TaxTMI 
TaxTMI 
TaxTMI 
2023 (3) TMI 184
X X X X Extracts X X X X
X X X X Extracts X X X X
.... according to the petitioner, was causing huge financial loss and therefore, the petitioner sought the following reliefs:- "It is, therefore, most respectfully prayed, that in conspectus of the facts, circumstances and grounds mentioned herein supra, this Hon'ble Court may graciously be pleased to: (a) Issue a Writ of Mandamus or any other appropriate Writ, direction or order directing learned Respondents to release the consignment imported under B/E No. 4956991 dated 06.08.2021. (b) Issue a Writ of Mandamus or any other appropriate Writ, direction or Order directing learned Respondents to either pay themselves or to waive the payment of demurrage detention and any other charges. (c) Issue Rule Nisi in terms of prayers at (a) and (b) above and confirm the same after hearing the parties; (d) Pass ad-interim ex-parte order in terms of prayer at (a) and above; (e) Award cost of this Petition; and/or (f) Pass such other order(s) or direction(s) as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case and in favour of the Petitioner in the interest of justice." 1.2. This Court (Coram:- Ms. Sonia Gokani and Ms. Nisha M. Thakore, JJ) a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the Deputy Commissioner, Dock Examination to release the subject goods and vide letter dated 04.02.2022 directed the respondent no.5 not to charge any detention charges on the subject consignment till the clearance as per Regulation 10(1) of Sea Cargo Manifest Transport Regulations, 2018 ('the Regulations' hereinafter). 2.2. The petitioner forwarded this communication of 04.02.2022 to the respondent no.5 and requested the respondent no.5 to waive the demurrage and issue the delivery order through several e-mails, but, it denied the request and insisted on the payment of the demurrage charges and hence, this petition with the following prayers:- "(a) Issue Writ of Mandamus or any other appropriate Writ or order(s) directing Respondents to release the consignment imported under B/E No.4956991 dated 06.08.2021 without charging demurrage/detention. (b) Issue Writ of Mandamus or any other appropriate Writ or order(s) directing Respondent No.5 to waive off demurrage and detention charges; or in alternative (c) Issue Writ of Mandamus or any other appropriate Writ or order(s) directing Respondent No. 1 or 4 or both to pay the demurrage and detention charges to Respondent No. 5. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the above discussion, the appeals are allowed. The judgment of the High Court is set aside and the writ petitions filed by the respondent-importers are dismissed. No order as to costs. Pending application(s), if any, stand(s) disposed of." 4. In the aforesaid context, Mr. Tirth Nayak, the learned counsel appearing for the writ applicant invited our attention to one order passed by this Court in the case of Green Gold Timbers Pvt. Ltd. Through Its Directors Akhilesh Manglik Vs. Commissioner of Customs in Special Civil Application No.10082 of 2020 decided on 12.01.2022, wherein this Court took the view that the customs cargo service provider as defined in the Regulation No.2(1) (b) of the Regulations is not entitled in law to charge any rent or demurrage on the goods seized or detained or confiscated by the Customs or any other Authority. However, according to Mr. Verma, the order of this Court in the case of Green Gold Timbers Pvt. Ltd. (Supra) is with respect to ground rent charges and not helpful to the writ applicant. 5. We propose to admit this writ application and pass an interim order reserving the liberty in favour of the respondent No.5 to raise all the legal contenti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ooing one container for transportation of its consignment of 750 Bales of Chinese Knotted Woolen Carpets from Charleston Port to Gandhidham, Gujarat. Accordingly, the respondent's overseas agent booked the container and issued its booking confirmation number 67060695 and also issued the Sea Way Bill as well as the Bill of Lading on 09.07.2021. 4.3. There was a transportation contract executed between the consignor, consignee, owner of goods as well as the notified consignor in India, who is to receive the same from the present respondent. The Sea Way Bill/ Bill of Lading issued by the respondent acts as a binding contract between the parties to an international shipping transaction. This has been repeatedly recognized by the Apex Court whereas it has held that the terms of the Bill of Lading is a contract of carriage between the parties which is a legal and binding contract and it can be enforced under the law. The parties to the shipping transaction i.e. the consignor, owner and the consignee, at the time of entrusting their goods to the Shipping Line or carrier for transportation of goods and issuance of a Bill of Lading entered into a legal contract and thereafter, the terms th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the petitioner's consignment was by done by the other respondents who are statutory public authorities. The present respondent is only a carrier of the goods and not a public authority. It was not a party in the previous petition and was not heard while directing the release order on 07.01.2022. The direction for release of goods issued in the previous petition was only to the other respondents and not to the present respondent. In this set of facts and events, the grievance of the petitioner against the respondent - public authorities had already been addressed by the Court by its previous order and the public authorities are directed to release the cargo where their role has come to an end. 4.8. The only question that survives is between the petitioner and the present respondent who are the private parties. The respondent had denied releasing of the petitioner's cargo as there are heavy container detention charges payable on the said cargo. The said charges are legally recoverable from the petitioner as the container was lent to the petitioner under the contract of carriage and the detention is in exercise of its right to lien over the said goods. Hence, the petition will no....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing containers on hire and on that revenue, the company runs. Therefore, the said containers are valuable business assets and therefore, the customs cannot be given unfettered right to detain the said containers and then direct waiver of detention charges which is demanded under a contractual agreement between the importer and the shipping line. 5. The affidavit-in-reply on behalf of the respondent nos. 1 to 4 is by the Deputy Commissioner in the office of Commissioner of Customs, Custom House Mundra wherein it heavily relied on the provisions of Sea Cargo Manifest and Transshipment Regulations, 2018, more particularly Regulations 10, 11 and 12. 5.1. Regulation 10 states that, it is the responsibility of the authorized carrier not to demand any container detention charges for the containers laden with the goods detained by customs for purpose of verifying the entries made under Section 46 or Section 50 of the Act, if the entries are found to be correct. However, in the instant case, authorized carrier/shipping line has not followed the Regulations 10(1) of the Regulations, 2018. 5.2. As per Regulations 11 to 13 of Regulations, 2018, if the authorized carried/shipping line fails ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e appeals are allowed. The judgment of the High Court is set aside and the writ petitions filed by the respondent-importers are dismissed. No order as to costs. Pending application(s), if any, stand(s) disposed of." 6.1. The Madras High Court in case of M/s. Isha Exim vs. Commissioner of Customs and others [Writ Petition No. 26838/2018] has held that the claim for detention and demurrage charges and the exemption or refund thereof is a matter of adjudication and cannot be decided in a writ proceedings. 6.2. The Division Bench of Delhi High Court in case of International Lease Finance Corporation vs. Union of India and Others [Civil Writ Petition No. 6490/2018] has held that warehousing is a commercial activity and Courts cannot direct waiver of demurrage charges to the service providers. 7. The petitioner has pleaded for the enforcement of the order dated 04.02.2022 which is an order of the customs authority to the private party. Proviso to Regulation 10(1)(1) of the Regulations, 2020 provides a right to carrier to demand container detention charges after expiry of sixty days from detention. In the present case, the container was detained from 06.08.2021. It also provides for t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....apter V-A which was introduced with effect from 09.01.1997 provides for fixation of tariff for Major Port Trusts. The tariff to be charged by the port trust is determined by an independent statutory authority, called the Tariff Authority for Major Ports, under Section 47A of the Act. 46. We are, therefore, clearly of the view that even though there may be some delay on the part of the DRI and the customs authorities, the respondent-importers have also been guilty of delaying the matter and, therefore, they cannot claim that they are not liable to pay demurrage and detention charges. We may, however, clarify that the respondent-importers are free to approach the Mumbai Port Trust in terms of Section 53 of the Act for exemption and remission of demurrage and other charges and the Board may take a sympathetic view while considering the case of the respondent-importers under Section 53. 47. As far as detention charges of the Shipping Line are concerned, in addition to what we have observed above, we are of the view that the High Court could not in writ proceedings have directed the DRI/Customs to pay the detention charges to the Shipping Line since these were to be paid on the ba....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., where it remained with the Container Corporation of India. The Shipping Corporation of India is engaged in the business of carriage of goods. On the terms and conditions contained in the Bill of Lading, in respect of the goods consigned to it, the corporation claims that the goods cannot be released unless demurrage charges are paid. After the goods arrived in Delhi and remained in the custody of the appellant, the customs authorities being of the opinion that import of polyester filament yarn weighing 5,376 kgs. was unauthorised and directed confiscation of the same, valued at Rs.11.5 lakhs under Section 111(d) of the Customs Act, 1962. The said customs authorities however permitted the owner to redeem the goods on payment of Rs. 7 lakhs. That apart, a penalty of Rs. 1 lakh was also levied under Section 112(a) of the Customs Act. The owner of the goods assailed the order before the Customs, Excise & Gold (Control) Appellate Tribunal [for short CEGAT]. The tribunal instead of deciding the objections raised by the owner to the validity of the order of the Additional Collector of Customs, ordered that the advance licence and DEEC Book be amended and adjourned the appeal for a pe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....orities and a bank guarantee of Rs. 5 lakhs but the owner had not taken advantage of the said interim order and the goods continued to remain in the custody of the present appellant and demurrage charges went on accruing. The order of Delhi High Court was assailed in this Court by filing a Special Leave Petition by the Customs Authorities but that Special Leave Petition however stood dismissed on 13.11.95 in SLP No. 5671/95. The owner of the goods having failed in his attempt to get the goods released, notwithstanding the orders of the High Court in CWP No. 1604/91, filed an application for initiating a contempt proceeding, which was registered as CCP No. 120/95. The High Court however came to hold that the authorities cannot be held to be guilty of disobeying the orders of the Court and accordingly, dismissed the contempt petition. While dismissing the contempt petition, the learned Judge, granted liberty to the owner to move the Division Bench of the High Court for appropriate directions regarding payment of demurrage/detention charges. Pursuant to the aforesaid observations in the contempt proceedings, an application being filed by the owner, the same was registered as CM 482....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... as such observed that the cases should be placed before a Three Judge Bench and that is how, this batch of cases are before this three Judge Bench. When these appeals by grant of special leave were placed before the Three Judge Bench on 1st March, 2001, we had directed the goods be released to the owner without any conditions but such release will be subject to the ultimate decision in these appeals. 4. In view of the submissions made at the Bar appearing for different parties, referred to earlier, the first question that arises for consideration is whether in the case in hand, the importer of the goods can be made liable to pay any demurrage/detention charges? It is undisputed that under the terms and conditions of Bills of Lading, the carrier had a lien over the goods until all the dues are paid and the goods having been kept, not being released, the corporation-carrier was entitled to charge demurrage charges. But in view of the specific directions of the Delhi High Court in the writ petition filed by the importer of the goods, challenging the legality of the order of the customs authorities in confiscating the goods and levying penalty and that order having reached finality....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ayment of the detention and demurrage charges. In the contextual facts, notwithstanding the judgment of the High Court, the goods not having been released, the impugned order and direction dated 18.1.99, cannot be held to be infirm in any manner. In the absence of any provision in the Customs Act, entitling the customs officer to prohibit the owner of the space, where the imported goods have been stored from levying the demurrage charges, levy of demurrage charges for non-release of the goods is in accordance with the terms and conditions of the contract and as such would be a valid levy. The conclusion of the High Court to the effect that the detention of the goods by the customs authorities was illegal and such illegal detention prevented the importer from releasing the goods, the customs authorities would be bound to bear the demurrage charges in the absence of any provision in the Customs Act, absolving the customs authorities from that liability. Section 45(2)(b) of the Customs Act cannot be construed to have clothed the customs authorities with the necessary powers, so as to absolve them of the liability of paying the demurrage charges. In the aforesaid premises, we see no in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on of demurrage for the authority concerned to take a sympathetic view while considering the case of the petitioner. At the same time, the detention charges of the shipping lines are to be paid on the basis of the contract between the petitioner and the shipping line. The Apex Court had been quite clear that the High Court cannot in writ proceedings direct the DRI/Customs to pay the detention charges to the shipping line, firstly because there was a contract between the importer and the shipping line and moreover, under the writ jurisdiction, these aspects are not to be adjudicated as there are many aspects on facts which would need the proper adjudication. 10.3. It is quite clear from the chronological events that the period of four months for which the consignment comprising the Chinese Knotted Woolen Carpets were detained by the respondent no.2 had resulted into this Court directing the consignment to be released. It was further directed to the respondent no.5 not to charge the detention charges on the subject consignment till the clearance as per Regulation 10(1) of the Regulations. The request had already been made by the petitioner on 04.02.2022 to the respondent no.5 to wai....
X X X X Extracts X X X X
X X X X Extracts X X X X
....icer cannot detain the goods without seizure under Section 110 of the Customs Act. The issue of Circular Trading of the Carpets was being examined by the authority concerned. The provisional assessment of the goods of the imported consignment had been put on a halt as the three summons were not answered by the petitioner. 10.7. It appears that without passing any order of seizure under Section 110 of the Customs Act, when there was a detention and there was a specific denial for shifting the goods to the public warehouse under Section 49 in order to save the demurrage and detention charges, the respondent authority cannot insist on the demurrage which is in its hand. So far as the detention charges are concerned, in our opinion, the contract of the parties would govern the detention charges if eventually it is found that it was without any valid and justifiable reasons, the other respondents, other than respondent no.5, are the reasons for this detention charges, the Court concerned can definitely decide. It was the action of the other respondents which was under challenge by the petitioner in earlier litigation. At the same time, it was not naive enough not to include the respond....