2014 (4) TMI 101 - HC - Customs

Waiver of Demurrage/detention charges Certificate of waiver issued u/s 6(1)(l) of the Handling of Cargo under Customs Area Regulations, 2009 - Despite the letter dated 6.11.2012, CELEBI refused to waive off the demurrage/detention charges - Whether the CELEBI is entitled to charge demurrage/detention charges for the period the goods were detained by the customs authorities Held that - Custom authorities are issuing waiver directions even in cases where the importers are clearly at fault and fine, penalty, personal penalty and/or warning has been imposed by the customs authorities - Even in cases of mis-declaration, undervaluation and concealment, the certificates are being issued - This is clearly giving premium to dishonesty - The waiver should be granted in genuine cases where the importers are ultimately found not at fault. In cases where the importer is found innocent and there is no imposition of any fine, penalty, personal penalty and/or warning by the customs authorities, the Policy for Waiver would be applicable and the importer would be entitled to be considered for its benefit provided a certificate entitling him to be so considered is issued by the custom authorities. The importer would not be automatically exempt but would be covered under the Policy for Waiver and eligible for waiver which would be granted subject to other compliances. Where the importer is clearly at fault and fine, penalty, personal penalty and/or warning is imposed by the customs authorities, making the regulations applicable and granting the benefits of waiver would be clearly unreasonable and would grant benefit of waiver, with the person who has provided space suffering. This was and is not the intention and purpose behind HCCAR. Regulation recognises and accepts that any other law in force is not abrogated or repealed. The existing provision applicable stands protected. Petitioner shall be entitled to release of the goods by furnishing a security bond and a Bank Guarantee securing the demurrage charges and undertaking that the Petitioner would pay the demurrage charges in case on conclusion of the adjudication proceedings any fine, penalty, personal penalty and/or warning is imposed by the customs authorities. - Decided partly in favor of petitioner.

Summary

Issues Involved:
1. Entitlement of CELEBI to charge demurrage/detention charges for goods detained by customs authorities.
2. Applicability of the Handling of Cargo under Customs Area Regulations, 2009 (HCCAR) versus the Policy for Waiver of Demurrage Charges by the Airports Authority of India (AAI).
3. Harmonious construction of HCCAR and AAI's Policy for Waiver.
4. Legal responsibilities and powers under the Customs Act, 1962 and the Airports Authority of India Act, 1994.
5. The role of CELEBI, DIAL, and AAI in cargo handling and demurrage charges.

Detailed Analysis:

1. Entitlement of CELEBI to Charge Demurrage/Detention Charges:
The primary issue is whether CELEBI can charge demurrage/detention charges for goods detained by customs authorities, despite customs issuing a certificate advising waiver of these charges under Section 6(1)(l) of HCCAR. The court examined whether CELEBI is bound by HCCAR or by the AAI's Policy for Waiver of Demurrage Charges.

2. Applicability of HCCAR versus AAI's Policy for Waiver:
The court analyzed various statutory provisions, regulations, and policies to determine the applicability. Section 45 of the Customs Act, 1962, stipulates that imported goods in a customs area remain in the custody of an approved person until cleared. Section 49 allows for storage of imported goods in a warehouse pending clearance. Regulation 6(1)(l) of HCCAR mandates that no rent or demurrage be charged on goods seized or detained by customs. However, the AAI's Policy for Waiver specifies that demurrage charges shall not be waived if a fine/penalty is imposed by customs.

3. Harmonious Construction of HCCAR and AAI's Policy for Waiver:
The court found that both HCCAR and AAI's Policy for Waiver can coexist harmoniously. The policy distinguishes between innocent importers and those who violate the law. Importers found innocent, without any fine or penalty, are eligible for waiver under the policy. Conversely, importers who face fines or penalties are not entitled to such waivers. The regulations from 2009 are subject to any other law in force, thus aligning with the AAI's 2003 policy.

4. Legal Responsibilities and Powers under the Customs Act, 1962 and AAI Act, 1994:
The Customs Act empowers customs authorities to control imported goods in a customs area and appoint custodians. The AAI Act empowers AAI to establish warehouses and fix charges for cargo handling. CELEBI, under a concession agreement with DIAL, handles cargo at the terminal and follows guidelines from the Ministry of Civil Aviation, AERA, and AAI.

5. Role of CELEBI, DIAL, and AAI in Cargo Handling and Demurrage Charges:
CELEBI, as a cargo handler, is bound by policies from AAI and AERA. The court noted that CELEBI's refusal to waive charges, despite customs directions, aligns with AAI's policy when fines or penalties are involved. The execution of superdginama by CELEBI, stating no claim for storage charges, does not override AAI's policy.

Judgment Summary:
1. WP (C) No. 7438/2012: The petitioner is entitled to the release of goods on furnishing a security bond and bank guarantee for demurrage charges, pending adjudication. If fines or penalties are imposed, demurrage charges must be paid.
2. WP (C) No. 2200/2013: Since fines and penalties were imposed, the petitioner is not entitled to waiver benefits and must pay demurrage charges for the release of goods.

Conclusion:
The court concluded that waiver of demurrage charges applies only to importers found innocent without fines or penalties. CELEBI must follow AAI's policy, which does not grant waivers in cases involving fines or penalties. The writ petitions were disposed of accordingly, with no costs.