2020 (3) TMI 1067 - HC - Customs

Facility of paying terminal handing charges and other charges of the port terminal directly to the terminal operators instead of shifting through the Shipping Lines - Allegation that impugned SCN issued without taking into consideration the pre-negotiated contracts already entered between the first petitioner's members and clients and without considering that it has no locus and/or authority for payment of the charges - HELD THAT - On a perusal of the provisions of 141(2) of the Customs Act, no doubt certain procedure is being prescribed with regard to storage and arrival of the consignment but the argument that the notice having been issued without jurisdiction is not able to cut eyes on plain and simple reading of the provisions of Section 143AA inserted with effect from 29th of March 2018. On a perusal of the provision of section 141(2) of the Customs Act, the board of the custom is empowered to take measures for the facilitation of trade by prescribing accepted procedures, documentation for a class of importers or exporters or for categories of goods prohibiting accepted documentary clause on or category of goods basis of the modes of transport of goods, in order to maintain transparency in the import and export documentation or clearance or release of goods or reduction of transaction cost and balance between customs control and facilitation of legitimate trade. The petitioners do not have any cause of action in laying challenge to Ext.P1. There was already a written contract between them and the client and obviously the apprehension expressed of deviation is at far-fetched. It will not curtail or take away their right to recover the handing charges as per the terms and conditions of the contract - there are no justification warranting any interference under Article 226 of the Constitution of India, to bring the case under the realm of judicial review. Petition dismissed.

Summary

Issues:
Challenge to notice regarding payment of terminal handling charges directly to terminal operators bypassing shipping lines.

Detailed Analysis:
The petitioners, Container Shipping Lines Association and two other agencies, challenged a notice issued by the Commissioner of Customs on behalf of the Government of India, Ministry of Finance, Central Board of Indirect Taxes and Customs. The notice allowed importers with AEO status or DPD facility to pay terminal handling charges directly to terminal operators instead of through shipping lines. The petitioners argued that the notice disregarded pre-negotiated contracts between the petitioners' members and clients. They contended that clients were contractually bound to pay charges to the petitioners' members, including terminal handling charges. The petitioners provided various services related to vessel clearance, coordination with customs and port health authorities, and other port-related activities. They argued that the notice was unsustainable and lacked jurisdiction, citing a Bombay High Court judgment regarding similar issues.

The court examined the impugned notice and relevant provisions of the Customs Act. The notice aimed to enhance transparency, ease of doing business, and reduce logistics costs by allowing eligible importers to pay terminal charges directly to terminal operators. The court noted the provisions of Section 141(2) of the Customs Act regarding the handling of imported and exported goods in customs areas. The court also referenced Section 143AA, which empowers the Board to prescribe procedures to facilitate trade and maintain transparency in import and export documentation. The court highlighted delegation of powers under Section 152 of the Customs Act, allowing certain customs officials to exercise powers conferred by the Board.

The court found that the petitioners lacked cause of action to challenge the notice as there was an existing contract between them and the clients. The court dismissed the writ petition, citing the Bombay High Court judgment that upheld similar facility notices to facilitate efficient movement of containers for early clearance of goods. The court concluded that the dispute between shipping lines and importers or exporters should be resolved under contract law, and there was no justification for judicial interference under Article 226 of the Constitution of India.