TaxTMI 
TaxTMI 
2010 (2) TMI 409
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....erefore, the consignment could not be cleared. It was shifted to the warehouse of CWC gradually from 23rd January 1996 to 11th March 1996. 3. APML filed a Bill of Entry for the import with the customs authorities only on 25th March 1996 for bonded warehousing since storage at the port, where the ground rent was prohibitively high, was not a viable option. It is stated that nevertheless the consignment was stored at the warehouse of the CWC at CFS, Dronagiri where the ground rent was high, i.e., Rs.9 lakhs per month as compared to the rate of Rs.30,000/- per month at the nearby warehouses. Since the customs authorities were delaying the assessment of the consignment, APML requested CWC to waive the demurrage charges in terms of Clause 59 of the General Terms & Conditions of storage. 4. The assessment was finally made by the customs authorities on 18th/19th June 1997. APML paid the entire duty as assessed on the same day. According to the Petitioner, the delay of 15 months in making the assessment was not on account of the Petitioner. The delay by the customs authorities had unnecessarily caused the demurrage to rise to exorbitant levels. The Petitioner sent another letter dated 2....
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....eed to shift the goods at their warehouse at Ambernath subject to the Petitioner bearing the transportation charges. However, in breach of that order, CWC had shifted the goods to Kalamboli and not Ambernath. Taking a serious view of the above act of the CWC in unilaterally and in breach of the order of the court shifting the goods to the Kalamboli where the charges were higher than the charges in Ambernath, the Bombay High Court passed the following order: "(a) The Customs authorities shall issue a detention certificate in respect of the goods imported by the petitioner for the period from the date of filing of bill of entry on May 25, 1996 till the assessment of the goods on June 9, 1997, within a period of two weeks from today. (b) The order passed by the C.W.C. dated July 21, 1997 declining to waive the warehousing charges is quashed and set aside and the C.W.C. is directed to dispose of the waiver application of the petitioner by passing a fresh reasoned order in accordance with law after giving an opportunity of hearing to the petitioner as expeditiously as possible and in any event within a period of six weeks from today. (c) In the event of the C.W.C. declining to....
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....ovember 2007 was dispatched only on 3rd December 2007 and received by APML on 7th December 2007 and therefore it was impossible to meet the deadline of 30th November 2007 as stipulated in the said letter. Moreover, APML disputed the calculation on the basis of which the total demurrage charges were computed as Rs.3,00,88,800/-. It accordingly requested for a detailed computation. In reply more than a month letter on 4th January 2008, the CWC enclosed the basis of the computation. The Petitioner sent a letter dated 11th January 2008 to the CWC highlighting the errors in the computation. APML also sent a corrigendum to its letter dated 11th January 2008 on 21st January 2008. It was clarified that the CWC was liable to claim service tax from 16th August 2002 and not 11th May 2007. 10. When APML did not get any response, it filed the present petition on 18th February 2008. The prayers in this writ petition are for quashing of the aforementioned letters dated 29th November 2007 and 4th January 2008 and for a direction to the CWC to release the consignment of the APML upon payment of any legitimate amount. 11. While directing notice to issue in the present petition on 3rd March....
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....ays time to file an affidavit explaining how the amount now sought to be recovered from the Petitioner, has been calculated in compliance with the above directions. 3. List on 18th January, 2010. Order be given dasti to the counsel for the parties." 14. Consequent to the above order, the CWC filed an additional affidavit dated 15th January 2010. 15. This Court has heard the arguments of Mr. P.S. Patwalia, learned Senior counsel for the Petitioner and Mr. Arun Bhardwaj, learned Senior counsel appearing for the Respondent CWC. 16. At the outset, it is submitted that the bank guarantee was sought to be furnished on 5th December 2008 beyond the time limit fixed by this Court in its interim order dated 18th August 2008 and accordingly not accepted by CWC. The resultant position is that the consignment still remains in the warehouse of the CWC at Kalamboli. 17. Mr. Patwalia states that the industrial policy of the State of Himachal Pradesh where the proposed paper mill was to be set up is expiring in 2010 and therefore if the consignment cannot be made available now, the entire effort of the APML would be rendered futile. Therefore, the Petitioner has come forward to pay any legitima....
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....charges required for open space at CW, Ambernath for storage of 40‟ containers in the open will be @ Rs.48/- + 5% per sq mtr per month if the open space available at the centre is taken on a continuous reservation basis for the actual carpet area of the selected storage space including operation of space, internal roads etc. as required for providing linkage to the storage site. The above rate is not inclusive of handling rates, insurance for the container and cargo and service tax and other government levies which will be payable extra. As per our calculations, the storage area required for the 150 X 40‟ containers will be roughly 6,000 sq mtrs. The insurance charges are applicable at the rate of 5 paise per Rs.100/- value of the stocks per month or part thereof. Service tax and education cess applicable as on date is 12.36% of the storage charges. We are looking forward to your confirmation of your requirements." 19. A further letter was written on 4th October 2007 by the HOPL to the CWC stating that it was interested in finalizing the contract for storage of 40 ft. containers at Ambernath at Rs.48/- + 5% per sq. m per month. Further the following clarifications were ....
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.... square metres per month 35,66,563.55 Waiver at rate of 50% as per the order dated 29th November 2007 17,83,281.78 Insurance Charges 13,11,519.00 Service Tax Charges (Rounded up) 2,00,000.00 Grand Total 35,78,594.71 23. Mr. Arun Bhardwaj, the learned Senior counsel for the CWC in explaining the CWC‟s calculation sheets (according to which APML has to pay Rs.2.03 crores) refers to the CWC‟s additional affidavit where it is first contended that the waiver was conditional upon the payment being made on or before 30th November 2007 which decision was informed telephonically to the Petitioner on 12th November 2007. Since this deadline was crossed, the APML was required to pay the storage charges. Further it is stated that worldwide, containers are always charged on per container basis and that the amount of storage charges as far as CFS is concerned, have been calculated in terms of the prevailing circulars. Since the Petitioner had itself prayed before the Bombay High Court [in prayer clause (d) (ii) of its writ petition] for shifting of the consignment to the warehouse at Ambernath at Rs.100/- per c....
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.... filed against the judgment by APML. 26. Although it is sought to be contended by the CWC that it has not deviated from that order, it appears to this court that what the CWC has calculated now as being due as storage charges from APML is not consistent with that order. The calculations by the CWC includes storage charges for the period from 23.1.1996 till 24.3.1996 whereas the computation in terms of the judgment of the Bombay High Court was to begin from 15th March 1996 (after giving three days‟ „free period‟ after the complete consignment was shifted from Navi Mumbai port to CWC‟s warehouse). APML filed its Bill of Entry on 25th March 1996 and therefore till then it was required to pay rent. However for the period from 25th March 1996 till 18th June 1997 when the assessment was made, APML was not liable to pay storage charges as this was the period, which according to the judgment of the Bombay High Court was to be covered by the detention certificate. However, CWC has in its calculations computed storage charges for the period from 25th March to 24th May 2006 and again from 10th to 18th June 1997. 27. The next phase is from 18th June 1997 till 22nd Decembe....
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....when the Bombay High Court directed it to pay the storage charges payable on the basis of the rates prevailing at Ambernath. 30. The Petitioner has placed on record the relevant circulars which show the revised rates of storage charges. Going by this it appears to this court that the calculations given by the CWC are far beyond what was permitted by the Bombay High Court. Instead of applying its own circulars and in light of the judgment of the Bombay High Court, the CWC has added all kinds of charges to justify its demand. If the CWC had any further clarification to seek in this regard, it could have easily applied to the Bombay High Court. This it did not choose to do. 31. Mr. Bhardwaj referred to the judgments of the Supreme Court in Board of Trustees of the Port of Bombay v. Indian Goods Supplying Co. (1977) 2 SCC 649; International Airport Authority of India v. Grand Slam International (1995) 3 SCC 151 and Trustees of the Port of Madras through its Chairman v. M/s. K.P.V. Sheikh of Mohd. Rowther & Co. Pvt. Ltd. (1997) 10 SCC 285 and urged that even if the unjustified detention of the imported goods resulted in incurring demurrage, the liability to pay the warehousing charges....