2010 (4) TMI 455 - HC - Customs

Court Upholds Partial Demurrage Remission Decision by Port Authority

The Court upheld the partial remission of demurrage charges granted by the Board of Trustees of the Port of Bombay (BPT) to the petitioners, totaling Rs. ... Demurrage Charges - This petition filed under Article 226 of the Constitution of India is directed against the act of refusing to grant remission of demurrage charges of 80% of first 150 days and 50% beyond 150 days by the 1st respondent in violation of their own guidelines which provide for such remission when the detention of the goods by the Custom is for bona fide operations and ITC facilities. Held that- guidelines for remission provide that detention certificate must be for bonafide ITC formalities, petitioner failed to establish this requirement. Port trust to apply goods passed and petitioner not having any locus to claim remission. Case not a special case for section 53. No case of arbitrariness or perversity. Port Trust’s view that remission not available upheld. Issues Involved:1. Refusal to grant remission of demurrage charges by the Board of Trustees of the Port of Bombay.2. Violation of guidelines by the Board of Trustees of the Port of Bombay.3. Discrimination against the petitioners compared to the Gilt Pack case.4. Petitioners' liability for demurrage charges due to Customs' detention of goods.Issue-wise Detailed Analysis:1. Refusal to Grant Remission of Demurrage Charges:The petitioners, dealers and importers of goods, faced refusal from the Board of Trustees of the Port of Bombay (BPT) for remission of demurrage charges on consignments detained by Customs for bona fide operations and ITC facilities. The petitioners argued that they were not responsible for demurrage charges as they were not recognized as owners or importers of the goods during the detention period. They sought remission based on the guidelines providing for such relief when detention is due to bona fide Customs operations.2. Violation of Guidelines by BPT:The petitioners contended that BPT violated its own guidelines by not granting remission for the period from the filing of Bills of Entry to the date of noting in the Bills of Entry. The guidelines allowed remission when goods were detained for bona fide ITC formalities. The petitioners argued that BPT's refusal was arbitrary and contrary to the guidelines, especially since Customs issued detention certificates for the relevant period.3. Discrimination Against Petitioners Compared to Gilt Pack Case:The petitioners highlighted that in a similar case involving Gilt Pack, BPT granted remission for the period prior to the noting of the importer's name in the Bill of Entry. They argued that the refusal to extend the same treatment to them amounted to hostile discrimination, violating Article 14 of the Constitution of India. The petitioners claimed that their situation was factually similar to Gilt Pack, where remission was granted for the period of certified detention due to ITC formalities.4. Petitioners' Liability for Demurrage Charges Due to Customs' Detention:The petitioners argued that they should not suffer financial losses due to Customs' detention of goods. They contended that the goods were not available for clearance due to Customs' actions, and thus, they should not be held liable for demurrage charges. The petitioners sought a direction for the refund of demurrage charges paid, along with interest.Consideration and Judgment:The Court considered the rival contentions and the factual context. It noted that the petitioners were granted partial remission of demurrage charges by BPT, amounting to Rs. 90,52,535/-. The Court observed that BPT had considered the petitioners' case sympathetically and granted remission to the extent justified. The Court found that BPT's refusal to grant further remission was based on guidelines and was not arbitrary or unreasonable.The Court held that the petitioners were not entitled to remission for the period prior to the noting of the Bills of Entry as they did not have title to the goods during that period. The Court also rejected the claim of discrimination, noting that the facts of the Gilt Pack case were different. The Court emphasized that judicial review is concerned with the decision-making process and not the merits of the decision itself.The Court concluded that BPT's decision was fair, reasonable, and in accordance with the guidelines. It found no grounds to interfere with BPT's decision and dismissed the petition, discharging the rule with no order as to costs.