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TMI Blog2023 (1) TMI 310X X X X Extracts X X X X X X X X Extracts X X X X ..... n 22nd December, 2021 for Discarded and Non-Serviceable Motor Scrap (92% heavy moulding scrap) (hereinafter referred as the "Goods") with one M/s Earth Wire Private Ltd - the Importer. Pursuant to the said contract, an invoice dated 14th July, 2022 for a CIF sum of $44057.13 was raised by the Petitioner against M/s Earth Wire. The goods were shipped from New York, USA to Delhi, India through Respondent No. 2- Hapag-Lloyd, Toronto. It is the admitted position that the goods were received at Mundra ICD, Sonepat on 27th August, 2022 vide bill of entry number 21481860 dated 25th August, 2022. 4. After receipt of the goods, the importer M/s Earth Wire did not pay the customs duty - hence, the goods were not cleared. Thereafter, some correspondence is stated to have taken place between the Petitioner and the importer, and instead of $44057.13, the Petitioner agreed to give a trade discount of $7000 which reduced the outstanding amount to $37057.13. It is the case of the Petitioner that despite the said discount being given, the importer neither paid the Petitioner for the supply nor cleared the goods from the customs authority by paying the requisite duty. It is not disputed that apart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be imposed upon the Petitioner as per this judgement. 8. Mr. Ravi Prakash, ld. CGSC appearing for the Respondent No. 1 submits that under Section 2(26) of the Customs Act, 1962, an importer is the owner of the goods. In the present case, the importer did not abandon the goods but, in effect, processed the release of the goods. Even the out-of- process formalities were undertaken, but thereafter, the importer did not clear the goods and also did not pay the customs duty or the detention/demurrage charges. He further relies upon the communication given to him by the Additional Commissioner (Legal), ICD, PPG, Delhi to state that the Bill of Entry of the goods have been assessed for customs duty amounting Rs.7,44,889/- and an interest of Rs.35,571/- (till date) is also liable to be paid. He further submits that detention/demurrage charges till 4th January, 2022 are to the tune of Rs.15,68,220/-. 9. It is brought to the notice of this Court by ld. CGSC that the present case has differentiating factors from Agrim Sampada (supra) case as in the said case, the importer did not undertake any process with the customs authority. In contrast, in the present case, the processing of documents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the judgment in Agrim Sampada (supra) clearly shows that the original importer in the said case, who had to make payment on cash against delivery basis, had abandoned the same and under such circumstances, the Court had held that the party similarly situated as the Petitioner is entitled to present the original bill of entry to the customs authority, upon which the goods have to be cleared. The clear observation in the said decision is that the ownership would shift under such circumstances. Relevant observations are set out below: "9. It has further been submitted on behalf of the petitioners that Section 2(26) of the Customs Act, 1962 defines ''importer'' to include the owner of the goods and any person holding himself out to be the importer at any time between the importation of the goods and the clearance of goods for home consumption and, accordingly the refusal to register the Bill of Entry of the Petitioner was contrary to law. He clearly stated that the amendment of the manifest under Section 30(3) of the Customs Act, 1962 was permitted by a competent authority and, this permission, being a quasi-judicial order, could not be withdrawn by the Deputy Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... importer even in a case where he abandons them, that is, in a situation where he does not pay for and receive the documents of title. It may be that for such act of abandonment, action may be taken against him for suspension/cancellation of license. May be, some other proceedings can also be taken against him. But certainly he cannot be treated as the owner of the goods even in such a case. Holding otherwise would place the exporter in a very difficult position; he loses the goods without receiving the payment and his only remedy is to sue the importer for the price of goods and for such damage as he may have suffered. This would not be conducive to international trade. We can well imagine situations where for one or other reason, an importer chooses or fails to pay for and take delivery of the imported goods. He just abandons them. (We may reiterate that we are speaking of a case where the import is not contrary to law). It is only with such a situation that we are concerned in this case and our decision is also confined only to such a situation. Condition (ii) in sub-clause (3) of Clause 5, in our opinion, does not operate to deprive the exporter of his title to said goods in suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reated under a statute even if is the custodian of the imported goods because of the provisions of the Customs Act, 1961, 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 periods 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. 18. In Union of India v. Sanjeev Woolen Mills, 1998 (9) SCC 647, under special circumstances, the High Court's order directing the Appellants to bear detention/demurrage charges was not interfered with by the Supreme Court. Subsequently, in Shipping Corporation of India Ltd. v. C. L. Jain Woolen Mills & Ors. 2001 (5) SCC 345, the Supreme Court clarified that there is no inconsistency between the decisions in Grand Slam (supra), and the Supreme Court clarified as under: "10. We have also examined the decision of this Court in Union of India vs. Sanjeev Woolen Mills 1998(100) ELT 323(SC) and we do not find any apparent inconsistency between the decision of this Court in Grand Slam and that of the Sanjeev Wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age charges, levy of demurrage 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 and such illegal detention prevented the importer from releasing the goods, the customs authorities would be bound to bear the demurrage charges in the absence of any provision in the Customs Act, absolving the customs authorities from that liability. Section 45(2)(b) of the Customs Act cannot be construed to have clothed the customs authorities with the necessary powers, so as to absolve them of the liability of paying the demurrage charges. In the aforesaid premises, we see no infirmity with the directions given by the Delhi High Court on 18.1.99. The goods in question, having already been directed to be released, without the payment of the demurrage charges, the importer must have got the goods released. Having regard to the fact situation of the present case, it would be meet and paper for us to direct the Shipping Corporation and Container Corporation, if an application is filed by the customs auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ile considering the case of the Respondent-importers Under Section 53." 21. Thus, the position that emerges is that if the importer is at fault, demurrage would be liable to be paid. 22. Coming to the facts of the present case, between 28th August, 2022 till 23rd November, 2022, the goods continued to lie with the customs authority under the ownership of the importer, which was the original beneficiary. The out-of-charge process has also been done on 15th September, 2022 pursuant to the documents submitted by the importer. The original documents were taken back from the bank only on 2nd December, 2022 upon the notice being sent by the Petitioner to the Bank. The entire matter was at large between September 2022 to December, 2022 between the two parties i.e. the Petitioner and the importer and the customs authority were not to blame. The Petitioner sent the first representation to the customs authority only on 3rd December, 2022 - thereafter, the present writ petition has been filed. 23. The question that now arises is whether the demurrage would be liable to be paid by the Petitioner. Insofar as the customs duty and the interest is concerned, the Petitioner is willing to pay the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s claimed to have transferred. Be that as it may, even the importer would be liable to be blamed in the present case, inasmuch as the importer, in effect, has processed the documents but has not cleared the goods after paying the duty. 27. Since the Petitioner is now seeking release of the goods, in the facts and circumstances of the present case and the legal position discussed above, the following directions are issued: a) The Petitioner shall pay the customs duty and interest as quantified above. b) Insofar as the detention/demurrage charges are concerned, since there is no explanation for the delay between September 2022 to December, 2022 and the first representation itself was made on 3rd December, 2022, the Petitioner would be liable to pay 50% of the detention/demurrage charges payable till 3rd December, 2022 as also demurrage charges for the period from 3rd December, 2022 till date. c) In order to quantify the exact amounts payable, the Petitioner is permitted to appear before the customs authority on 9th January, 2023 at 11:30 a.m. The Petitioner's representative shall appear before the customs authorities on the said date and time. d) The remedies of the Petition ..... 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