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TMI Blog2015 (10) TMI 2131X X X X Extracts X X X X X X X X Extracts X X X X ..... seeking a clarification from the MOEF with regard to the nature of the goods being hazardous or not appears to unjustified and arbitrary, especially when the petitioner made a specific application for shifting the goods to a warehouse in terms of Section 49 of the Act. - By not passing any orders on the petitioners application for provisional assessment or by not passing any orders on the application of the petitioner under Section 49 of the Act for storage of the imported goods in a warehouse pending clearance would amount to detention of the goods. – Petitioner granted relief; - allowed to clear goods without payment of demurrage charges upto the period 15th January, 2015; handling or demurrage charges leviable subsequent to 15th January, 2015 till the actual clearance – Decided in favour of Petitioner. - Civil Misc. Writ Petition (Tax) No. 205 of 2015 - - - Dated:- 14-10-2015 - Hon'ble Tarun Agarwala And Hon'ble Surya Prakash Kesarwani, J. ORDER (Per: Tarun Agarwala, J.) The petitioner is a company engaged in the manufacture and sale of Carbon Black from its unit situate at Ghaziabad. The raw material for manufacturing carbon is Carbon Black Feed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... azardous in nature. The MOEF vide their letter dated 29th December, 2014 again informed respondent no.3 that the goods imported by the petitioner was not hazardous and that the provisions of the Rules of 2008 were not attracted. Based on the aforesaid instructions issued by the MOEF dated 29th December, 2014, the custom authorities assessed the imported the goods of the petitioner on 6th January, 2015. On the basis of this assessment, the petitioner deposited the customs duty at the appropriate rate on 7th January, 2015 and 9th January, 2015. On 15th January, 2015 the customs authorities permitted clearance of the goods by putting a seal on the invoice bill as imported detached meaning thereby that the goods could be cleared by the importer. According to the petitioner, this was a delivery order issued by the custom authorities. However, based on this, the petitioner approached respondent no.4-Albatross Inland Ports Pvt. Ltd., which is the customs cargo service provider contemplated under Section 45 of the Act read with Handling of Cargo in Customs Areas Regulations, 2009 (hereinafter referred to as the Regulations of 2009) for release of the goods. The said respondent deman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urrage charges of ₹ 7,67,04,408/- demanded by Respondent No.4 for the period during which the imported goods were detained for examination by Respondent No.3; D. Issue any other writ, order or direction, which this Hon'ble Court deems fit in the facts and circumstances of the case; E. Award costs to the Petitioner. At the time of hearing the petitioner has confined his relief to prayer A and C and submitted that he does not wish to press relief B. The petitioner in a nutshell has prayed that he is not liable to pay demurrage charges to respondent no.4 and in the alternative, if demurrage charges has to be paid to respondent no.4, the same should be paid by the customs authorities and not by the petitioner. In this backdrop, we have heard Sri S.D. Singh, the learned Senior Counsel assisted by Sri N ishant Mishra, the learned counsel for the petitioner, Sri B.K.S. Raghuvanshi, the learned counsel for the Custom Department and Sri A.K. Verma, the learned counsel along with Sri Rajiv Joshi and Sri Siddharth Yadav, the learned counsels for respondent no.4. The learned Senior Counsel contended that the demand of demurrage charges is completely without autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... continues till the delivery order is given to the importer or the invoice bills are endorsed in favour of the importer. The learned counsel contended that in the instant case, the delivery order or the endorsed invoices have not been placed before the said respondent till date and, consequently, the goods cannot be delivered to the petitioner, quite apart from the fact that the goods can only be cleared upon payment of handling charges, other charges and demurrage charges. Before proceeding, it would be appropriate to refer to a few provisions of the Customs Act. The custom authorities exercise their powers under the provisions of the Customs Act. Section 2(11) of the Act defines a customs area , namely, the area of a customs station and includes any area in which imported goods or exported goods are ordinarily kept before clearance by the customs authorities. Section 8 of the Act empowers the Collector of Customs to approve a proper place in any customs port or customs airport or coastal port for the unloading and loading of goods and specify the limits of the customs area. Section 33 of the Act prohibits unloading of imported goods at any place other than the place approved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng clearance, be permitted to be stored in a public warehouse, or in a private warehouse if facilities for deposit in a public warehouse are not available; but such goods shall not be deemed to be warehoused goods for the purposes of this Act, and accordingly the provisions of Chapter IX shall not apply to such goods. Warehouse has been defined under Section 2(43) of the Act which means a public warehouse appointed under Section 57 or private warehouse licensed under Section 58. Such appointments of public warehouse under Section 57 of the Act and licence of private warehouse under Section 58 of the Act is granted by the Commissioner of Customs. Section 63 of the Act provides for payment of warehouse charges at rates fixed under any law by the Commissioner of Customs. For facility, the said provision is also extracted hereunder:- 63. Payment of rent and warehouse charges. - (1) The owner of any warehoused goods shall pay to the warehouse-keeper rent and warehouse charges at the rates fixed under any law for the time being in force or where no rates are so fixed, at such rates as may be fixed by the Commissioner of Customs. (2) If any rent or warehouse charges ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpose an obligation on the custodian approved under sub-section (1) thereof not to collect charges leviable on the consignee. Similar view was again given by the Supreme Court in Shipping Corporation of India (supra) as well as in Monika India Vs. Union of India, 2012 (283) ELT 33 by the Delhi High Court and by the Supreme Court in Trustees of Port of Madras M/s K.P.V. Sheikh of Mohd. Rowther and Co. Pvt. Ltd., AIR 1999 SC 1922. In the light of the aforesaid, it is clear that demurrage charges can be levied by the custodian under Section 45 of the Act. Inland Container Depot at Dadri has been notified under Section 8(a) of the Act by means of Notification No.13 of 2003 dated 9th December, 2003 as the area for loading of export goods and for unloading of imported goods. The limits of the customs area for Inland Container Depot at Dadri measuing 43,335.11 sq. mts. has also been specified under Section 8(b) of the Act. Repondent no.4 was initially appointed as a custodian of import and export cargo at ICD, Dadri by an order dated 19th April, 2006, which was issued in exercise of the powers conferred under Section 45 of the Act. The appointment was subject to certain terms and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h April, 2006 would be applicable and one such condition is, that the custodian would not charge any demurrage charge on the goods detained by the customs department. Clause 4 of the renewal order dated 18th May, 2011 provides that the custodian will discharge all the responsibilities assigned under regulation 6 of the Regulation of 2009. Regulation 6 of the Regulations of 2009 provides various responsibilities, which are required to be carried out by the customs cargo service provider, namely, by respondent no.4. Regulation 6(1)(l) is extracted hereunder: 6(1). The customs cargo service provider shall:- (l) subject to any other law for the time being in force, shall not charge any rent or demurrage on the goods seized or detained or confiscated by the proper officer. The aforesaid provision indicates that subject to any other law for the time being in force, the custom cargo service provider shall not charge any rent or demurrage on the goods assessed or detained or confiscated by the customs department. In the light of the aforesaid provisions, the contention of the learned counsel for the petitioner that the Customs Act does not provide any provision to levy an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er seized nor detained nor confiscated the goods and had only referred the matter to the MOEF to seek clarification as to whether the goods so imported were hazardous or not. Upon receiving the clarification from the MOEF, the duty was assessed at the earliest opportune moment and, therefore, they are not responsible for any delay. On the other hand, we find that the petitioner issued letters dated 16th September, 2014 and 19th September, 2014 requesting the Commissioner of Customs for clearance of the goods on provisional assessment against test bonds. No orders were passed by the customs authorities on these applications nor the goods were released on provisional assessment. The petitioner thereafter, filed an application under Section 49 of the Act for storage of the goods in the warehouse pending clearance. No orders were passed by the customs authorities on this application. The stand of the customs department is that provisional assessment is allowed only when classification of the goods or the valuation of the goods are under investigation but when there was a fear as to whether the goods are hazardous waste or otherwise, provisional assessment order could not be passed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment or by not passing any orders on the application of the petitioner under Section 49 of the Act for storage of the imported goods in a warehouse pending clearance would amount to detention of the goods. Goods unloaded in the customs area are kept under the direct control of the customs department and no goods can be removed either by the custodian or by the importer until the goods are cleared of customs duty. Section 34 of the Act clearly debars the importer from unloading goods in any other area except under the supervision of the customs authorities. In the light of the aforesaid, it is not necessary to dwell upon the provisions of Section 49 of the Act and the impact of Section 63 of the Act. It is also not necessary for us to go into the question of bailor and bailee relationship between respondent no.4 with the shipping line in terms of Section 48 of the Act or the lien of goods by respondent no.4 in terms of Section 170 of the Contract Act. We find that the goods were finally cleared by the custom authorities on 15th January, 2015. Consequently, we are of the opinion that respondent no.4 was not entitled to charge demurrage charges on the goods so detained by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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