2020 (5) TMI 476 - HC - Customs

Waiver / remission from payment of demurrage charges,Transshipment and other charges - storage of containers by the custodian of the goods - Rejection of issue of Detention Certificate - delay in transshipment - It is the case of the petitioner that since it has wide-bodied cargo aircrafts and since there is no facility for landing of such aircrafts in Trivandrum, the petitioner brought the cargo in these aircrafts to the Chennai International Airport for being transshipped to Trivandrum/Calicut by road - petitioner requested to issue of Detention Certificate to claim waiver / remission from payment of demurrage charges from the 3rd/4th respondent at the earliest - HELD THAT - The procedure for issue of Detention Certificate was contained in Public Notice No. 111 of 1985 dated 29.07.1985 of the Bombay Custom House. Issue of Detention Certificate was an innovation by the Customs Authorities. This was introduced much prior to Handling of Cargo in Custom Areas Regulations, 2009. Regulation 6(1)(l)of the Handling of Cargo in Customs Area Regulations, 2009 mandates that the Customs Cargo Service provider shall subject to any other law for the time being in force, shall not charge any rent or demurrage on the goods seized or detained or confiscated by the Superintendent of Customs or Appraiser or Inspector of Customs or Preventive officer or examining officer, as the case may be - As per Regulation 6(1)(l) of the Handling of Cargo in Customs Area Regulations, 2009, a Customs Cargo Service Provider which includes the Air Port Authority of India cannot charge any rent or demurrage on the seized or detained or confiscated goods by the Superintendent of Customs or Appraiser or Inspector of Customs or Preventive officer or examining officer, as the case may be. This was perhaps framed in line with Public Notice No.111 of 1985 dated 29.07.1985 of Bombay Customs House. The Superintendent of Customs or the Appraiser or the Inspector of Customs or the preventive officer or examining officer as the case may be can exercise the power to recommend waiver of demurrage and other charges that are chargeable by the custodian of the goods in whose place/premises the goods are stored before being transshipped. In Trustees of the Port of Madras Vs. M/s. Aminchand Pyarelal, 1975 (9) TMI 170 - SUPREME COURT , the Hon ble Supreme Court has held that the Port Trusts were under a statutory obligation to render services of various kinds in the larger public and national interest - The Hon ble Supreme Court also observed that the demurrage charges are levied in order to ensure quick clearance of the cargo from the harbour and the rates are fixed in such a way that they would make it unprofitable for the importer to use the port premises as a warehouse. In case there is congestion in the port it would affect the free movement of ships and of essential goods. Therefore, the scale of rates had to be framed in such a manner that it worked both as an incentive to the importers to remove the goods as expeditiously as possible from the transit areas and also acted as a disincentive to keep the goods in the premises of the Board for a long time, thereby increasing the demurrage charges substantially with passage of time - The Court thus held that it was the duty of the Board to recover rates; the Board had a lien on the goods and the right to seize and detain the goods, until the rates were fully paid and to sell the goods if the rates were not paid and recover the same. It was held that certain concessions may be given taking into account the hardship of the importers, but the legality of the rates cannot be questioned. The authorities under the Airport Authority Act, 1994 require certificate from the Customs for granting waiver from payment of demurrage under the policy framed under Regulation 6 of the Airport Authority of India (Storage and Processing of Cargo, Courier and Express Goods and Postal Mail) Regulations, 2003 - In fact, such certificate need not be confined to the circumstances specified in Public Notice No.111 of 1985 dated 29.07.1985 of the Bombay Custom House alone. It can be issued in appropriate case to cover the circumstances specified in the Policy of the Airport Authority as per Regulation 6 of the Airport Authority of India (Storage and Processing of Cargo, Courier and Express Goods and Postal Mail) Regulations, 2003. Though, it is not the case of the abuse by the officers of the Customs, there are sufficient indications to show that there was a complete disruption of service at the Air Cargo Complex during the relevant period due to alleged arrest of the officers. In absence of the officers to receive the transshipment application, there could have been total disruption and no application was received which perhaps may have led to the delay - If there were no proper officers or there were only few officers to handle the workload due to alleged arrest and the delay in receiving the transshipment application for being processed by the 1st respondent should not be at the cost of the petitioner. If indeed there was a complete breakdown due to alleged arrest and resulted in disruption of the operations at the Air Cargo Complex, the petitioner should be compensated as such delay cannot be attributed by the petitioner. This would require proper facts being established by the petitioner. This aspect would require proper verification - Issue is therefore left open for the petitioner to establish that Customs Department is liable to compensate the petitioner - Petition allowed by way of remand.

Summary

Issues Involved:
1. Rejection of the application for the issuance of a "Detention Certificate" by the Commissioner of Customs.
2. Liability for transshipment and demurrage charges due to delays.
3. Alleged inaction and delay by the Customs Department in processing transshipment applications.
4. Impact of the arrest of customs officers on the transshipment process.
5. Legal provisions and precedents related to the waiver of demurrage charges.

Issue-wise Analysis:

1. Rejection of the Application for Issuance of a "Detention Certificate":
The petitioner challenged the impugned communication dated 10.03.2010, wherein the 1st respondent Commissioner of Customs rejected the application for the issuance of a "Detention Certificate" to claim waiver of transshipment charges billed by the Integrated Air Cargo Complex, represented by the 3rd/4th respondent. The petitioner argued that the delay in transshipment was due to the Customs Department's refusal to accept transshipment applications promptly, leading to additional charges. The 1st respondent maintained that the applications were processed without delay and that the petitioner suppressed material facts regarding the rejection of the request by the 3rd and 4th respondents.

2. Liability for Transshipment and Demurrage Charges:
The petitioner, an international airline company, was billed for demurrage and transshipment charges for delays in transshipping cargo from Chennai to Trivandrum between 26.11.2009 and 13.12.2009. The petitioner contended that the delay was due to the Customs Department's inaction and not their fault. The 3rd and 4th respondents, as custodians of the imported goods, demanded payment of ?65,46,830/- after adjustments. The 1st and 2nd respondents argued that the petitioner was responsible for filing transshipment applications on time and that there was no evidence to substantiate the delay.

3. Alleged Inaction and Delay by the Customs Department:
The petitioner claimed that the Customs Department delayed receiving transshipment applications and completing formalities, resulting in additional charges. The 2nd respondent's letter dated 14.12.2009 queried the reasons for routing the cargo through Chennai instead of directly to Trivandrum, indicating an attempt to deflect the issue. The petitioner argued that the delay in processing transshipment applications was due to the Customs Department's inaction, not their fault.

4. Impact of the Arrest of Customs Officers on the Transshipment Process:
During the hearing, the petitioner revealed that 9 out of 11 customs officers handling transshipment at Chennai Air Cargo Complex were arrested, causing a complete disruption of activities. The petitioner submitted newspaper clippings to support this claim, stating that the arrest led to delays in receiving and processing transshipment applications. The respondents countered that these allegations were not the basis of the writ petition and that newspaper reports could not be treated as proof.

5. Legal Provisions and Precedents Related to Waiver of Demurrage Charges:
The petitioner relied on several judgments, including Shipping Corporation of India Limited Vs. C.L. Jain Woolen Mills and Agrim Sampada Limited Vs. UOI, to argue for the issuance of a "Detention Certificate." The respondents cited Mumbai Port Trust Vs. Shri Lakshmi Steels and other cases to assert that the petitioner was liable for demurrage charges regardless of delays caused by customs authorities. The court noted that Regulation 6 of the Handling of Cargo in Customs Area Regulations, 2009, and the Airports Authority of India (Storage and Processing of Cargo, Courier and Express Goods and Postal Mail) Regulations, 2003, govern the waiver of demurrage charges.

Conclusion:
The court concluded that the petitioner might not have been guilty of any delay in filing transshipment applications and that the delay could have been due to the arrest of customs officers. The case was remitted back to the 1st respondent to verify the facts and determine whether the petitioner was entitled to compensation for the delay. The 1st respondent was directed to pass appropriate orders within three months, and the petitioner was instructed to pay the amounts due to the 3rd and 4th respondents. The writ petition was disposed of with these directions.