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of <h1>Customs' Authority to Detain Goods Upheld; Liability Shifted in Delay Dispute</h1> <h3>DONALD & MACARTHY (P) LTD. Versus UNION OF INDIA</h3> DONALD & MACARTHY (P) LTD. Versus UNION OF INDIA - 1997 (89) E.L.T. 53 (Cal.) Issues involved:1. Authority of Customs to detain goods and insist on discharge before re-export.2. Liability of the petitioner Company to pay demurrage and port charges.3. Right of the Calcutta Port Trust to claim demurrage and other port charges.4. Issuance of Detention Certificate by Customs and its impact on demurrage liability.5. Guidelines on waiver/remission of demurrage charges.Summary:1. Authority of Customs to detain goods and insist on discharge before re-export:The petitioner Company, incorporated in Singapore, shipped consignments to Calcutta Port. Upon the importer's inability to take delivery, the petitioner requested the shipping lines not to discharge the goods but to return them to Singapore. However, the Customs authorities insisted on discharging the goods at Calcutta Port as they were included in the Import Manifest and required examination before re-export.2. Liability of the petitioner Company to pay demurrage and port charges:The petitioner Company argued that it should not be liable for demurrage and port charges as the goods were detained by Customs without its fault. The learned Single Judge initially allowed re-shipment without demurrage liability, which was affirmed by the Appeal Court subject to export duty payment. However, the Calcutta Port Trust, not initially a party to the proceedings, later intervened, claiming its statutory dues.3. Right of the Calcutta Port Trust to claim demurrage and other port charges:The Calcutta Port Trust argued that under Section 59 of the Major Port Trusts Act, 1963, it had a lien over the goods for recovery of demurrage and other port charges, which could not be negated by the Customs' Detention Certificate. The Court acknowledged the statutory right of the Port Trust to claim demurrage and port charges.4. Issuance of Detention Certificate by Customs and its impact on demurrage liability:Despite the Detention Certificate issued by Customs, the Court noted that the liability for demurrage and port charges should be shifted to the authority responsible for the delay. The Customs authorities were directed to pay the demurrage and other dues of the Calcutta Port Trust within fifteen days, allowing the petitioner Company to re-export the goods upon payment of export duty.5. Guidelines on waiver/remission of demurrage charges:The Court considered the guidelines issued by the Central Government u/s 111 of the Major Port Trusts Act, 1963, for remission of demurrage charges. It was observed that the guidelines allowed remission where goods were detained by Customs for special examination or compliance with Import Trade Control formalities. The Court concluded that the actual burden of demurrage payment should fall on the Customs authorities responsible for the delay.Conclusion:The application was disposed of by directing the Customs authorities to pay the demurrage and other dues to the Calcutta Port Trust, enabling the petitioner Company to re-export the goods. The application for vacating the interim order by the Calcutta Port Trust was also disposed of accordingly, with no order as to costs.
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