and 5. Reference was made to the earlier detention cum demurrage waiver certificate dated 10th November, 2020. The two authorities were informed that the imported goods are detained goods and therefore, it was clarified that they should not demand any rent or detention charges or demurrage charges for the containers laden with the goods. Specific direction was issued not to charge any rent or detention charges or demurrage charges and thus to facilitate clearance of the goods immediately. In the said certificates it was pointed out that this court in its order dated 27th October, 2020 had directed maintenance of status-quo in respect of the subject goods. It was mentioned that issuance of the said certificates had the approval of Principal Commissioner i.e. respondent No.2. 23. Notwithstanding issuance of the above certificates ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods under section 49 of the Customs Act in order to reduce detention and demurrage charges. 30. In so far the first order-in-original is concerned reference has been made to observations of the RMS Facilitation Centre which indicated under invoicing of the goods. Petitioner submitted letter dated 27th August, 2020 requesting waiver of show cause notice and personal hearing; further requesting valuation of the goods as per Platt rate after allowing for 10% variation. On that basis and after considering S P Global Platts valuation the first order-in-original was passed. 31. After the fresh order-in-original was passed on 6th November, 2020, respondent No.2 requested the jurisdictional Principal Commissioner of Customs, Nhava Sheva-I vide letter dated 9th November, 2020 to decide the request for waiver of detention and demurrage charges and to submit action taken report immediately. Further, respondent No.2 acting on the petitioner s letter dated 3rd November, 2020 had directed the Customs Intelligence Unit in the office of the Commissioner of Customs (General), Nhava Sheva to investigate into the allegations made by the petitioner. Investigation is in progress. 32. Acti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion charges as the grounds set forth in the detention cum demurrage certificate do not qualify for grant of waiver under Regulation 10(1)(l) and (m) of the Sea Cargo Manifest and Transhipment Regulations, 2018. Thereafter, show cause notice dated 1st January, 2021 has been issued to the shipping line M/s Ocean Network Express (India) Private Limited to show cause as to why the registration approval should not be revoked and as to why penalty should not be imposed. Therefore, it is contended that Commissionerate of Customs (General), Nhava Sheva has taken prompt and firm action for waiver of detention and demurrage charges. 35. Denying all averments and allegations made in the writ petition, answering respondents seek dismissal of the writ petition. 36. Respondent No.4 has filed reply affidavit through one Mr. Ashutosh Madhav Purohit. At the outset respondent No.4 has raised preliminary objection as to maintainability of the writ petition. It is contended that petitioner is seeking a writ of mandamus against respondent No.4 which is a private party. That apart, petitioner is seeking enforcement of a writ in a contractual matter binding the petitioner and the principal of which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat petitioner had approached the High Court against withholding of the goods by the customs authority on the ground of under invoicing. 40. On 10th November, 2020 the customs housing agent of the petitioner emailed respondent No.4 the detention cum demurrage waiver certificate dated 10th November, 2020 issued by the customs authority. The said certificate was issued by the customs authority to respondent Nos.4 and 5 for waiver of detention / demurrage charges for the goods till 10th November, 2020 under various provisions of the Customs Act and Regulation 6(1)(l) of the Handling of Cargo in Customs Areas Regulations, 2009 (briefly the 2009 Regulations hereinafter). It is stated that provisions of the 2009 Regulations are not applicable to respondent No.4 or its principal. 41. Respondent No.4 informed the customs housing agent of the petitioner vide emails dated 10th November, 2020 and 11th November, 2020 that the petitioner was contractually bound to pay the charges levied by respondent No.4. It was further contended that the 2009 Regulations were not applicable to respondent No.4 as it was not a customs cargo service provider defined in the 2009 Regulations. Clarifying th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r.Gopakumar, learned counsel for the petitioner submits that a perusal of this court s order dated 27th October, 2020 in the earlier writ petition filed by the petitioner would go to show the absolute non-application of mind on the part of the adjudicating authority who had passed the first order-in-original. It is evident that petitioner was subjected to severe harassment by the customs authorities for not meeting the extraneous demands of some of the field officials including respondent Nos.10 and 11. The fact that this court had quashed the first order-in-original itself is indicative of the manifest procedural error which vitiated the said order. This court despite exercising complete restraint could not deprecate the conduct of the adjudicating authority, which clearly suggested unfairness and arbitrariness. The fact that petitioner was subjected to harassment has been buttressed by the subsequent order-in-original dated 6th November, 2020. The new adjudicating authority clearly held that the transaction value was enhanced arbitrarily without any evidence on record whereafter he has held that the declared value of the imported goods as per the bill of entry merited acceptance. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of status-quo in respect of the subject goods. It was clarified that the subject goods are the detained goods and, therefore, as per Regulation 6(1)(l) of the 2009 Regulations, respondent No.5 was directed not to charge any rent or demurrage charges and facilitate clearance of the goods. Similar certificate has been issued to respondent No.4 under Regulation 10(1)(l) of the 2018 Regulations. He, therefore, submits that the official respondents on their part had done whatever was required to be done. When it was found that respondent No.4 was not complying with the detention cum demurrage waiver certificate, show cause notice has been issued to it. Justifying the initial detention, he has referred to paragraphs 9.1 to 9.5 of the reply affidavit of the official respondents. Besides, he has also referred to petitioner s letter dated 27th August, 2020 addressed to respondent No.3. By the said letter, petitioner while waiving the requirement of show cause notice and personal hearing had requested respondent No.3 to apply the value as per Platt - rate by giving 10% variation as per standing order No.7493 of 1999 dated 3rd December, 1999 and subsequent standing order No.44 of 2016 dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erms and conditions therein including paragraph 12.13 of the bill of lading. Referring to the Indian Bills of Lading Act, 1856 more particularly to section 3 thereof, he contends that bill of lading in the hands of the consignee would be construed to be conclusive evidence of the shipment as against the master etc. 51. Mr.Kamat has submitted two compilations and relies upon the following decisions:- (1) Shipping Corporation of India Limited Vs. C. L. Jain Woolen Mills, (2001) 5 SCC 345; (2) All India Power Engineering Federation Vs. Sasan Power Limited, (2017) 1 SCC 487; (3) J. J. Polyplast Private Limited Vs. Ministry of Shipping, Writ Petition No.2973 of 2014 decided on 30.06.2018; and (4) Mumbai Port Trust Vs. Shri Lakshmi Steels, (2018) 14 SCC 317. 52. Mr.Gopakumar in his reply submits that respondents cannot hide behind technicalities and make the petitioner suffer by levying detention and demurrage charges for such period when the detention was on account of wrongful action of the official respondents. He has particularly referred to Regulation 10(1)(l) of the 2018 Regulations to contend that it is one of the responsibilities of the authorize ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statement made in the aforementioned paragraphs quite surprises us to say the least. To say that on 4th September, 2020, the operative part of the order was recorded and that the reasons/ discussion and findings would come later is to put the cart in front of the horse rather than behind it. We are unable to comprehend as to how without dealing with the facts and without giving reasons, the operative part of a quasi judicial order can be arrived at or even recorded. According to us, this kind of approach by a quasi judicial authority is not only shocking but also against the basic tenets of conduct by quasi judicial authorities. 56. Going deeper into the affidavit filed by the said adjudicating authority, court further noted as under :- 21. From the above, we note that the Commissioner concerned has made contradictory statements; on the one hand, he submits that the operative part was recorded on 4th September, 2020 and the typed speaking order with discussion and findings was signed on 24th September, 2020, on the other hand, he says in paragraph 10 that the bill of entry was finally assessed on 9th September, 2020 as per adjudication order. We are unable to comprehend a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestion. It was held thus:- 32. In view of the above discussion and the circumstances of the case, we are left with no choice but to set aside the order in original dated 4th September, 2020 signed on 24th September, 2020 and issued on 24th September, 2020 in toto. Also in view of the above discussion, we direct the Respondent No.2 to depute another Officer in place and instead of the present Officer to hear the case of the Petitioner and after giving an opportunity of personal hearing pass a speaking order with reasons in accordance with law within a period of two weeks from the date of this order. In the meanwhile, parties to maintain status-quo in respect of the goods under Bill of Entry No.8389492 dated 6th August, 2020. 59. From the above it is evident that this court despite exercising complete restraint could not but set aside the order-in-original in its entirety and directed the Commissioner to depute a new adjudicating officer to pass fresh order-in- original. From the observations made by this court it is quite evident that the officer who had passed the initial order-in- original had done so most mechanically and in a manner which is shocking to the judicial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent No.3 had issued detention cum demurrage waiver certificate dated 10th November, 2020 under Regulation 6(1)(l) of the 2009 Regulations and as per public notice No.26 of 2010 dated 2nd March, 2010, subsequently, respondent No.3 issued further set of detention cum demurrage waiver certificate dated 16th November, 2020. It was clarified that the earlier detention cum demurrage waiver certificate dated 10th November, 2020 was in respect of the container freight station but it was addressed to the shipping line as well. Therefore, it was clarified that the subsequent certificate dated 16th November, 2020 was issued in terms of Regulation 10(1)(l) of the 2018 Regulations which is applicable to an authorized carrier certifying that the goods in storage under respondent No.4 are detained goods. Accordingly, respondent No.4 was directed not to charge any detention charges for the containers laden with the detained goods and to facilitate clearance of the goods immediately. 63. Respondent Nos. 2,3 and 6 to 11 have taken the stand that they have done their part under the law and therefore, they cannot be faulted for non-release of the goods of the petitioner. According to them, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the proper officer or in such manner as may be prescribed. Sub section (3) deals with pilferation of imported goods in a customs area with which we are not presently concerned. 67. Section 141 of the Customs Act says that conveyances and goods in a customs area are subject to control of officers of customs. As per sub section (1), all the conveyances and goods in a customs area shall, for the purpose of enforcing the provisions of the Customs Act, be subject to the control of officers of customs. Sub section (2) says that the imported or export goods may be received, stored, delivered, dispatched or otherwise handled in a customs area in such manner as may be prescribed and the responsibilities of persons engaged in the aforesaid activities shall be such as may be prescribed. 68. Before proceeding to the provision providing the power to make regulations, it may be noted that a conjoint reading of sections 45 and 141 of the Customs Act makes it clear that officers of customs have an overall control over the goods unloaded in a customs area or which are in custody of persons approved by the Principal Commissioner or Commissioner. However, as we shall see, such general power can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 3 and postal authority. Regulation 2(1)(d) defines the expression authorized sea carrier to mean the master of the vessel carrying imported goods, export goods and coastal goods or his agent or any other person notified by the Central Government. Custodian has been defined under Regulation 2(1)(f) to mean a person approved by the Principal Commissioner or the Commissioner of Customs, for the purposes of section 45 of the Customs Act. Jurisdictional Commissioner of customs has been defined under Regulation 2(1)(j) to mean the Commissioner of Customs who has granted registration under Regulation 3. Regulation 2(2) clarifies that any reference to a Commissioner of Customs shall also include a reference to Principal Commissioner of Customs for the purposes of the 2018 Regulations. Regulation 3 deals with registration of a person required to deliver arrival manifest or departure manifest. Regulation 10 deals with responsibilities of the authorised carrier under the 2018 Regulations. Sub regulation (1) lays down as many as 13 responsibilities of an authorised carrier. Paragraphs (l) and (m) are relevant. As per paragraph (l), an authorised carrier shall not demand any container ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant could not be nullified by issuance of a certificate of detention by the customs authorities unless for issuance of such detention certificate any provisions of the Customs Act authorise. Thereafter it was noted that their Lordships were not shown any provisions of the Customs Act which would enable the customs authorities to compel the carrier not to charge demurrage charges the moment a detention certificate is issued. Referring to section 45(2)(b) of the Customs Act, Supreme Court held that the said provision cannot be construed to mean authorizing a 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. In the absence of any provision in the Customs Act entitling the customs officer to prohibit the owner of the space where the imported goods have been stored from levying the demurrage charges, levy of demurrage charges for non-release of the goods was held to be in accordance with the terms and conditions of the contract and was as such held to be a valid levy. 75. Supreme Court in All India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the view that relation between the importer and the shipping line is purely contractual which is by virtue of a contract between the two parties. The contract being a contract of carriage of goods, it would be outside the purview of the powers of the customs officer to give any direction or to intervene in any dispute between the shipping line and the importer. Section 141 cannot be construed to confer power upon the customs officers to intervene in a contractual dispute between importer and shipping line. This court noted that no statutory provision or any rule conferring any legal right on the importer and the same being infringed at the hands of the respondents were brought to its notice to invoke its writ jurisdiction. As noted above, the decision in this case was rendered on 30th June, 2015 much before the 2018 Regulations came into effect and therefore this court had no occasion to examine the impact of the said Regulations. 77. We may now turn our attention to the decision of the Supreme Court in the case of Mumbai Port Trust (supra), on which much emphasis has been placed by both Mr. Singh, learned Additional Solicitor General and Mr. Kamat, learned counsel for resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat Regulation 6(1)(l) of the 2009 Regulations begins with the words subject to any other law for the time being in force . Therefore, it is obvious that the 2009 Regulations are subject to any other law including the Major Port Trusts Act, 1963. It was in that context Supreme Court held that as far as detention charges are concerned, this is a private contract between the importer and the carrier i.e. the shipping line. Directorate of Revenue Intelligence or the customs authorities can be directed to pay the demurrage/detention charges only when it is proved that the action of the said authorities is absolutely mala fide or is in gross abuse of power. Even if an importer feels that it has been unjustly dealt with, still it must clear the goods by paying the charges due and then claim reimbursement from the customs authority. Therefore, Supreme Court held that the High Court could not have in a writ proceeding directed the Directorate of Revenue Intelligence or the customs to pay the detention charges to the shipping line since these were to be paid on the basis of a contract between the importer and the shipping line. The raison d etre of the Supreme Court ruling can be found in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 78. The above decision of the Supreme Court in Mumbai Port Trust (supra) is clearly distinguishable and would not be attracted to the facts of the present case. In addition to the distinguishing features clearly discernible from paragraphs 29 to 32 which we have extracted above, we also find that relationship between the petitioner and the shipping line is contractual being bound by the bill of lading dated 4th June, 2020, but in this case respondent No.3 has issued two detention cum demurrage waiver certificates dated 10th November, 2020 and 16th November, 2020, one to the container freight station i.e. respondent No.5 and the other to respondent No.4 not to demand any rent or demurrage or detention charges. In the certificate addressed to respondent No.4, it has been clarified that the goods are detained goods and hence as per Regulation 10(1)(l) of the 2018 Regulations, it was directed not to demand any detent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the force of law. Since it has been framed by the Board in exercise of the powers conferred by section 157 read with sections 30, 30A, 41, 41A, 53, 54, 56, 98(3) and 158(2) of the Customs Act, certainly the 2018 Regulations have statutory force. Respondent No.3 with the approval of respondent No.2 has issued the detention cum demurrage waiver certificate dated 16.11.2020 certifying that the subject goods are detained goods and directing respondent No.4 not to demand any detention charges in respect of the containers as per Regulation 10(1)(l) of the 2018 Regulations and thus facilitate clearance of the goods immediately. Respondent No.4 has only collaterally questioned the effectiveness of such a certificate as being not bound by it. It has not stated anything in the reply affidavit regarding any independent challenge made by it to the said certificate. Question is whether it is open to respondent No.4 or for that matter a shipping line to contend that it will not comply with the mandate of Regulation 10(1)(l) of the 2018 Regulations, more so when Regulation 10(1)(m) makes it clear that the authorised carrier shall be bound by the provisions of the Customs Act and all the rules, r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent No.4 is not legally tenable. The detention cum demurrage waiver certificate dated 16th November, 2020 has been validly issued as it can be traced to Regulation 10(1)(l) of the 2018 Regulations and under Regulation 10(1)(m) thereof, respondent No.4 i.e., the shipping line is under a legal obligation to comply with the certificate. Thus, the detention cum demurrage certificate dated 16th November, 2020 is binding on respondent No.4. That apart, holding on to the goods of the petitioner by respondent No.4 post the detention cum demurrage waiver certificate dated 16th November, 2020 and levying detention charges thereafter would be illegal and thus unlawful. 88. We may further clarify that it is nobody s case that the 2018 Regulations have not been validly made. It has therefore the full force and effect of a statute. A conjoint reading of Regulations 10(1)(l) and 10(1)(m) makes it abundantly clear that the 2018 Regulations are fully binding on the shipping line and it is not open to the latter relying on a contractual provision to contend that it will not comply with a direction or certificate issued under Regulation 10(1)(l). The private contract between the petitioner and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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