2020 (2) TMI 1384 - HC - Customs

Court upholds demurrage charges by DCSC; importer liable, cannot waive; petitioner retains right to claim damages.

The court dismissed the writ petition, affirming that DCSC is entitled to charge demurrage and retain custody of the goods until the demurrage is paid. ... Prohibition from charging demurrage from the petitioners during the period of delayed filling of the counter-affidavit by respondents - Regulation 6(1)(l) of the Handling of Cargo in Customs Areas Regulations, 2009 - HELD THAT:- The issue at hand, is squarely covered in M/S. GLOBAL IMPEX THROUGH ITS PARTNER, SHREE SHYAM ENTERPRISES, SURENDER KUMAR JAIN THROUGH ITS PROPRIETOR, BISHT INTERNATIONAL THROUGH ITS PROPRIETOR, ROOP SINGH ENTERPRISES THROUGH ITS PROPRIETOR, VERSUS MANAGER, CELEBI IMPORT SHED AND ANR., UNION OF INDIA & ORS. [2019 (12) TMI 957 - DELHI HIGH COURT] where the prayer, of the petitioner, for issuance of directions to the respondents, not to collect any demurrage, in respect of the goods, imported by the petitioner and in the custody of CELEBI, is bereft of merit. DCSC is entitled, in light of the Regulation 6(1)(l) of the Handling of Cargo Regulations, to charge demurrage in respect of the goods consigned to its custody, and to retain custody over such goods till the demurrage is paid. Keeping in view, clause (iii) of para 104 in Global Impex, we reiterate that the Customs authorities cannot direct waiver of demurrage, which can only be done by the custodian (the DCSC here). Moreover, merely because the Customs authority expends a reasonable time in dispensation of their sovereign functions of search, seizure and investigation, cannot lead to transference of liability to pay demurrage, to the Customs authorities. Even in a case in which the seizure is entirely unjustified, the importer would, in the first instance, have to pay demurrage, to the custodian and, thereafter, pursue, with the Customs authorities, for obtaining reimbursement of the amount. Petition dismissed. Issues Involved:1. Waiver of Demurrage Charges.2. Authority of Customs to Direct Waiver of Demurrage.3. Legal Basis for Charging Demurrage by DCSC.4. Liability for Payment of Demurrage.Detailed Analysis:Waiver of Demurrage Charges:The petitioner sought a writ of mandamus to prohibit DCSC from charging demurrage on goods seized by the Commissioner of Customs. The petitioner relied on a letter dated 6th May 2019 from the Assistant Commissioner (SIIB), which directed that no demurrage should be charged until the completion of the investigation. The petitioner argued that the customs authorities had undertaken not to charge demurrage, and thus, the goods should be released without demurrage charges.Authority of Customs to Direct Waiver of Demurrage:The court analyzed whether customs authorities have the power to direct the waiver of demurrage charges. The court referred to its earlier judgment in Global Impex v. Manager, CELBI Import Shed, which established that the customs authorities do not have the jurisdiction to instruct custodians to waive demurrage charges. The custodian's lien over the goods, including the right to charge demurrage, is statutory or contractual and cannot be overridden by customs authorities' directions.Legal Basis for Charging Demurrage by DCSC:DCSC argued that its authority to levy demurrage charges stems from the Airport Authority of India (Storage and Processing of Cargo, Courier and Express Goods and Postal Mail) Regulations, 2003, specifically Regulation 10.1.10. These regulations have the force of law, as they were framed under the Airport Authority of India Act, 1994. The court confirmed that DCSC's right to charge demurrage is legally sanctioned and falls within the 'law for the time being in force' as per Regulation 6(1)(l) of the Handling of Cargo Regulations.Liability for Payment of Demurrage:The court reiterated that the importer is liable to pay demurrage irrespective of the justifiability of the customs authorities' seizure and detention of goods. Even if the seizure is unjustified, the importer must first pay the demurrage to the custodian and then seek reimbursement from the customs authorities. The court emphasized that the customs authorities' reasonable time spent on search, seizure, and investigation does not transfer the liability to pay demurrage to them.Conclusion:The court dismissed the writ petition, affirming that DCSC is entitled to charge demurrage and retain custody of the goods until the demurrage is paid. The customs authorities cannot direct the waiver of demurrage, and the importer must pay the demurrage first and then seek any possible reimbursement. The petitioner is not precluded from pursuing any claims for damages against the respondents, if permissible by law.