2017 (8) TMI 347 - HC - Customs

Re-export of prohibited goods - demurrage/rent charges - Whether the Petitioner is permitted to re-export its consignment of health products without payment of demurrage/rent charges owed to the Cargo handling company? Held that - There is nothing on record to support the case of the Petitioner that there was a bona fide mistake or that the goods were meant for Singapore and were wrongly brought to India. All the documents on record clearly reveal that there was a proper detailed invoice for the health products, which was raised on Visha Enterprises and was meant to be cleared by Visha Enterprises - Under Section 111 (d) of the CA, goods which are prohibited under any law for the time being in force, are liable to be confiscated. Such goods fall in the category of prohibited goods under Section 2 (33) of the CA and any import or attempt to import the same, entails confiscation. The ACC (Imports), having confiscated the goods, could not have permitted the reexport of the same, as per law, without the imposition of fine or penalty. The confiscation of goods having not been challenged by the Petitioner, nonimposition of penalty/fine is clearly erroneous and unsustainable. It is the admitted position that the consignment consisted of prohibited goods and the same having arrived in Delhi and having been confiscated, the Petitioner being the owner of the goods, has to take the responsibility for the same. Mere non-imposition of penalty/fine, which is the mandate under Section 125 of the CA in case of confiscated goods, cannot automatically result in letting the Petitioner go scot-free - In the present case, the arrival of the consignment in Delhi, which contains prohibited goods, is clearly not innocent and is contrary to law. The goods being prohibited goods and having been confiscated, even as per Trip Communication, the Petitioner would not be entitled to waiver of demurrage/rent charges. The Petitioner, having accepted the finding that the consignment contained prohibited goods and was liable for confiscation, cannot claim waiver of demurrage/rent charges to the detriment of CELEBI, which was not even heard by the ACC (Imports). The consignment having contained prohibited goods , which were confiscated in terms of Section 111 (d) of the CA, the Petitioner is not entitled for re-export of the same without payment of demurrage/ground rent - petition dismissed - decided against petitioner.

Summary

Issues Involved:
1. Whether the Petitioner is permitted to re-export its consignment of health products without payment of demurrage/rent charges owed to the Cargo handling company.

Detailed Analysis:

Issue 1: Permissibility of Re-export without Payment of Demurrage/Rent Charges

Background and Petitioner’s Argument:
The Petitioner, a Dubai-based trading company, exported a consignment of health products to Delhi. Upon arrival, the importer, Visha Enterprises, did not file any bill of entry or send remittance. The Directorate of Revenue Intelligence (DRI) requested the consignment be put on hold for examination. The Petitioner sought permission from Customs authorities to re-export the goods, claiming the consignment was sent to India by mistake. The Additional Commissioner of Customs (Imports) (ACC (Imports)) held the goods liable for confiscation under Section 111 (d) of the Customs Act, 1962, but accepted the Petitioner’s explanation of a bona fide mistake and did not levy any fine or penalty.

Respondent’s Argument:
CELEBI, the customs cargo handler, argued that they were not heard before the ACC (Imports) order and that the waiver of demurrage charges would result in a loss for them. They contended that under Section 125 of the Customs Act, fine must be imposed in lieu of confiscation, and that the Petitioner’s reliance on the ACC (Imports) order was misplaced.

Court’s Analysis:
The court examined whether the export of the consignment to India was a bona fide mistake. The Petitioner failed to provide any contemporaneous documents to support the claim that the consignment was meant for Singapore. The court found that the consignment consisted of prohibited goods under Section 22 of the Food Safety and Standards Act, 2006, and was liable for confiscation under Section 111 (d) of the Customs Act. The ACC (Imports) erred in not imposing a fine or penalty, as mandated by Section 125 of the Customs Act.

Legal Precedents:
The court referred to the judgment in Trip Communication Pvt. Ltd. v. Union Of India, which held that there would be no automatic exemption of demurrage/rent charges. In cases where the importer is found innocent, the waiver policy would apply, but in cases involving prohibited goods, the Petitioner would not be entitled to such waiver. The court also cited Grand Slam International and Trustees of Port of Madra v. Nagavedu Lungi & Co., which upheld the custodian’s right to charge demurrage.

Conclusion:
The court concluded that the Petitioner was not entitled to re-export the consignment without payment of demurrage/ground rent. The consignment contained prohibited goods, and the Petitioner’s claim of a bona fide mistake was unsupported by evidence.

Order:
1. CELEBI is directed to communicate the amount of demurrage/ground rent to the Petitioner within a week.
2. Upon payment, the Petitioner is permitted to re-export the goods.
3. If the Petitioner fails to pay, CELEBI will proceed to deal with the goods in accordance with the law.

The writ petition and pending application were disposed of with no order as to costs.