TaxTMI 
TaxTMI 
TaxTMI 
1991 (9) TMI 85
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....e petitioner filed this writ application challenging the refusal of the Customs Authority to release the goods and for a direction of the Customs Authority to pay the demurrage which had accrued by reason of the non-release of the goods. 4. Several interim orders have been passed in this proceeding which are noted in greater detail later in this judgment. Briefly stated these orders initially directed the release of the goods subject to the fulfilment of conditions by the petitioner and subsequently the removal of the goods to a customs warehouse under Section 49 of the Customs Act, 1962 (referred to as the Act). The goods were neither released nor kept in a warehouse under Section 49. 5. In the meanwhile, on 24th January 1990 the Customs Authorities issued a notice under Section 124 of the Act to the petitioner. This show cause notice has not been challenged by the petitioner nor has the petitioner replied thereto. 6. On 2-2-1990 the Port Trust Authorities appeared and submitted that the goods could not be removed without meeting the port charges. It was claimed that the Port Trust Authorities had a lien over the goods under the provisions of the Major Port Trust Act. By an ord....
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...., as to the nature of which they themselves were not sure. They have failed to prove under-invoicing. It is contended that the Customs Authorities have acted on mere suspicion and conjecture which they are not entitled to do. Therefore, it is urged that the Customs Authorities are obliged forthwith to release the goods. 10. The petitioner has relied upon the following cases in this connection:- (i) Babcock Venkateshwara Hatcheries v. Collector of Customs, Bombay - 1985 (20) E.L.T. 335 (Tri.); (ii) Automotive Enterprises v. Collector of Customs - 1985 (22) E.L.T. 283 (Tri.); (iii) Walia Enterprise, Amritsar v. Collector of Customs & Central Excise, Chandigarh -1987 (32) E.L.T. 774 (Tri.); (iv) Sharad Himmattal Daphtary v. Collector of Customs - 1988 (36) E.L.T. 468 (Cal.); (v) Rakesh Press, New Delhi v. Collector of Customs - 1985 (21) E.L.T. 140 (Tri.); (vi) Orient Express, New Delhi v. Collector of Customs, Cochin - 1986 (23) E.L.T. 507 (Tri.); (vii) ....
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....eld that the valuation is not correct. In both these cases the matter had been adjudicated upon. The Court found that the Customs Authorities had accepted and were still accepting the price declared by importers in other cases, and that there was no other legally acceptable material on the basis of which the Customs Authorities could have deviated from their earlier acceptance of the price. In this case, as already observed, there has been no adjudication order till date as the petitioner has not replied to the show cause notice nor appeared before the Customs Authorities nor has the show cause notice been challenged. In any event it appears from the show cause notice that there is some material before the Customs Authorities for questioning the correctness of the invoice value as declared by the petitioner. In the circumstances it cannot be said at this stage that there was no material before the Customs Authorities to claim that the price declared by the petitioner as the value of the imported goods was incorrect. 17. The Customs Authorities have agreed to conclude the adjudication proceedings expeditiously but have argued that pending the adjudication proceedings the goods shou....
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....e order dated 4-12-1989. 22. An interim order was passed on the review application to the following effect :- "It is submitted that pending for the order the petitioner will not take the release of the goods in terms of the order dated December 4, 1989. Instead the goods may be stored in the Bonded Warehouse by the Customs Authority by Tuesday next under Section 49 of the Customs Act. Such submission is not opposed by the Respondents." 23. On 19-12-1989 the seizure under Section 110 was withdrawn. The goods, however, were not removed to the Bonded Warehouse. On 21-12-1989 at the instance of the petitioner the Director of Revenue Intelligence and the Port Authorities were added as party respondents to the writ petition. The Court then passed the following order on 21-12-1989 :- "It is made clear that the order dated 15th December 1989 shall be carried out by storing the goods in a bonded warehouse. The clearing agent of the petitioner will take all effective steps for removal of the goods for the purpose of storing and the Customs Authorities and D.R.I. will not raise any objection and such removal will be subject to the ultimate result of the writ petition." 24. Up to 29th Janu....
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.... (1) The matter can only be decided in a suit. There was no evidence of any negligence on the part of the Customs Authority. (2) The goods were detained under the provisions of Section 110 of the Act. This detention was not challenged. (3) Delay in removal of the goods was attributable to the petitioner who did not pay the port charges before removal of the goods to the Customs warehouse under Section 49. (4) Under Section 155 of the Customs Act, 1962 no action could be taken against the Customs Authorities for any loss suffered by the petitioner unless it was proved that the action of the Authorities was mala fide. There was no proof of mala fides in this case. (5) The Customs authorities are agreeable to issue detention and wharf rent ex emption certificates for the period that the goods were detained i.e. upto 19-12-1989. 28. The Trustees of the Port of Calcutta have contended :- (1) The Port Authority was entitled in law to the payment of its port charges for the period during which the goods remained at the port premises beyond the free period of three working days. Reliance has been placed on the following cases in this connection :- (i) Padam Kumar Agarwalla v. The A....
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....* ***** ***** ***** ***** ***** All other goods Tonne per day 40.00 60.00 80.00 Rent on goods detained in the Port by the Collector of (5) Customs for special examination under Section 17 of the Customs Act, 1962 involving chemical/analytical test other than the ordinary process of appraisement by the customs shall be remitted as under: Extent of remission (i) For the first 60 days 75% of the rent due (ii) For the next 60 days (i.e. The 61st day to the 120th day) 50% of the rent due (iii) For the subsequent period Nil. The remission shall, however, be granted provided the detention in each case is certified by the Collector of Customs to be not attributable to any fault or negligence on the part of the importer. (5) Rent on goods detained in the Port by the Collector of Customs for analytical test under the Drugs Control Act and/or compliance with Import Trade Control Formalities shall be remitted as under :- Extent of remission (i) For the first 60 days 66.2/3% of the rent due (ii) For the next 30 days (i.e. 61st day to 90th day) 50% of the rent due (iii) For the next 30 days (i.e. 91st day to 120 day) 3....
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....he validity of which cannot be questioned. The claim cannot be resisted as there is no evidence that the delay was due to any act of the Port Trust or persons for whom the Port Trust is responsible." 36. The question is whether this liability can be shifted to the Customs Authority by the petitioner in the facts of this case. The relevant facts are: 37. Firstly uptil the order dated 27-9-1989 the Customs Authorities had detained the goods under an order issued under Section 110 of the Customs Act. This order has not been challenged in these proceedings. 38. Secondly by the order dated 27-9-1989 the Court directed the petitioner to obtain release of the goods by furnishing a Bank Guarantee for the difference between the final assessment and the provisional assessment. It is true that there was no final assessment but a 'calculation' of the liability for Customs duty. However, the order dated 27-9-1989 was clarified at the petitioner's instance on 4-12-1989. By this clarification the court directed the petitioner to obtain release of the goods after furnishing a Bank Guarantee for 50% of the calculated amount. This the petitioner did not do. 39. Thirdly, there is no evidence that....
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....y I am of the view that the Port Authorities cannot charge any demurrage for the period subsequent to 2-2-1990. My reasons for so holding are as follows:- (i) The general law applicable to liens is that no rent can be charged by the lien- holder for the period that the goods are detained by him in exercise of its lien. This law has been recognised and stated in Halsbury's Laws of England (Fourth Edn.) paragraph 544 in which it has been stated :- "The holder of property the subject of a lien is not normally permitted to make any claim for the use of the place in which the property is detained, or otherwise for keeping it...." (ii) The only difference between the statutory lien and any other type of lien is as to the circumstances of their creation. The statutory lien is created by statute. Other liens may arise under contract or equity etc. There is no difference as to the incidence of the lien. There is nothing in the Major Port Trust Act to exclude the applicability of the general principle. It is also in keeping with common sense that if a person detains something forcibly, such person cannot claim rental for doing so. 44. No authorit....
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.... the period prior to 2-2-1990. For the reasons aforesaid I dispose of this writ petition by the following order : It is directed :- (i) The petitioner will submit his answer to the show cause notice dated 24-1-1990 by 1-10-1991. (ii) The petitioner and the Customs Authority will disclose documents sought to be relied on and grant inspection (if asked for) by 8-10-1991. (iii) The Adjudication proceedings must be completed by 29-11-1991 unless extended by mutual consent. (iv) Pending the adjudication the petitioner will be at liberty to obtain the release of the goods subject to furnishing Bank Guarantee in favour of the Collector of Customs, Calcutta and personal bond in terms of the order dated 4-9-1989 and subject to making payment of Port charges upto 2-2- 1990. Such payment will be without prejudice to the petitioner's right to recover the same from the Customs Authority as provided hereunder. The Bank Guarantee must be of a nationalised bank and must be kept renewed pending the adjudication proceedings and for fifteen days thereafter. The Bank Guarantee must contain a clause to the effect that if the bank guarantee is not renewed the Bank will of its own and forthwith de....