1990 (1) TMI 84 - HC - Customs

Court grants 80% remission of demurrage charges, sets aside rejection order. Respondent directed to refund.

The court ruled in favor of the Petitioners, holding that they were entitled to remission of 80% of demurrage charges for 150 days. The order of the ... Demurrage - Waiver - Customs - Natural Justice Issues Involved:1. Validity of the detention of goods by Customs Authorities.2. Entitlement to remission of demurrage charges by Bombay Port Trust (B.P.T.).3. Accountability of Customs Authorities for demurrage charges.4. Validity of the B.P.T.'s order rejecting remission of demurrage charges.Issue-wise Detailed Analysis:1. Validity of the Detention of Goods by Customs Authorities:The Petitioners imported stainless steel hot rolled plates under four REP licenses and filed a Bill of Entry for Home Consumption on 20-5-1985. The Customs Authorities refused clearance on the ground that the licenses were not valid. Despite the Petitioners producing another license, clearance was still denied. The Chief Controller of Imports and Exports later clarified that the licenses were valid, but the Customs Authorities did not grant clearance. An adjudication order dated 1-8-1985 confiscated the goods, allowing clearance on payment of a Rs. 3,00,000/- redemption fine. The High Court, in a previous writ petition, set aside this adjudication order and directed the Customs Authorities to issue a detention certificate, which was issued on 9-12-1985.2. Entitlement to Remission of Demurrage Charges by B.P.T.:The Petitioners sought remission of demurrage charges from B.P.T. The B.P.T. policy allowed for remission of 80% of demurrage charges for up to 150 days in cases where goods were detained by Customs for bona fide import control formalities. The Petitioners argued that since the detention was not their fault, they should receive full remission for the entire period of 226 days. However, the court held that under the B.P.T. policy, the Petitioners were entitled to only 80% remission for 150 days.3. Accountability of Customs Authorities for Demurrage Charges:The Petitioners alternatively argued that if B.P.T. could not remit the full amount, the Customs Authorities should be held accountable for the balance. The court rejected this submission, stating that the Customs Authorities were performing their duties in a bona fide manner and there was no statutory provision under the Customs Act to levy the balance amount on them.4. Validity of the B.P.T.'s Order Rejecting Remission of Demurrage Charges:The B.P.T. rejected the Petitioners' request for remission without assigning reasons or granting a personal hearing. The court noted that Section 53 of the Major Port Trusts Act, 1963, did not obligate the Board to record reasons for denying remission. However, the court found the reasons given in the affidavit for rejecting the request to be unreasonable and perverse. The court cited the principle that every action of public authority must be informed by reason and meet the test of Article 14 of the Constitution. Consequently, the order dated 28-7-1986 was set aside.Conclusion:The court ruled that the Petitioners were entitled to remission of 80% of demurrage charges for 150 days. The order of the B.P.T. dated 28-7-1986 was set aside, and Respondent No. 4 was directed to remit/refund the amount accordingly. The rule against Respondents Nos. 2 and 3 was discharged, and each party was ordered to bear its own costs. The operative part of the judgment was stayed till 19-3-1990.