Court Orders Release of Withheld Goods, Petitioner Bears Deposit for Demurrage, Customs to Cover Charges in Some Cases

The court ordered the release of goods withheld by Customs Department, with the petitioner required to make a deposit towards demurrage, provide property security, and undertake to pay if the petition is dismissed. The court emphasized the principle that importers should not bear charges when not at fault, directing Customs to bear charges in certain situations. This decision aimed to balance the petitioner's rights while addressing unresolved legal aspects of demurrage liability, considering pending cases related to the issue.

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Issues:
Dispute over demurrage charges in the case of goods illegally withheld by Customs Department.

Analysis:
1. The petitioner, engaged in manufacturing and trading, faced illegal detention of goods by Customs on suspicion of undervaluation. Despite representations, the goods were confiscated, and penalties imposed. The Commissioner of Customs later ordered payment of duty and penalty, with an option for goods' release. An appeal led to unconditional release by the Commissioner of Customs (Appeals).

2. The Customs issued detention certificates citing undervaluation investigations, leading to prolonged detention. Despite appeals and representations, the petitioner faced demurrage charges. The petitioner argued that these charges should be borne by the Customs, responsible for the illegal withholding of goods.

3. Legal precedents, including International Airports Authority of India case, highlighted the authority's right to charge demurrages and hold importers liable even for delays caused by Customs. However, exceptions existed, such as cases where Customs themselves admitted fault, as seen in Union of India v. Sanjeev Woollen Mills.

4. The petitioner's plea for release without demurrage payment, given the Customs' fault, aligned with the principle that importers should not bear charges when not at fault, as seen in Om Petro Chemicals case. The court emphasized the importance of equity in such matters, directing Customs to bear charges in certain situations.

5. Considering pending cases related to demurrage liability, the court ordered the goods' release with specific conditions: a deposit towards demurrage, property security, and an undertaking to pay if the petition is dismissed. This decision aimed to balance the petitioner's rights while addressing the unresolved legal aspects of demurrage liability.

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