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        Case ID :

        2019 (12) TMI 957 - HC - Customs

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        Demurrage liability on imported goods remains with the importer, and cargo regulations do not override the governing statutory framework. Regulation 6(1)(l) of the Handling of Cargo in Customs Areas Regulations, 2009 was treated as subject to other law in force, so it did not override the ...
                      Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.

                          Demurrage liability on imported goods remains with the importer, and cargo regulations do not override the governing statutory framework.

                          Regulation 6(1)(l) of the Handling of Cargo in Customs Areas Regulations, 2009 was treated as subject to other law in force, so it did not override the statutory and contractual framework governing CELEBI's demurrage charges under the Airports Authority of India Act, the OMDA and the concession agreement. The Court held that Customs authorities could not compel waiver of demurrage absent a governing legal or contractual basis, and CELEBI could retain the goods until charges were paid. It further reaffirmed that demurrage is ordinarily payable by the importer, not the Customs authorities, unless the custodian itself is responsible for unconscionable delay or comparable abuse.




                          Issues: (i) Whether Regulation 6(1)(l) of the Handling of Cargo in Customs Areas Regulations, 2009 prohibits CELEBI from charging demurrage on seized, detained or confiscated imported goods notwithstanding the statutory and contractual framework governing its charges; (ii) Whether the liability to pay such demurrage lies on the importer or can be fastened on the Customs authorities.

                          Issue (i): Whether Regulation 6(1)(l) of the Handling of Cargo in Customs Areas Regulations, 2009 prohibits CELEBI from charging demurrage on seized, detained or confiscated imported goods notwithstanding the statutory and contractual framework governing its charges.

                          Analysis: The prohibition in Regulation 6(1)(l) is expressly made subject to any other law for the time being in force. CELEBI's authority to charge demurrage was held to arise from the statutory scheme under the Airports Authority of India Act, 1994, the OMDA, and the concession agreement, all of which were treated as law for the time being in force. The regulation could not override that framework, and the Customs authorities had no power to compel waiver of demurrage absent a governing statutory or contractual stipulation.

                          Conclusion: Regulation 6(1)(l) does not bar CELEBI from charging demurrage in such cases, and CELEBI is entitled to retain the goods until demurrage is paid.

                          Issue (ii): Whether the liability to pay such demurrage lies on the importer or can be fastened on the Customs authorities.

                          Analysis: The settled principle reiterated from the prior authorities is that demurrage is payable by the importer, irrespective of whether the Customs detention was justified, unless the custodian itself is responsible for unconscionable delay or comparable abuse. The Court found no mala fide or unreasonable conduct on the part of the Customs authorities in the present matters. The importer was therefore required to clear the goods by paying the charges and could not shift that burden to the Customs authorities.

                          Conclusion: The demurrage liability rests on the importer, not on the Customs authorities.

                          Final Conclusion: The petitions failed on merits, and the Court upheld CELEBI's right to recover demurrage under the governing statutory framework while declining to impose that burden on the Customs authorities.

                          Ratio Decidendi: A custody-and-charge regime created or authorised by statute or statutory contract is not displaced by Regulation 6(1)(l) where that regulation is expressly subject to other law in force, and demurrage remains payable by the importer unless the custodian itself is at fault.


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                          ActsIncome Tax
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