2016 (3) TMI 1035 - HC - Customs

Court orders reconsideration of demurrage charge waiver citing procedural unfairness and directs notice, hearing within 8 weeks.

The Court set aside the Board's decision denying waiver of demurrage charges, citing procedural unfairness and failure to consider the petitioner's unique ... Grant of waiver of demurrage charges - Exportation of copper wires - Petitioner sent goods but the importer did not turn up to file Bill of Entry hence, the petitioner sought for reshipment of goods - Board chose to not to exercise power under Section 53 of the said Act and rejected the claim for demurrage - Held that:- in rejecting the claim of the petitioner, upon having entered into an exercise to consider the same, the Board relied on guidelines for waiver of demurrage charges on imported cargo on recording there is no guideline for waiver of demurrage charges on export cargo. Inference can be drawn that the petitioner was taken by surprise on the reliance of such guidelines as they had come prepared and did submit without reference to the same. Prejudice appears to have been caused to the petitioner and the demonstration of it is borne out from the face of the impugned order itself. The Board did not invite the petitioner, as does not appear from the impugned order, to make submissions with reference or regard to the guidelines for waiver of demurrage on imported cargo. Apart from that the Board having itself found no guideline was in place to cover the case of the petitioner, went on to say its case did not deserve consideration due to any special circumstance. On the top of that record bears the finding by this Court in the petitioner’s earlier writ petition, as would appear from the passage reproduced above, that so far as the Customs was concerned their ‘bureaucratic machinery, in such a situation, will not be able to function, because none of the standard operations quite fits the special situation’. Therefore, the impugned order is not sustainable and set aside. Also, the respondent no.1 shall revisit the claim of the petitioner for waiver of demurrage charges. Such direction is being made because the said respondent itself chose to consider the same under Section 53 of the said Act inasmuch as the claim of the petitioner was not rejected in limine. - Petition disposed of Issues Involved:1. Waiver of demurrage charges.2. Applicability of guidelines for waiver of demurrage charges.3. Exercise of discretion by the Board under Section 53 of the Major Port Trusts Act, 1963.4. Legal validity of the Board's decision and procedural fairness.Issue-wise Detailed Analysis:1. Waiver of Demurrage Charges:The petitioner challenged an order by the Trustees of the Kolkata Port Trust dated 16th December 2005, which denied the waiver of demurrage charges. The petitioner argued that the Board relied on undisclosed guidelines for waiver of demurrage charges on import cargo, whereas the petitioner's case involved exportation of goods. The petitioner cited Section 53 of the Major Port Trusts Act, 1963, arguing that the Board did not apply its mind to the waiver request.2. Applicability of Guidelines for Waiver of Demurrage Charges:The Board's decision was based on guidelines for waiver of demurrage charges on import cargo, despite the petitioner's case involving export cargo. The Board stated that there were no guidelines for waiver of demurrage charges on export cargo, thus applying the import cargo guidelines. The petitioner contended that they were not at fault for the goods being detained and should not be liable for demurrage charges.3. Exercise of Discretion by the Board under Section 53 of the Major Port Trusts Act, 1963:Section 53 allows the Board to exempt or remit charges in special cases for reasons recorded in writing. The Board, however, did not find the petitioner's case to warrant special consideration under this provision. The Board concluded that both the petitioner and Customs were at fault, and thus, the guidelines for waiver did not apply.4. Legal Validity of the Board's Decision and Procedural Fairness:The Court found that the Board did not provide the petitioner an opportunity to address the guidelines for import cargo, which were ultimately used to reject their claim. The Court noted that the petitioner was prejudiced by this reliance on undisclosed guidelines. Additionally, the Court referenced a previous judgment that highlighted the need for judicial intervention in cases where standard procedures do not fit unique situations.Conclusion:The Court set aside the impugned order, finding that the Board's decision was procedurally unfair and did not properly consider the petitioner's unique circumstances. The Court directed the Board to revisit the petitioner's claim for waiver of demurrage charges, providing notice and hearing to both the petitioner and Customs, and to dispose of their claims within eight weeks.Disposition:The writ petition was disposed of with directions for reconsideration of the waiver claim by the Board.