2010 (10) TMI 150 - HC - Customs

Supreme Court rules on demurrage charges in import cases, importer liable for delays

The Supreme Court dismissed the writ petition regarding the levy of demurrage charges by Container Corporation of India Ltd. The Court upheld that CCI ... Demurrage charges - Board or the Authority which is its proprietor is entitled to charge the importer - until Customs clearance the Board or the Authority may not permit the importer to remove his goods form its premises does not imply that it may not charge the importer for the space his goods have occupied until their clearance - plea of the Petitioner that it should be exempted from paying the demurrage charges and a mandamus should issue to the Customs Department to pay the demurrage charges, rejected - petition dismissed Issues Involved:1. Levy of demurrage charges by the Container Corporation of India Ltd. (CCI).2. Direction to the Commissioner of Customs to de-stuff and release the remaining containers.3. Payment of shipping line charges by the Customs Department.4. Liability for demurrage charges due to delay in release of goods.Issue-wise Analysis:1. Levy of Demurrage Charges by CCI:The Petitioner was aggrieved by the levy of demurrage charges by CCI for 40 containers. The Petitioner argued that the Customs Department should bear the liability for demurrage charges due to delays in releasing the goods. The Customs Department countered that the delay was due to the Petitioner's illegal import activities, including misdeclaration of goods and weight, which warranted detailed investigations and seizures. The Supreme Court's judgment in International Airport Authority of India Ltd. v. Grand Slam International was cited, affirming that CCI could recover demurrage charges from the importer irrespective of any fault by the Customs Department.2. Direction to Commissioner of Customs to De-stuff and Release Containers:The Petitioner sought a direction for the Commissioner of Customs to de-stuff the remaining 13 containers and release them without further delay. The Customs Department argued that the Petitioner failed to clear the goods provisionally and did not pay the assessed duty, fine, and penalty. The Court noted that the Petitioner's imports were illegal, and the delay was due to ongoing investigations revealing smuggling activities. Hence, the Customs Department was not liable for the delay.3. Payment of Shipping Line Charges by Customs Department:The Petitioner requested that the Customs Department pay the shipping line charges. The Court rejected this plea, stating that the Petitioner's illegal activities and failure to clear the goods provisionally or after final assessment were the causes of the delay. The Court held that the Customs Department could not be held responsible for the demurrage charges.4. Liability for Demurrage Charges Due to Delay:The Petitioner argued that the Customs Department should bear the demurrage charges due to their failure to release the goods in a reasonable time, as mandated by certain circulars. The Court found this argument without merit, emphasizing that the Petitioner's imports were illegal, involving misdescription and misdeclaration. The Court stated that the circulars applied to valid imports without misdeclaration, and thus, the Petitioner could not insist on the same treatment. The Court upheld the settled law that CCI could recover demurrage charges from the importer, and no mandamus could be issued to the Customs Department to pay these charges.Conclusion:The writ petition was dismissed with costs of Rs. 10,000, divided equally between the Customs Department and CCI. The Court reaffirmed that the liability for demurrage charges rested with the importer, not the Customs Department, especially in cases involving illegal imports and misdeclaration.