Port Trust demurrage powers prevail over Customs regulations; liability stays with importer absent proved mala fides.

Regulation 6(1) of the Handling of Cargo in Customs Areas Regulations, 2009 cannot override the Major Port Trusts Act, 1963, because a major port authority's power to levy and recover demurrage is preserved by that statute and by section 160(9) of the Customs Act, 1962. Relief from such charges must be sought from the Port Trust under section 53 of the Major Port Trusts Act, not by judicial direction under the 2009 Regulations. Demurrage and detention charges also could not be shifted to the DRI or Customs Authorities, since liability ordinarily remains with the importer and transfer to Customs requires clear proof of mala fide or grossly abusive conduct, which was not established.

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Issues: (i) Whether the Mumbai Port Trust could be directed to waive demurrage charges in view of Regulation 6(1) of the Handling of Cargo in Customs Areas Regulations, 2009. (ii) Whether the demurrage and detention charges could be fastened upon the DRI and the Customs Authorities.

Issue (i): Whether the Mumbai Port Trust could be directed to waive demurrage charges in view of Regulation 6(1) of the Handling of Cargo in Customs Areas Regulations, 2009.

Analysis: The Port Trust's power to levy and recover rates, including demurrage, flows from the Major Port Trusts Act, 1963. Sections 48, 53, 58 and 59 of that Act confer the statutory framework for fixation, recovery, lien and exceptional remission of charges. Section 160(9) of the Customs Act, 1962 preserves the powers of a major port authority and prevents the Customs Act from affecting those powers. Regulation 6(1) of the 2009 Regulations is subordinate legislation and is expressly made subject to other laws in force. It cannot override the Major Port Trusts Act or extinguish the Port Trust's statutory entitlement to demurrage. The proper course for an importer seeking relief is to apply to the Port Trust under Section 53 for exemption or remission.

Conclusion: The Port Trust could not be judicially directed to waive demurrage under the 2009 Regulations, though remission may be considered under Section 53 of the Major Port Trusts Act, 1963.

Issue (ii): Whether the demurrage and detention charges could be fastened upon the DRI and the Customs Authorities.

Analysis: Demurrage is ordinarily payable by the importer even where clearance is delayed by Customs action, and detention charges arise from the contract with the carrier. Liability may be shifted to Customs only where mala fide conduct or gross abuse of power is clearly established. On the facts, the Court found that the Revenue had sufficient intelligence to justify close scrutiny, there was no clear finding of mala fides, the respondents themselves did not promptly avail provisional assessment, and they also contributed to delay. In these circumstances, the extraordinary direction to make the DRI or Customs pay demurrage and detention charges could not be sustained.

Conclusion: The DRI and the Customs Authorities could not be made liable to pay the demurrage and detention charges.

Final Conclusion: The statutory regime governing major ports remained intact, Customs regulations could not displace it, and the importer remained liable for the charges in the absence of proved mala fides or other exceptional grounds.

Ratio Decidendi: Regulations framed under the Customs Act cannot override the statutory power of a major port authority to levy demurrage, and liability for demurrage or detention charges cannot be shifted to Customs absent clear proof of mala fide or grossly abusive conduct.

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