2021 (7) TMI 990 - HC - Customs

Refund of Container Detention Charges - violation of the Detention / Demurrage Waiver Certificate dated 27.10.2017 - unflavoured supari - despite the Detention Certificate, no action has been taken by the 4th respondent / Service Provider - HELD THAT - Once the imported goods are confiscated by the Customs authorities, they became in possession of the goods and therefore, the Service Provider shall not levy any charges for the said confiscated goods. If at all any deposits are collected in this regard, the said deposits are to be refunded - In the present case, even the goods are not released and the Service Provider is claiming charges, which is in violation of the Detention certificate issued by the Customs authorities. Thus, the petitioner is constrained to move the writ petition. In the present case, admittedly, the goods are being maintained by the Service providers. On confiscation, the Customs authorities take possession. However, the goods are still under the custody of the Service Provider. The goods are not taken away from the premises of the Service Provider. Therefore, the grievances of the service provider are also to be looked into and considered, while granting the relief of release of the imported goods or refund of the deposits, if any made - this Court is of the considered opinion that in between disputes, more specifically, with the Service Provider and the importer or exporter has not been considered in any of these judgments relied upon by the petitioners. Therefore, this Court is of the opinion that the Detention certificate issued under the provisions of the Customs Act is reiteration of the legal position, which is binding on the Service Provider. However, such Detention certificate cannot be the sole document for the purpose of grant of relief of refund or release of goods without further adjudication with reference to the disputes or grievances exists between the Service Provider, who is a private party and the exporter or importer. The contractual relationship between the service providers, who is a private person and the petitioner cannot be resolved under writ jurisdiction by the High Court. Thus, based on the Detention Certificate issued by the Customs Authorities, the petitioner has to adjudicate the same before the Competent Forum or claiming recovery of refund - this being the nature of the Detention Certificate issued under the Regulations, this Court is of an opinion that mere issuance of Detention Certificate would not confer any right to get refund directly from service provider, who is a private party. The contract between the service provider and the importer and exporter are to be considered and terms and conditions are to be looked into with reference to the facts and an adjudication on the factual aspects, became imminent, and such an exercise cannot be done in a writ proceedings. Petition dismissed.

Summary

Issues Involved:
1. Refund of Container Detention Charges.
2. Issuance and enforceability of Detention/Demurrage Waiver Certificate.
3. Compliance with Handling of Cargo in Customs Areas Regulations, 2009.
4. Adjudication of disputes between Service Provider and importer/exporter.
5. Jurisdiction of High Court under Article 226 of the Constitution of India.

Detailed Analysis:

1. Refund of Container Detention Charges:
The petitioner sought a refund of ?20,57,526.72 collected by M/s. APL India Pvt. Ltd. as Container Detention Charges, arguing that these charges were collected in violation of a Detention/Demurrage Waiver Certificate issued by the Deputy Commissioner of Customs. The petitioner asserted that once a Detention Certificate is issued under the applicable regulations, the service provider is obligated to refund the collected amount.

2. Issuance and Enforceability of Detention/Demurrage Waiver Certificate:
The petitioner contended that the Detention/Demurrage Waiver Certificate, issued under Regulation 6(1)(l) of the Handling of Cargo in Customs Areas Regulations, 2009, should be honored by the service provider. The court noted that the certificate provides a right to the holder to claim the release of imported goods or seek a refund of the deposit. However, it emphasized that this right must be exercised through proper legal channels, considering any existing disputes between the service provider and the importer/exporter.

3. Compliance with Handling of Cargo in Customs Areas Regulations, 2009:
The court acknowledged that under Regulation 6(1)(l), a service provider should not charge rent or demurrage on goods seized, detained, or confiscated by customs authorities. The petitioner argued that the service provider's failure to comply with this regulation warranted action from the authorities. However, the court highlighted that the mere issuance of a Detention Certificate does not automatically entitle the petitioner to a refund without resolving any disputes.

4. Adjudication of Disputes Between Service Provider and Importer/Exporter:
The court emphasized that disputes between the service provider and the importer/exporter regarding charges or contractual obligations cannot be adjudicated in writ proceedings under Article 226. It stated that such disputes must be resolved through appropriate legal forums. The court referred to previous judgments, including those from the Bombay High Court and Madras High Court, which underscored the need for adjudication of disputes before granting relief based on a Detention Certificate.

5. Jurisdiction of High Court Under Article 226 of the Constitution of India:
The court clarified that while the High Court has the power to issue directions under Article 226, it cannot adjudicate disputes involving private contractual obligations between a service provider and an importer/exporter. The court stated that the Detention Certificate should be seen as an eligibility certificate for claiming a refund, but the actual refund process requires resolving any disputes through proper legal channels.

Conclusion:
The court concluded that the petitioner must resolve disputes with the service provider through appropriate legal forums before seeking a refund based on the Detention Certificate. The writ petition was dismissed, with the petitioner advised to initiate appropriate action to claim the refund following the prescribed procedures.