2010 (8) TMI 347 - HC - Customs

Demurrage charges clearance disallowed where the goods are prohibited goods where duty due was not paid - warehouse not under an obligation to waive charges, liable under a contract - wrongful action of delaying clearance of goods, the customs department may be liable for damages, but this cannot be a ground by itself to waive demurrage charges payable under a contract to a warehouse - relationship between importer and the warehouse was governed by the contract, which is not nullified merely by issuance of detention certificate by the customs authorities - customs authorities had no jurisdiction to compel a warehouse not to charge demurrage charges. - Airport Authority v. Grand Slam International - (1995 -TMI - 44028 - SUPREME COURT OF INDIA), Trustees of Port of Madras v. K.P.V. Sheikh Mohd. Rowther & Co. P. Ltd. - (1995 -TMI - 44195 - SUPREME COURT OF INDIA) and Shipping Corporation of India Ltd. v. C.L. Jain Woolen Mills - (2001 -TMI - 45892 - SUPREME COURT)

Summary

Issues:
- Mandamus to direct waiver of demurrage charges or refund of charges
- Delay in clearance of goods and recovery of demurrage charges
- Entitlement to waiver of demurrage charges
- Obligation of customs authorities and warehouse in cases of delayed clearance
- Jurisdiction of customs authorities in compelling waiver of demurrage charges
- Adjudication of disputed questions of fact for damages claim

Analysis:
The writ petition sought mandamus to direct the Collector of Customs to waive demurrage charges or refund the amount recovered from the petitioner. The petitioner imported goods, faced delays in clearance due to Customs authorities, and argued for a refund of demurrage charges. The Customs Department contended that the delay was due to the petitioner's actions, leading to a change in goods declaration and subsequent clearance after clarification. The central issue was whether the petitioner was entitled to waiver of demurrage charges in the given circumstances.

The High Court emphasized the obligation of customs authorities to promptly decide on goods clearance but clarified that warehouses are not obligated to waive charges as per contractual terms. The Court cited relevant judgments, including International Airport Authority v. Grand Slam International and Trustees of Port of Madras v. K.P.V. Sheikh Mohd. Rowther & Co. P. Ltd., highlighting that the importer-warehouse relationship is contractual and not nullified by a detention certificate. The Court reiterated that customs authorities cannot compel warehouses to waive demurrage charges, as seen in Shipping Corporation of India Ltd. v. C.L. Jain Woolen Mills.

Consequently, the Court dismissed the petition, stating that the claim for waiving demurrage charges was not acceptable. It noted that any damages claim against the Customs Department would require adjudication of disputed facts beyond the scope of a writ petition. The judgment clarified that the order did not prejudice the petitioner's right to pursue claims against the Customs Department through other appropriate legal avenues.