Lawful seizure and post-adjudication detention: Customs liability for demurrage arises only after confiscation is set aside and release is delayed.

During lawful seizure and adjudication, the importer remained liable for demurrage, warehousing and storage charges because detention under show-cause proceedings did not make custody unlawful for that period. Once the appellate tribunal set aside confiscation and penalty, the Customs authorities were bound to release the consignments forthwith, and continued retention thereafter lacked lawful justification. Liability therefore shifted to the Customs authorities only for charges incurred after the adjudication proceedings ended and up to the respective dates of release, while claims for the earlier period were not maintainable. Recovery was limited to the post-adjudication period, subject to verification.

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Issues: Whether the Customs authorities were liable to reimburse demurrage, warehousing and storage charges for the period after conclusion of the adjudication proceedings and release of the imported consignments.

Analysis: The importer remained liable to pay demurrage during the pendency of seizure and adjudication proceedings, because lawful seizure followed by show-cause notice did not make the detention unlawful for that period and the importer's liability to the warehousing authority continued. However, once the appellate tribunal set aside confiscation and penalty and the adjudication proceedings came to an end, the Customs authorities were bound to give effect to that order and release the goods forthwith. Retention of the consignments thereafter had no lawful justification and amounted to unlawful detention, giving rise to liability for the charges incurred after that date. The claim for the earlier period was therefore not maintainable, but the claim for the post-adjudication period was.

Conclusion: The Customs authorities were not liable for charges incurred up to the end of the adjudication proceedings, but were liable to reimburse the charges incurred from 17 February 2000 until the respective dates of release for the consignments covered by the order.

Final Conclusion: Relief was granted only for the period of unlawful detention after the adjudication proceedings concluded, and the importer was left to recover demurrage and storage charges for that post-adjudication period upon verification by the Customs authorities.

Ratio Decidendi: Liability for demurrage rests on the importer during lawful detention pending adjudication, but once confiscation is set aside and the authorities are obliged to release the goods, continued retention becomes unlawful and the Customs authorities become liable for the resulting post-adjudication charges.

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