2018 (8) TMI 49 - SC - Customs

Entitlement to Demurrage charges - effect of subsequent development i.e. clarification dated 14th May 1996 - Held that - No mala fide intent or any extraneous reasons/ grounds can be attributed to the Revenue in detaining and refusing to clear the goods of the importer(s). Rather the actions of the Revenue were prompted by what we consider to be a possible understanding of the provisions of the Notification in force i.e. Notification No.104/95 dated 30th May 1995. The subsequent change of opinion and issuance of Circular bearing No.4/1006 dated 14th May 1996 would not make the Revenue liable as has been sought to be contended by the importer(s) unless the initial action is palpably wrong or wholly unacceptable which is not the position in the present case - A stand taken by the Revenue or an action undertaken which is subsequently corrected by the Revenue itself or corrected on the basis of a subsequent judicial pronouncement will not ipso facto make the Revenue liable for payment of demurrage charges as has been contended on behalf of the appellant(s) importer(s). Petition dismisssed - decided against appellant-importer.

Summary

Issues:
Appeal against direction issued by the Bombay High Court regarding detention certificate, refund of charges, and demurrage/BPT charges.

Analysis:
The appeal before the Supreme Court involved a grievance raised by the importer(s) against a direction issued by a learned single judge of the Bombay High Court. The issue revolved around the detention certificate, refund of charges paid to Customs Authorities, and the direction to move the Port Trust authorities for demurrage/BPT charges. The High Court upheld the order, leading to the appeal before the Supreme Court.

The materials on record indicated that the goods were not cleared by the importer(s) due to a dispute regarding the interpretation of a specific clause in a notification. A direction from the Central Board of Excise and Customs further complicated the clearance process. The importer(s) eventually moved the High Court, and after a conditional interim order, the goods were cleared. A subsequent clarification by the Revenue confirmed that the importer(s) were entitled to certain benefits.

During the final arguments before the High Court, it was contended that the Revenue's stand was incorrect in light of the subsequent clarification. The importer(s) argued that they should not be liable for demurrage charges as the Revenue had unlawfully detained the goods. However, the High Court affirmed the direction based on the context and contentions presented.

Upon examining the counter/reply affidavit filed by the Revenue, the Supreme Court found no mala fide intent or wrongful grounds in the Revenue's actions. The Court noted that a change in opinion or subsequent corrective measures by the Revenue did not automatically make them liable for demurrage charges. Unless the initial action was egregiously wrong, the Revenue could not be held accountable for such charges. Consequently, the Supreme Court dismissed the appeal, finding it without merit based on the presented arguments and circumstances.