TaxTMI 
TaxTMI 
2010 (10) TMI 91
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....the said consignments were lying for shipment on, 11th June 2001 the officers of the Department of Revenue Intelligence ("DRI") detained the consignments for some investigation. On 4th July 2001, the DRI referred the investigation to the Commissioner of Customs (Preventive). On 6th July 2001 SAM Aviation requested the AAI for waiver of demurrage charges. On 11th July 2001 the Petitioner was summoned by the Commissioner of Customs (Air Cargo Preventive) for giving evidence and producing documents in respect of the enquiry being conducted with regard to the consignments. 3. By a letter dated 20th July 2001 the AAI directed SAM Aviation to produce certain documents for considering their request for waiver of demurrage charges. In the meanwhile, the DRI completed its investigation and referred the matter again to the Customs (Preventive). Subsequently the investigation with regard to the market value was also completed by the Customs (Preventive). 4. On 14th August 2001 SAM Aviation submitted relevant documents and requested for consideration of their case on a priority basis as the export had been held up since 11th June 2001. It is stated that the Petitioner by a letter dated 18th ....
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....from your side." (emphasis supplied) 8. It is stated that by this time, the goods in question had accrued a demurrage of Rs. 46 lakhs. In these circumstances, the present petition was filed on 4th September 2001 seeking the reliefs mentioned hereinbefore. 9. By an interim order dated 20th December 2001, this Court permitted the Petitioner to shift the goods to the Customs Department Bonded Warehouse but further directed that the goods will not be removed without the permission of the Court. It was clarified that the AAI will continue to have a lien over the goods for the amount which may be due to it towards demurrage. The Petitioner was asked to pay the required charges to the Customs Department for storage of the goods in the bonded warehouse. 10. Two principal contentions were advanced by Mr. G.L. Rawal, learned Senior counsel appearing for the Petitioner. The first is that to justify retaining lien over the goods AAI has relied upon Regulation 3 of the International Airports Authority (Storage and Processing of Goods) Regulations, 1993 ("1993 Regulations") framed under Section 37 of the International Airports Authority Act, 1971 (IAAI Act) which has since been repealed, and....
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....sion of a Division Bench of Andhra Pradesh High Court in Sujana Steels Ltd. v. Commissioner of Customs & Central Excise 2002 (141) ELT 51 (AP). 12. Appearing for the AAI, Mr. Aruneshwar Gupta, learned counsel points out that the Customs Department has no powers and cannot regulate the activities of the AAI. The AAI acts as bailee vis-a-vis the consignee, and is governed by the provisions of Sections 152 and 161 of the Contract Act, 1872 ("CA"). The power of the AAI to levy demurrage charges flows from the IAAI Act read with the 1993 Regulations. He placed reliance on the decisions of the Supreme Court in Shipping Corporation of India v. C.L. Jain Woolen Mills (2001) 5 SCC 345, International Airport Authority v. Grand Slam International (1995) 3 SCC 151 and P.V. Mohd. Barmay Sons v. Director of Enforcement (1993) Supp. 2 SCC 724. As regards the repeal of the IAAI Act, it is submitted that it did not result in the automatic repeal of the 1993 Regulations. According to Mr. Gupta, Section 24 of the GCA is a complete answer. He placed reliance on the judgments in Poonjabhai Varmalidas v. Commissioner of Income Tax AIR 1991 SC 1; Neel @ Niranjan Majumdar v. State of West Bengal AIR 197....
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....I to communicate the demurrage charges. On the other hand it does appear that the Petitioner was never prepared to pay any demurrage charges as is evident from its letter dated 27th August 2001. One possible reason may have been that since the demurrage charges had already accumulated to Rs. 46 lakhs, the Petitioner decided to contest the demand and therefore, filed this petition in early September 2001. In the circumstances this Court is unable to conclude that AAI was under an obligation to communicate to the Petitioner the exact demurrage charges and that the failure to do so would exempt the Petitioner from paying the demurrage charges. 15. As regards the applicability of the 1993 Regulations, this Court is inclined to accept the submission of the learned counsel for the AAI that in view of Section 24 of the GCA, the 1993 Regulations continued to be applicable and ought to be treated as having been enacted under Section 42 of the 1994 Act read with Section 46(1) thereof till such time the 2003 Regulations came into force. In Chief Inspector of Mines v. K.C. Thapar AIR 1961 SC 838, a more or less similar situation arose. In para 20 it was explained as under (AIR @ p. 845): "2....