2006 (1) TMI 368 - AT - Customs

Refund - Demurrage charges paid to port authorities - Adjudication - Demurrage waiver certificate

Summary

Issues:
Claim for refund of demurrage charges; Applicability of Section 27 of the Customs Act; Entitlement to refund of demurrage charges from Customs Department; Maintainability of claim for refund of demurrage charges before Customs authorities; Comparison with Supreme Court's judgment in Shipping Corporation of India v. C.L. Jain Woolen Mills.

Analysis:
The appeal in question pertains to the rejection of a claim for refund of demurrage charges paid by the appellant to the Chennai Port Trust. The demurrage charges were paid on 8-6-2002 and 10-6-2002, with the claim for refund filed on 23-5-2003. The lower authorities deemed the claim time-barred under Section 27 of the Customs Act.

Upon examination, it was revealed that the appellant had imported a consignment declared as "Re-Rollable Non-Alloy Steel Scrap" and filed a Bill of Entry dated 7-6-2002 for warehousing the goods. Customs authorities doubted the declaration's accuracy and had samples tested by the National Metallurgical Laboratory (NML), which indicated a mixture of "usable Alloy and Non-Alloy Steel Tubes/Pipes." Subsequent re-tests by IIT Chennai and SGS India Pvt. Ltd. confirmed the goods as "Non-Alloy Steel Re-Rollable Scrap," leading to bonding and clearance of the goods.

The appellant claimed entitlement to a refund of demurrage charges from the Customs Department, citing the Supreme Court's judgment in Shipping Corporation of India v. C.L. Jain Woolen Mills. However, the Customs authorities were not found liable for the demurrage charges due to the absence of confiscation of goods and the procedural nature of sample testing. The delay in goods release was attributed to necessary testing procedures, and no fault was found on the part of Customs authorities.

The judgment distinguished the present case from the Supreme Court precedent, emphasizing that the Customs Department was not responsible for the demurrage charges paid to the Port Trust. The claim for refund of demurrage charges before Customs authorities was deemed not maintainable, leading to rejection as time-barred. The appellant's failure to pursue a Waiver Certificate application with the Commissioner or Chief Commissioner further limited avenues for relief.

In conclusion, the appeal was disposed of with the suggestion for the appellant to address their grievance before the Chief Commissioner of Customs for potential relief, emphasizing the limitations of seeking redressal from the Customs Department in this context.