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TMI Blog2016 (11) TMI 464X X X X Extracts X X X X X X X X Extracts X X X X ..... loping, designing, constructing, upgrading, modernizing, financing and managing of the Indira Gandhi International Airport, New Delhi ("IGI Airport''). DIAL took over the operations of the IGI Airport from AAI and therefore was empowered under the provisions of the agreement to exercise powers under Section 12A(4) of the AAI Act to exercise AAI's statutory powers under the Regulations framed in 2003, with regard to levy of demurrages charges at the IGI Airport. 3. On 17.03.2009, the Central Board of Excise and Custom ("CBEC"), exercising its powers under Section 141(2) read with Section 157 of the Customs Act, notified the Cargo Regulations, which contained the impugned regulation. The petitioner executed a Concession Agreement dated 24.08.2009 with Celibi Delhi Cargo Terminal Management India Pvt. Ltd. (Proforma fourth respondent, hereafter "Celibi"), which enabled it to upgrade, modernize, finance, operate, maintain and manage the cargo terminal at IGI Airport. Thereafter, the Commissioner of Customs started issuing directions to DIAL and Celibi, to waive demurrage charges in accordance with the impugned regulation. These directions were not complied with; consequently t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in a customs area and the responsibilities of persons engaged in the said activities. The said provisions do not, in any way, empower respondent no.2 to frame regulations for waiver of demurrage charges by the custodian of goods. It is alleged that the impugned regulation has no nexus with the object the Act seeks to achieve and is hence violative of Article 14 of the Constitution of India. It is argued that Article 19(1)(g) too is violated as the impugned regulation places a blanket ban, on the charge of demurrage by the custodian of goods in case of detention, confiscation or seizure of goods by customs. 7. The respondents argue that the impugned regulations are silent as to what is the nature of directions that can be issued by customs authorities; they were framed in terms of the undoubted powers conferred by Section 142 (2) and cannot be said to be ultra vires. It is submitted that as far as direction to waive charges in individual cases is concerned, in case of any difficulty, the DIAL can approach the authorities and eventually, if it is not resolved satisfactorily, even seek the guidance and directions of the Central Government. 8. The third respondent, i.e. Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 157 of the Customs Act. Those provisions show that the Central Board of Excise and Customs, the second respondent, is empowered to prescribe the responsibilities of persons engaged in the activities of receiving, storing, delivering dispatching or otherwise handling of imported or export goods in a customs area. 11. Undoubtedly DIAL's functions in relation to operating, maintaining, developing, designing, constructing, upgrading, modernizing, financing and managing of the IGI Airport as conferred by the Agreement, except those functions pertaining to the cargo terminal which have been sub-contracted to the proforma fourth respondent by virtue of the concession agreement (supra), are governed by the AAI Act, as was argued by it. Nevertheless, the obligations of the "Customs Cargo Service provider"/proforma fourth respondent is governed by the Cargo Regulations. This court is aware that the Supreme Court has, in Grand Slam International and C.L. Jain Woolen Mills (Supra), observed that there was no provision in the Customs Act empowering the customs authorities to direct the custodian of goods to waive the demurrage charges on the goods. However, these decisions were pronounc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egulations had to be judged on a three-fold test namely: (1) whether the provisions of the regulations fall within the scope and ambit of the power conferred on the delegate; (2) whether the Regulations made are to any extent inconsistent with the provisions of the enabling Act; and (3) whether they infringe any of the fundamental rights or other restrictions or limitations imposed by the Constitution. In the present case, the first test is answered in the affirmative and the second and third tests are answered in the negative, which would imply that the Cargo Regulations is well within the scope and ambit of its parent Act i.e the Customs Act, and is also consistent with the same, and does not, in any way, violate constitutional provisions. 14. This court acknowledges that Section 151A of the Customs Act places an obligation upon the officers of customs to follow the orders, instructions and directions of the Central Board of Excise and Customs/Respondent no.2, as far as they relate to any prohibition, restriction or procedure for import or export of goods. The said provision is reproduced below for ease of reference: "151A. Instructions to officers of customs. - The Board may, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the Customs Act on the one hand and the Major Ports Act and the International Airports Authority Act on the other hand are different. The former deals with the collection of Customs duties on imported goods. The latter deals with the maintenance of seaports and airports, the facilities to be provided thereat and the charges to be recovered therefor. An importer must land the imported goods at a sea-port or airport. He can clear them only after completion of Customs formalities. For this purpose, the sea-ports and airports are approved and provide storage facilities and Customs officers are accommodated therein to facilitate clearance. For the occupation by the goods of space in the sea-port or airport, the Board or the Authority which is its proprietor is entitled to charge the importer. That until Customs clearance the Board or the Authority may not permit the importer to remove his goods from its premises does not imply that it may not charge the importer for the space his goods have occupied until their clearance. 42. What is stated in the quoted clause of the said customs public notice would be effective against the Authority only if it were shown that the Authority had, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discussion, held that the above power cannot be questioned, as wide and that as long as Parliamentary intent is discernable, subordinate legislation, which broadly conforms to its objectives, cannot be impeached. In exercise of its powers, Regulation 6 (1) was framed; it specifically obliges service providers not to charge demurrage in certain cases if directed not to do so ("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 Superintendent of Customs or Appraiser or Inspector of Customs or Preventive officer or examining officer, as the case may be."). Interestingly, the duty not to charge - when imposed by any customs official authorized to do so, is specifically subordinated to other laws ("subject to any other law for the time being in force"). Thus the powers under the Airports Authority Act, 1994 (like in the case of the International Airports Authority in Grand Slam)- specifically, Section 42 (2) (d)- discussed above are available for prescribing the rate(s) for storage charges. In Grand Slam (supra), the court had commented on the power of the Central Government to issue directio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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