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2019 (12) TMI 957 - HC - CustomsImposition of Demurrage charges - liability is of the importer or customs department - On examination of the consignment, it was felt that there had been misdeclaration of quantity. Pursuant thereto, vide Panchnama, the Commissioner seized the consignment and handed it over, to CELEBI for safe custody - petitioner represented, to the Commissioner requesting that the aforesaid goods be permitted to be warehoused, so that further demurrage charges could be avoided - whether Respondent No.1 (CELEBI) could charge demurrage, on the goods imported by the petitioners, which have been stored in the premises of CELEBI? - Regulation 6(1)(l) of the Handling of Cargo in Customs Areas Regulations, 2009. HELD THAT - The charging of demurrage by the CELEBI, being in terms of the concessionaire agreement, between the DIAL and CELEBI, which was entered into, by them, in terms of the OMDA, which, in turn, stands sanctified by Section 12A of the AAI Act, the CELEBI must be treated as charging, and recovering, demurrage, in accordance with law for the time being in force . The inevitable sequitur would be that the injunction, engrafted in Regulation 6(1)(l) of the Handling of Cargo Regulations, on the charging of demurrage in respect of goods detained/seized, or confiscated by the customs authorities, would not apply to, or affect, CELEBI - It is also settled, by various decisions that the liability, to pay demurrage to the CELEBI, was of the petitioner - the Customs authorities have acted mala fide or have contributed, in any manner, to delay in release of the consignment imported by the petitioner. It is only where a clear case of unquestionable delay, bordering on mala fides and demonstrative of unreasonable harassment of an importer, is made out, that the customs authorities can be mulcted with the liability to pay demurrage or detention charges. A reading of sub-section (1) of Section 13 of the AERA Act makes it abundantly clear that the AERA is basically concerned with fixing tariff, and not with other airport services, including actual collection of demurrage, for continued storage of the goods. The prayer, of the petitioner, for issuance of directions to the respondents, not to collect any demurrage, in respect of the goods, imported by the petitioner and in the custody of CELEBI, is bereft of merit - CELEBI is entitled, despite Regulation 6(1)(l) of the Handling of Cargo Regulations, to charge demurrage in respect of the goods consigned to its custody, and to retain custody over such goods till the demurrage is paid - demurrage, to CELEBI, would be payable by the petitioners-importers in these writ petitions, and not by the Customs authorities. Petition dismissed.
Issues Involved:
1. Whether CELEBI could charge demurrage on goods imported by the petitioners stored in its premises. 2. Applicability and interpretation of Regulation 6(1)(l) of the Handling of Cargo in Customs Areas Regulations, 2009. 3. Legal provisions and case law regarding the charging of demurrage by custodians. 4. Whether the Customs authorities can direct custodians to waive demurrage charges. 5. The petitioners' liability to pay demurrage charges to CELEBI. Detailed Analysis: 1. Whether CELEBI could charge demurrage on goods imported by the petitioners stored in its premises: The core issue was whether CELEBI could charge demurrage on goods imported by the petitioners and stored in CELEBI’s premises. The petitioners contended that CELEBI had no right to charge demurrage based on Regulation 6(1)(l) of the Handling of Cargo in Customs Areas Regulations, 2009. The court examined the legal provisions and past judgments to determine the validity of CELEBI’s claim for demurrage. 2. Applicability and interpretation of Regulation 6(1)(l) of the Handling of Cargo in Customs Areas Regulations, 2009: Regulation 6(1)(l) states that the Customs Cargo Service provider shall not charge any rent or demurrage on goods seized, detained, or confiscated by Customs authorities, subject to any other law for the time being in force. The court noted that this regulation is subject to other prevailing laws, which could include statutory provisions that authorize the charging of demurrage. 3. Legal provisions and case law regarding the charging of demurrage by custodians: The court referred to several landmark judgments, including Trustees of the Port of Madras v. Aminchand Pyarelal (1976), Board of Trustees of the Port of Bombay v. Indian Goods Supplying Co. (1977), and Board of Trustees of the Port of Bombay v. Jai Hind Oil Mills Co. (1987). These cases established that custodians, including port trusts and airport authorities, have a statutory right to charge demurrage for goods stored in their premises, irrespective of whether the delay in clearance was due to the importer’s fault or not. The court also referred to the Grand Slam International case (1995), which reinforced the custodian’s right to charge demurrage even if the delay was due to Customs authorities' actions. 4. Whether the Customs authorities can direct custodians to waive demurrage charges: The court held that Customs authorities do not have the jurisdiction to direct custodians to waive demurrage charges. This was supported by the Supreme Court's decision in Grand Slam International, which stated that the issuance of detention certificates by Customs authorities does not bind custodians to waive demurrage charges. The court emphasized that custodians operate under statutory provisions that allow them to charge demurrage, and these provisions cannot be overridden by Customs authorities' directions. 5. The petitioners' liability to pay demurrage charges to CELEBI: The court concluded that the petitioners are liable to pay demurrage charges to CELEBI. It was noted that CELEBI’s right to charge demurrage is backed by statutory regulations under the Airports Authority of India Act, 1994, and the concession agreement with Delhi International Airport Pvt Ltd (DIAL). The court dismissed the petitioners' argument that Regulation 6(1)(l) of the Handling of Cargo Regulations exempted them from paying demurrage, as this regulation is subordinate to other laws that authorize the charging of demurrage. Conclusion: The court dismissed the writ petitions, confirming that CELEBI is entitled to charge demurrage for the goods consigned to its custody. The liability to pay demurrage lies with the petitioners-importers and not with the Customs authorities. The court also clarified that if the petitioners seek a waiver of demurrage charges, they must apply to CELEBI, which will consider the request based on its waiver policy.
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