2005 (6) TMI 42 - HC - Customs

Port Authority Negligent on Unclaimed Goods Disposal: Demurrage Charges, Custodian Responsibility

SWAHOM SHIPPING SERVICES PVT. LTD. Versus COMMISSIONER OF CUS. (PORT)

SWAHOM SHIPPING SERVICES PVT. LTD. Versus COMMISSIONER OF CUS. (PORT) - 2005 (190) E.L.T. 436 (Cal.) Issues Involved:1. Entitlement to demurrage charges.2. Responsibility for the clearance and destuffing of containers.3. Actions of the Port Authority and Customs Authorities.4. Liability for costs and expenses incurred during the sale of goods.Issue-wise Detailed Analysis:1. Entitlement to Demurrage Charges:The court examined whether the demurrage charges accrued due to the fault of the petitioners or the Port Authority. It was established that the goods arrived at the port on 13th November 2001 and were not cleared by the importer. Under Sections 48 and 150 of the Customs Act, 1962, and Sections 61, 62, and 63 of the Major Port Trusts Act, 1963, the Port Authority should have taken steps to dispose of the goods within the stipulated period. The Port Authority's failure to act led to unnecessary accrual of demurrage charges. The court held that the Port Authority was negligent and thus disentitled to claim demurrage charges beyond the initial two months.2. Responsibility for the Clearance and Destuffing of Containers:The petitioners argued that they took all reasonable steps to ensure the destuffing of the containers and that the responsibility lay with the Port Authority. The court noted that the Port Authority, as the statutory custodian, was duty-bound to take steps under the law for the disposal of unclaimed goods. The court rejected the argument that the Port Authority was not the custodian until the goods were destuffed, stating that the Port Authority had the jurisdiction and authority to facilitate the sale and destuffing of the goods.3. Actions of the Port Authority and Customs Authorities:The court found that the Port Authority failed to discharge its statutory obligations by not disposing of the goods after the expiry of two months from their arrival. The Customs Authority did not file any affidavit in opposition or claim duty, which the court noted but did not consider relevant to the matter at hand. The court emphasized that the Port Authority should have acted under Section 48 of the Customs Act and the Uncleared Goods (Bill of Entry) Regulations, 1972, to prepare a bill of entry and sell the goods at auction.4. Liability for Costs and Expenses Incurred During the Sale of Goods:The court directed that the costs and expenses incurred by the petitioners for the sale of goods, amounting to Rs. 54,128/-, should be reimbursed from the sale proceeds held by the Special Officer. The remuneration of the Special Officer and his clerk was to be deducted from the sale proceeds before reimbursement. The balance amount, together with any accrued interest, was to be made over to the Port Authority. The court also directed the Port Authority to allow the removal of the containers.Conclusion:The court concluded that the Port Authority was negligent in not taking timely action to dispose of the unclaimed goods and thus was not entitled to claim demurrage charges beyond the initial two months. The petitioners were also found to be partly responsible for not taking lawful action sooner. The demurrage charges accrued from the expiry of two months until 4th April 2003 were to be shared equally by the Port Authority and the petitioners, with the Port Authority waiving charges from 5th April 2003 onwards. The costs and expenses incurred by the petitioners for the sale of goods were to be reimbursed, and the containers were to be allowed to be removed.