2017 (6) TMI 309 - HC - Customs

Development of CFS - validity of public notices - compulsory imposition of DPD facility - importers find it difficult to make the logistical arrangements necessary to evacuate RMS facilitated containers through DPD from the terminal - Held that - silence of the petitioners and parties like them for more than 8 years is eloquent enough. This only indicates that so long as there is no threat to their business opportunity or their commercial interest, the petitioners or their representative association do not complain. The complaint now is motivated by pure commercial considerations. In these circumstances, the contesting respondents are right in their submission that we cannot take into account the petitioners commercial consideration or business prospects in dealing with the challenge raised in the writ petition. Validity of Public Notice No. 161 of 2016 dated 28th November, 2016 - Held that - The designation of Speedy in Public Notice No. 161 of 2016 read with Public Notice No. 66 of 2008 has the effect of arbitrarily and unreasonably discriminating against the members of the association. They do not enjoy a level playing field for providing their services. However, it is apparent from a reading of this representation at page 107 of the paper book that the same refers to the earlier Public Notice No. 66 of 2008 dated 11th September, 2008. We have already set out as to how no grievance was raised for more than 8 years when the arrangement and particularly of designation of respondent no. 9 was holding the field. Suddenly, on account of the Public Notice No. 161 of 2016 that such a representation was addressed. Public Notice No. 180 of 2016 dated 19th December, 2016 - Held that - This public notice refers to the prior public notices and states that the DPD facility reduces the time and cost for importers considerably. In order to reduce dwell time and cost associated with import at Nhava Sheva, it has been decided to extend DPD permission to importers as mentioned in Anexure A enclosed to this public notice. The other conditions mentioned in public notice dated 28th November, 2016 will remain the same. Therefore, there is an enlargement and extension of facility to those importers whose names are mentioned in Annexure A . Public Notice Nos. 8 and 9 of 2017 - Held that - In the first notice of 2017 (Public Notice No. 8 of 2017 dated 16th January, 2017), the office of the Commissioner of Customs refers to the representations by various stakeholders/members from trade and then states that as a measure of trade facilitation and ease of doing business, the points raised by these persons have been examined and point-wise clarification/procedural requirements are set out in this public notice - In Public Notice No. 9 of 2017, there is a reference made to meetings with the CFSs within the jurisdiction of JNCH, at which, their views were solicited in order to find a solution to logistic arrangements. It was discussed that the JNPT is already preparing a logistic solution in the form of engaging 5-7 major transporters, who will provide transport services to DPD clients in efficient manner and evacuation of containers from terminal will take place on best pick up basis. This will facilitate further rationalisation of shifting charges being charged by terminal operators. The DPD clients can avail the aforesaid logistic solution. Public Notice No. 16 of 2017 - Held that - Point wise clarification/procedural requirements set out in this Public Notice No. 16 of 2017 dated 9th February, 2017, therefore, carries the matter further. However, the basic policy decision has already been taken by earlier public notices. This point-wise clarification further elaborately sets out the procedural requirements. There are meetings held with the stakeholders as well. As far as this Public Notice No. 27 of 2017 is concerned, it came to be issued because there was a request from the stakeholders to devise a system so that container is released to DPD importer only after issue of delivery order even in case where CFS is logistic service provider. Therefore, the further documents that are required to be obtained by DPD importer, before the consignments are cleared, would ease the movement in the sense if advance intimation is submitted by DPD importer to shipping lines, then, the shipping lines can access the CFS. That is how this public notice has been issued. The limited tender notice dated 17th March, 2017 is really in furtherance of the policy measures and enunciated in the public notice. That is why when that limited tender notice was published, it referred to the relevant paragraphs of the public notices and states that the detailed terms and conditions of the limited tender notice are mentioned in Annexure A . The limited tender is to invite offers under the bids especially for designation of CFSs for delivery of DPD containers from port terminals of JNCH, Nhava Sheva to CFSs, if not cleared beyond prescribed period and certain other circumstances as specified in the public notices. It is in that sense the participation in the limited tender is not restricted nor does it perpetuate the alleged monopoly of respondent no. 9. Even the respondent no. 9 cannot claim a absolute right simply because it can only receive such containers/goods which are not cleared by the importers within the above time limit of 48 hours. Thus, there is a arrangement devised to move such cargo/goods out of the port. If such is the intent and purpose and which is sought to be achieved and when we find that even the members of respondent no. 8 association and some of the petitioners have favourably responded to this tender, then, all the more, we are disinclined to interfere in writ jurisdiction. Petition dismissed - decided against petitioner.

Summary

Issues Involved:
1. Challenge to Public Notices No. 16 and 27 of 2017.
2. Challenge to Public Notice No. 8 of 2017.
3. Challenge to paragraph 4.9 of Public Notice No. 161 of 2016.
4. Challenge to the appointment of respondent no. 9 as the Designated Container Freight Station (CFS).
5. Challenge to paragraphs 3.7 and 3.8 of Facility Notice No. 63 of 2008.
6. Challenge to the tender notice dated 17th March, 2017.
7. Request for a writ of mandamus to prevent enforcement of the impugned public notices and tender notice.

Detailed Analysis:

1. Challenge to Public Notices No. 16 and 27 of 2017:
The petitioners challenged these notices on the grounds that they arbitrarily favor respondent no. 9 as the designated CFS, thereby discriminating against other CFSs. The court noted that the public notices aimed to reduce dwell time and transaction costs, thus facilitating ease of doing business. The court found that the measures were in line with the Customs Act, 1962, and the Handling of Cargo in Customs Area Regulations, 2009 (HCCA Regulations, 2009). The court held that the public interest in reducing port congestion and expediting cargo clearance outweighed the petitioners' commercial interests.

2. Challenge to Public Notice No. 8 of 2017:
This notice reiterated that DPD containers not cleared within 48 hours should be transferred to the designated CFS, respondent no. 9. The court found that the notice was consistent with the objective of reducing congestion and facilitating faster clearance of goods. The court emphasized that the regulations under the Customs Act allowed for such measures, and the petitioners' challenge was primarily motivated by commercial considerations rather than any legal infirmity.

3. Challenge to paragraph 4.9 of Public Notice No. 161 of 2016:
The petitioners sought to quash paragraph 4.9, which extended the DPD facility to more importers. The court noted that the extension was based on the volume of transactions and the ability of importers to comply with conditions. The court found that the measure was aimed at reducing time and cost for importers and was within the powers conferred by the Customs Act and the HCCA Regulations, 2009.

4. Challenge to the appointment of respondent no. 9 as the Designated CFS:
The petitioners argued that the appointment was arbitrary and lacked transparency. The court observed that respondent no. 9 was designated as the closest CFS to the port to avoid road congestion and reduce transaction costs. The court noted that the designation was in public interest and was done transparently, with subsequent measures ensuring open participation from other CFSs through a limited tender process.

5. Challenge to paragraphs 3.7 and 3.8 of Facility Notice No. 63 of 2008:
These paragraphs provided for the appointment of a designated CFS. The court found that the measures were consistent with the objective of decongesting the port and facilitating faster clearance of goods. The court held that the regulations under the Customs Act allowed for such measures, and the petitioners' challenge was not substantiated by any legal infirmity.

6. Challenge to the tender notice dated 17th March, 2017:
The petitioners challenged the tender notice, arguing that it perpetuated the monopoly of respondent no. 9. The court found that the tender notice aimed to ensure transparency and open participation from all registered CFSs. The court noted that the tender process was a response to the petitioners' demand for transparency and provided an equal opportunity for all CFSs to participate.

7. Request for a writ of mandamus:
The petitioners sought to prevent the enforcement of the impugned public notices and tender notice. The court held that the measures were in public interest, aimed at reducing port congestion and facilitating faster clearance of goods. The court found no violation of Articles 14 and 19(1)(g) of the Constitution of India and dismissed the petition.

Conclusion:
The court dismissed the petition, holding that the impugned public notices and tender notice were in line with the Customs Act, 1962, and the HCCA Regulations, 2009. The measures were aimed at reducing port congestion, facilitating faster clearance of goods, and ensuring transparency. The court found no violation of the petitioners' fundamental rights and emphasized that public interest outweighed the petitioners' commercial considerations.