2007 (10) TMI 32 - HC - Customs

Demurrage charges for detained goods Appellant went in to appeal instead of paying duty and getting goods cleared from port. Since bad faith or ill motive not proved against adjudicating authority and customs Importer is liable to pay demurrage charges

Issues Involved:
1. Release of imported goods without payment of ground rent/demurrage.
2. Enhancement of the value of imported goods by the Customs authorities.
3. Liability for payment of demurrage charges.
4. Application of principles of natural justice.
5. Entitlement to quantity discount and its impact on valuation.
6. Immunity of Customs authorities under Section 155 of the Customs Act.
7. Good faith in the context of actions taken by Customs authorities.

Issue-wise Detailed Analysis:

1. Release of Imported Goods Without Payment of Ground Rent/Demurrage:
The petitioner sought a direction for the release of its imported goods from Singapore without paying ground rent or demurrage. The petitioner claimed that the Customs authorities were at fault for the delay in releasing the goods, and thus, the liability for demurrage should not be on them.

2. Enhancement of the Value of Imported Goods by the Customs Authorities:
The Customs authorities enhanced the value of the imported goods without hearing the petitioner, leading to an appeal to the Customs, Excise, and Gold Control Appellate Tribunal (CEGAT). The Tribunal set aside the initial order and remanded the matter, eventually leading to a revised valuation based on comparable imports. The petitioner contended that the valuation should consider the quantity discount available for large imports.

3. Liability for Payment of Demurrage Charges:
The petitioner argued that they should not be liable for demurrage charges as the delay was due to the Customs authorities' actions. The Customs authorities and the International Airports Authority of India (IAAI) contended that demurrage charges are payable irrespective of fault, as they are for services rendered by the IAAI.

4. Application of Principles of Natural Justice:
The initial enhancement of the goods' value without hearing the petitioner was a breach of natural justice, leading to the Tribunal remanding the matter for a fresh hearing. The Tribunal's final order vindicated the petitioner's stand, accepting the valuation based on the quantity discount.

5. Entitlement to Quantity Discount and Its Impact on Valuation:
The Tribunal, upon rectification, accepted the petitioner's contention that they were entitled to a quantity discount, which affected the valuation of the imported goods. This led to the acceptance of the invoice price and the setting aside of the redemption fine.

6. Immunity of Customs Authorities Under Section 155 of the Customs Act:
Section 155 provides immunity to Customs authorities for actions taken in good faith under the Act. The Customs authorities argued that their actions were in the legitimate exercise of their quasi-judicial powers and thus protected under this section.

7. Good Faith in the Context of Actions Taken by Customs Authorities:
The court examined the concept of 'good faith' and concluded that the Customs authorities acted within their jurisdiction and without bad faith or ill motive. The mere fact that the order was later reversed in appeal did not imply a lack of good faith or jurisdiction.

Conclusion:
The court concluded that the petitioner was liable to pay the demurrage charges as the Customs authorities acted in good faith and within their jurisdiction. The petition was dismissed, and the petitioner was directed to deposit the balance 20% of the demurrage charges with the IAAI within four weeks. The IAAI was instructed to return the bank guarantees furnished by the petitioner upon deposit of the said amounts.

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