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2011 (3) TMI 1445 - HC - CustomsImport of regrind polycarbonate - payment of demurrage charges- requirement of licence - held that - since the petitioners have succeeded before the Tribunal and the confiscation as ordered by the Commissioner of Customs has been set aside, the Department must take on the liability of meeting the demurrage charges of the custodian. The petitioner company would, therefore, be entitled to reimbursement of the warehousing charges paid by it on account of wrongful confiscation by the customs authorities. As observed in the aforesaid decisions, to hold otherwise would be unjust to the petitioners who have met with success in their litigations with the Department. The Department shall be liable to bear the warehousing charges amounting to Rs. 93,622/- which has been paid by the petitioners and as such, the petitioners would be entitled to reimbursement of the same.
Issues Involved:
1. Whether the petitioners are entitled to a detention certificate for the goods imported under Bill of Entry No. 600739/00. 2. Whether the customs authorities are liable to reimburse the petitioners for warehousing and demurrage charges incurred due to wrongful confiscation of goods. Issue-wise Detailed Analysis: 1. Entitlement to a Detention Certificate: The petitioners, a private limited company engaged in manufacturing, imported goods under Bill of Entry No. 600739/00 dated 23rd October 2000. The customs authorities issued a show-cause notice on 4th January 2001, proposing confiscation and penalty under Section 111(d) and Section 112(a) of the Customs Act, 1962, respectively. The petitioners contested this, citing a favorable Tribunal decision dated 22nd March 2001, which classified the goods under CTH 3907.40, and quashed the Commissioner's order. Despite this, the Commissioner of Customs, Ahmedabad, passed an Order-in-Original on 30th April 2001, imposing fines and penalties. The petitioners appealed to the Tribunal, which set aside the Commissioner's order on 13th July 2001. The petitioners then requested the customs authorities to clear the goods per the Tribunal's order, but faced delays. The High Court, on 5th September 2001, allowed the petitioners to clear the goods under protest. Given that the goods have already been cleared, the first relief sought by the petitioners no longer survives. 2. Liability for Warehousing and Demurrage Charges: The petitioners argued that the customs authorities' wrongful confiscation should not burden them with warehousing and demurrage charges. They cited precedents from various High Courts, including Karnataka, Delhi, Andhra Pradesh, and Madras, supporting the view that when an importer succeeds in litigation against customs authorities, the latter should bear the demurrage charges. The respondents contended that the petitioners should bear these charges because they chose to appeal against a live Bill of Entry without paying the redemption fine. They referenced Public Notice No. 38/2001, which stipulates that importers appealing live Bills of Entry must pay demurrage or detention charges. The petitioners countered that this public notice is invalid as it contradicts established legal principles and that the customs authorities failed to follow the procedures outlined in the notice. Judgment: The court noted that the Tribunal's order dated 13th July 2001, which set aside the Commissioner's confiscation and penalty, had attained finality. The court agreed with the petitioners, referencing the Supreme Court's decision in Padam Kumar Agarwalla v. The Additional Collector of Customs, Calcutta, and other High Court rulings, which held that customs authorities should bear demurrage charges when their actions are overturned. The court found the petitioners entitled to reimbursement of warehousing charges due to wrongful confiscation. Since the goods were already cleared, issuing a detention certificate was deemed unnecessary. Instead, the court directed the customs authorities to reimburse the petitioners Rs. 93,622/- for warehousing charges within four weeks. Conclusion: The petition was allowed, and the customs authorities were ordered to reimburse the warehousing charges incurred by the petitioners due to the wrongful confiscation of goods. The court made the rule absolute with no order as to costs.
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