AI Drafter 
TaxTMI 
TaxTMI 
2020 (5) TMI 542
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....edical equipments etc. Petitioner/ Foundation 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 per....
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....er Major Ports whereas respondents No.4 to 6 are operating 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 Addi....
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.... on behalf of second respondent that communication of 21st April, 2020 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 ....
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..... It was submitted that each consignment of container deal with matter of contract 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 ....
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....spondents No. 3 to 6 submitted that respondent No.3 has issued an advisory dated 11th May, 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 &....
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....5 and fall under "State" within the meaning of Article 12 of Constitution of India. It is stated that 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 a....
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....t respondent no.2 does not have any control or supervision over activities or cost structure of CFS. The letters/ 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....
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.... would entitle invocation of' force majeure' provisions inasmuch as obligations under various contracts (involving the Major Ports) are concerned. 7. The aforesaid orders do not impact or dilute the 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 St....
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....ed that:- 3. Remission of charges to Port Users (i) Storage Charges: Ports shall allow free storage time to all port users for the Lock-down Period. (ii) Lease rentals, licence fees related charges: Ports shall allow deferment of April, May and June months, annual lease rentals/licence fees on pro-rata basis, without any interest, if requested by lessee/licensee. 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 ....
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....pt operations, non-transhipment requirements 'etc. for the Lockdown Period plus 30 days recovery period. (v) Additional Land for storage: If requisite additional area is available within port, the port shall provide additional storage area to PPP concessionaires, on temporary basis, without any charges, rentals, fee etc. for upto 30th June 2020 on 'as is where is' basis. 5. Vessel related charges from Shipping Lines: Marine 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 ....
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....ection 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. This order shall also be followed by Kamarajar Port Limited. Copy to, (i) Secretary, Revenue (ii) Secretary, Ministry of Commerce With a request to issue (iii) Chairman CBIC appropriate directions to CFS and ICDs. Copy also to: (i) PS to Hon'ble Minister (IC) (ii) PS to Secretary(S) (iii) PS to Chairman, IWAJ (iv) PS to AS(S) (v) PS to Sr. Advisor(E) (vi) PS to DG(S) (vii) PS 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 issue....
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....pose any new or additional charge. This decision is purely a onetime mea1ure to deal with the present disruptions caused by spread of COVID-19 epidemic. (Amitabh Kumar) Director General of Shipping To 1. 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 Shipping Lines Association, Mumbai. 6. INSA, Mumbai 7. 1CCSA, Mumbai. 8. Inland Importers and Consumer Association, Delhi. 9. Timber Importer Association, Maharashtra. 10. 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). 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 .03.20....
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....s cargo) for smooth functioning of the trade and maintenance of supply chain in the country. 7. Now therefore, in order to maintain proper supply chain at the Indian seaports, shipping companies or Carriers (and their agents by whatever name called) are advised not to charge, levy or recover any demurrage, ground rent beyond allowed free period, storage charges in the port, additional anchorage charge, berth hire charges or vessel demurrage or any performance related penalties on cargo owners/consignees of non-containerized cargo (i.e. bulk brake bulk and liquids cargo) whether LCL or not, for the period from 22nd March, 2020 to 14th April, 2020 (both days inclusive), due to delay in evacuation of cargo caused by reasons attributable to lockdown measures since 22nd March, 2020. The above exemption/remission shall be over and above free time arrangement that is currently 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....
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....well time charges, detention charges etc. shall be levied on import and export of shipments. The same was directed to be strictly implemented by the major port users including CFS and shipping Line etc. Respondent no. 1 had therefore, issued a letter dated 23.04.2020 to all Principal Chief Commissioners/Chief Commissioners of Customs for strict compliance of order of Ministry of shipping by CFS. The said letter runs as follows:- F.No. 394/46/2020-Cus (AS) Government of India Ministry of finance Department of Revenue Central Board of Indirect Taxes and Customs Anti-Smuggling unit Room No.501, 5th Floor, Hudco Vishala Building Bhikamaji Cama Place, new Delhi-110066 Dated 23.04.2020 To, All Principal Chief Commissioner/Chief Commissioner of Customs, All Principal Chief Commissioner/Chief Commissioner of Customs (Preventive), All Principal Chief Commissioner/Chief Commissioner of CGST & Customs, Madam/Sir, Subject: Covid-19 Pandemic- waiver of Demurrage Charges levied by ICDs/CFSs/Port/Terminal Operators during lockdown-reg. The Ministry of Home Affairs, Government of India ha....
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....vious also for the reason that letter dated 23.04.2020 issued by respondent no. 1 which is based upon letter dated 21.04.2020, of Ministry of shipping cannot go beyond the direction/guidelines/directions conveyed by the same. 42. Ld. Counsel for the petitioner has, however, relied upon various advisories issued by Commissionerates of Customs to the ports falling under their jurisdiction and which contemplate a humanitarian and sympathetic approach and advises for waiver of ground rent charges, detention charges etc. These advisories bearing no. 01.2020 dated 10.04.2020 and bearing no. 02/2020 dated 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/Public Notice/03/ Date:- 10.04.2020 ADVISORY NO. 01/2020 To, The Custodians of ICD-PPG and Haryana ICDs under Commissioner of Customs ICD PPG & Other ICDs. [As per Annexure-A] Sub: Advisory for non-charging of Container detention charges and Ground rent charges for the COVID-19 related lockdown period -reg. 1. In the context of the national effor....
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....is worth appreciating that M/s CONCOR vide Public Notice CON/NR/TKD/EXIM/Public Notice/2020/19 dated 04.04.2020 has waived HNP charge, Ground rent on Cargo, Auction Charges, Terminal Service charge on container and late payment surcharge etc. during the Lock down period. 7. Customs cargo charges collected under regulation 6(3) of Handling of Cargo in Customs Areas Regulations, 2009 may be suitably amended and a public notice issued by Custodian at each port. 8. In order to provide better facilitation to importers/ exporters in this extra ordinary situation, this Commissionerate, in public interest, has also issued Pubic Notice No. 21/2020, 22/2020, 23/2020, 24/2020 and 25/2020 dated 25.03.2020, 28.03.2020, 30.03.2020, 04.04.2020 and 04.04.2020 respectively. 9. This issues with the approval of Commissioner of Customs, ICD PPG & other ICDs. (Dr. Abhishek Chandra Gupta) Additional Commissioner ICD-PPG & other ICDs Copy forwarded to:- 1. The Chief Commissioner of Customs(DZ), New Custom House, New Delhi-110037 2. The Commissioner of Customs, ICD, PPG, Delhi. 3. All the Shipping Lines and other stakeholders through Del....
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....free period. 4. In the above context, Director General of Shipping, M/o Shipping vide Order No. 7/2020 dated 29.03.2020 advised the Indian seaports, carriers, shipping lines not to impose any container detention charges on import and export shipments for the lock down period (22.03.2020 to 14.04.2020) over and above free time arrangements. Also during the period shipping lines have been advised not to imposed any new or additional charge. Further, Ministry of Shipping has again in its order no. 11 of 2020 dated 22.04.2020 has extended the time period upto 03.05.2020. 5. The above is brought to the notice of all concerned ICDs for strict compliance. 6. This issues with the approval of Commissioner of Customs, ICD PPG & other ICDs. Encl.: As Above (Dr. Abhishek Chandra Gupta) Additional Commissioner ICD-PPG & other ICDs Copy forwarded to:- 1. The Chief Commissioner of Customs (DZ), New Custom House, New Delhi-110037 2. The Commissioner of Customs, ICD, PPG, Delhi. 3. All the Shipping Lines and other stakeholders through Delhi Customs website. 4. All Custodians: ICD PPG, ICD BBG, ICD Piyala, ICD Palwal....
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....y Ld. Counsel for the respondent no.3 that with a view to support the Govt. in its fight against the Pandemic, it has issued another advisory dt. 11.05.2020 thereby directing its members to offer discount or the ground relief. The copy of the advisory dt. 11.05.2020 runs as follows: CONTAINER FREIGHT STATIONS ASSOCIATION OF INDIA (CIN: U63031MH2006PTC162883) 306, 3" Floor, Anchorage, Ship Agents Premises Co-op Society, Plot No. 2, Sec 11, Dronagiri, Dist. Raigad, Navi Mumbai - 400 707. Tel/Fax: 022- 2747 1649 Email: [email protected] Web: cfsai.in CFSAI /Advisory/27/2020-21 11th May, 2020 CFSAI Advisory to Members By our last Advisory on 24th March 2020, the Association had requested all members to consider 10 days waiver of ground rent from 22nd March 2020 to 31st March 2020 due to the impact of outbreak of pandemic COVID19 on EXIM Trade. The Association and most of its members have again been approached by several importers / trade bodies and Associations to consider additional waiver as the lockdown was further extended. Whereas, as part of partial relaxation even during the Lockdown, the Government of India permitted essential services including Po....
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....t waiver already accorded between 22nd March to 31st March (10 days) members will consider a further waiver on the Ground rent of up to 50% prospectively, to the customers who have not taken delivery for the containers that have arrived in their CFSs between 1st April and 15th April 2020. • This advisory will have no bearing on the containers already cleared by Importers from respective CFSs on mutually agreed terms prior to issuance of this Advisory. • The provisions of this advisory would be applicable to containers mentioned above that are cleared by Importers on or before 20th May 2020. The handling, transportation and other CFS charges would be as per respective CFSs published tariffs. In view of above concessions proposed by several Members of CFSAI, it is requested that Importers/CHAs and other customers be directed to come forward and take deliveries of Import laden containers from CFSs expeditiously. It may please be noted that CFSs are functional and Documentation/ Delivery/ payment counters are open throughout the day. The trade may also be sensitized that CFSs have taken utmost care and initiated several Safety and Health rela....