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Issues: (i) Whether the Central Warehousing Corporation could be compelled to release the imported goods without payment of storage and demurrage charges on the strength of the customs appellate order and detention certificate; (ii) whether the liability to bear the storage and demurrage charges should, in the facts of the case, be shifted to the Customs authorities who were responsible for the wrongful detention of the goods.
Issue (i): Whether the Central Warehousing Corporation could be compelled to release the imported goods without payment of storage and demurrage charges on the strength of the customs appellate order and detention certificate.
Analysis: The imported goods remained in the custody of a statutory warehouse keeper under the Customs Act and the Warehousing Corporations Act. The Court applied the principle that a custodian is entitled to recover lawful storage and demurrage charges even where the importer is prevented from clearance by customs detention. The customs appellate order and detention certificate did not, by themselves, extinguish the statutory and contractual right to recover custody charges from the importer.
Conclusion: The issue was answered against the importer. The Central Warehousing Corporation was not bound to release the goods free of storage and demurrage charges.
Issue (ii): Whether the liability to bear the storage and demurrage charges should, in the facts of the case, be shifted to the Customs authorities who were responsible for the wrongful detention of the goods.
Analysis: The Court held that the importer was not at fault for the detention and that the Customs authorities had accepted the appellate order and issued the clearance certificate. Relying on the constitutional requirement of reasonableness and non-arbitrariness, the Court found it unjust to compel the importer to pay first and seek reimbursement later. The burden of the charges was therefore directed to be shifted to the Customs authorities responsible for the delay.
Conclusion: The issue was answered in favour of the importer. The Customs authorities were directed to pay the storage and demurrage dues to the custodian.
Final Conclusion: The writ petition succeeded in substance: the importer was not required to bear the detention-related charges, and the Customs authorities were made liable to satisfy those dues so that the goods could be released.
Ratio Decidendi: A statutory custodian may recover storage and demurrage charges for imported goods, but where customs detention is wrongful and the importer is not at fault, the court may direct the Customs authorities responsible for the delay to bear those charges in order to avoid arbitrariness.
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