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TMI Blog2017 (6) TMI 309X X X X Extracts X X X X X X X X Extracts X X X X ..... otivated by pure commercial considerations. In these circumstances, the contesting respondents are right in their submission that we cannot take into account the petitioners’ commercial consideration or business prospects in dealing with the challenge raised in the writ petition. Validity of Public Notice No. 161 of 2016 dated 28th November, 2016 - Held that: - The designation of Speedy in Public Notice No. 161 of 2016 read with Public Notice No. 66 of 2008 has the effect of arbitrarily and unreasonably discriminating against the members of the association. They do not enjoy a level playing field for providing their services. However, it is apparent from a reading of this representation at page 107 of the paper book that the same refers to the earlier Public Notice No. 66 of 2008 dated 11th September, 2008. We have already set out as to how no grievance was raised for more than 8 years when the arrangement and particularly of designation of respondent no. 9 was holding the field. Suddenly, on account of the Public Notice No. 161 of 2016 that such a representation was addressed. Public Notice No. 180 of 2016 dated 19th December, 2016 - Held that: - This public notice refers to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts that are required to be obtained by DPD importer, before the consignments are cleared, would ease the movement in the sense if advance intimation is submitted by DPD importer to shipping lines, then, the shipping lines can access the CFS. That is how this public notice has been issued. The limited tender notice dated 17th March, 2017 is really in furtherance of the policy measures and enunciated in the public notice. That is why when that limited tender notice was published, it referred to the relevant paragraphs of the public notices and states that the detailed terms and conditions of the limited tender notice are mentioned in Annexure ‘A’. The limited tender is to invite offers under the bids especially for designation of CFSs for delivery of DPD containers from port terminals of JNCH, Nhava Sheva to CFSs, if not cleared beyond prescribed period and certain other circumstances as specified in the public notices. It is in that sense the participation in the limited tender is not restricted nor does it perpetuate the alleged monopoly of respondent no. 9. Even the respondent no. 9 cannot claim a absolute right simply because it can only receive such containers/goods which ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r any other writ, order or direction in the nature thereof, the petitioners are seeking a direction to the respondents, who are contesting the writ petition, not to enforce or apply the impugned public notices and to go ahead with the tender notice. 9. These reliefs have been claimed against the Union of India, the Chief Commissioner of Customs and other authorities and officials functional under the Customs Act, 1962 (respondent nos. 2 to 6). Respondent no. 7 is the Central Board of Excise and Customs, whereas, respondent no. 10 is the Assistant Commissioner of Customs, CFS Management Cell, Jawaharlal Nehru Customs House (JNCH), who has issued the tender notice dated 17th March, 2017. Respondent no. 8 before us is the Association of the Container Freight Stations, against whom, no relief is sought, whereas, respondent no. 9 has been joined as a party respondent simply because it has been appointed as the designated CFS for the purpose of Facility Notice No. 63 of 2008. 10. The background facts giving rise to the present petition are that in 1989, the Government of India introduced a policy for development of CFS. The need for CFS was in response to the growing volume of inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receiving approval, the applicant is required to set up the infrastructure within one year from the date of the approval. This requires a substantial investment for constructing the CFS, which involves the following:- a) Construct a warehouse for storing containers; b) Construct a yard that either has to be concrete or with paver blocks, so as to take the weight of at least 4 containers one over the other; c) Construction of electrical substation, fire pump room and workshop for the maintenance of equipments and repairing of containers; d) Construction of administrative building where the Customs officers will be operating from. The administrative building has to be constructed keeping in mind the requirements of also housing a bank branch, cafeteria, canteen in the CFS; e) Purchasing and setting up of sophisticated cargo handling equipments such as cranes, reach stackers, empty handlers, truck trailers, fork lifts etc.; f) Purchase and set up security equipments such as CCTV cameras, sniffer dogs, metal detectors etc. (iii) Once the infrastructure is set up, the Commissioner of Customs inspects the facility and upon being satisfied of the infrast ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contains information like container number, weight, size, status (laden/empty), category (hazardous/reefer etc.), POD, mode of transport (rail/road), seal number etc. Further, the IAL also provides details of the destination of the container, including the name of the port and the preferred CFS. A sample IAL is annexed as Exhibit 'D' to the petition. (iv) Thereafter, the vessel berths at the POD. After berthing of the vessel, the customs inwards clearance takes place, where the Customs authorities board the vessel and check the vessel's documents like statutory certificates, bonded items, fuel, fresh water, crew personnel declaration etc. In some instances, the clearance may also be given prior to the berthing of the vessel to facilitate commencement of operations without any delay on berthing. This is done by boarding officer by making entry in the ICEGATE. Similar inspection and clearances also take place by immigration authorities and the Port Health Officer. (v) Thereafter, the terminal (utilising its own facilities, staff, equipment etc.) discharges the cargo and simultaneously loads export cargo on the vessel. (vi) In cases where cargoes are meant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut examination. At this stage, this facility was available only to certain select importers who fulfilled the prescribed criteria. The main criterias were as follows: (i) The importer should have imported goods worth ₹ 10 crores or paid duty equivalent to ₹ 1 crore in the previous financial year; (ii) The importer should have filed at least 25 bills of entry in the previous financial year in one or more Indian Customs stations. The said circular formed part of Public Notice No. 64 of 2005 (PN 64/2005) dated 12th December, 2005 issued by respondent no. 3, copy of which is annexed at Exhibit G . 16. On 1st September, 2008, respondent no. 3 issued Facility Notice No. 63 of 2008. That notice, inter alia, provided for DPD facility (i.e. for importers to take delivery directly from the port terminal) to ACP importers (as per Public Notice No. 64 of 2005) and to 100% Export Oriented Units (EOUs) for FCL containers covered by the RMS or where no examination is required. The petitioners state that under the DPD facility, delivery of the containers would be done at the port itself and therefore, such containers would not travel to a CFS for completion of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntainers from the port within 48 hours, there was an increase in the number of DPD containers that were sent to the designated CFSs i.e. Speedy/respondent no. 9 on account of not being collected within the period of 48 hours prescribed by Public Notice No. 161 of 2016, as illustrated in further details below. 21. On 28th November, 2016, respondent no. 4 issued Public Notice No. 161 of 2016 with effect from 1st December, 2016, extending the DPD facility to a list of 467 named importers from 26 importers as late as July, 2016 by relaxing the eligibility requirements specified in Facility Notice No. 63 of 2008. Further, Public Notice No. 161 of 2016 sets out the procedure for the DPD facility and changed the time period of 24 hours prescribed by Facility Notice No. 63 of 2008 for clearance of DPD containers to 48 hours. 22. On 9th December, 2016, respondent no. 8 addressed a detailed letter to respondent no. 2 regarding the above mentioned Public Notices, wherein, it contended that the appointment of respondent no. 9 as designated CFS to receive all DPD containers, which were not cleared in 48 hours, was arbitrary and amounted to discrimination against its members. Respondent no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e petition. 26. On 16th January, 2017, respondent no. 6 issued Public Notice No. 8 of 2017, whereby, it was reiterated that in cases where DPD containers are not cleared by the DPD importers within 48 hours, the terminals should transfer the same to the designated CFS i.e. respondent no. 9, unless otherwise directed by the Customs. However, Public Notice No. 8 of 2017 went further and also directed that an importer eligible for DPD must give advance intimation of at least 72 hours to the shipping line, inter alia, regarding the DPD code of the importer and the preferred CFS of the importer. The petitioners state that notwithstanding a preferred CFS being indicated by the importers, with the exception of containers that are out of charge i.e. where the import/customs formalities have been completed, all the DPD containers that are not out of charge and are not cleared in 48 hours are being sent to Speedy/respondent no. 9. Further, Public Notice No. 8 of 2017 also directed that where such advance intimation for availing of the DPD facility is not given by the importer, then, in respect of importers who hold PDP permissions, the terminal should identify their containers and earma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2017, respondent no. 8 addressed another letter to respondent no. 2 in response to the abovementioned advisory dated 27th December, 2016, issued by respondent no. 5 to CFSs to the effect that serious action would be taken against CFSs if containers, which are earmarked for DPD, are accepted by a CFS. Respondent no. 8 indicated that CFSs do not move the containers from the port on their own (the same being on the basis of the IGM filed by the importer/shipping line) and therefore, action against the CFSs is misconceived. The said letter once again reiterated the legal contentions against the designation of Speedy/respondent no. 9 as the designated CFS in the context of the DPD facility. A copy of letter dated 16th January, 2017 addressed by respondent no. 8 is annexed as Exhibit Q to the petition. 31. On 18th January, 2017, respondent no. 6 addressed a letter to respondent no. 8 in response to the above letters addressed by respondent no. 8. In this letter, respondent no. 6 stated as follows:- (i) That the procedure prescribed in Public Notice No. 161 of 2016 for moving DPD containers to Speedy/respondent no. 9 in the event that they are not cleared in 48 hours will apply o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent no. 9 as the designated CFS and directing all DPD traffic towards Speedy/respondent no. 9 alone, a monopoly has arbitrarily and unfairly been created in favour of a single designated CFS in respect of those DPD containers which are not cleared by importers within the prescribed period of 48 hours and that this designated CFS has been appointed without giving any opportunity to any other CFS to bid or compete for the same. 32. A copy of the letter dated 18th January, 2017 addressed by respondent no. 6 to respondent no. 8 is annexed as Exhibit R to the petition. 33. On 9th February, 2017, respondent no. 6 issued Public Notice No. 16 of 2017, whereby, it was reiterated that in cases where importers eligible for the DPD facility of RMS facilitated containers do not obtain clearance from respondent nos. 2 to 6 i.e. a Customs out of charge is not received in respect of the said containers, the importers would not be permitted to choose their CFS. As detailed hereinabove, several importers are unable to obtain an out of charge from respondent nos. 2 to 6, within the stipulated time period on account of various difficulties beyond their control. A copy of Public Notice N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rms of direct port delivery code and importer s choice of CFS code has been permitted to the importers/trade. This has resulted in a dramatic reduction of DPD containers not cleared from Customs within 48 hours. In the Month of February, 2017, the number of such DPD containers going to Speedy/respondent no. 9 was 7215 containers, which got reduced to 3568 containers in the period of 1st March to 22nd March, 2017. In one month, this figure of DPD containers not cleared within 48 hours has reduced by 30% and it is foreseen to be reducing still further in the coming days. Interestingly, the figure of the DPD containers for which the importer has chosen the other CFS including the petitioners, stands at 2049 containers in the month of February. That has dramatically increased to 7698 containers till 22nd March, 2017. Thus, reliance is placed on a copy of the data sheet with regard to clearance of DPD containers from the port terminal. Therefore, there cannot be any grievance and if at all there was one, it has been redressed. Hence, the petition be rejected. 39. Then, it is explained in the further paragraphs that the rationale and the reason for extending DPD to RMS facilitated car ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CH notified Speedy Multimodes Ltd., as the designated CFS due to it being owned by JNPT and which accordingly falls under the domain of Tariff Authority For Major Ports [for short TAMP]. TAMP Regulations put a ceiling on what Speedy Multimodes Ltd., CFS can charge. It cannot charge in an arbitrary manner. This decision was taken by the commissioner of Customs, JNCH, considering Public Interest, so that any default evacuation of containers [beyond 48 hours] will avoid congestion on the road and also to reduce the Transaction cost of Importers/Trade. 42. Then, what is relied upon is a letter of the Chairman, JNPT dated 29th November, 2016, copy of which is annexed as Exhibit 6 to the affidavit in reply. It is stated that as per the information available to Customs, petitioner nos. 1 to 13 do not fall under the domain of Tariff Authority for Major Ports. This gives them the liberty to charge market rates, and/or more, and on their terms. Thus, it is stated that subsequent public notices issued by the Commissioner and impugned in the petition envisage that if the DPD containers were not cleared within 48 hours, they should be moved to the designated CFS in public interest and fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e object of facilitating all stakeholders. Without prejudice to what is stated above, I will now deal with the various paras of the petition as under. 45. It is finally contended that the petitioners have misrepresented the facts and projected incorrect perception. The Customs House has sou moto extended the DPD facility to more than 700 importers and there are no cases where any importer is aggrieved against the extension of DPD to them. Further, there is no reason for any importer to be aggrieved as this facility is intended to reduce their transaction time and cost considerably. The monthly total imports of containers through JNPT and other port terminals being at approximately 1,20,000 Twenty Feet Equivalent Units (TEU), even if 40% of the import containers are cleared as DPD containers, which is around 48,000 TEUs, there would be approximately cost saving up to ₹ 48 crores to the importers/trade. Thus, how the petitioners can be aggrieved against extension of DPD to importers by Customs or by terminals has not been clarified. Thus, there being no right vesting in the petitioners, the petition is motivated and filed for purely commercial considerations. The rest of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eply, it appears that the respondents are agreeable to DPD eligible containers, regardless of whether such container has received an out of charge from Customs, being delivered to the CFSs of the importers choice after expiry of 48 hours period within which they are to be cleared by the importers as per Public Notice No. 161 of 2016. However, this stand is contrary to Public Notice No. 27 of 2017, which clarifies that only those containers which have received an out of charge from Customs within 48 hours can be sent to the CFS preferred by the importer and in the event that such out of charge is not received for that container, the same will be sent to the designated CFS. Thus, requiring all DPD containers to go to a single designated CFS is arbitrary, illegal and unconstitutional interference with the right of the petitioners to carry on their trade, regardless of the method, by which such a designated CFS has been appointed. The petitioners do not have an equal opportunity to participate in the DPD regime created by the impugned public notices. Instead of allowing all the petitioners as well as other CFSs an equal opportunity to participate in the DPD regime, the impugned p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inst the petitioners on no rationale or reasonable basis. In other words, the advantage or benefit derived by respondent no. 9 is to the detriment of the petitioners. The authorities have, assuming but without admitting, attempted to subserve larger public interest, but that is not served at all. It is the interest of the private entity-respondent no. 9, which is protected. This being a disincentive to the importers, it is the petitioners who have to suffer. This is unduly harsh and unreasonable step, which violates the mandate of Article 14 of the Constitution of India. Mr. Dwarkadas then submits that there is no public purpose being achieved, as the congestion at the port has not been reduced at all by the impugned actions. Mr. Dwarkadas submits that respondent no. 9 s interest cannot be compared with the petitioners for the petitioners cannot be compensated by issuance of a limited public tender. The petitioners grievances and as highlighted in the petition have not be redressed. Now, by an administrative order or act and without the sanction of law, the impugned actions have been taken. Once the petitioners have pointed out the lack of power or jurisdiction in the authorities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterest on duty leviable on the warehoused goods, ensure prompt payment of duty and impose interest on delayed payments of duty. There is a desire to expedite the realization of revenue and discourage indiscriminate warehousing of imported goods. Once the changes ensure prompt payment of duties by imposing a time limit, then, we do not see how there is any difficulty presented by the impugned measures. 52. The definitions are contained in Chapter I in section 2 and customs airport , customs port and customs station are the words and expressions duly defined. The word examination is inclusively defined in section 2(17) to mean, in relation to any goods, measurement and weighment thereof. The Act also contains the definition of the term smuggling in section 2(39). There are other definitions, which are substituted by Act 28 of 2016 to words warehouse in section 2(43) and warehoused goods in section 2(44). By Chapter II, the officers of Customs and their classes are indicated. By Chapter III, appointment of Customs ports, airports etc. is dealt with. By Chapter IV, section 11 is inserted, which deals with prohibitions on importation and exportation of goods. Chapter IV ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eived, stored, delivered, dispatched or otherwise handled in a customs area in such manner as may be prescribed and the responsibilities of persons engaged in the aforesaid activities shall be such as may be prescribed. 54. A bare perusal of this section, which was renumbered by insertion of sub-section (1) and sub-section (2) by Act 18 of 2008, would indicate that all conveyances and goods in a customs area shall, for the purpose of enforcing the provisions of this Act, be subject to the control of officers of Customs and the imported and export goods may be received, stored, delivered, dispatched or otherwise handled in a Customs area in such manner as may be prescribed and the responsibilities of persons engaged in the aforesaid activities shall be such as may be prescribed. The word conveyances is defined in section 2(9) to include a vessel, an aircraft and a vehicle. The word customs area has been defined in section 2(11) to mean the area of a customs station and includes any area in which imported goods or export goods are ordinarily kept before clearance by Customs authorities. Customs port means any port appointed under clause (a) of section 7 to be a customs port ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remises of the importer or exporter, as the case may be. 55. Once we have a general power to make regulations so as to carry forward the object and purpose of the Act or carry out the same additionally by invoking sub-section (2) of section 157, the Board can make regulations consistent with the Act so as to set conditions subject to which the transhipment of all or any goods under sub-section (3) of section 54, the transhipment of all or any goods under section 56 and the removal of warehoused goods from one warehouse to another under section 67 may be allowed without payment of duty. JNCH, without dispute is a Custom area. 56. Now we refer to the relevant regulations. They have to be read together with the sections appearing in Chapter IX of the Customs Act, 1962 and all sections and provisions preceding and following the same. If all these are read together and harmoniously, then, it is apparent that the regulations empower regulating the movement of cargo in customs area. That also enables regulating the movement of cargo and containers from the terminal to the CFS in the larger interest of trade and public. Mr. Singh learned Additional Solicitor General is right in refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntrol. The provisions of the Customs Act, 1962 have to be enforced so as to carry out its object and purpose and the goods in the customs area are subject to the control of officers of Customs. They can, with the aid of these regulations and framed by the Board, control the receipt, storage, delivery, despatch or otherwise handling of the imported or export goods in customs area. If sub-section (2) of section 141 enables the Board to make regulations for this purpose so as to assist the officers of Customs in performing their functions and duties, then, all the more there is no substance in the contentions of Mr. Dwarkadas that the officials lack the power or jurisdiction to issue the impugned notices. The impugned notices are referable to the regulations which are made under the provisions of the Act. Therefore, issuance of public notices is implicit and inherent in the exercise of the enabling power of ensuring proper handling of the goods in the customs area and the larger power of control vesting in the officers of the Customs. 58. We have also perused the impugned notices. The petitioners have annexed copies thereof. By Circular No. 18 of 2009 at page 69 of the paper book, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the petitioners or other CFSs, we do not find any challenge raised to these arrangements. The only pleading is that the DPD facility was optional and though respondent no. 9 was notified as a designated CFS in a arbitrary manner, that did not cause serious threat to the business and existence of the CFSs like the petitioners at that point of time. 61. We are of the view that this silence of the petitioners and parties like them for more than 8 years is eloquent enough. This only indicates that so long as there is no threat to their business opportunity or their commercial interest, the petitioners or their representative association do not complain. The complaint now is motivated by pure commercial considerations. In these circumstances, the contesting respondents are right in their submission that we cannot take into account the petitioners commercial consideration or business prospects in dealing with the challenge raised in the writ petition. Article 19(1)(g) of the Constitution of India protects certain rights and particularly to practice any profession or to carry on any occupation, trade or business. However, clause (6) of Article 19 enables placing of reasonable rest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... profit making body. It represents the interest of 24 CFSs, who are its members. The designation of Speedy in Public Notice No. 161 of 2016 read with Public Notice No. 66 of 2008 has the effect of arbitrarily and unreasonably discriminating against the members of the association. They do not enjoy a level playing field for providing their services. However, it is apparent from a reading of this representation at page 107 of the paper book that the same refers to the earlier Public Notice No. 66 of 2008 dated 11th September, 2008. We have already set out as to how no grievance was raised for more than 8 years when the arrangement and particularly of designation of respondent no. 9 was holding the field. Suddenly, on account of the Public Notice No. 161 of 2016 that such a representation was addressed. 64. Then, we have on record another Public Notice No. 180 of 2016 dated 19th December, 2016, which is at page 110 of the paper book. This public notice refers to the prior public notices and states that the DPD facility reduces the time and cost for importers considerably. In order to reduce dwell time and cost associated with import at Nhava Sheva, it has been decided to extend DPD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notices dated 16th January, 2017. They are Public Notice Nos. 8 and 9 of 2017. The copies of these notices are annexed as Exhibit O and Exhibit P at pages 133 and 137 of the paper book. 67. In the first notice of 2017 (Public Notice No. 8 of 2017 dated 16th January, 2017), the office of the Commissioner of Customs refers to the representations by various stakeholders/members from trade and then states that as a measure of trade facilitation and ease of doing business, the points raised by these persons have been examined and point-wise clarification/procedural requirements are set out in this public notice. In Public Notice No. 9 of 2017, there is a reference made to meetings with the CFSs within the jurisdiction of JNCH, at which, their views were solicited in order to find a solution to logistic arrangements. It was discussed that the JNPT is already preparing a logistic solution in the form of engaging 5-7 major transporters, who will provide transport services to DPD clients in efficient manner and evacuation of containers from terminal will take place on best pick up basis. This will facilitate further rationalisation of shifting charges being charged by terminal operat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the matter further. However, the basic policy decision has already been taken by earlier public notices. This point-wise clarification further elaborately sets out the procedural requirements. There are meetings held with the stakeholders as well. 70. It is in these circumstances that we do not find any reason to interfere with the said public notices. Even Public Notice No. 27 of 2017 dated at Exhibit U at page 153 refers to these very aspects. It is not necessary to repeat what we have already held hereinabove. As far as this Public Notice No. 27 of 2017 is concerned, it came to be issued because there was a request from the stakeholders to devise a system so that container is released to DPD importer only after issue of delivery order even in case where CFS is logistic service provider. Therefore, the further documents that are required to be obtained by DPD importer, before the consignments are cleared, would ease the movement in the sense if advance intimation is submitted by DPD importer to shipping lines, then, the shipping lines can access the CFS. That is how this public notice has been issued. It has been issued by those dealing with administration of the port and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness interests of the petitioners. For their commercial or business motives, a decision taken in public interest cannot be interfered with. The mandate of Articles 14 and 19(1)(g) of the Constitution of India are not violated. The limited tender notice dated 17th March, 2017 is really in furtherance of the policy measures and enunciated in the public notice. That is why when that limited tender notice was published, it referred to the relevant paragraphs of the public notices and states that the detailed terms and conditions of the limited tender notice are mentioned in Annexure A . The limited tender is to invite offers under the bids especially for designation of CFSs for delivery of DPD containers from port terminals of JNCH, Nhava Sheva to CFSs, if not cleared beyond prescribed period and certain other circumstances as specified in the public notices. It is in that sense the participation in the limited tender is not restricted nor does it perpetuate the alleged monopoly of respondent no. 9. Even the respondent no. 9 cannot claim a absolute right simply because it can only receive such containers/goods which are not cleared by the importers within the above time limit of 48 ..... 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