2022 (1) TMI 816 - HC - Customs

Validity of levy of detention charges and ground rent charges by customs cargo service provider - goods seized or detained or confiscated by the Superintendent of Customs or Appraiser or Inspector of Customs or Preventive Officer or Examining Officer - refund of the amount sought along with interest - HELD THAT - The issue is no longer res integra in view of a recent decision of the Bombay High Court in the case of SAHAJ IMPEX VERSUS BALMER LAWRIE CO. LTD. ANR. 2021 (1) TMI 821 - BOMBAY HIGH COURT , wherein the Bombay High Court has 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. The observations made by the Bombay High Court clinches the issue. The respondent no.3, as the customs cargo service provider as defined in regulation No.2(1)(b) of the Regulations, is not entitled in law to charge any rent or demurrage on the goods seized or detained or confiscated by the Superintendent of Customs or any other authority - this position seems to have been further clarified by the Commissioner of Customs (Export) by way of a public notice No.26/2010 with the further clarification that the 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. On account of the contractual relationship if the respondent no.3 wants to recover any other dues from the writ-applicant, it is open for the respondent no.3 to approach the appropriate forum for obtaining appropriate relief - Application allowed.

Summary

Issues:
1. Whether the customs cargo service provider is entitled to charge rent or demurrage on seized, detained, or confiscated goods.

Analysis:
The writ-application under Article 226 sought relief from the court, challenging the imposition of unjust and illegal detention and ground rent charges by the respondents. The court heard arguments from both parties' counsels and deliberated on the issue of whether the customs cargo service provider can levy charges on seized or detained goods. The court referred to a recent decision of the Bombay High Court in a similar case to analyze the legal provisions under the Customs Act and relevant regulations.

The central question before the court was whether the respondent, a customs cargo service provider, could charge rent or demurrage on goods seized or detained by customs authorities. The court cited Section 45 of the Customs Act, which outlines the custody and removal of imported goods, emphasizing that the Customs Cargo Service Provider has a legal obligation not to charge any rent or demurrage on such goods. This obligation is further clarified in Regulation 6 of the Handling of Cargo in Customs Areas Regulations, 2009.

The court highlighted that the respondent, being a Customs Cargo Service Provider as defined in the Regulations, was bound by the responsibilities outlined in Regulation 6, specifically clause (l), which prohibits charging rent or demurrage on seized or detained goods. The court noted that the respondent had detained the petitioner's goods beyond the prescribed period, leading to a violation of the regulations. The court rejected the argument that the dispute was contractual, emphasizing the respondent's obligation to act responsibly as a government enterprise under the control of customs authorities.

In conclusion, the court directed the respondent to release the goods without charging rent or demurrage and ordered the refund of the amount wrongly recovered as demurrage. The judgment clarified the legal position regarding the charging of rent or demurrage by customs cargo service providers on seized or detained goods, emphasizing compliance with regulations and lawful directions from customs authorities.