2022 (4) TMI 950 - HC - Customs

Seeking release of goods for home consumption - seeking waiver of demurrage charges in terms of Regulation 6(I) and 6(q) of Handling of Cargo in Customs Areas Regulations, 2009 - whether the Custom Authorities can direct waiver of demurrages otherwise recoverable by AAI in terms of AAI Regulation, 2003? - HELD THAT - This aspect was considered in detail by this Court in M/S. GLOBAL IMPEX THROUGH ITS PARTNER, SHREE SHYAM ENTERPRISES, SURENDER KUMAR JAIN THROUGH ITS PROPRIETOR, BISHT INTERNATIONAL THROUGH ITS PROPRIETOR, ROOP SINGH ENTERPRISES THROUGH ITS PROPRIETOR, VERSUS MANAGER, CELEBI IMPORT SHED AND ANR., UNION OF INDIA ORS. 2019 (12) TMI 957 - DELHI HIGH COURT , where after analyzing a catena of judgments has held that liability to pay the demurrage is on the importer, irrespective of the justifiability, or unjustifiability, of the seizure and detention of the goods by the Customs authorities. Even in a case in which the seizure is entirely unjustified, the importer would, in the first instance, have to pay demurrage, to the custodian and, thereafter, pursue, with the Customs authorities, for obtaining reimbursement of the amount. Similar issue arose in the case of MATE (INDIA) PVT. LTD. VERSUS COMMR. OF CUS., INLAND CONTAINER DEPOT 2020 (2) TMI 1374 - DELHI HIGH COURT , wherein similar facts were involved and it was thus concluded by this Court that the Custom Authorities cannot direct waiver of demurrage charges which can only be done by the custodian under AAI Act. Merely because the Custom Authority expends a reasonable time in dispensation of their sovereign functions of search, seizure and investigation, cannot lead to transference of liability to pay demurrage to the Customs Authority. Thus, it is evident that the Customs Authorities cannot direct waiver of demurrage which can only be done by the Custodian. Moreover, in the present case the decision was given on 6th May, 2019 vide which the fine and penalty were levied upon the petitioner. Admittedly, despite the aforesaid decision, the petitioner has not paid the penalty on the pretext that he would pay the same simultaneous to the release of goods. The appellant is thus, not entitled to waiver of demurrage charges - petition dismissed.

Summary

Issues:
1. Release of goods for home consumption without demurrage charges in accordance with Customs Regulations, 2009.
2. Applicability of demurrage charges under AAI Regulations, 2003.
3. Authority to waive demurrage charges - Customs Authorities vs. Custodian.

Issue 1: Release of Goods Without Demurrage Charges
The petitioner sought the release of imported goods without incurring demurrage charges under Customs Regulations, 2009. The goods were confiscated due to misdeclaration, and investigations led to the imposition of penalties. The petitioner requested release upon payment of dues but faced refusal due to unpaid demurrage charges. The respondent No.1 argued that demurrage charges could not be waived as penalties had been imposed, citing AAI Regulations, 2003.

Issue 2: Applicability of Demurrage Charges under AAI Regulations, 2003
The respondent No.1 contended that demurrage charges were governed by AAI Regulations, 2003, not Customs Regulations, 2009. The AAI Regulations specified that demurrage charges shall not be waived if penalties or fines are imposed by Customs Authorities. The respondent emphasized the distinction between the roles of Customs Authorities and AAI in managing cargo terminals and setting charges for storage and processing of goods.

Issue 3: Authority to Waive Demurrage Charges - Customs Authorities vs. Custodian
The Court analyzed previous judgments, including Global Impex and Mate (India) Pvt. Ltd., to determine the authority to waive demurrage charges. It was established that Customs Authorities cannot direct waiver of demurrage charges, which falls under the jurisdiction of the Custodian as per AAI Act. The Court emphasized that even if Customs actions were unjustified, importers must initially pay demurrage to the Custodian. The petitioner's failure to pay penalties despite the decision led to the dismissal of the petition, ruling that the appellant was not entitled to waiver of demurrage charges.

In conclusion, the Court dismissed the petition, affirming that Customs Authorities cannot direct the waiver of demurrage charges, which is the prerogative of the Custodian under AAI Regulations, 2003. The judgment highlighted the distinct roles of Customs Authorities and Custodians in managing cargo terminals and emphasized the importer's liability to pay demurrage charges regardless of Customs actions.