1991 (11) TMI 76 - HC - Customs

Court rules against International Airport Authority of India, allowing petitioners to tranship goods without demurrage fees

The court ruled that the first respondent, International Airport Authority of India (IAAI), was not entitled to charge demurrage fees. The petitioners ... Baggage - Demurrage charges Issues Involved:1. Declaration of the first respondent as a customs warehouse.2. Obligation of the first respondent to waive demurrage charges upon issuance of a detention certificate by customs authorities.3. Liability for payment of demurrage/storage charges.4. Applicability of Public Notices No. 29/86 and 30/86.5. Interpretation of relevant provisions of the Customs Act and related regulations.Detailed Analysis:Declaration of the First Respondent as a Customs Warehouse:The first respondent, International Airport Authority of India (IAAI), was declared a customs warehouse by virtue of Section 45 of the Customs Act, 1962, and the International Airport Authority Act, 1971, specifically under the International Airport Authority (Storage and Processing of Goods) Regulations, 1980. The first respondent was approved as the custodian of detained/mishandled baggage to be stored pending clearance/re-export/disposal under the provisions of the Customs Act.Obligation to Waive Demurrage Charges:The petitioners argued that the first respondent must waive demurrage charges upon the issuance of a detention certificate by customs authorities. The first respondent contended that it was entitled to levy charges under its own regulations and that the customs authorities were not empowered to waive these charges. The court held that the first respondent was bound by Public Notice No. 29/86, which stipulated that warehousing/storage charges should be calculated minus the charges for the period of detention at the instance of Customs, as certified by the Assistant Collector of Customs.Liability for Payment of Demurrage/Storage Charges:The court examined whether the petitioners or the airline carrier (third respondent) were liable to pay demurrage charges. It was noted that the first respondent had calculated charges amounting to Rs. 6,94,980/- based on its regulations and policy of remission/waiver. However, the court found that the first respondent was not entitled to charge demurrage for the period the goods were detained by customs authorities, as per Public Notice No. 29/86.Applicability of Public Notices No. 29/86 and 30/86:Public Notice No. 29/86 was issued for detained/mishandled baggage, whereas Public Notice No. 30/86 applied to imported/export cargo. The court clarified that Public Notice No. 29/86 was applicable in this case as it dealt with baggage and not commercial cargo. The court rejected the argument that unaccompanied baggage should be treated as cargo, affirming that baggage includes unaccompanied baggage.Interpretation of Relevant Provisions:The court interpreted various provisions of the Customs Act, including Sections 2, 8, 44-51, 52-56, and 81, as well as the International Airports Authority of India Regulations. It was concluded that the regulations did not provide for demurrage charges for baggage storage. The court also referenced the Passengers' Baggage (Levy of Fees) Regulations, 1966, which stipulated that no fee shall be levied for baggage detained by customs but released to the passenger as bona fide use.Conclusion:The court ruled that the first respondent was not entitled to charge any demurrage in these cases. The petitioners were entitled to have their goods transhipped to Nepal without payment of any ground rent/demurrage charges. The petitions were allowed, and the rule was made absolute, directing the respondents to allow transhipment of the goods forthwith without any demurrage charges. No order as to costs was made.