2009 (9) TMI 440 - AT - Customs

Demurrage charges- Detention Certificate- The original authority has very clearly brought out the actual position that the detention was not at the instance of customs or for examination by customs authorities. The impugned goods remained in the custody of the port trust as desired by the respondents. Hence it is clear that no detention certificate is required to be issued for waiver of demurrage and detention charges as the respondents were fully responsible for detention of the cargo. Held that- The respondents were fully responsible for not producing the required bank guarantee for the clearance of the cargo and in fact they had requested for release of the part of the consignment and retention of the balance quantity. Hence the original authority has rightly rejected their request for issue of a detention certificate required for seeking waiver of demurrage and detention charges from the port trust. In view of the foregoing we set aside the impugned order-in-Appeal and restore the order of the original authority. The department s appeal is allowed. The Cross-objection is dismissed.

Summary

Issues:
1. Whether detention certificate is required for waiver of demurrage and detention charges.
2. Interpretation of Circular No. 71/98-Cus. dated 15-9-98 regarding bank guarantee exemption.

Analysis:
1. The judgment addressed the issue of whether a detention certificate is necessary for the waiver of demurrage and detention charges. The original authority had communicated to the respondents that their request for a detention certificate was not suitable as the detention of the cargo was not at the instance of customs but due to the respondents' failure to produce the necessary bank guarantee. The respondents had requested clearance of one container from each consignment and retention of the balance cargo until the bank guarantee was extended. It was established that the impugned goods remained in the custody of the port trust as desired by the respondents, making it clear that no detention certificate was required as the respondents were fully responsible for the detention.

2. The judgment also delved into the interpretation of Circular No. 71/98-Cus. dated 15-9-98 concerning bank guarantee exemption. The consultant for the respondents argued that a bank guarantee was not required based on this circular. However, the department contended that the circular exempted a manufacturer-exporter listed with the central excise department from filing a bank guarantee under specific conditions, which the respondents had not fulfilled or provided evidence for. The department maintained that the benefit of the circular could not be claimed at that stage for obtaining a detention certificate. After considering both sides and the case records, the tribunal concluded that the detention was not for customs examination or assessment purposes, and the respondents' failure to produce the required bank guarantee led to the detention of the cargo.

In the final decision, the tribunal set aside the lower appellate authority's order and reinstated the original authority's decision. The department's appeal was allowed, and the cross-objection was dismissed, emphasizing that the detention certificate was not necessary for the waiver of demurrage and detention charges due to the respondents' responsibility for the cargo's detention. The judgment was delivered by Chittaranjan Satapathy, Member (T), and the operative part of the order was pronounced in open court on 23-9-2009.