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2017 (7) TMI 977 - SC - CustomsDetention of imported goods - demurrage and detention charges - Regulation 6(1) of the Handling of Cargo in Customs Areas Regulations, 2009 - The DRI was of the view that these consignments required 100% examination before these could be released - whether any direction could be given to the Mumbai Port Trust to waive the demurrage charges? - Held that - Neither the regulations nor the provisions of the Customs Act can impinge or in any manner affect the statutory power of the Major Port Trusts to levy rates under the Act. In fact, the Authority that framed the Regulations was itself aware of this because Regulation 6(l) itself begins with the words subject to any other law for the time being in force . It is, therefore, obvious that the Regulations are subject to any other law including the Major Port Trust Act. Therefore, these Regulations cannot in any manner affect the right of the Port Trust. We are, therefore, of the view that the High Court erred in holding that the law settled by this Court in a catena of judgments referred to above was no longer applicable in view of the 2009 Regulations. Reliance placed by the Union of India on Section 128 of the Major Port Trusts Act is totally misplaced. This provision only deals with the right of the Central Government to collect customs duties. It does not deal with the rights of the Port Trust to collect rates including demurrage. Whether any direction could be issued to the DRI/Customs Authorities to pay the demurrage charges to the Port Trust and the detention charges to the Shipping Line? - Held that - even though there may be some delay on the part of the DRI and the customs authorities, the respondent-importers have also been guilty of delaying the matter and, therefore, they cannot claim that they are not liable to pay demurrage and detention charges. We may, however, clarify that the respondent-importers are free to approach the Mumbai Port Trust in terms of Section 53 of the Act for exemption and remission of demurrage and other charges and the Board may take a sympathetic view while considering the case of the respondent-importers under Section 53. As far as detention charges of the Shipping Line are concerned, in addition to what we have observed above, we are of the view that the High Court could not in writ proceedings have directed the DRI/Customs to pay the detention charges to the Shipping Line since these were to be paid on the basis of a contract between the respondent-importers and the shipping line. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Whether the Mumbai Port Trust could be directed to waive the demurrage charges. 2. Whether the liability to pay demurrage/detention charges could be fastened upon the DRI/Customs Authorities. Detailed Analysis: Issue 1: Waiver of Demurrage Charges by Mumbai Port Trust The Supreme Court examined whether the Mumbai Port Trust, a statutory authority under the Major Port Trusts Act, 1963, could be directed to waive demurrage charges. The Port Trust argued that it is entitled to recover statutory tariffs, including demurrage charges, and that neither the High Court nor the Union of India could direct it otherwise. The Court noted that the tariff is determined by an independent statutory authority, the Tariff Authority for Major Ports, under Section 47A of the Act. The Court referred to various sections of the Major Port Trusts Act, such as Sections 48, 53, 58, and 59, which outline the Port Trust's authority to levy and collect charges. The Court also referred to Section 160(9) of the Customs Act, 1962, which states that nothing in the Customs Act shall affect the powers of any Port authority in a major port. The Court emphasized that the 2009 Regulations, framed under the Customs Act, are subordinate legislation and cannot supersede the statutory provisions of the Major Port Trusts Act. The Court held that the High Court erred in relying on Regulation 6(1) of the 2009 Regulations to direct the waiver of demurrage charges by the Mumbai Port Trust. The Court concluded that the Port Trust has the statutory right to levy demurrage charges, and this right is not affected by the Customs Act or the 2009 Regulations. Issue 2: Liability to Pay Demurrage/Detention Charges The Court examined whether the DRI/Customs Authorities could be held liable to pay demurrage/detention charges. The Court referred to several precedents, including Trustees of the Port of Madras v. M/s Aminchand Pyarelal, Board of Trustees of the Port of Bombay v. Indian Goods Supplying Co, and International Airports Authority v. Grand Slam International, which established that the importer is liable to pay demurrage charges even if the goods were detained by the Customs Authorities. The Court noted that demurrage charges are levied to ensure quick clearance of cargo and that the Port Trusts have the statutory right to recover these charges. The Court held that the DRI/Customs Authorities could only be directed to pay demurrage/detention charges if their actions were proven to be absolutely mala fide or a gross abuse of power. In this case, the High Court did not make a specific finding of mala fides against the DRI/Customs officials. The Court found that there was no unnecessary delay by the DRI in the initial stages of the investigation and that the respondent-importers themselves contributed to the delay by not cooperating fully. The Court concluded that the respondent-importers were liable to pay the demurrage and detention charges. The Court also noted that the respondent-importers could approach the Mumbai Port Trust for exemption or remission of charges under Section 53 of the Major Port Trusts Act, and the Port Trust may consider their case sympathetically. Conclusion: The Supreme Court allowed the appeals, set aside the judgment of the High Court, and dismissed the writ petitions filed by the respondent-importers. The Court held that the Mumbai Port Trust could not be directed to waive demurrage charges and that the DRI/Customs Authorities were not liable to pay the demurrage/detention charges. The respondent-importers were advised to seek exemption or remission of charges from the Mumbai Port Trust under Section 53 of the Major Port Trusts Act.
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