2015 (4) TMI 731 - HC - Customs

Demages for prolonged detention of goods - Delay in testing of goods - Import of hazardous goods - permission was given by the Indian authorities to the petitioner to re-export the goods - Damages in form of rent and de murrage charges - Held that - Petitioner did not respond to the letter of the customs to store the goods under Section 49 of the customs Act, 1962. Petitioner did not even deposit the charges of the National Test House which could have tested the goods in Kolkata. Having not received the fees for testing such goods in this laboratory, they had to be sent to New Delhi to be tested by the Central Revenue Control Laboratory. He did not offer the services of another testing centre to test the goods so as to rule out that the goods were hazardous. - When the writ petitioner found that the imported goods were not being cleared for home consumption by the Indian authorities, he should have immediately taken steps to re-export the same under Rule 17(2) of the Hazardous Waste (Management, Handling and Transboundary Movement) Rules, 2008. He took no decision to this effect before the hearing of the first writ before Mr. Justice Tandon. - Here the findings can only be prima facie. In this mesh of facts the court cannot and should not come to any final finding regarding fault or the nature of the goods. So, on appraisal of the facts, prima facie the writ petitioner is not entitled to any remedy. - Decided against assessee.

Issues Involved:
1. Detention of imported goods by customs.
2. Liability for demurrage charges.
3. Testing and classification of goods as hazardous.
4. Right to re-export and associated penalties.
5. Claim for damages due to alleged wrongful detention.

Detailed Analysis:

1. Detention of Imported Goods by Customs:
The writ petitioner imported a substance alleged to be furnace oil between January and March 2013. The goods were detained by customs on suspicion of being hazardous, which is prohibited under Indian law. The customs took samples and conducted tests, which eventually led to the finding that the goods did not meet the requirements for furnace oil/fuel oil and were classified as hazardous waste oil. Permission was given to re-export the goods, but the petitioner claimed damages for wrongful detention.

2. Liability for Demurrage Charges:
The petitioner argued that the demurrage charges, which exceeded the value of the goods, should be borne by customs due to the prolonged detention caused by their fault. The court noted that unpaid rent or demurrage charges operate as a lien on the goods, and the container freight station owners would not release the goods until these charges were paid. The eighth and ninth respondents claimed substantial amounts for storage charges. The court found that the petitioner did not respond to customs' offer to store the goods under Section 49 of the Customs Act, 1962, and did not deposit the fees for testing at the National Test House.

3. Testing and Classification of Goods as Hazardous:
The customs conducted multiple tests and consultations with various agencies, including the Central Pollution Control Board and Indian Oil Corporation, to determine the nature of the goods. The Central Revenue Control Laboratory ultimately classified the goods as hazardous. The petitioner failed to provide any contradictory test reports from any Indian agency to certify that the goods were non-hazardous. The court observed that the delay by Indian authorities was due to the lack of adequate testing facilities for such unusual imports.

4. Right to Re-export and Associated Penalties:
Permission to re-export the goods was granted by the court on 18th December 2013, with the condition of paying a fine of Rs. 10 lakh. The petitioner sought to quash this order to avoid the penalty. The court noted that the petitioner did not take immediate steps to re-export the goods under Rule 17(2) of the Hazardous Waste (Management, Handling and Transboundary Movement) Rules, 2008, contributing to the delay.

5. Claim for Damages Due to Alleged Wrongful Detention:
The petitioner sought damages in tort for wrongful detention of the goods, alleging misfeasance in public office by customs officials. The court found that the customs had made constant efforts to get the goods properly tested but faced obstacles due to inadequate testing facilities. The court referenced the Supreme Court decision in Padam Kumar Agarwala vs The Additional Collector of Customs, Calcutta & Ors, where the customs were found at fault but were not directed to pay demurrage charges. The court concluded that prima facie, the petitioner was not entitled to any remedy but kept the right to establish the fault of customs in a civil proceeding open.

Conclusion:
The writ application was disposed of, with the court finding no clear fault on the part of customs and noting the petitioner's contribution to the delay. The petitioner's right to pursue a civil proceeding to establish customs' fault was preserved.

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