2012 (8) TMI 1109 - HC - Customs

Court dismisses petition challenging demurrage, rent, and penalty demands, upholds liability; relief denied, Customs not liable for extended demurrages.

The court dismissed the petition seeking to quash demands for demurrages, penalty, and rent for the clearance of goods, citing liability to pay ... Liability to pay demurrage by port trust despite delay caused by customs authorities - warehousing v. transit area - disputed question of fact not to be decided in writ jurisdiction - relief not founded on pleadings cannot be granted - custody of imported goods and port authority's right to levy demurrageLiability to pay demurrage by port trust despite delay caused by customs authorities - custody of imported goods and port authority's right to levy demurrage - Whether the petitioner is liable to pay demurrage charges to the Kandla Port Trust in respect of the subject consignments. - HELD THAT: - The Court applied the principle in International Airports Authority of India v. Grand Slam International and held that an authority created under statute and acting as custodian of imported goods is entitled to charge demurrages and make the importer/consignee liable even for periods when clearance was delayed due to fault of customs or other authorities, absent a detention certificate or specific statutory basis shifting liability. No detention certificate was produced and, in any event, the impugned demand could not be set aside on the basis of the petitioner's general assertions. Consequently the challenge to the demand dated 12-6-2006 fails and the petitioner is liable to pay demurrages to Respondent No.4 in accordance with law. [Paras 18, 25]The petitioner is liable to pay demurrage to Kandla Port Trust; the challenge to the demand is rejected.Warehousing v. transit area - disputed question of fact not to be decided in writ jurisdiction - Whether the goods had been validly warehoused with effect from 11-10-1982 such that only warehousing charges (and not demurrage) would be payable. - HELD THAT: - The Court observed that sections of the Customs Act prescribe specific formalities for warehousing (entry, warehousing bond, permission for deposit, period, rent) and that the petitioner did not put forward documentary evidence showing compliance with those statutory requirements. The fourth respondent disputed that the goods were warehoused and maintained they remained in the transit area. As this is a disputed question of fact the Court, exercising writ jurisdiction under Article 226, would not enter into an inquiry to resolve it. On the material before the Court the petitioner failed to establish that warehousing had occurred and thus the alternative plea to restrict liability to warehousing rent was not accepted. [Paras 17, 20, 25]Petitioner has not established that the goods were warehoused from 11-10-1982; the plea for only warehousing charges is rejected.Relief not founded on pleadings cannot be granted - Whether the Court could direct the Customs authorities to bear demurrage or otherwise grant relief against customs when no such relief was pleaded. - HELD THAT: - The Court reiterated the settled principle that reliefs not founded on the pleadings should not be granted. The petition contained no specific pleadings or prayers seeking to fasten liability on the Customs authorities for demurrage; accordingly, notwithstanding oral submissions, no relief could be granted against the Customs. Even on the merits, the Court noted that Customs could, if liable at all, be so only for limited periods during proceedings before adjudicating/appellate authorities and not for the entire prolonged period attributable to the petitioner's conduct. Therefore no direction was issued against the Customs authorities. [Paras 22, 23, 25]No relief can be granted against the Customs authorities for payment of demurrage since such relief was not pleaded; petitioners' oral contention to that effect is rejected.Final Conclusion: The petition is dismissed. The Court held that the Kandla Port Trust is entitled to recover demurrage in accordance with law; the petitioner failed to prove warehousing or to plead any claim against the Customs authorities, and therefore is not entitled to quash the demand or secure clearance of the goods without payment of demurrage, rent, penalty or other charges. Interim relief previously granted is vacated, but extended for eight weeks to enable the petitioner to approach a higher forum. Issues Involved:1. Quashing of demands for demurrages, penalty, rent.2. Direction for clearance of goods without payment of demurrages, rent, penalty, or interest.3. Alternative relief for clearance of goods on payment of calculated rent.4. Liability of Customs authorities for demurrages.Summary:1. Quashing of demands for demurrages, penalty, rent:The petitioner sought to quash the demands of demurrages, penalty, and rent for the clearance of 582 MTs of stainless steel angles. The Court, referencing the Supreme Court decision in *International Airports Authority of India v. Grand Slam International*, held that the petitioner is liable to pay demurrages to the Kandla Port Trust. Consequently, the prayer for quashing the demand raised by the respondent did not merit acceptance.2. Direction for clearance of goods without payment of demurrages, rent, penalty, or interest:The petitioner sought a direction to clear the goods without payment of demurrages, rent, penalty, or interest. The Court found that the petitioner is liable to pay demurrages as per the law, and thus, no such direction could be granted.3. Alternative relief for clearance of goods on payment of calculated rent:The petitioner alternatively sought clearance of goods on payment of calculated rent. The Court noted that the petitioner failed to establish that the goods were warehoused on 11-10-1982. The veracity of the letter dated 23-5-2006 (Annexure P-8) was disputed by the respondent, who contended it was fabricated. Therefore, the prayer for clearance on payment of rent could not be granted.4. Liability of Customs authorities for demurrages:The petitioner argued that the Customs authorities should be liable for demurrages due to their default. The Court observed that there were no specific pleadings and prayers against the Customs authorities in the petition. Moreover, the Customs authorities could only be held liable until 9th August 1989 for the first consignment. For the second consignment, the delay was due to the petitioner prosecuting the matter before a wrong forum, which could not be attributed to the Customs authorities.Conclusion:The petition was dismissed, and the rule was discharged. The interim relief granted earlier was vacated but extended for eight weeks to enable the petitioner to approach a higher forum.