Court orders Shipping Line & Freight Station to comply with Customs detention certificate, waiving charges. Contempt risk for non-compliance.

The High Court directed the Shipping Line and Container Freight Station to comply with the terms of the detention certificate issued by the Customs department, waiving detention charges and demurrage from the date of detention until cargo release. Non-compliance within three days may lead to contempt proceedings. Compliance status to be reported on 25.04.2022.

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Issues Involved:
1. Application to add Container Freight Station (CFS) and Shipping Line as party respondents in a contempt petition.
2. Compliance with the Appellate Authority’s order regarding retesting and warehousing of goods.
3. Issuance of detention certificate and waiver of demurrage and container charges.
4. Legal standing and obligations of the Shipping Line under the Customs regulations.
5. Validity and enforceability of the detention certificate against the Shipping Line.

Detailed Analysis:

1. Application to Add CFS and Shipping Line as Party Respondents:
The petitioner sought to add M/s. Century Plyboards (I) Limited and PIL India Private Limited as respondents in the contempt petition. The High Court allowed the impleadment application, concluding that both entities are necessary and proper parties to the proceedings. The Court noted that the CFS had complied with the direction to waive demurrage charges, while the Shipping Line had not, making it essential to include them in the proceedings to enforce compliance.

2. Compliance with Appellate Authority’s Order:
The petitioner had initially filed a writ petition seeking compliance with the Appellate Authority's order, which directed the Customs department to draw fresh samples for retesting and allow warehousing of the goods. The High Court had previously directed the Customs department to comply with these orders. However, the petitioner alleged that the Customs department had deliberately delayed obtaining the test report and warehousing the goods, leading to the contempt petition.

3. Issuance of Detention Certificate and Waiver of Charges:
The Customs department issued a detention certificate waiving demurrage and container charges, but the Shipping Line did not comply. The Court observed that the Shipping Line was informed of the detention certificate and the Court's orders but failed to waive the charges. The Court held that the Shipping Line's refusal to comply amounted to obstructing the implementation of the Court's orders.

4. Legal Standing and Obligations of the Shipping Line:
The Shipping Line argued that they were not bound by the 2009 and 2018 Customs Regulations and that their contractual rights under the Indian Contract Act should prevail. However, the Court held that the Shipping Line falls within the definition of "Customs Cargo Service Provider" under Regulation 2(b) of the 2009 Regulations and is bound by both the 2009 and 2018 Regulations. The Court emphasized that the statutory regulations override the contractual rights, and the Shipping Line must comply with the detention certificate issued by the Customs department.

5. Validity and Enforceability of the Detention Certificate:
The Court rejected the Shipping Line's contention that the detention certificate could not negate their contractual rights. It held that the 2009 and 2018 Regulations are statutory in nature and bind the Shipping Line, which had voluntarily submitted to these regulations by obtaining a license. The Court concluded that the detention certificate is valid and enforceable, and the Shipping Line must comply by waiving the detention charges and demurrage.

Conclusion:
The High Court directed the Shipping Line and CFS to comply with the terms of the detention certificate issued by the Customs department, waiving the detention charges and demurrage from the date of detention until the release of the cargo. The Court granted three days for compliance, failing which it would consider initiating contempt proceedings. The matter was listed for reporting compliance on 25.04.2022.

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