TMI Blog2005 (10) TMI 106X X X X Extracts X X X X X X X X Extracts X X X X ..... K. at a concessional rate. 3. Under the prevailing Export-Import Policy, import of second-hand machinery at a concessional rate of duty was permissible only if the project was cleared by the Ministry of Industry, Government of India (GOI) and the said project was registered under the Project Import Regulations framed under the Customs Act, 1962. 4. With a view to import the second-hand machinery and clear the same at a concessional rate by availing the benefit of exemption, the petitioner on September 18, 1995 applied to the Central Government for Project Import Certificate. The said certificate was granted by the Ministry of Industry, (GOI) on January 29, 1996. 5. In the meantime, the petitioner had finalised the purchase deal with the foreign supplier in U.K. and the consignment of second-hand machinery valued at Rs. 1.07 crores loaded in 50 containers arrived by ship at the Jawaharlal Nehru Port Trust (JNPT) at Navi Mumbai in the second week of January, 1996. The said containers were unloaded on January 18, 1996, Since the stevedore agents were on strike, the said 50 containers unloaded at JNPT were shifted from the port to the warehouse at Container Freight Station (CFS), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by M/s. Superintendence Co. of India (P) Ltd. It may be noted that initially the Customs authorities were not willing to accept the first report dated September 23, 1995 and, therefore, the petitioner was required to submit another report of SGS India Limited in July, 1996. After passing the assessment order, the amount payable by the petitioner was computed on the bill of entry on June 18/19, 1997 and the petitioner paid the duty as computed on the same day. 9. In the meantime, in view of the delay on the part of the Customs authorities in assessing the goods, the petitioner had applied to the C.W.C. on January 24, 1997 to waive the demurrage charges payable on the imported consignment, by exercising its discretionary powers vested in them under clause 59 of the general terms and conditions of storage framed by the C.W.C. The petitioner addressed several letters in that behalf, however, the C.W.C. failed to dispose of the waiver application made by the petitioner. As a result, the petitioner could not clear the goods even after the goods were assessed and customs duty was paid as per the assessment order. 10. In view of the delay in disposal of the waiver application, the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing unit has been grounded since 1995. He submitted that on account of the gross delay on the part of the Customs authorities and the C.W.C. which is an instrumentality of the State, the petitioner is saddled with warehousing charges amounting to Rs. 2.27 crores in respect of the consignment worth Rs. 1.64 crores. Accordingly, counsel for the petitioner submitted that unless the warehousing charges are waived or borne by the Customs authorities, it will not be impossible for the petitioner to clear the goods valued at Rs. 1.64 crores. 14. Elaborating his arguments, Mr. Sorabjee submitted that at every stage there has been gross negligence on the part of the Customs authorities as can be seen from the following : (i) The petitioner had applied for registration of the project with the Customs authorities on February 2, 1996, but the same was registered belatedly on March 25, 1996. The Customs authorities had delayed registration of the project on the ground that the certificate of the Chartered Engineer dated September 23, 1995 was not proper. However, in the assessment order dated June 9, 1997 the very same certificate dated September 23, 1995 has been accepted by the adjudicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elay in assessing the goods, it is just and proper to shift the liability and order the Customs authorities to bear the warehousing charges payable on the goods imported by the petitioner. 15. Dealing with the lapses on the part of the C.W.C., Mr. Sorabjee submitted that in the present case there is total negligence on the part of the C.W.C. right from the inception. Firstly, as per clause 59 of the 'General Terms and Conditions of Storage framed by the C.W.C., it was obligatory on the part of the C.W.C. to dispose of the waiver application of the petitioner by passing a judicious order. In the present case, the waiver application of the petitioner filed in January, 1997 has been disposed of after about seven months on July 21, 1997 and that too without assigning any reasons. Thus, the said order is passed in gross violation of the principles of natural justice. Secondly, during the pendency of the waiver application, the petitioner by its letters dated June 21, 1997 and July 4, 1997 had requested for shifting the 50 containers from C.F.S., Dronagiri under the supervision and control of C.W.C. to some other warehouse where the warehousing charges were very low. The petitioner had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontravention of Section 17 of the Customs Act, what is to be seen in the facts and circumstances of the case is whether the liability of the petitioner to pay the warehousing charges is shifted to the Customs authorities. He submitted that once it is established that there is gross delay on the part of the Customs authorities in examining/assessing the goods, the liability to pay the warehousing charges shifts to the Customs authorities and the petitioner cannot be burdened with the said warehousing charges. 17. Although the decision of the Apex Court in the case of Union of India v. Sanjeev Woollen Mills reported in 1998 (100) E.L.T. 323 (S.C.) is in favour of the importer, Mr. Sorabjee fairly stated that the said decision was in the peculiar facts and circumstances of that case and he would not rest his case on the said decision. Referring to the judgment of the Apex Court in the case of Shipping Corporation of India v. C.L. Jain Woollen Mills Others reported in 2001 (129) E.L.T. 561 (S.C.) = (2001) 5 Supreme Court Cases 345, Mr. Sorabjee submitted that where the action of the Customs authorities in detaining the goods is illegal, the Customs authorities would be bound to bea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Union of India v. RCF (P) Ltd. reported in [2002 (139) E.L.T. 12 (S.C.) = 2002 (1) Supreme Court Cases 718, Mr. Rana submitted that even where the orders passed by the Customs authorities have been ultimately set aside, it is held that the liability to pay the warehousing charges would still be upon the importer and not on the Customs authorities and, therefore, in the facts of the present case, in the absence of any mala fides, liability to pay warehousing charges cannot be shifted upon the Central Government. Mr. Rana submitted that in view of the delay in assessing the goods imported by the petitioner, the Customs authorities are ready and willing to issue the requisite detention certificate to enable the petitioner to seek waiver of demurrage charges from the C.W.C. Accordingly, Mr. Rana submitted that the claim of the petitioner that the Customs authorities should be directed to pay the warehousing charges is legally unsustainable in law. 20. Ms. S.I. Shah, learned counsel appearing on behalf of the C.W.C. submitted that although an affidavit-in-reply has not been filed in the present case, the C.W.C. had taken out a Civil Application bearing No. 2524 of 2005 seeking an or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rter to some other person depending upon the facts of each case. In a given case, liability to pay the port charges may be shifted upon the Customs authorities if it is found that the said liability is attributable to the inaction or inordinate delay on the part of the Customs authorities in assessing the goods. However, there cannot be fixed period for finalising the assessment of the imported goods. Therefore, in a given case, whether the time taken for assessment is reasonable or not and whether the liability to pay charges has occassioned solely on account of the delay in assessment of the goods will have to be seen from the facts of each case. 24. In the present case, the petitioner had imported the goods even before the application of the petitioner for Project Import Certificate was processed by the Government of India. Having imported the goods in anticipation that the Project Import Certificate will be granted, it is not open to the petitioner to blame the Government for the delay in issuing the Project Import Certificate. Similarly, the time taken by the Customs authorities in registering the project under the Project Import Regulations in view of the clause contained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nuary 1996 was hoping to obtain an order for complete waiver of warehousing charges from the C.W.C. It is only after the C.W.C. declined to waive the warehousing charges, the petitioner has chosen to approach this Court. In these circumstances, in our opinion, the petitioner has not made a case for shifting the warehousing charges upon the Central Government. 26. Turning to the delay on the part of the C.W.C., we are totally dissatisfied with the manner in which the C.W.C. authorities have handled the present case. In the writ petition filed in the year 1997 serious allegations were made against the C.W.C. regarding the order passed on the waiver application filed, by the petitioner, in gross violation of the principles of natural justice and the gross negligence on the part of the C.W.C. in deciding the application filed by the petitioner for shifting the goods from C.F.S., Dronagiri to a cheaper warehouse under the control of C.W.C. Even though the said writ petition was served seven years ago, till date the C.W.C. has not chosen to file its reply to the petition. This petition was taken up for hearing on June 23, 2005. Thereafter, the petition was again taken up for hearing an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subject to the petitioner bearing the transportation charges. Accordingly, the petitioner paid the requisite charges. However, in breach of the Court's order, the C.W.C, have chosen to shift the goods to their warehouse at Kalamboli instead of their warehouse at Ambernath as ordered by this Court. The explanation given by the C.W.C. that there was no space at Ambernath for storing the consignment of the petitioner cannot be accepted because in the first instance, it was the C.W.C. which had voluntarily represented to the Court that they are willing to shift the goods to their warehouse at Ambernath. Therefore, it was obligatory on the part of the C.W.C. to comply with the Court order. Even assuming that there was some difficulty, the C.W.C. ought have approached the Court and get the order modified. Instead of approaching this Court for modification of the order, the C.W.C. unilaterally and in breach of the order of this Court has stored the goods in their warehouse at Kalamboli where the charges are higher than the charges at Ambernath. 29. For all the aforesaid reasons and taking overall view of the matter, we are of the opinion that the interest of justice would be met by pas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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