2021 (7) TMI 420 - HC - Customs

Dishonor of Detention Certificate - seeking permission for clearance of goods without payment of demurrage and container detention charges in terms of Regulation 6 (1) (l) of Handling of Cargo in Customs Areas Regulations 2009 - contentions of the petitioners are that once the Statutory provisions contemplate that the goods belong to the Customs Department are confiscated and the Service Provider is not entitled to collect any charges then they are bound to release the goods and refund the deposit if any collected - HELD THAT - Once the imported goods are confiscated by the Customs authorities they became in possession of the goods and therefore the Service Provider shall not levy any charges for the said confiscated goods. If at all any deposits are collected in this regard the said deposits are to be refunded. In the present case even the goods are not released and the Service Provider is claiming charges which is in violation of the Detention certificate issued by the Customs authorities. Thus the petitioner is constrained to move the writ petition - This Court is of the considered opinion that a thin distinction is to be drawn in between the Detention certificate as well as the relief granted by various Courts with reference to the Detention certificate issued by the Customs Department. The in-between possible or existing disputes are relevant for the purpose of granting the relief and such disputes between the Service Provider and an importer or exporter cannot be adjudicated in a writ proceedings under Article 226 of the Constitution of India. In the present case admittedly the goods are being maintained by the Service providers. On confiscation the Customs authorities take possession. However the goods are still under the custody of the Service Provider. The goods are not taken away from the premises of the Service Provider. Therefore the grievances of the service provider are also to be looked into and considered while granting the relief of release of the imported goods or refund of the deposits if any made - this Court is of the considered opinion that in between disputes more specifically with the Service Provider and the importer or exporter has not been considered in any of these judgments relied upon by the petitioners. Therefore this Court is of the opinion that the Detention certificate issued under the provisions of the Customs Act is reiteration of the legal position which is binding on the Service Provider. The undertaking clause in Regulation 5 (5) is to ensure that the service providers implement the provisions of the Act and the Rules as well as the consequent orders issued by the Authorities. However this Court has held in the aforementioned paragraphs that Detention Certificate is to be construed as Eligibility Certificate for the purpose of claiming refund and the refund is to be granted after resolving the disputes if any exist between the service providers and importers or exporters. The contractual relationship between the service providers who is a private person and the petitioner cannot be resolved under writ jurisdiction by the High Court - thus based on the Detention Certificate issued by the Customs Authorities the petitioner has to adjudicate the same before the Competent Forum or claiming recovery of refund. This being the nature of the Detention Certificate issued under the Regulations this Court is of an opinion that mere issuance of Detention Certificate would not confer any right to get refund directly from service provider who is a private party - petition dismissed.

Summary

Issues Involved:
1. Refund of demurrage and container detention charges.
2. Validity and enforceability of the Detention Certificate.
3. Responsibilities of the Customs Cargo Service Provider.
4. Adjudication of disputes between the Service Provider and the importer/exporter.
5. Jurisdiction of the High Court under Article 226 for resolving contractual disputes.

Issue-wise Detailed Analysis:

1. Refund of Demurrage and Container Detention Charges:
The petitioner sought a refund of Rs. 38,99,383/- collected by the 3rd respondent, arguing that the charges were collected in violation of the Detention Certificate issued by the 2nd respondent. The Detention Certificate, issued under Regulation 6(1)(l) of the Handling of Cargo in Customs Areas Regulations, 2009, stated that no rent or demurrage is payable for goods under detention. The petitioner contended that once the Detention Certificate is issued, the Service Provider is obligated to honor it and refund the collected charges.

2. Validity and Enforceability of the Detention Certificate:
The petitioner relied on previous judgments, including those from the Bombay High Court and Madras High Court, which upheld the enforceability of Detention Certificates. The court noted that the Detention Certificate is an eligibility certificate confirming the importer/exporter's right to claim a refund under Regulation 6(1)(l). However, the court emphasized that mere issuance of the certificate does not automatically confer a right to a refund without further adjudication of any disputes between the Service Provider and the importer/exporter.

3. Responsibilities of the Customs Cargo Service Provider:
The court highlighted the responsibilities of the Customs Cargo Service Provider under Regulation 6(1)(l), which prohibits charging rent or demurrage on goods seized, detained, or confiscated by customs authorities. The court noted that the Service Provider must comply with the regulations and the orders issued by the customs authorities. However, the court also recognized that disputes regarding service charges or other contractual obligations between the Service Provider and the importer/exporter must be resolved before enforcing the Detention Certificate.

4. Adjudication of Disputes Between the Service Provider and the Importer/Exporter:
The court emphasized that disputes between the Service Provider and the importer/exporter regarding charges or other contractual obligations must be adjudicated before granting relief based on the Detention Certificate. The court stated that such disputes cannot be resolved in a writ proceeding under Article 226 of the Constitution of India. The court noted that the terms and conditions of the contract between the Service Provider and the importer/exporter are crucial in determining the right to a refund.

5. Jurisdiction of the High Court Under Article 226 for Resolving Contractual Disputes:
The court clarified that while the High Court has the power to issue orders to private parties in certain circumstances involving public interest or public duties, it cannot adjudicate contractual disputes between private parties in a writ proceeding. The court stated that the petitioner must approach the appropriate forum for resolving disputes and claiming a refund. The court dismissed the writ petition, stating that the petitioner is at liberty to initiate appropriate action before the competent forum to resolve the disputes and claim the refund.

Conclusion:
The court concluded that the Detention Certificate issued by the customs authorities serves as an eligibility certificate for claiming a refund but does not confer an automatic right to a refund without resolving disputes between the Service Provider and the importer/exporter. The court dismissed the writ petition, directing the petitioner to seek resolution of disputes and claim the refund through the appropriate legal forum.