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TMI Blog2012 (4) TMI 235X X X X Extracts X X X X X X X X Extracts X X X X ..... the bills of entry nos. 102948, 103182 and 103165 from parties in Taiwan and Korea. The aforesaid goods arrived at ICD, New Delhi between 21st February, 1991 and 21st March, 1991. After the goods were imported, the petitioner firm filed the bills of entry for release of the consignment on payment of duty on 23rd February, 1991, 19th March, 1991 and 21st March, 1991. 3. On 19th April, 1991, Assistant Commissioner of Customs drew samples and these were sent for testing to Central Revenue Control Laboratory (CRCL, for short), New Delhi. The test report of CRCL dated 8th July, 1991, indicated that the imported material was staple fibre and not synthetic waste, as declared by the Petitioner. For the present, we may just know that there was delay in drawing the samples, in sending the drawn samples, and then in getting the report from CRCL. We may also record the contention of the petitioner that customs authorities were empowered to release the goods, pending the execution of Test Bond, on provisional basis. 4. On 29th August, 1991, a show cause notice was issued by the customs authorities to the petitioner. The petitioner has highlighted the delay between 8th July, 1991 and 29th Aug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resaid 4 laboratories for the test. The reports be submitted within 3 weeks of the receipt of this order. The samples may be taken and sent to the four laboratories in the presence of the parties. Taking of the samples and sending thereof to the aforesaid four laboratories and getting the reports would be the duty of the respondents. To come up on 02.04.1993." 8. It is apparent that to resolve the controversy, as suggested by the parties, it was directed that fresh samples would be drawn and would be sent to four laboratories for their reports. On 23rd April, 1993, the following order was passed:- "WP 3277 CM No. 6115/92 Counsel for respondent placed on record six reports. He submits that out of six reports three are in favour of petitioner one is favouring the respondent and two reports are unequivocal. Counsel for petitioner, however, states that these two reports are also in favour of the petitioner. Counsel for respondent also says that the method of taking sample was not correct and consequently the reports which were in favour of the petitioner were also not correct and he wants another opportunity to draw the samples properly in the presence of the petitioner and the offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ICD, Pragati Maidan, New Delhi and in her presence the sample will be taken preferably tomorrow, the 29th May, 1993 at 11.00 A.M. and in case it is not possible due to Saturday, being non working day, then on Monday, the 31st May, 1993 at 11.00 AM. She will be paid Rs. 3000/-as her fee to be borne by the parties in equal shares. As far as the first two consignments, the goods of the petitioner should be released forthwith on petitioner's furnishing P.D. bonds which according to the petitioner they have already filled in on the format supplied by the respondents. As regards the third consignment as soon as the sample is taken the same be released on petitioner's furnishing P.D. bonds on the format supplied by the respondents. C.M. stands disposed of." 11. Thus, in respect of first two consignments, the goods belonging to the petitioner were directed to be released forthwith on furnishing provisional duty bond on the format supplied by customs authorities. The third consignment was also to be released on the petitioner furnishing provisional duty bond in the prescribed format after samples were drawn. The dates for drawing of samples were specified. 12. After the aforesaid orders w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... June, 1993, had written to the Container Corporation of India and the Shipping Corporation of India to clear the goods without detention charges/container charges. It was also stated in these letters that the amount demanded by them towards demurrage charges was much more than the value of the goods. The Container Corporation of India, vide their letter dated 2nd April, 1994, informed the petitioner that they have agreed to reduce detention and demurrage charges but were not to agreeable complete waiver, which according to the petitioner was still 10 times the CIF value. Aggrieved, the petitioner filed Writ Petition No. 3057/1995 against the Container Corporation of India and Shipping Corporation of India. The customs department was not made a party to the said writ petition. The contention of the customs authorities is that the petitioner was not aggrieved by their conduct or action/inaction as they had already issued detention certificates. It is further their contention that they were not made a party to the writ petition because the customs authorities had fully complied with the orders/directions passed in the Writ Petition (Civil) No. 3277/1992, referred to above. There is m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and was disposed of vide order dated 19th March, 1997, which reads as under:- "CW 3916 and CM 6571/95 and CM 3924/96 Learned counsel for the petitioner seeks leave to withdraw the petition with liberty to approach the court again, if need be. Dismissed as withdrawn." 18. At this point, it may be relevant to note that an appeal filed by an associate partnership firm M/s Sanjeev Woolens Mills was pending before CEGAT. This was noted in the order dated 5th February, 1993, passed in Writ Petition (Civil) No. 3277/1992. This appeal of M/s Sanjeev Woolens Mills was disposed of by the CEGAT with an order of remit. Vide order dated 11th August, 1995, the Chief Commissioner of Customs ordered unconditional release of goods under all four Bills of Entry in the case of M/s Sanjeev Woolens. It may also noted that the objections raised by customs authorities against M/s Sanjeev Woolen Mills was of a similar nature and the consignment imported by M/s Sanjeev Woolens Mills was also detained on account of misdiscription on the allegation that the goods imported were not synthetic waste soft quality but were staple fiber. The contention of M/s Sanjeev Woolens Mills that the goods imported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... import duty by denial of duty free exemption under Pass book Scheme. Therefore, we allow the appeals of the party appellants and set aside the impugned order." 20. The contention of the petitioner, in these circumstances, is that the goods should be released without payment of demurrage or container charges. Secondly, it is submitted that the liability to pay demurrage/container charges should be fastened and if payable should be the liability of the customs authority. Reliance in this regard has been placed by the petitioner on the decision of the Supreme Court in the case of Union of India vs. Sanjeev Woolen Mills, (1998) 9 SCC 647 and decisions of this Court in Gulab Impex Enterprises Ltd. vs. International Airport Authority of India, (1992) 48 DLT 515 (DB - Del); Om Petro Chemical vs. UOI, 2002 (140) ELT 353 (Del); Agrim Sampada vs. UOI, 2004 (168) ELT 15 (Del.); and Sonia Overseas Private Limited vs. Assistant Commissioner of Customs, 2009 (244) ELT 30 (Del). 21. The decision in the case of Sanjeev Woolen Mills (supra) was explained and elucidated by the Supreme Court in Shipping Corporation of India vs. C.L. Jain Woollen Mills, (2001) 5 SCC 345. Reference was made to a larg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tled to remove his goods from the premises unless customs clearance is given. But that would not mean that demurrage charges could not be levied on the importer for the space his goods have occupied, since the contract between the importer and the proprietor of the space is in no way altered because of the orders issued by the Customs Authorities. The learned Additional Solicitor General vehemently argued and pressed sub-section (2)(b) of Section 45 in support of his contention that the imported goods have to be dealt with in accordance with the permission in writing of the proper officer of the Customs Department and in exercise of such power when the Customs Authorities initiate adjudication proceeding and ultimately confiscate and levy penalty, when such order is struck down and a detention certificate is issued, the said issuance of detention certificate would come within the expression "otherwise dealt with" used in Section 45(2)(b), and therefore, the proprietor of the space would be bound not to charge any demurrage charges. We are unable to accept this contention inasmuch as the expression "otherwise dealt with" used in Section 45(2)(b), in the context in which it has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r in question is meant to do justice to the importer, looking to the totality of the circumstances and the conduct of the Customs Authorities. Thus, we see no inconsistency between the ratio in Sanjeev Woollen Mills and the judgment of this Court in Grand Slam. That apart, the judgment in Grand Slam was a three-Judge Bench judgment. In the case in hand, as has already been stated earlier, the earlier judgment of the Delhi High Court dated 9-9-1994 in CWP No. 1604 of 1991 has become final, which entitles the importer to get the goods released without payment of the detention and demurrage charges. In the contextual facts, notwithstanding the judgment of the High Court, the goods not having been released, the impugned order and direction dated 18-1-1999, cannot be held to be infirm in any manner. In the absence of any provision in the Customs Act, entitling the Customs Officer to prohibit the owner of the space, where the imported goods have been stored from levying the demurrage charges, levy of demurrage charges for non-release of the goods is in accordance with the terms and conditions of the contract and as such would be a valid levy. The conclusion of the High Court to the effec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Apex Court therefore are authorities for the proposition in certain situation; the court may direct the customs authorities to bear the demurrage charges. In the instant case the customs authorities still insisted that the goods were illegally imported. It sought to justify its stand even before this Court. This Court is not only a court of law but also a court of equity. In a situation of this nature we are of the opinion that this Court may find that in place of the importer or the consignee, the customs authorities should bear the charges. Once it is held that the petitioner herein has not committed any illegality in importing the goods in question, in our opinion, it cannot ordinarily be saddled with the liability of payment of demurrage. The petitioner in the fact situation of this case must be held to have been sinned against than sinning. In UOI v. Sanjeev Woollen Mills JT 1998 (4) 124 the Apex Court in the fact situation obtaining therein held that demurrage may not be paid by the importer." 24. In Sonia Overseas (P) Ltd. (supra), while referring to Om Petro Chemicals (supra), it has been observed as under:- "6. A consummate reading of these precedents thus reveals th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpanies, is a matter of considerable debate. Decision in the case of Sanjeev Woolen Mills (supra) states that in some cases customs authorities can be asked to pay demurrage to the warehousing company or shipping company. However, for this exceptional relief, grounds are required to be made out and established. 28. Keeping in view the aforesaid legal position, we have to examine whether, in the facts of the present case, the respondents No. 1 to 3 can be compelled or asked to pay the demurrage charges. The factors which are in support of the petitioner may be noted first. (i) There was delay in drawing the samples and getting report from the test laboratories. The 3 consignments had arrived on 23rd February, 1991, 19th March, 1991 and 21st March, 1991. The samples were drawn on 19th April, 1991 and sent to CRCL in June, 1991. The report from CRCL was received on 8th July, 1991. (ii) Show cause notice was issued on 29th August, 1991 i.e. nearly six months from the filing of the bill of entries. (iii) Petitioner had repeatedly requested for verification/testing of samples by SASMIRA, Government approved laboratory but the same were only sent in January, 1992 and in March, 1992. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... delay is not justified. (ii) The petitioner had filed WP(C) No. 3277/1992 and vide order dated 23rd April, 1993, it was directed that the goods shall be released on furnishing provisional duty bond and the customs authorities shall issue detention certificates. Detention certificates were issued on 29th May, 1993/8th June, 1993. It was the obligation of the customs authorities to only issue detention certificates. To what extent demurrage could, and should, be waived was not in the hands of the customs authorities. Respondent No. 4, Shipping Corporation of India, reduced the claim from Rs. 10.27 crores to Rs. 83,29,000/- by limiting the detention charges. The Container Corporation also reduced the charges as per their policy. The petitioner, however, did not pay the reduced demurrage charges and get the goods released. (iii) Order dated 23rd April, 1993, has been quoted above. The said order was just, fair and balanced equities between the parties. The court was conscious of the fact that samples had to be tested and the appeal in the case of M/s Sanjeev Woolen Mills was still pending before the tribunal. The show cause notice was not quashed by the Court. The petitioner did not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here is considerable delay and laches in filing this writ petition. The contention of the petitioner that there is no delay as the tribunal had passed a favourable order in favour of the petitioner, in the year 2004, does not have any merit. The petitioner had earlier also filed writ petitions. (x) The action of the customs authorities cannot be substantially faulted, once they had issued detention certificates in 1993, except to the extent of passing of the adverse assessment order. If the petitioner had made payment of reduced demurrage charges on the basis of the detention certificates, the position may have been different. The inter se disputes between the partners, it is apparent, had prompted and prevented the petitioner firm from making the payment of reduced demurrage/detention charges etc. to get the good released. It may be noted here that even in the case of M/s Sanjeev Woolen Mills, part payment of demurrage was directed to be made by the partners of that firm because of delay on their part. The delay on their part was occasioned because of the inter se disputes. [See last portion of the judgment in Sanjeev Woolen Mills (supra).] (xi) We do not think that the factual ..... X X X X Extracts X X X X X X X X Extracts X X X X
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