2023 (2) TMI 681 - HC - Customs

Court upholds CONCOR's right to levy charges under Customs Act, dismissing petitioner's waiver request. Negligence claims not actionable.

The court upheld CONCOR's right to levy charges under Section 63 of the Customs Act, dismissing the petitioner's request for waiver of demurrage/detention ... Waiver of demurrage/detention charges - Interpretation of Regulation 6(1)(l) of HCCAR, 2009 as subject to any other law for the time being in force - Section 63 of the Customs Act - right of warehouse keeper to levy rent and warehouse charges - Power of the Settlement Commission under Section 127F of the Customs Act to exercise powers of a customs officer - Mandamus against a private Cargo Service Provider to waive chargesWaiver of demurrage/detention charges - Interpretation of Regulation 6(1)(l) of HCCAR, 2009 as subject to any other law for the time being in force - Section 63 of the Customs Act - right of warehouse keeper to levy rent and warehouse charges - Mandamus against a private Cargo Service Provider to waive charges - Whether Respondent No.2 (CONCOR) was bound to waive Terminal Service Charges (demurrage/detention) upon issuance of a detention certificate and/or in view of Regulation 6(1)(l) of HCCAR, 2009. - HELD THAT: - The Court examined Regulation 6(1)(l) of HCCAR, 2009 which provides that, subject to any other law for the time being in force, a Custom Cargo Service Provider shall not charge rent or demurrage on goods seized or detained. Because the regulation is expressly subject to other law, Section 63 of the Customs Act - which then conferred on the warehouse keeper the right to levy rent and warehouse charges - had primacy at the relevant time. The Court relied on precedents holding that customs authorities cannot direct a carrier or warehouseman to waive charges and that waiver cannot be compelled by mandamus against private service providers who have invested in and operate commercial warehousing facilities. The Division Bench decision in Trip Communication and subsequent authorities were held to support refusal of waiver where a penalty/fine has been imposed. The Court also observed the public interest and commercial considerations underlying CONCOR's policy and concluded that it was not open to the Court to direct CONCOR to waive its charges in the facts of this case. [Paras 39, 41, 45, 51, 52]The petition seeking waiver of Terminal Service Charges was rejected; CONCOR was not directed to waive demurrage/detention charges.Power of the Settlement Commission under Section 127F of the Customs Act to exercise powers of a customs officer - Applicability of CONCOR policy where a penalty has been imposed - Whether the penalty imposed by the Settlement Commission amounts to a penalty imposed by a customs authority for purposes of CONCOR's policy denying waiver where a penalty/fine has been imposed. - HELD THAT: - The Court noted Section 127F which confers on the Settlement Commission the powers vested in an officer of customs and observed that when the Settlement Commission settles cases under the Customs Act it exercises powers of a customs authority. Consequently, a penalty imposed by the Settlement Commission is to be treated as a penalty imposed by customs. The petitioner's contention that the Settlement Commission is not a customs authority and therefore CONCOR's policy would not apply was rejected on this statutory basis and in view of relevant authorities. [Paras 47, 48, 49]Penalty imposed by the Settlement Commission is to be treated as a penalty imposed by a customs authority and, therefore, CONCOR's policy precluding waiver in such cases applied.Mandamus against a private Cargo Service Provider to waive charges - Writ relief for negligence or apathy of customs authorities - Whether the Court could, in writ jurisdiction, adjudicate claims of negligence/apathy against the respondents or direct initiation of disciplinary action against CONCOR under HCCAR, 2009. - HELD THAT: - The Court reiterated that allegations of negligence and apathy of respondents do not readily translate into relief in a writ petition under Article 226 where the relief sought would require directing a private cargo service provider to waive charges. The Court relied on precedent holding that mandamus cannot be issued to compel a cargo/warehouse operator to waive demurrage and that negligence claims of this nature are not appropriately remedied in such writ proceedings. Accordingly, the Court declined to entertain prayers for compensation, for directions to initiate action against CONCOR, or for other such reliefs in the present proceedings. [Paras 46, 53]Claims for compensation, directions against CONCOR for alleged violation of HCCAR, 2009, and related negligence claims were not granted; such reliefs were not allowed in the writ petition.Final Conclusion: Writ petition dismissed. The Court held that Regulation 6(1)(l) of HCCAR, 2009 is subject to other law in force (notably Section 63 at the relevant time), a penalty imposed by the Settlement Commission is to be treated as a penalty by a customs authority, and the Court will not direct a private Cargo Service Provider to waive demurrage/detention charges or grant the claimed reliefs for negligence in this writ proceeding. Issues Involved:1. Waiver of demurrage/detention charges.2. Compensation for negligence and apathy leading to perishing/deterioration of goods.3. Action against respondent for violation of Handling of Cargo in Customs Area Regulations, 2009 (HCCAR, 2009).Issue-wise Detailed Analysis:1. Waiver of Demurrage/Detention Charges:The petitioner sought the release of goods without charging demurrage/detention charges, citing Regulation 6(1)(l) of HCCAR, 2009, which states that no rent or demurrage should be charged on goods seized or detained by customs. The petitioner argued that CONCOR, as a Customs Cargo Service Provider, is bound by these regulations and should waive the charges once a detention certificate is issued by customs.CONCOR countered that Section 63 of the Customs Act, 1962, which was in force at the time, empowers warehouse keepers to levy rent and warehouse charges. They argued that Regulation 6(1)(l) of HCCAR, 2009, is subject to any other law in force, including Section 63. Therefore, CONCOR's policy of not waiving charges in cases where penalties or fines were imposed by customs authorities was not in violation of any legislation.The court agreed with CONCOR, stating that Regulation 6(1)(l) of HCCAR, 2009, is subject to Section 63 of the Customs Act, which was in force when the waiver was denied. The court also referred to the Division Bench's decision in Trip Communication Pvt. Ltd. Vs Union of India, which supported the view that if penalties or fines are imposed, the importer is liable to pay the charges. The court held that the Settlement Commission, while imposing penalties, acts as a customs authority, making the petitioner's case ineligible for waiver under CONCOR's policy.2. Compensation for Negligence and Apathy Leading to Perishing/Deterioration of Goods:The petitioner claimed compensation for the deterioration of goods due to the negligence and apathy of the respondents, particularly the delay in issuing the provisional release order and the harsh conditions imposed for release.The court dismissed this claim, stating that the negligence and apathy of the respondents cannot be adjudicated in a writ proceeding under Article 226 of the Constitution of India.3. Action Against Respondent for Violation of HCCAR, 2009:The petitioner sought action against the respondent for violating HCCAR, 2009, by imposing demurrage/detention charges despite the issuance of a detention certificate by customs.The court found no violation of HCCAR, 2009, by CONCOR. It held that CONCOR's policy of not waiving charges in cases where penalties or fines were imposed was consistent with Section 63 of the Customs Act, which was in force at the relevant time. The court also referenced the decision in Monika India Vs Union of India, which stated that customs authorities can issue detention certificates but cannot direct Cargo Service Providers to waive charges.Conclusion:The court dismissed the writ petition, upholding CONCOR's right to levy charges under Section 63 of the Customs Act and finding no violation of HCCAR, 2009. The court also dismissed the claims for compensation and action against the respondent, stating that these issues cannot be adjudicated in a writ proceeding.