2002 (6) TMI 50 - HC - Customs

Summary

Issues Involved:
1. Legality of the seizure and detention of goods by Customs authorities.
2. Liability for payment of demurrage charges.
3. Reimbursement of charges incurred by the petitioner due to wrongful detention.

Detailed Analysis:

1. Legality of the Seizure and Detention of Goods:
The petitioner, an importer, purchased an advance license and imported Copper Wire Bars. The Customs authorities alleged mis-declaration of the value of goods, leading to their seizure under Section 110(1) of the Customs Act, 1962. The petitioner contested this, resulting in a series of legal proceedings. Initially, the Commissioner of Customs ordered confiscation, but this was overturned by the Customs, Excise & Gold (Control) Appellate Tribunal (CEGAT), which directed the declared CIF values to be accepted and set aside the confiscation and penalty. The Supreme Court dismissed the Customs authorities' appeal, affirming CEGAT's decision.

2. Liability for Payment of Demurrage Charges:
The petitioner sought reimbursement for container charges, warehousing, and storage charges incurred due to the wrongful detention of goods. The Customs authorities argued that the seizure was lawful as it complied with Section 110(2) of the Customs Act, 1962, and that the importer is liable for demurrage charges even if the detention is later found unjustified. The court upheld this view, referencing Supreme Court judgments in cases like Grand Slam International and Trustees of Port of Madras v. Nagavedu Lungi & Co., which established that importers are liable for demurrage charges even during unjustified detentions by Customs authorities.

3. Reimbursement of Charges Incurred by the Petitioner:
The court distinguished between the period up to the adjudication process and the period thereafter. It held that the Customs authorities' actions during the adjudication process were within jurisdiction and lawful. However, post-adjudication, the Customs authorities were bound to release the goods as per CEGAT's order. The failure to do so rendered the detention illegal from February 17, 2000, onwards. The court directed the Customs authorities to reimburse the petitioner for demurrage charges incurred from February 17, 2000, to the dates when the goods were finally released (December 12, 2000, for four consignments and February 28, 2001, for two consignments).

Conclusion:
The court allowed the writ application in part, directing the Customs authorities to determine and reimburse the demurrage charges incurred by the petitioner from February 17, 2000, onwards. The Customs authorities were given three months to complete this determination and an additional 30 days to make the payment, failing which the petitioner would be entitled to interest at 9% per annum. The court clarified that the petitioner could seek further legal recourse if aggrieved by the Customs authorities' determination.