2004 (1) TMI 86 - HC - Customs

Import of zinc ingots from Singapore - Importer - Meaning of - detention certificate for the waiver of demurrage charges - HELD THAT - We find that the goods were originally imported by Shiv Ganga Organic Chemicals Ltd. on cash against delivery basis. These goods landed in India sometime in February, 2001. The import of these goods was not contrary to law. However, the said Shiv Ganga Organic Chemicals abandoned these goods and did not make any payment for the same. Clearly, the title in the goods in such a situation remained with the foreign supplier, i.e. Allied Deals, Singapore and it was well within its rights to enter into the transaction with the petitioner. Since the goods were transferred to the petitioner and the petitioner held the document of title in respect thereof the petitioner was clearly within the definition of ''importer'' as provided u/s 2(26) of the Customs Act and was, therefore, entitled to present the Bill of Entry and to have the goods cleared for home consumption. The goods did not belong to Shiv Ganga Organic Chemicals Ltd. Thus, the Bill of Entry sought to have been registered in the name of the petitioner by the respondents and the petitioner ought to have been permitted to clear the goods on the filing of such Bill of Entry and on payment of appropriate duty of customs. In the present case also, it is clear that the petitioner has not committed any illegality in ''importing'' the goods in question and, therefore, it cannot be saddled with the liability of payment of demurrage. Therefore, as in the case of Om Paper Chemicals (supra), it is the Customs Department which should be directed to bear the demurrage. Thus, the writ petition is allowed. The respondents are directed that the order of amendment of the manifest by the Deputy Commissioner dated 25-3-2001 be restored and the goods be allowed to be cleared by the petitioner upon the Respondents' registering the Bill of Entry in the name of the petitioner and on payment of appropriate duty of customs. It is further directed that the Customs Department shall bear the demurrage charges in respect of the goods in question from 28-3-2001 (viz. the date on which the petitioner sought to file the Bill of Entry) till the date permission to clear the goods is granted as aforesaid. There shall be no order as to costs.

Summary

Issues Involved:
1. Registration of Bill of Entry and clearance of goods.
2. Issuance of detention certificate for waiver of demurrage charges.
3. Ownership and title of the goods.
4. Applicability of previous legal precedents.
5. Liability for demurrage charges.

Summary:

1. Registration of Bill of Entry and Clearance of Goods:
The petitioner, a public limited company, imported zinc ingots from Singapore and sought to register the Bill of Entry for clearance. The Customs Authorities refused to register the Bill of Entry, citing that the goods were involved in a customs offence case linked to Shiv Ganga Organic Chemicals Ltd. Despite no restriction on the import of zinc ingots and no allegations of under-valuation, the goods were treated as "offending goods" liable for confiscation. The petitioner argued that no show cause notice had been issued within the stipulated period u/s 110(2) of the Customs Act, 1962, making the goods liable to be returned.

2. Issuance of Detention Certificate for Waiver of Demurrage Charges:
The petitioner also sought a direction for the issuance of a detention certificate to waive demurrage charges. The court held that since the petitioner had not committed any illegality in importing the goods, it could not be saddled with the liability of payment of demurrage. The Customs Department was directed to bear the demurrage charges from the date the petitioner sought to file the Bill of Entry until the date permission to clear the goods was granted.

3. Ownership and Title of the Goods:
The court examined the ownership of the goods, noting that Shiv Ganga Organic Chemicals Ltd. had abandoned the goods and did not pay for them. The title remained with the foreign supplier, Allied Deals, Singapore, who then transferred the title to the petitioner. The petitioner, holding the document of title, was deemed the legitimate owner and entitled to clear the goods for home consumption u/s 2(26) of the Customs Act, 1962.

4. Applicability of Previous Legal Precedents:
The petitioner relied on several legal precedents, including Union of India v. Sampat Raj Dugar, which established that if an importer abandons goods and does not pay for them, the supplier retains ownership and can transfer the title to another party. The court applied this principle, affirming that the petitioner, as the holder of the document of title, was the rightful owner of the goods.

5. Liability for Demurrage Charges:
Referring to the decision in Om Petro Chemicals v. Union of India, the court held that the Customs Authorities should bear the demurrage charges since the petitioner had not committed any illegality in importing the goods. The court emphasized its role as a court of equity, ensuring that the petitioner was not unjustly burdened with demurrage charges.

Conclusion:
The writ petition was allowed. The court directed the respondents to restore the order of amendment of the manifest, register the Bill of Entry in the petitioner's name, and permit the clearance of goods upon payment of appropriate customs duty. The Customs Department was also directed to bear the demurrage charges from the date the petitioner sought to file the Bill of Entry until the clearance permission was granted. No order as to costs was made.