Customs cargo regulation upheld as valid, with demurrage restrictions treated as a reasonable public-interest measure.

The Delhi High Court upheld Regulation 6(1)(l) of the Handling of Cargo in Customs Areas Regulations, 2009 as within the scope of the Customs Act, 1962 and the Airports Authority of India Act, 1994. It held that the regulation validly applied to Customs Cargo Service Providers, including subcontractors operating cargo terminals, and that earlier authorities cited against it were distinguishable because they predated Section 141(2) of the Customs Act and the related regulations. The Court also found the restriction on charging demurrage for seized, detained, or confiscated goods to be a reasonable measure in the public interest, with a direct nexus to customs administration, and rejected the challenge under Articles 14 and 19(1)(g).

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Issues: (i) Whether Regulation 6(1)(l) of the Handling of Cargo in Customs Areas Regulations, 2009 was ultra vires the Customs Act, 1962 and the Airports Authority of India Act, 1994. (ii) Whether the said regulation violated Articles 14 and 19(1)(g) of the Constitution of India.

Issue (i): Whether Regulation 6(1)(l) of the Handling of Cargo in Customs Areas Regulations, 2009 was ultra vires the Customs Act, 1962 and the Airports Authority of India Act, 1994.

Analysis: The regulation was framed under the power to prescribe the manner of handling imported or export goods in a customs area and the responsibilities of persons engaged in those activities. The Court held that the Customs Cargo Service Provider, including the sub-contractor operating the cargo terminal, was bound by the regulatory regime. The earlier decisions relied upon by the petitioner were distinguished because they predated the insertion of Section 141(2) of the Customs Act, 1962 and the consequential regulations. The regulation therefore fell within the scope of the enabling provisions and was consistent with the parent statute.

Conclusion: The challenge on the ground of ultra vires failed and the regulation was held to be valid.

Issue (ii): Whether the said regulation violated Articles 14 and 19(1)(g) of the Constitution of India.

Analysis: The regulation had a direct nexus with the object of regulating the handling of goods in customs areas and imposing responsibilities on service providers. The restriction on charging demurrage for seized, detained, or confiscated goods was treated as a reasonable restriction in the public interest, given the role of customs investigation and the need to prevent obstruction of clearance in matters involving trade policy, safety, and security. The Court held that the measure did not fail the test of arbitrariness and was saved by Article 19(6) of the Constitution of India.

Conclusion: The constitutional challenge under Articles 14 and 19(1)(g) failed.

Final Conclusion: The impugned regulation was upheld as a valid exercise of delegated legislative power and the writ petition was dismissed.

Ratio Decidendi: A subordinate regulation framed within the scope of the enabling statute, having a reasonable nexus with the statutory object and not infringing constitutional guarantees, cannot be struck down as ultra vires or unconstitutional.

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