2009 (9) TMI 122 - HC - Customs

Port Trust demand of demurrage charge holding remission permissible for maximum of 90 days liability of department to pay demurrage charges - Detention Certificate issued for the period from 30-6-1997 to 4-8-2004 - In this case as the fault as admitted is on the Department for wrongly detaining the goods from 30-6-1997 to 4-8-2004 in my considered opinion the Department alone has to pay the demurrage charges for the said period. For the rest of the period i.e. from 5-8-2004 till the date of clearance of the goods the petitioner is liable. - It is a well settled proposition of law that writ of mandamus lies on the principle request and denial which means there should be a request by an individual and subsequent denial by the statutory authorities. In this case though a request was made by the petitioner to the Port authorities and the same was rejected the petitioner had not challenged the said order of rejection. Instead he filed this writ petition seeking for a direction to the Customs authorities which strictly speaking is not maintainable. -

Issues Involved:
1. Liability for demurrage charges due to delay in clearance of imported goods.
2. Validity of enhanced valuation of goods by customs authorities.
3. Issuance and extension of Detention Certificate.
4. Responsibility for demurrage charges during the period of detention.

Detailed Analysis:

1. Liability for Demurrage Charges Due to Delay in Clearance of Imported Goods:
The petitioner sought a mandamus directing the respondents to pay demurrage charges until the clearance of goods covered under Bill of Entry No. 34129, dated 30-6-1997. The petitioner claimed that the delay in adjudication by the customs authorities led to the accumulation of demurrage charges. The court noted that the petitioner had not challenged the Traffic Manager's order, which limited the remission of demurrage to a maximum of 90 days. The court also emphasized the principle of "request and denial" for issuing a writ of mandamus, which was not fully met in this case as the petitioner did not request the customs authorities to pay the demurrage charges before approaching the court.

2. Validity of Enhanced Valuation of Goods by Customs Authorities:
The petitioner imported Bearing Seamless Tubes and declared their value at USD 310/MT. The customs authorities enhanced the value to USD 1800/MT, which was contested by the petitioner. The Commissioner of Customs (Appeals) initially set aside the enhanced valuation, but the matter went through multiple rounds of appeals and remands. Ultimately, the second respondent accepted the declared value of USD 310/MT as per the Order-in-Original No. 557/1999, dated 22-8-1999. This order attained finality as it was not challenged further.

3. Issuance and Extension of Detention Certificate:
Pursuant to the court's direction, the first respondent issued a Detention Certificate for the period from 30-6-1997 to 27-2-2004, which was later extended to 4-8-2004. The certificate indicated that the detention was due to no fault or negligence on the part of the petitioner. This was a crucial factor in determining the liability for demurrage charges.

4. Responsibility for Demurrage Charges During the Period of Detention:
The court held that the customs authorities were responsible for the demurrage charges from 30-6-1997 to 4-8-2004, as the detention was not due to any fault of the petitioner. For the period from 5-8-2004 onwards, the petitioner was held liable for the demurrage charges. The court referred to Section 53 of the Major Port Trusts Act, 1963, which allows the Board to exempt or remit charges in special cases. The Supreme Court's decision in Shipping Corporation of India v. C.L. Jain Woolen Mills was cited, which held that customs authorities are liable for demurrage charges when goods are wrongly detained.

Conclusion:
The court partially granted the petitioner's relief, directing the customs authorities to pay the demurrage charges for the period from 30-6-1997 to 4-8-2004. The petitioner was directed to pay the demurrage charges for the period from 5-8-2004 until the clearance of the goods. The Port authorities were instructed to release the goods upon realization of the entire dues, and the Board was advised to consider any application for refund or waiver of demurrage charges under Section 53 of the Major Port Trusts Act. The writ petition was disposed of in these terms without any costs.

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