2021 (4) TMI 422 - HC - Customs

Court upholds customs authority's e-auction right, denies relief request, stresses contractual nature

M/s. A.B. Kanisha Timbers Versus The Commissioner of Customs, The Assistant Commissioner of Customs (Disposal), M/s. Continental Warehousing Corporation (Nhava Seva) Limited, M/s. COSCO Shipping Lines (India) Private Limited, M/s. Glottis Global Logistics Services

The court upheld the customs authority's right to proceed with e-auction of goods not cleared within the specified time frame, rejecting the petitioner's ... Warehoused goods - goods were not cleared within the time limit stipulated in Section 48 of the Customs Act, 1962, the customs authority proposed to auction the goods - contractual relationship and contractual liability - requirement to issue waiver certificate or not - HELD THAT:- It is well settled that no Court can issue 'Mandamus' contrary to law. The statutory authority cannot be restrained from discharging its statutory functions. In the case on hand, the customs authority had issued notice on 15.09.2020 calling upon the petitioner to clear the goods. In the counter affidavit, the customs authority has pointed out that though the customs authority could have issued first notice on the expiry of the 30th day, they chose to wait for about three months before issuing the notice. Since proper response was not forthcoming from the petitioner, they decided to e-auction the imported goods. The goods had arrived on 09.05.2020 - The bill of entry was filed on 21.05.2020. Warehousing was ordered on 21.05.2020. The Customs Authority has pointed out that if the goods had been seized or detained or confiscated by them, the Customs Cargo Services Provider cannot charge any rent or demurrage on the goods. In the case on hand, there has been no seizure or detention or confiscation - If there was detention of goods and the customs authority had issued waiver certificate and still the warehousing entity refuses to release the goods, the importer can certainly move the Writ Court for relief. But the case on hand is not one such. The customs authority at no point of time detained the goods. Therefore, this is purely a contractual issue between the petitioner on the one hand and the private respondents on the other. In such a case, it would not be open to the Writ Court to issue any Mandamus compelling the private respondents herein to permit clearance of the goods, even though the petitioner has not satisfied the contractual demand raised by the shipping liner/warehousing entity - The goods are not prohibited goods. Unfortunately, though the amount was debited from his account, it did not get credited in the account of the fourth respondent. While the petitioner is willing to pay a sum of ₹ 2,00,000/- to the warehousing entity, the demand of the third respondent is ₹ 35,00,000/-. Since there are no meeting point, no purpose will be in keeping the issue alive. No grant of any relief in these writ petitions. These Writ Petitions stand dismissed. Issues:1. Customs authority's right to dispose of goods for non-clearance within stipulated time2. Petitioner's request for waiver of charges and relief from detention charges3. Maintainability of writ petition against private entities in contractual matters4. Equitable relief in the face of mounting charges and financial burden on petitionerAnalysis:Issue 1: Customs authority's right to dispose of goods for non-clearance within stipulated timeThe court examined the provisions of Section 48 of the Customs Act, which allows for the auction of goods not cleared within the specified time frame. The customs authority issued a notice to the petitioner after a delay, giving them an opportunity to clear the goods. As there was no seizure or detention by the customs authority, the court found that the waiver certificate provision did not apply, and the authority was within its rights to proceed with e-auction.Issue 2: Petitioner's request for waiver of charges and relief from detention chargesThe petitioner argued that under Regulation 6 of the Handling of Cargo in Customs Areas Regulation, 2009, authorities must issue a certificate for waiving demurrage and other charges. The petitioner faced exorbitant charges due to delayed payments and lack of response from the fourth respondent. Despite the petitioner's plea for waiver, the charges escalated significantly, leading to a financial crisis. The court acknowledged the petitioner's genuine intent and financial strain but found no legal basis to compel the private entities to waive the charges.Issue 3: Maintainability of writ petition against private entities in contractual mattersThe court considered whether a writ petition could be maintained against private entities in contractual disputes. While acknowledging previous judgments allowing writs against private entities in certain circumstances, the court determined that since there was no detention by the customs authority, the issue was contractual between the petitioner and the private respondents. Thus, the court declined to issue a mandamus against the private entities to permit clearance of goods without satisfying contractual demands.Issue 4: Equitable relief in the face of mounting charges and financial burden on petitionerRecognizing the unfortunate situation faced by the petitioner, the court expressed inability to investigate further or pass an equitable order due to the contractual nature of the issue. Despite the petitioner's willingness to pay a reduced amount, no consensus was reached between the parties. The court dismissed the writ petitions but granted the petitioner liberty to seek redress for losses suffered. The customs authority was directed not to proceed with e-auction for a brief period to allow further negotiations.In conclusion, the court dismissed the writ petitions, highlighting the need for parties to resolve the matter independently while recognizing the financial strain on the petitioner. The judgment emphasized the limitations of the court in intervening in purely contractual disputes and encouraged seeking resolution through appropriate forums.