1995 (3) TMI 105 - SC - Customs

Consignees Liable for Demurrage & Harbour Dues, Customs Duty Not Leviable on Supplies

The Supreme Court upheld the High Court's decision that consignees are liable for demurrage charges and harbour dues payable to the Port Trust of Madras, ... Whether the demurrage charges, harbour dues, etc. payable to the Port Trust of Madras were to be recovered from the consignee of the goods or from the 'steamer agent'? Held that:- No ground to differ with the reasoning and the conclusions reached by the Division Bench of the High Court that the consignee was liable to pay the charges. Appeal dismissed. Issues:1. Liability for demurrage charges, harbour dues, etc. payable to the Port Trust of Madras - consignee or 'steamer agent.'2. Interpretation of judgments regarding liability for demurrage charges.3. Customs duty leviable in respect of stores supplied out of bonded stock to 'daughter vessels.'Analysis:1. The judgment addressed the issue of liability for demurrage charges and harbour dues payable to the Port Trust of Madras, specifically whether these charges are to be recovered from the consignee of the goods or from the 'steamer agent.' The High Court concluded that the consignee is liable to pay the charges based on the provisions of the Port Trust Act and the contractual obligations between the parties. It was emphasized that once the goods are handed over to the Port Trust, the steamer agent's responsibility for the goods ends, and any subsequent detention by the Port Trust, even due to customs intervention, does not impose additional liability on the steamer or its agents beyond the contract with the shipper. The judgment highlighted that imposing such responsibility on carriers would be unreasonable and not contemplated by the original contract.2. The appellant relied on a previous judgment to argue that the 'steamer agent' should be liable for the charges. However, the High Court distinguished the cited judgment, emphasizing that it pertained to services rendered by the Port Trust at the time of landing and removal of goods, whereas the current case concerned demurrage charges after the goods were in the custody of the Port Trust and the consignee had taken possession. The Supreme Court agreed with the High Court's reasoning and conclusions, citing another case where an authority under a statute was entitled to charge demurrages for imported goods in its custody, making the importer or consignee liable for such charges even during delays caused by customs or other authorities.3. The judgment also addressed the issue of customs duty leviable in respect of stores supplied from bonded stock to 'daughter vessels.' The High Court concluded that the supplies made to daughter vessels should be considered as supplies made to foreign vessels, and therefore, no customs duty would be leviable. The Supreme Court upheld this reasoning, emphasizing that daughter vessels were merely a means to discharge cargo on land and should be treated no differently from the foreign vessels themselves. The appeals related to this issue were dismissed, with the Supreme Court agreeing with the conclusions of the High Court's Division Bench.In conclusion, the Supreme Court dismissed the appeal related to liability for demurrage charges, upheld the High Court's decision on customs duty leviable for supplies to daughter vessels, and dismissed all related appeals accordingly.