2021 (1) TMI 821 - HC - Customs

Confiscation of goods - rent / demurrage charged on the goods seized / detained / confiscated by the proper officer of customs - It was pointed out that this was a violation of Regulation 6(1)(l) of the Handling of Cargo in Customs Areas Regulations, 2009 which stipulates that Customs Cargo Service Providers including custodians of container freight stations should not charge any rent or demurrage on the goods seized or detained or confiscated by the proper officer - HELD THAT - It is not in dispute that respondent No. 1 is a Customs Cargo Service Provider as defined in Regulation 2(1) (b) of the Regulations. Being so, it is under a legal obligation to discharge the responsibilities as mandated under Regulation 6, more particularly in clause (l) thereof which clearly says that a Customs Cargo Service Provider shall not charge any rent or demurrage on the goods seized or detained or confiscated by the Superintendent of Customs or Appraiser or Inspector of Customs or Preventive Officer or Examining Officer as the case may be. This position has been clarified by the Commissioner of Customs (Export) in the public notice dated 26/2010 with the further clarification that Customs Cargo Service Providers shall allow the goods on production of a certificate issued from the proper officer certifying such period of seizure or detention or confiscation without charging and collecting any rent or demurrage for such period. It is also not disputed that the goods imported by the petitioner vide bill of entry No. 7540462 dated 07.08.2018 were detained by the proper officer of the customs department for the period from 14.08.2018 to 06.02.2019 which has been certified by the Superintendent of Customs in the prescribed format further mentioning that the certificate was issued as per public notice No. 26/2010 dated 02.03.2010 - for the period from 14.08.2018 to 06.02.2019, respondent No. 1 is under a legal obligation not to charge any rent or demurrage on the goods of the petitioner or on the container in which the goods have been stored and kept under its custody. Following the certificate dated 31.01.2019, it was also under a legal obligation to release the goods kept under its custody on or before 06.02.2019 to enable the petitioner to re-export the goods. Failure to do so has not only caused prejudice to the petitioner but would also disentitle respondent No. 1 from claiming any rent and demurrage for the period beyond 06.02.2019 till release of the goods because such retention of goods would be clearly unlawful being in violation of Regulation 6(1)(l) of the Regulations and the public notice dated 02.03.2010. The respondent No.1 is directed to release the goods imported by the petitioner forthwith to enable the petitioner to re-export the same in terms of letter dated 28.11.2018 of the Deputy Commissioner of Customs, Special Investigation and Intelligence Branch.

Issues Involved:
1. Whether respondent No. 1 is obligated to release the detained goods without charging rent or demurrage.
2. The applicability of Regulation 6(1)(l) of the Handling of Cargo in Customs Areas Regulations, 2009.
3. The legal obligations of Customs Cargo Service Providers regarding the charging of rent or demurrage on detained goods.
4. The jurisdiction and appropriateness of the High Court to adjudicate the dispute.

Detailed Analysis:

Issue 1: Obligation to Release Detained Goods Without Rent or Demurrage
The petitioner, a company engaged in the import and export of plastic granules and regrind, sought the release of its imported goods detained by the customs department. The goods were detained from 14.08.2018 to 06.02.2019, as certified by the Superintendent of Customs. Despite fulfilling conditions for re-export and presenting the required certificate, respondent No. 1, a Customs Cargo Service Provider, refused to release the goods without payment of rent and demurrage charges. The court directed respondent No. 1 to release the goods without charging rent or demurrage for the detention period, citing the legal obligation under Regulation 6(1)(l) and the public notice dated 02.03.2010.

Issue 2: Applicability of Regulation 6(1)(l)
Regulation 6(1)(l) of the Handling of Cargo in Customs Areas Regulations, 2009, prohibits Customs Cargo Service Providers from charging rent or demurrage on goods seized, detained, or confiscated by customs authorities. The court emphasized that respondent No. 1, as a Customs Cargo Service Provider, must adhere to this regulation. The regulation was further clarified by a public notice, which mandated that goods should be released without rent or demurrage upon presenting a proper certificate.

Issue 3: Legal Obligations of Customs Cargo Service Providers
Respondent No. 1, being a Customs Cargo Service Provider, is legally bound to follow the responsibilities outlined in Regulation 6, particularly clause (l). The court highlighted that respondent No. 1's failure to release the goods and its demand for rent and demurrage were unlawful. The court noted that the goods were detained by customs authorities, and the petitioner had complied with all conditions for re-export, including furnishing a bank guarantee and P.D. Bond.

Issue 4: Jurisdiction and Appropriateness of High Court
Respondent No. 2 argued that the dispute was contractual and should be resolved in a civil court. However, the court rejected this argument, stating that respondent No. 1, a Government of India enterprise, must act responsibly and in accordance with customs regulations. The court asserted its jurisdiction to adjudicate the matter, emphasizing that respondent No. 1's actions were in violation of legal obligations and customs authorities' directions.

Conclusion:
The court directed respondent No. 1 to release the detained goods without charging rent or demurrage, allowing the petitioner to re-export the goods as per customs authorities' approval. The writ petition was allowed, and the court underscored the importance of adhering to customs regulations and lawful directions.

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