TaxTMI 
TaxTMI 
2020 (5) TMI 542
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....on claims that the usage of PVC Resin is intermediary to manufacture bottles containing sanitizers, masks and personal protective equipments (PPE), helmets, goggles or other garments etc., which are urgently needed to meet the requirements to contain Covid 19. 2. Respondent No.3 is the association of Container Freight Stations, whose members are involved in the overall movement and handling of the containers. 3. It has been stated that due to lock down since 22nd March, 2020, several shipments/ containers belonging to the importers/traders associated with petitioner/Foundation could not be lifted from respective ports due to non availability of transport and labour. It is alleged that the respondent No.3 and its members i.e. respondents No. 4 to 6, are not permitting the traders/members of petitioner/Foundation to lift their material from their respective ports without payment of penal charges. In this petition, a direction is sought to direct respondents No.1 & 2 to further direct respondents No.3 to 6 and all other CFSs not to charge demurrage, ground rent, container detention charges etc. till the lockdown is functional and to permit traders/members of petitioner/Foundation to....
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....g from Mudra and Jam Nagar ports in Gujrat, which are not Major Ports. 9. It was further submitted by learned CGSC that CFSs are not custom stations, but are declared as customs areas by virtue of Section 8 of Customs Act, 1962 read with Handling of Cargo in Custom Area Regulations, 2009 by the Principal Commissioner or Commissioner of Customs and their functions are under the control of customs. It was submitted that these Regulations also decide the manner in which the goods imported/exported, shall be received, stored and delivered in the customs area and are applicable to all 'Custom Cargo Service Providers" (CCPs) and would cover all custom facilities ports, airports, ICDs, CFSs and Land Customs Station (LCSs). 10. Lastly, it was submitted that the letter of 23rd April, 2020 issued by first respondent is binding upon Custom Cargo Service Providers, including Container Freight Stations (CFSs) operating under "Major Ports" and all other CFSs operating under other ports, are bound to adhere to the advisories issued by their respective Commensurate. 11. On behalf of Respondent No.2/Ministry of Shipping, learned Additional Solicitor General (ASG), submitted that the Government o....
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....0 applies only on "Major Ports" and upon those CFSs /ICDs who operate from Major Ports and that there are no ICDs located within the port limits of Major Ports and only a select few CFSs operators are located at Major Ports, except two out of Kandla Port and Jawaharlal Nehru Port, whose tariff are determined by TAMP which is situated in Mumbai and not by Respondent No.2/Ministry of Shipping. It was also stated on behalf of second respondent that none of the Major Ports have any ability to influence or be privy to the tariffs/ charges levied by the CFS and ICD operators upon their respective customers/ clients/users. 15. It was further submitted by learned ASG that respondent No.2 as well as Major Ports have no information on record of the operational cost and expenses of any CFSs/ICDs, except that those which are situated within the port limits of Major Ports and consequently pay rent onto the Major Ports and that the respondent No.2 as well as Major Ports have no administrative control over respondents No.3 to 6 and it has no idea about the cost and expenses or rent and charges levied by any CFS/ICD, which is entirely a private arrangement executed by CFS and ICD with its custome....
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....t and the facts of each case are different. However, it was submitted that in all the cases charges / rates levied are either published or posted on websites and available on public domain, which are already discounted rates and the choice of shipping line is with the cargo interest and hence, the cargo owner chooses them with full knowledge of rates charged by these respondents and only after the CFS members obtain the delivery order from the shipping line/ company, after payment of necessary charges qua freight, custom clearance including custom duty, fine and penalty, if any, etc., that the CFS members give delivery. 21. Learned senior counsel submitted that an importer also has the option to take direct delivery from the shipping line at the port itself immediately on discharge within 48 hours and in case the importer does not avail of this facility, such importer cannot thereafter claim any benefit or waiver or exemption from CFS charges. It was stated that a few traders have themselves chosen to keep their goods at CFSs at their own risk and, therefore, they cannot avoid the circumstances and claim benefit. 22. Learned senior counsel pointed out that to provide service to t....
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...., 2020 directing its members to offer discounts on the ground rent and quite a many importers have already availed of its benefit. 26. It is submitted that if any container/ material of any of the member of petitioner/Foundation is lying at any facility of respondent No.3, the said relationship between the consignor/consignee/ cargo interest is purely contractual and that of a bailor and bailee. It is submitted that respondents No.1 & 2 cannot in any way govern or modify the terms of arrangement between the two private parties under a contract and that the term "disaster management" under Section 2(e) of the Disaster Management Act, 2005, nowhere empowers the Government or concerned authorities to regulate the relationship between two private parties. 27. Learned senior counsel for respondents No. 3 to 6 also submitted that only ground rent remains with respondents No. 3 to 6, rest of the payments are made to the contractors. 28. Lastly, learned senior counsel for respondents No.3 to 6 has relied upon Hon'ble Supreme Court's decisions in Navodya Vidyalya Samiti & Anr. Vs. Afshan Khan & Ors. (2019) 11 SCC 548 and State of U.P. & others Vs. Ram Sukhi Devi (2005) 8 SCC 733, to subm....
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....at stand of respondents No.1 & 2 that respondents No. 3 to 6 cannot be bound by the order dated 21st April, 2020, is highly arbitrary as the Director General of Shipping in his order dated 31st March, 2020 has specifically directed that Major Port shall ensure that benefit of waiver/ remission are extended to the end customer by the ports. 31. It is further submitted by petitioner's counsel that petitioner/Foundation is not seeking complete waiver of charges levied by CFS on importers/ traders for handling and clearance of cargo, but is praying for waving off of ground rent penal charges, demurrage, Container Detention Charges etc., especially when they themselves have been exempted from paying Port ground rent charges during the lock down. It is submitted that respondents No.3 to 6 are bound to follow the directions/ advisories/ notifications issued by second respondent under Section 111 of the Major Port Trust Act, 1963. 32. Lastly, it is submitted by counsel for the petitioner that the various decisions relied upon by learned senior counsel for respondents No. 3 to 6 do not apply in the case, as in those cases interim relief was not denied under extra ordinary circumstances fa....
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....tters/ guidelines/ instructions dated 31.03.2020 and 21.04.2020 are addressed to the Major Ports and were issued under Section 111 of the Major Port Trusts Act, 1963 and any reliance placed upon them by Ld. Counsel for the petitioner is, therefore, misplaced. 35. Guidelines dt. 31.03.2020 were issued by Ministry of Shipping to Major Ports regarding Exemptions /Remission on penalties etc. and issues relating to Force Majeure and it runs as follows: No. PD-14300/4/2020-PD VII Government of India Ministry of Shipping 31.03.2020 To, Chairperson & CMD All Major Ports. Sub.: Guidelines to Major Ports on (i) Exemptions/Remission on penalties etc. and (ii) Issues relating to Force Majeure Part A- Exemptions/Remission of Penalties etc. Ministry of Home Affairs, Government of India had issued order No 40-3 /2020-DM-1 (A) dated 24 .03.2020 to impose lockdown for a period of 21 days to contain C'OVID- 19 pandemic in the country. 2. Further, Ministry of Home Affairs. Government of India had vide its order No. 40-J/2020-DM-l (A) dated 25.03.2020 issued an addendum specifically giving exceptions to the operations of seaports for cargo movement and inter-state movemen....
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....e fact that each Major Port needs to remain operational during the COVlD-19 pandemic and continue cargo operations in all respects. 8. In view of the situation arising because of the COVID-19 pandemic and after considering the representations received from various stakeholders, Major Ports are directed that - (i) The period for completion of any Project under implementation in PPP mode or otherwise, can be extended by the Ports. (ii) For existing and operational PPP projects, the Major Ports can permit waiver of all penal consequences on a case-to-case basis along with deferment of performance obligations as per relevant provisions of Concession Agreement. (iii)The period of Force Majeure starts from the date of order of Ministry or Finance referred above and will end when the competent authority so orders. 9. The above order issues under Section 111 of Major Port Trusts Act, 1963 with the approval of Hon'ble Minister of State for Shipping (IC) and to be implemented with immediate effect. (Arvind Chaudhary) Director. Copy to: (i) PS to Hon' ble Minister (lC) (ii) PS to Secretary(S) (iii) PS to AS(S) (iv) PS to JS( P)/JS (S)/JS(SM)/JS (PPP) (v) PS t....
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....see. This shall be applicable only for the annual lease rentals/licence fee to be received by port for year 2020. (iii) Other Charges, penalties etc.: Ports shall ensure that no penal charges, demurrages, detention charges, dwell time charges, anchorage charges, penal berth hire charges, performance related penalties etc. are levied on any port user (traders, importer, exporters, shipping lines, concessionaires, licensees, CFS, etc.)for any delay in berthing, loading/unloading operations or evacuation/arrival of cargo during the Lock-down Period plus 30 days recovery period. (iv) Additional land for storage: If requisite additional land is available within port area, the port shall make all efforts to provide the additional storage land to port users, on temporary basis, without any charges, rentals, fee etc upto 30th June 2020 on 'as is where is' basis. 4. Remission of charges to PPP concessionaire Due to the impact of COVJD and lockdown measures, there is drop in cargo volume at several Public Private Partnership (PPP) berths/terminals in Major Ports. Therefore, ports shall extend the following to such PPP concessionaires; (i) Revenue share, royalty and equipmen....
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....e Due/Vessel related charges: Ports shall allow interest free 60 days deferment of marine dues/ vessel related charges to Indian coastal vessels, if requested by vessel operators. Ports shall obtain requisite Bank Guarantee, as security, from coastal vessel operators for the same. Only deferment requests received by 30th May 2020 shall be considered. 6. Force Majeure: The Ministry of Finance vide OM No.18/4/2020-PPD dated 19th February. 2020 inter alia citing "A Force majeure (FM) means extraordinary events or circumstances beyond human control such as an event described as an Act of God (like natural caiamity)" has clarified that spread of corona virus should be considered as a case of natural calamity and Force Majeure may be invoked. The Ministry of Shipping, Government of India through Order No PD- 13/33/2020-PPP/e-339106 dated 20.03.2020 and letter dated 24'h March, 2020 has already intimated the Major Ports that the COVID-19 pandemic shall be considered as a 'natural calamity' that would entitle invocation of' force majeure' provisions inasmuch as obligations under various contracts (involving the Major Ports) are concerned. The aforesaid orders do....
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....S to JS(P)/JS(S)/JS(SM)/JS(PPP)/JS(A) (viii) MD, IPA (ix) All Director/DS in Ministry of Shipping 37. Perusal of the above letters/circulars reveals that these only apply to Major Ports and since cargo of the petitioner is lying at Mudra and Jam Nagar ports, the petitioner cannot derive any benefit on the basis of the same and, therefore, reliance placed upon these letters by Ld. Counsel for the petitioner is misplaced and does not help the petitioner in any manner. 38. Let this court now examine the advisories issued by Director General of shipping which is a regulatory body authorized by the Central Govt., Ministry of Shipping under the Merchant Shipping Act, 1958 regarding waiver of ground rent and penal charges. The advisories dated 29.03.2020 and 31.03.2020 are quoted below for ready reference:- GOVERNMENT OF INDIA MINISTRY OF SHIPPING DIIRECTORA TE GENERAL OF SHIPPING, MUMBAI F.NQ.,.MJO/Review Schedule-II (1)/20 19 Dated 29.03.2020 DGS Order No. 07 of 2020 Sub.: Advisory on non-charging of container detention charges on import shipments 1. Whereas, the Ministry of Home Affairs, Government of India has issued order No 40-3/2020-DM-1 (A) dated 24.03.2020 to impose....
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.... Ministry of Shipping, Transport Bhawan, I, Parliament Street, New Delhi-11000 1 (Attn.: Shri P. Chhabra, Deputy Chief Controller of Chartering). The letter dated 31.03.2020 issued by Ministry of Shipping runs as follows:- GOVERNMENT OF INDIA MINISTRY OF SHIPPING DIIRECTORA TE GENERAL OF SHIPPING, MUMBAI F.No. MTO/Review Schedule-II(1)/2019 Dated 31 .03.2020 DGS Order No. 08 of 2020 Sub.: Advisory on non-charging of any demurrage, ground rent beyond the allowed free period or any performance related penalty on non-containerized cargo during the period of effect of Covid-l9 pandemic. 1. Whereas, the Ministry of Home Affairs, Government of India has issued order No 40- 3/2020-DM-l (A) dated 24.03.2020 to impose a complete lockdown in India for a period of 2l days in view of the threat posed by the spread of COVID-I9 pandemic. 2. Whereas, the Ministry of Home Affairs has vide its order No 403/2020-DMJ (A) dated 25.03.2020 issued an addendum to the Guidelines annexed to the said order, exempting seaports and its operational organisations from this lockdown to ensure regular supply of goods in the country. 3. Whereas, the Government is working towards smooth function....
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....ly agreed and availed as part of any negotiated contractual terms. During this period the shipping companies (and their agents) are also advised not impose any new or additional charge. This decision is a onetime measure to factor-in the present situation arising out of the COVID-l9 pandemic. (Amitabh Kumar) Director General of Shipping To I. All stakeholders concerned, through DGS Website. 2. Shipping Corporation of lndia, Mumbai. 3. Indian Ports Association, New Delhi. 4. Indian Private Ports & Terminal Association, Mumbai. 5. Container Freight Station Association of India. 6. Container Shipping Lines Association, Mumbai. 7 INSA, Mumbai 8. 1CCSA, Mumbai. 9. Inland Importers and Consumer Association, Delhi. 10. Timber Importer Association, Maharashtra. 11. Association of Multimodal Transport Operators Association of India, Mumbai. Copy to: Secretary to the Government of India, Ministry of Shipping, Transport Bhawan, I, Parliament Street, New Delhi-11000 1 (Attn. : Shri P. Chhabra, Deputy Chief Controller of Chartering). 39. Ld. ASG has submitted that the above circulars or communications issued by Director General of shipping applies to shipping li....
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....ied by ICDs/CFSs/Port/Terminal Operators during lockdown-reg. The Ministry of Home Affairs, Government of India had issued order no. 40-3/2020-DM-I (A) dated 24.03.2020 and subsequent order dated 15.04.2020 along with its amendments to impose lockdown from 22nd March to 3rd May, 2020 to contain COVID-19 pandemic in the country. On account of lockdown measures, the logistics chain of businesses have been most adversely impacted. The chain includes the activities of all stockholders (Importers, Exporters, Customs Brokers, Transporters, Labour, etc.) dealing with the clearance of cargo from Customs facilities viz. Ports, ICDs and CFSs. As a result, importers are not able to clear the import of consignments in many parts of the country for reasons that are beyond their control. In the circumstance, numerous importers and trade associations have requested for the waiver of penal charges, which are collected by the custodians on the imported goods lying at various ports, ICDs, CFSs beyond the normal free period. 2. In this context, it is seen that the Director General of Shipping, M/o Shipping vide Order no. 7/2020 dated 29.03.2020 and vide Order no. 8/2020 dated 31....
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....ckdown period -reg. 1. In the context of the national effort to battle COVID-19, the Ministry of Home Affairs, Govt. of India has issued Order No. 403/2020 DM-I(A) dt. 24.03.2020 to impose a compete lockdown in India for a period of 21 days. 2. Whereas, Ministry of Home Affairs, Govt. of India, vide order No. 40-3/2020 DM-I(A) dt. 25.03.2020 issued an addendum and included Customs clearance at ports/airports/land border in the exemption to Clause 1. Further, operations of Railways and sea ports and their related organizations for cargo movement were also added in the exemption list. 3. This complete lockdown in the country has put the trade, particularly importers, under a very difficult situation, as considering the prohibitory orders, transport of goods along with movement of Importers/Customs Brokers and their staff, is not feasible to secure the release of imported goods. Moreover, due to ongoing lockdowns and prohibitory orders loading and transportation of goods to the importers premises is also very difficult. 4. Apprehending that, delays in securing release of goods from the ICD/CFS may result into containers detention charges levied by shipping lines along with con....
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....l Custodians: ICD PPG, ICD BBG, ICD Piyala, ICD Palwal, ICD Garhi Harsaru, ICD Patli, ICD Rewari, ICD Pali, ICD Bawal, ICD Sonepat, ICD Barhi, ICD Jhattipur. 5. The Deputy/Assistant Commissioner of Customs, ICD, PPG, ICD BBG, ICD Piyala, ICD Palwal, ICD Garhi Harsaru, ICD Patli, ICD Rewari, ICD Pali, ICD Bawal, ICD Sonepat, ICD Barhi, ICD Jhattipur 6. The President, Delhi Customs Clearing Agents Association, 260-61, Anarkali Bazar, Jhandewalan Extension, DDA Shopping Complex, New Delhi-110055. 7. Notice Board 8. Guard File. 43. The other advisory bearing no.2/2020 dt. 24.04.2020 runs as follows: OFFICE OF THE COMMISSIONER OF CUSTOMS, INLAND CONTAINER DEPOT, PATPARGANJ & OTHER ICDs, NEAR GAJIPUR, DELHI-110096 C.No.VIII/6/HQ/ICD/PPG/Reg.Comp/Instructions/15/2020 Date: 24.04.2020 ADVISORY NO. 2/2020 To, The Custodians of ICD-PPG and Haryana ICD under Commissioner of Customs ICD-PPG & other ICDs (As per Annexure A) Sub.: Advisory for COVID-19 Pandemic- Waiver of Demurrage Charges levied by ICDs/CFSs/Ports/Terminal Operators during lockdown - Ministry of Shipping. Order vide No. PD-14033/4/2020-PD VII dated 21.04. 2020-reg. Attention of the importers, Customs Broker....
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...., ICD Piyala, ICD Palwal, ICD Garhi Harsaru, ICD Patli, ICD Rewari, ICD Pali, ICD Bawal, ICD Sonepat, ICD Barhi, ICD Jhattipur 6. The President, Delhi Customs Clearing Agents Association, 260-61, Anarkali Bazar, Jhandewalan Extension, DDA Shopping Complex, New Delhi-110055. 7. Notice Board 8. Guard File. 44. Perusal of the above advisories reveals that these are not mandatory or directory. Vide these advisories shipping lines and Custodians of ICDs are advised to adopt a sympathetic and humanitarian approach while levying the container detention charges/ground rent charges on import cargo for the lockdown period. Thus, it is very clear from the above circulars that these are in the form of advisories and are not directory in nature and do not mandate respondent no.3 to 6 not to charge ground rent, penal charges/ demurrage etc. 45. The question which now arises for consideration is whether the above guidelines/letters which are only advisory in nature and contain no directions under any statute can bind CFS and direct them not to charge ground rent etc. Ld. Sr. Counsel for the respondent no. 3 to 6 has vehemently argued that they have their containers located on a land which i....
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....pective facilities open and remained functional albeit with reduced staff as per the directives of the Government, notwithstanding that the members did incurred huge extra cost in mobilizing TTs, labour, surveyors, staff and other resources. Whereas in this hour of crisis, it was with tremendous proactive facilitation measures initiated by Shipping Ministry, Special Secretary (Logistics), JNPT, JNCH & other Custom Houses, Nhava Sheva Police, District Collector Raigad, Gram Panchayat and several other Governmental agencies, that import deliveries commenced significantly by first week of April and got normalized to a large extent by 15th April 2020. Our members played a significant role in this process. Whereas the Association has been invited by Government of India through different Ministries/ agencies/ authorities and based on the interactions and discussions held, the Association has shared Government advisories and sensitized all members from time to time. Most of member CFSs recognizing the difficulties faced by the trade have been considerate and on their own accord, when approached by the importers/shipping 1ines/CHAs have been extending substantial waivers either in form....
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....issued by CFS Association shows that it is also alive to the situation and taking a sympathetic view and giving considerable discount in ground rent/ penal charges. 49. Now coming to the letters issued by the concerned Ministries, the facts narrated in the earlier paras and detailed discussions clearly point out that circulars/guidelines/advisories issued by respondent no. 1 and 2 prima facie do not bind respondent no. 3 to 6 who are not availing any concession from port authorities and who have their containers located outside the Port Land. Moreover, the letters/guidelines/advisories also cannot intervene or interfere in a private contract which respondent no. 3 to 6 have with their customers i.e. petitioner. Respondent no. 3 to 6 on their own have given considerable relaxation/waiver of ground rent and are sympathetically considering the request of cargo owners in view of the Covid-19. On careful examination of all the facts and submissions made by the Ld. Counsels for the parties, this Court is of the opinion that petitioner has failed to make out a prima facie case for grant of injunction. As discussed earlier, the circulars/guidelines and advisories issued by respondent no.1....