TMI Blog2023 (1) TMI 310X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 issue of payment of demurrage has been considered by several decisions of the Supreme Court and of this Court. On the question of demurrage, the Supreme Court in INTERNATIONAL AIRPORTS AUTHORITY VERSUS GRAND SLAM INTERNATIONAL OF INDIA [ 1995 (2) TMI 70 - SUPREME COURT ] , held that the demurrage would be liable to be charged even if there was fault on the part of the customs authority. Whether the demurrage would be liable to be paid by the Petitioner insofar as the customs duty and the interest? - HELD THAT:- These circumstances would clearly show that until December, 2022, the abandonment could not have been concluded by the Customs authorities, at the importer's instance as the out-of-process charge had already been done. Therefore, the customs authorities could not have presumed change in ownership till December 2022. If the goods are not released to the Petitioner, the authorities would follow the procedure prescribed in law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 from $7350 being paid in advance, the importer paid no other amount after the goods were shipped. 5. Under such circumstances, the Petitioner took it upon itself to get the goods cleared and hence addressed a notice dated 1st December, 2022 to the importer and sought the payment of $37057.13 and also damages amounting to $10000, to which there was no reply. Thereafter, the Petitioner attempted to obtain all the original documents from the Bank. The Bank which was holding t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 was done by Respondent No. 2 at the instance of the importer. He also relies upon Section 46 of the Customs Act, 1962 to argue that once an entry is made on the customs automatic system of bill of entry, the detention/demurrage charges would be liable to be paid by the concerned importer. 10. The Court has considered the matter. 11. The situation in the present case is that though the out-of-charge process was undertaken by the importer way back ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion 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 Commissioner of Customs without any appeal or review of the said order and the mere previous filing of a Bill of Entry could not be a valid ground for withdrawal of the permission to amend the manifest. The learned counsel appearing on behalf of the Petitioner also contended that as the goods were freely importable and as there was no allegation of under-valuation and that the Petitioner would at the time of clearance pay the appropr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 such a situation.'' In this view of the matter, applying this principle to the facts of the present case, we find that the goods were originally imported by Shiv Ganga Organic Chemical Ltd on cash against delivery basis. These goods landed in India sometime in February, 2001. The import of these goods was not contrary to law. However, the said Shiv Ganga Organic Chemicals abandoned these goods and did no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies 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 Woolen Mills. In Sanjeev Woolen Mills, the imported goods were synthetic waste (soft quality), though the customs authorities detained the same, being of the opinion that they were prime fibre of higher value and not soft waste. On account of non-release, the imported goods incurred heavy demurrage charges but the customs authorities themselves gave an undertaking before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orities 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 authorities to waive the demurrage charges. The appeal is disposed of accordingly. 19. In Om Petro Chemicals v. Union of India, 2002 (140) ELT 353(Del), the ld. Division Bench of this Court held that the demurrage charges would not be liable to be paid if the party is not at fault. The relevant observations of the ld. Division Bench are as under: 23. Would that ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ship 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 same. Accordingly, the customs duty and the interest assessed, as recorded above, shall be paid by the Petitioner to the custom authority. 24. On the question of demurrage, since the Petitioner received the original documents only in the first week of December, 2022, they could not have approached the customs authority prior to that. Between S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent 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 Petitioner against the importer as also the remedies of the customs authority against the importer, who failed to clear goods M/s.Earth Wire, are left open. e) If the Petitioner wishes to avail of its remedies in accordance with law to challenge the present order, the Petitioner shall be allowed to clear the goods by paying the dem ..... 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