2009 (11) TMI 436 - HC - Customs

Customs Authority Directed to Pay Demurrage Charges for Goods Detained: Precedent Upheld

RK. ENTERPRISES Versus BOARD OF TRUSTEES, CHENNAI PORT TRUST

The court ruled in favor of the petitioner, directing the customs authority to pay demurrage charges for goods detained without fault on the importer. The ... Demurrage charges- The petitioner submitted that the goods imported through bill of entry No. 294360 dated 27-9-2000 were allowed clearance by M/s. C.C.T.L, Chennai after full waiver of demurrage charges based on the detention certificate issued by the second respondent. However in respect of other bill of entry, the first respondent refused to waive the demurrage charges and sent a letter dated 2-12- 2003 to the petitioner and demanded a sum of Rs. 2,03,201/- being the demur- rage charges. The said order passed by the first respondent is impugned in this writ petition before this court. Held that- submission of custom that port trust to waive demurrage charges. Number of decisions of Supreme Court and High Court that Custom alone is liable to pay demurrage charges for goods detained in port trust premises as instance of customs. Customs directed to pay said charges and goods be released. Issues:1. Petitioner's request for direction to pay demurrage charges by second and third respondents.2. Detention of goods by customs authorities leading to demurrage charges.3. Dispute over waiver of demurrage charges between petitioner and first respondent.Issue 1:The petitioner sought a direction for the second and third respondents to pay demurrage charges incurred during the detention of imported goods. The petitioner imported diodes in two consignments, which were detained by the customs authorities due to suspicion of undervaluation. After investigation and dropping of charges, the customs officers examined the goods and passed a release order. However, the petitioner claimed that the demurrage charges incurred during the detention period were not paid, leading to the request for a detention certificate and subsequent writ petition for the issuance of the certificate.Issue 2:The petitioner argued that the customs authorities were solely responsible for the detention of goods and should bear the demurrage charges. The petitioner relied on legal precedents, including judgments by the Supreme Court and various High Courts, which held that when goods are detained by customs without fault on the part of the importer, the customs authorities are liable to pay demurrage charges. The court concurred with this argument, stating that the customs authority cannot evade the responsibility of paying demurrage charges for the goods detained in the first respondent's premises.Issue 3:A dispute arose regarding the waiver of demurrage charges between the petitioner and the first respondent, the Chennai Port Trust. The first respondent demanded demurrage charges for one consignment while the other consignment was cleared with a waiver based on the detention certificate issued by the customs authority. The first respondent contended that charges must be paid for the space occupied by the goods and cited the Tariff Authority for Major Ports regulations. However, the court held that based on legal principles and previous judgments, the customs authority was liable to pay demurrage charges for the goods detained, and directed the second respondent to settle the charges with the first respondent.Overall, the judgment emphasized the liability of the customs authority to pay demurrage charges for goods detained without fault on the part of the importer, as established by legal precedents and statutory provisions. The court's decision favored the petitioner's claim, directing the customs authority to settle the demurrage charges with the port trust and release the goods accordingly.