2019 (4) TMI 1922 - HC - Customs

Refund of Customs Duty - duty paid under protest - levy of wharfage charges on the chartered cable vessel, belonging to petitioner - HELD THAT - This Court is of the view that once the Port Trust has declared the vessel itself as a cargo, in view of its activity of laying under sea cable, it is well within the power of the Port Trust authorities to levy wharfage against the vessel itself. When the vessel itself is involved in the type of activity as admitted by the petitioner themselves, which carry the fiber-optic cable and other submerged equipment to be laid on the sea bed, there is no escape from the demand of wharfage against the activity of the vessel belonging to the petitioner at the time when it was berthed in the second respondent Port. Admittedly, the vessel itself was manifested as cargo and this Court does not find the description of the vessel as cargo is invalid or not warranted for the simple reason that from the description of the activity of the vessel itself, there cannot be two opinions about the vessel being manifested as cargo by the Port authority. Once the vessel was manifested as cargo, the consequence of that was to levy wharfage as per the rates applicable for such import of cargo. In these circumstances, the Port authorities had calculated the wharfage under Chennai Port Trust Scale of Rates issued vide Gazatte No. 251, dated 27-8-2014. The rate was calculated under Item No. 36(A) Items not otherwise specified - other than bulk of the schedule of wharfage under Scale 1 of Chapter-III of the scale of rates. The contention of the petitioner is not about the rate of scale applied towards them. But, the very levy of wharfage itself is being questioned in the writ petition. Therefore, once this Court holds the view that the vessel was rightly manifested as cargo, in view of its admitted activity of laying under sea cable by way of importing its services for their client in India, the charge towards wharfage as demanded by the Port Trust authorities, cannot be the subject-matter of controversy or dispute at the hands of the petitioner. In any event, the rates as applied is not the subject-matter of contention on behalf of the petitioner. This Court is of the considered view that the manifesting of the vessel as cargo did not suffer from any infirmity with reference to the activity of the vessel which was berthed in the second respondent Port vis-a-vis the definition of wharfage and other provisions of Major Port Trust Act. The petitioner is unable to point out any apparent error in the order passed by the second respondent Port Trust towards manifesting the vessel as cargo except stating that wharfage can be levied only on cargo. Such contention cannot be accepted by this Court, in view of the activity of the vessel for which the vessel services were utilized by way of import by the local client in the Country. On the whole, this Court does not find anything wrong with the wharfage levied on the petitioner s vessel and the demand as such made by the Port authority towards wharfage, does not suffer from any legal lapses or infirmity - Petition dismissed.

Issues Involved:
1. Legitimacy of levying wharfage charges on the vessel itself.
2. Interpretation of the term "wharfage" under the Major Port Trusts Act, 1963.
3. Applicability of subsequent clarificatory amendments to past transactions.
4. Validity of the petitioner's declaration of the vessel as cargo in the import general manifest.

Issue-wise Detailed Analysis:

1. Legitimacy of levying wharfage charges on the vessel itself:
The petitioner contended that wharfage charges should only be levied on cargo, not on the vessel itself. The vessel, which arrived at the Chennai Port carrying fiber-optic cables and other submerged equipment, was declared as cargo by the second respondent Port authorities, leading to the imposition of wharfage charges. The court held that the vessel, due to its activity of laying undersea cables, was rightly manifested as cargo. As such, the Port Trust authorities were within their rights to levy wharfage charges on the vessel.

2. Interpretation of the term "wharfage" under the Major Port Trusts Act, 1963:
The petitioner's counsel argued that wharfage, as defined under the Scale of Rates of Chennai Port Trust, refers to dues recoverable on all cargo imported, exported, or transshipped through the port. The court referred to Section 48 of the Major Port Trusts Act, 1963, which outlines the services for which rates can be framed, including wharfage. The court concluded that the vessel's activity of laying undersea cables justified its classification as cargo, thus making it subject to wharfage charges.

3. Applicability of subsequent clarificatory amendments to past transactions:
The petitioner argued that a subsequent order by the Tariff Authority for Major Ports (TAMP) dated 15-5-2015 clarified that vessels declared as cargo in the import general manifest should not be treated as cargo and no wharfage should be levied. The court, however, determined that this order, which inserted a new note under Scale 1 - Schedule of wharfage charges, was prospective in nature and took effect from 25-3-2015. As such, it did not apply to the wharfage levied on the petitioner's vessel prior to this date.

4. Validity of the petitioner's declaration of the vessel as cargo in the import general manifest:
The petitioner contended that the declaration of the vessel as cargo in the import general manifest was merely to comply with the Customs Act and should not be the basis for wharfage charges. The court rejected this argument, stating that the vessel's activity of laying undersea cables justified its classification as cargo. The court emphasized that the petitioner's compliance with customs requirements did not preclude the Port Trust from levying wharfage charges based on the vessel's activity.

Conclusion:
The court dismissed the writ petition, affirming the legitimacy of the wharfage charges levied on the petitioner's vessel. The court held that the vessel was rightly classified as cargo due to its activity of laying undersea cables, and the subsequent clarificatory amendment by TAMP did not apply retrospectively. The court found no legal infirmity in the Port Trust's actions and upheld the demand for wharfage charges.

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