9911796707
TMI Blog2019 (12) TMI 957X X X X Extracts X X X X X X X X Extracts X X X X ..... by them, in terms of the OMDA, which, in turn, stands sanctified by Section 12A of the AAI Act, the CELEBI must be treated as charging, and recovering, demurrage, in accordance with law for the time being in force . The inevitable sequitur would be that the injunction, engrafted in Regulation 6(1)(l) of the Handling of Cargo Regulations, on the charging of demurrage in respect of goods detained/seized, or confiscated by the customs authorities, would not apply to, or affect, CELEBI - It is also settled, by various decisions that the liability, to pay demurrage to the CELEBI, was of the petitioner - the Customs authorities have acted mala fide or have contributed, in any manner, to delay in release of the consignment imported by the petitioner. It is only where a clear case of unquestionable delay, bordering on mala fides and demonstrative of unreasonable harassment of an importer, is made out, that the customs authorities can be mulcted with the liability to pay demurrage or detention charges. A reading of sub-section (1) of Section 13 of the AERA Act makes it abundantly clear that the AERA is basically concerned with fixing tariff, and not with other airport services, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct 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; 3. Customs Cargo Services provider is defined, in clause (b) of Regulation 2 of the 2009 Regulations, in the following terms: (b) Customs Cargo Services provider means any person responsible for receipt, storage, delivery, dispatch or otherwise handling of imported goods and export goods and includes a custodian as referred to in section 45 of the Act and persons as referred to in sub- section (2) of section 141 of the said Act; 4. Act is defined, in clause (a) of Regulation 2(1) of the 2009 Regulations, as meaning the Customs Act, 1962 (hereinafter referred to as the Customs Act ). Section 45 of the Customs Act, which deals with restrictions on custody and removal of imported goods, reads thus: 45. Restrictions on custody and removal of imported goods. - (1) Save as otherwise provided in any law for the time being in force, all imported goods unloaded in a customs area shall remai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of quantity. Pursuant thereto, vide Panchnama dated 9th May, 2019, the Commissioner seized the consignment and handed it over, to CELEBI for safe custody, vide letter dated 10th May, 2019. The said letter stated, inter alia, thus: The said consignment will remain in your custody till the completion of investigation. As investigation will take some time, there shall not be any demurrage charges on the above said consignment is from the date of holding of these Bills of Entry i.e. 06.05.2019 till the finalisation of the investigation as informed by the competent authority of Customs. (Emphasis supplied) 9. In response, CELEBI wrote, to the Deputy Commissioner of Customs (Preventive), stating that charging of demurrage was subject to the Airport Authority of India (Storage and Processing of Cargo, Courier and Express Goods and Postal Mails) Regulations, 2003, or any other law for the time being in force. Accordingly, it was opined that, if the investigation was likely to take time, the petitioner would be well advised to seek warehousing of the goods, under Section 49 of the Customs Act. The petitioner, accordingly, represented, to the Commissioner, on 14th May, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demurrage that had accumulated on the goods till then. 14. The petitioner assails the said demand, as raised by CELEBI. Reliance has been placed, by the petitioner, on the letter, dated 10th May, 2019 supra, from the Deputy Commissioner (Preventive) to CELEBI, as well as on clause (l) of Regulation 6(1) of the 2009 Regulations. It is emphasised, in this regard, that clause (q) of Regulation 6(1) obliges the custodian to abide by all the provisions of the Customs Act, as well as the Rules, Regulations, notifications and orders issued thereunder. In view of this mandate, the petitioner seeks to contend that CELEBI could not have disobeyed the direction, contained in the letter, dated 10th May, 2019, of the Deputy Commissioner (Preventive), not to charge demurrage from the petitioner. The petitioner has also drawn attention to the fact that the quantum of demurrage is so excessive, as to render the release, of the goods, practically unviable. Analysis Trustees of the Port of Madras v. Aminchand Pyarelal (1976) 3 SCC 167, Indian Goods Supplying Co. (1977) 2 SCC 649 and Board of Trustees of the Port of Bombay v. Jai Hind Oil Mills Co. 1987 (30) ELT 633 (SC) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted that they had mistakenly issued the detention certificate, as the goods had been detained to examine the issue of compliance with import trade control formalities, and not for examination and assessment. 20. In this scenario, the Board of Trustees contended that, owing to the negligence, on the part of the Customs authorities in issuing the detention certificate, demurrage, of ₹ 1963.60, alone, had been charged from Aminchand, whereas it was actually liable to pay demurrage of ₹ 3,20,951.64. Asserting thus, the Board of Trustees directed the Customs authorities to remit the balance demurrage, due to it. The Customs authorities, however, denied any liability, contending that the Union of India could not be held liable for negligent, or even tortious, acts, committed by its officers in good faith. 21. The Board of Trustees, thereupon, sued Aminchand, as well as the Customs authorities, for recovery of the differential amount of demurrage, stated to be due to it. 22. It is clear, therefore, that, in this case, the Board of Trustees was not denying its liability to waive demurrage charges, consequent to the issuance of detention certificate by the Custo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of its dues, sell the goods by public auction. 27. Section 109 of the Madras Port Trusts Act provided that nothing, in the said Act, would affect any power vested in the Chief Officer of Customs under any law for the time being in force. The Supreme Court observed that Section 49 of the Customs Act provided that, where, in the case of imported goods, the Assistant Collector of Customs was satisfied that the goods could not be cleared within a reasonable time, the goods could, pending clearance, be permitted to be stored in the public warehouse or in private warehouse, if facilities for depositing public warehouse were not available. 28. Having thus adverted to the relevant provisions, the Supreme Court went on to hold, unequivocally, in para 22 of the report, that services, provided by the Board of Trustees, were subject to payment, at the rates stipulated in the Act, and that those who desired to avail of the services of the Board of Trustees were liable to pay for the said services, at the prescribed rates, and to comply with the requisite conditions, stipulated in that regard. It was observed that, in such matters, where services are offered by a public authority o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence. As observed by the High Court, all the relevant facts were before the appellants who could, with reasonable care, have avoided the consequences flowing from the certificate issued by the third respondent. (Emphasis supplied) 31. Despite thus holding that the Board of Trustees was entitled to the demurrage claimed by it, the Supreme Court, nevertheless, went on to discountenance the claim of the Board of Trustees, as against Aminchand, on the ground that the goods were imported, by Aminchand, only on behalf of the State Trading Corporation of India (hereinafter referred to as STC ), in whose name Import Licence had been issued. It was noted that STC had issued an authorisation in favour of Aminchand, which was liable to deliver the consignment to the nominees of the STC, and was only entitled to a commission, for the work done by it in pursuance of the said authorisation. Aminchand, it was observed, had neither title nor interest in the goods, and was only concerned with delivery of the goods in accordance with the instructions of the STC. In the circumstances it was held that if the appellants were to enforce their statutory lien, the incidence of the demurrage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Before the Supreme Court, the Board of Trustees submitted that it was not seeking repayment of the said amount, but was concerned with a proper determination of the question of law, relating to its entitlement to claim demurrage. The question arising before it for consideration was framed by the Supreme Court as whether the claim of demurrage by the Port Trust for the period during which the goods were detained with the Port Trust in respect of Import Trade Control formalities is maintainable . 36. As in the case of Aminchand Pyarelal (1976) 3 SCC 167, the Supreme Court referred to the various provisions of the Bombay Port Trust Act, 1879, which governed the appellant before it, and which were largely in pari materia to the provisions of the Madras Port Trust Act. It was noted that Section 43B(1) of the Bombay Port Trusts Act required that every scale of rates, framed by the Board of Trustees, was required to be sanctioned and gazetted by the Central Government, whereupon it would acquire the force of law. The scale of rates, on the basis of which demurrage was being claimed, by the Board of Trustees, it was observed, had been so sanctioned and gazetted, as a result wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to its own default, and that demurrage could not be imposed for the period during which the goods were detained for operation of the Import Trade Control Regulations was, therefore, held to be erroneous. Owing to the concession, made by the Board of Trustees before the Supreme Court, however, no recovery was directed. 40. The third pre- Grand Slam 1995 (77) ELT 753 (SC), decision, to which reference is required to be made, is Board of Trustees of the Port of Bombay v. Jai Hind Oil Mills Company 1987 (30) ELT 633 (SC). The respondent Jai Hind Oil Mills Co. (hereinafter referred to as Jai Hind ) imported five consignments of propylene in January, 1986. Disputes arose, between Jai Hind and the Customs authorities, who alleged undervaluation. Jai Hind directly approached the High Court of Bombay, by way of WP No. 122 of 1986. The goods, which were in the custody of the Board of Trustees, were incurring demurrage. Vide order dated 2nd April, 1986, a learned Single Judge of the High Court of Bombay allowed Jai Hind to clear the consignments on furnishing of an Import Trade Control bond for the value of the goods, along with a Bank guarantee for the differential value, as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by Jai Hind, vide Bills of Entry No 3133/221, 3133/222 and 3133/223, were received by the Port Trust from the customs authorities, on 3rd July, 1986. As a result, in accordance with the order, dated 17th June, 1986 supra, passed by the High Court, two of the five consignments were cleared, by Jai Hind, on 3rd July, 1986 and the remaining three consignments were cleared on 5th July, 1986, on payment of an aggregate amount of ₹ 49,510.50, towards demurrage charges levied by the Port Trust. As against the amount paid by Jai Hind, the demurrage charges claimed by the Port Trust were to the tune of ₹ 3,53,514.75. As such, an amount of ₹ 3,04,004.25, claimed by the Port Trust towards demurrage, remained to be paid. 44. Against the orders, dated 26th June, 1986, passed in Appeal No 512 of 1986 and Appeal No 535 of 1986, the Port Trust approached the Supreme Court. The two primary contentions advanced by the appellant Port Trust, before the Supreme Court, were that (i) the High Court should not have directed the Customs authorities to issue detention certificates, without impleading the Port Trust and, in any event, without securing payment of the wharfage and de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat, in its order passed in the writ petition filed by Jai Hind, the High Court had, while directing the Customs authorities to issue detention certificates, safeguarded the interests of the Customs authorities, by directing furnishing of a bank guarantee, by Jai Hind, in respect of the duty payable by it, the High Court had, insofar as the demurrage charges payable to the Port Trust were concerned, merely directed an undertaking to be provided by Jai Hind, in favour of the High Court. The Supreme Court opined that the High Court ought, appropriately, to have safeguarded, not only the differential duty allegedly payable to the Customs authorities, but also the demurrage charges payable to the Port Trust, in the event of the importer being found to have been in default. 47. In so observing, the Supreme Court noted the fact that issuance of the detention certificate by the Customs authorities, vitally affected the interests of the Port Trust, as, by virtue of the booklet issued by the Port Trust, the issuance of such a detention certificate, by the Customs authorities, obliged the Port Trust to allow clearance of the goods without payment of full demurrage charges. Inasmuch as i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CWC not to charge demurrage, for the period during which the goods were in their custody. On the IAAI, and the CWC, refusing to abide by the said directions, the concerned importers approached the High Court, by way of writ petitions. The writ petitions were allowed by the High Court, which held that the IAAI and the CWC, being custodians of the Customs authorities, could not ignore the detention certificate issued by the Customs authorities, and were not entitled to recover any demurrage for the periods covered by the detention certificates. 52. The correctness of the said decisions, of the High Court, were assailed, by the IAAI and the CWC, by way of Civil Appeals, which were decided by the Supreme Court vide a common judgement. 53 . Bharucha, J. observes, at the very outset of his opinion, thus: The judgments and orders under appeal are contrary to the judgment of the Delhi High Court in the case of M/s. Trishul Impex Trishul Impex v. U.O.I., 1992 (58) ELT 192 (Del) (ibid) as also the decisions of this Court in the cases of Trustees of the Port of Madras v. M/s. Aminchand Pyarelal Ors., Board of Trustee of the Port of Bombay v. Indian Goods Supplying Co. and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luding storage charges and demurrage, whereas Regulation 6 empowered the Chairman of the IAAI to, in his discretion, and for reasons to be recorded, waive demurrage in deserving cases. A separate policy, governing waiver of demurrage, had been framed by the IAAI. Inasmuch as the provisions of the IAA Act were similar to the provisions of the Major Port Trusts Act, 1963, as well as other Port Trusts Acts, Bharucha, J. observed, in para 34 of the report, that the ratio of the decisions in Aminchand Pyarelal, Indian Goods Supplying Co. and Jai Hind Oil Mills would apply, mutatis mutandis, to the IAAI. 57. The various respondents, before the Supreme Court, sought to distinguish the decisions in Aminchand Pyarelal, Indian Goods Supplying Co. and Jai Hind Oil Mills by contending that these decisions only held that an importer had to pay demurrage even if the delay, in clearing its goods, was not due to his default or negligence, whereas the contention of the respondents, before the Supreme Court, was different, i.e., that the IAAI was the custodian of the Customs authorities and was obligated, therefore, to abide by the directions contained in the detention certificates, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rter, for such period as the Customs authorities directed. Paras 41 and 42 of the opinion of Bharucha, J, went on to hold thus: 41. The purpose of the Customs Act on the one hand and the Major Port Trusts 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 sea-ports 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 imported 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer cause to be sold (any transfer of the warehoused goods notwithstanding) such sufficient portion of the goods as the warehouse-keeper may select. 59. When sub-section (1) above, does not relieve the owner of any warehoused goods to 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 Collector of Customs, although such goods were kept by the warehouse-keeper for and on behalf of the Customs Department and again when sub-section (2) enables the warehouse-keeper even to sell the warehouse goods with the permission of the proper officer for unpaid rent or warehouse charges, it is difficult to think that there could be any provision in the Act or the Rules or the Regulations made thereunder which confers on the Collector of Customs power to direct the release of the goods kept in the custody, as custodian of the Customs Department without demanding payment of keeping charges from the consignee of goods because of detention certificates issued in that regard by the Customs authorities, inasmuch as, the said provision shows the legislative inten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Venkatachala, J., proceeds to conclude, in para 65, 66 and 68 of his concurring opinion, thus: 65. From the above decisions of this Court it becomes clear that an authority created under a statute even if is the custodian of the imported goods because of the provisions of the Customs Act, 1962, would be entitled to charge demurrages for the imported goods in its custody and make the importer or consignee liable for the same even for periods during which he/it was unable to clear the goods from the Customs area, due to fault on the part of the Customs Authorities or of other authorities who might have issued detention certificates owning such fault. 66. Thus, the above decisions of this Court which uphold the power of Ports Trusts created under Ports Act to levy and collect demurrage charges for goods they keep as Custodians for Customs Department from the consignees notwithstanding the detention certificates issued by the Customs Department clearly support the view I have taken that the IAAI, an authority constituted under the International Airports Authority Act, 1971, when is entitled to collect charges for keeping custody of the imported goods by regulations made th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demurrage charges and other incidental charges, even if the goods were illegally detained by the Customs authorities. 63. U.O.I. v. Sanjeev Woollen Mills 1998 (100) ELT 323 (SC) is a decision, rendered by two Hon ble Judges, which assumes importance, not so much for its own precedential value, as for the fact that it led to the subsequent judgement in Shipping Corporation of India Ltd v. C. L. Jain Woollen Mills 2001 (129) ELT 561 (SC). The respondent, in Sanjeev Woollen Mills 1998 (100) ELT 323 (SC), imported goods, under five Bills of Entry, declaring them to be synthetic waste. The Customs authorities were of the view, per contra, that the goods were prime fibre, which fetched a much higher price. This resulted in the issuance of a Show Cause Notice to Sanjeev Woollen Mills (referred to, hereinafter, as SWM ). 64. As, owing to their continued detention, the goods were incurring demurrage, SWM filed CWP 802/1991, before this Court, in respect of two of the four Bills of Entry. In the said proceedings, on 3rd April, 1991, the learned Counsel appearing for the Union of India stated that, in case, after inspection, the goods were found to be synthetic waste, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ease of the goods, to SWM, within three weeks, and resolution, of the issue of payment of charges, by the Container Corporation of India and the Shipping Corporation, between themselves. 68. Though, pursuant to the aforesaid order, dated 19th March, 1997, the Union of India reported that the matter stood resolved with the Shipping Corporation, and delivery of the goods was also allowed by the Container Corporation of India, without payment of any demurrage charges, SWM did not take delivery of the goods, owing to an inter-se dispute among its partners, which resulted in the filing of Civil Suit No 748/1997, in this Court, in which an injunction, restraining the defendant partners from taking delivery of the goods, was passed by this Court on 27th January, 1998. 69. Be that as it may, the judgement, dated 15th July, 1996, as well as the subsequent order, dated 19th March, 1997, passed by this Court in CWP 3469/1994, were carried, in appeal, to the Supreme Court, by the Union of India. It was contended, by the Union of India, that this Court erred in directing it to issue a detention certificate, or to bear the demurrage and container detention charges. 70. The Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... much as Sanjeev Woollen Mills was decided on its own peculiar facts, with the express clarification that the judgement would not constitute a precedent. 72. C. L. Jain Woollen Mills is, however, an important decision, not for that reason, but because it is erroneously cited, on numerous occasions, as an authority for the proposition that, where the detention of the goods, by the Customs authorities, is illegal, the burden, to bear the demurrage charges, would fall on the Customs authorities. As would become apparent from the recital that follows hereinafter, the Supreme Court never held so. The direction to the Customs authorities to bear the detention and demurrage charges, as issued in the said case, was attributable solely to an order, dated 9th September, 1994, passed by this Court, the Special Leave Petition, preferred whereagainst, was also dismissed, by the Supreme Court, on 13th November, 1995. Else, a holistic reading of C. L. Jain Woollen Mills makes it apparent that the burden, to pay demurrage charges, is on the importer, and cannot be waived by the Customs authorities, by issuance of a detention certificate. It is also important to note, in the context of C. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and levying the penalty and that order having reached finality by dismissal of the special leave petition against the same filed by the Union of India, the liability of the importer to pay the demurrage charges ceases and that question cannot be reopened. 75. It needs to be noted, even at this stage, therefore, that the Supreme Court, in C. L. Jain Woollen Mills9 did not direct CLJ to pay demurrage charges, as it felt its discretion, in that regard, to be constrained by the dismissal of SLP 5671/1995 on 13th November, 1995. As the recital hereinafter as well as a holistic reading of the decision in C. L. Jain Woollen Mills9 would, however, disclose, the liability of the importer, in law, to pay the demurrage charges, was upheld by the Supreme Court. 76. To return to the recital of facts in C. L. Jain Woollen Mills, despite the judgement, dated 9th September, 1994 supra, passed by this Court, CLJ was unsuccessful in getting the goods released, resulting in the filing, by CLJ, of CCP 120/1995, before this Court, for initiation of contempt proceedings. The said contempt petition was, however, dismissed, by this Court, reserving liberty, with CLJ, to move the Division B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her the career of the goods who had a over the goods for non-payment of duty, can enforce the terms and conditions of the contract against the customs authorities, making the said authorities liable to pay the demurrage charges. 79. The Supreme Court went on to reproduce Section 45 of the Customs Act and, after referring to the said Section, in juxtaposition with other provisions of the said Act, held that it was apparent, from the said provisions, that the Customs Authorities had full power and control over the imported goods and that, without their permission, the goods could not be cleared. 80. At the same time, it was held, there is no provision in the Customs Act, conferring power on the Customs Authorities to prohibit or injunct any other authority where the imported goods are stored from charging the demurrage charges for the services rendered for storing the imported goods . The Supreme Court also clarified that it was not concerned with a situation in which any statute, such as the Major Ports Trust Act, or the IAA Act, applied. 81. Before the Supreme Court, it was sought to be contended, on behalf of the Shipping Corporation, that the right of the Shippi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion would flow from the issuance, by the Customs Authorities, of a detention certificate. The right, of the Shipping Corporation, to charge demurrage charges, it was held, was owing to the occupation, by the imported goods, of the space of the Shipping Corporation. 84. The following words, of the Supreme Court, as occurring in para 7 of the report, merit reproduction: 7 .. But that by itself, would not clothe the customs authorities with the power to direct the carrier who continues to retain a lien over the imported goods, so long as his dues are not paid, not to charge any demurrage charges nor the so- called issuance of detention certificate would also prohibit the carrier from raising any demand towards demurrage charges, for the occupation of the imported goods of the space, which the proprietor of the space is entitled to charge from the importer. The importer also will not be entitled 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect to dimensions as well as quantity. At the request of RC Fabrics, show cause notice was waived, and a formal adjudication order was passed, by the Assistant Collector, on 15th January, 1991, allowing release, to RC Fabrics, of the excess goods, on payment of redemption fine of ₹ 25,000/ and personal penalty of ₹ 5000/ . The said amounts, along with Customs duty of ₹ 43,657/ , on the quantity of goods allegedly in excess, were deposited, by RC Fabrics on 22nd September, 1990. On the same day, however, officers of the Directorate of Revenue Intelligence (DRI) detained the consignment which was, subsequently, seized, by the DRI, on 15th November, 1990. 88. RC Fabrics petitioned this Court, seeking issuance of a mandamus, to the Customs authorities, to release the aforesaid consignment. The DRI contested the writ petition, alleging invasion of Customs duty, by RC Fabrics, of over ₹ 60 lakhs. This Court allowed completion of investigation, by the DRI, as well as issuance, to RC Fabrics, of Show Cause Notice, with directions, to RC Fabrics, to respond, thereto, within 48 hours of the receipt thereof. Adjudication was directed to be completed and conclude ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court, rendering the Customs authorities liable to pay demurrage, container charges and ground rent, to the CWC, for the period after 16th January, 1991, on the ground that the said direction was contrary to the judgement in Grand Slam4. Grand Slam4 was, thereby, reiterated and reinforced. 92. The next judgement of significance, chronologically, is Om Shankar Biyani v. Board of Trustees, Port of Calcutta 2002 (140) ELT 321 (SC). The appellant Om Shankar Biyani (hereinafter referred to as Biyani ) imported a consignment of bearings, vide Bill of Entry dated 13th July, 1989. The goods were seized on 1st August, 1989. Biyani filed a writ petition in the High Court of Calcutta. Vide order dated 27th September, 1989, the High Court permitted Biyani to clear the goods on payment of duty, as assessed, on the basis of the CIF value as appearing in the invoice. Biyani was, however, directed to furnish a bank guarantee, for the difference between the duty found payable on proper assessment, and the duty being paid by it. The order did not, however, allow removal, by Biyani, of the goods, without payment of the charges due to the Board of Trustees. The order dated 27th September, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Division Bench of the High Court, vide order dated 27th July, 2000, whereby the directions, of the learned Single Judge, permitting recovery of demurrage, by the Board of Trustees only till 2nd February, 1990, was set aside, and the Board of Trustees was held entitled to recover demurrage for the entire period during which the goods remained with it. 97. This order, dated 27th July, 2000, was challenged, by Biyani, before the Supreme Court. 98. The Supreme Court first extracted Section 58 of the Major Port Trusts Act, 1963, which clearly provides that, in respect of goods to be removed from the premises of the Board of Trustees, demurrage would be payable before the goods are so removed. In view of this categorical statutory position, the Supreme Court held that the High Court had seriously erred in permitting removal of the goods without payment of port charges. It was observed that the Board of Trustees was not concerned with the question of the person who would have to bear the said charges. Biyani being interested in clearance of the goods, it was the responsibility of Biyani to pay the charges and clear the goods. The Supreme Court went on to hold that, even i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es ought not to be allowed to charge demurrage charges after 10th January, 1992. This decision, however, obviously turns on the peculiar facts before the Supreme Court, and cannot be treated as constituting part of the ratio decidendi of the judgement in Om Shanker Biyani which, otherwise, reiterated and reinforced the principle that the Board of Trustees/custodian was entitled to charge demurrage for the period over which the goods were consigned to its custody. 102. The last judgement of the Supreme Court, in this list, would be Jindal Drugs Ltd v. U. O. I. 2018 (361) ELT 769 (SC). The appellant Jindal Drugs Ltd (hereinafter referred to as Jindal ) moved the Supreme Court, challenging the decision, of the High Court of Bombay, whereby, even while holding Jindal to be entitled to issuance of a detention certificate and refund of detention charges paid to the Customs authorities, it was directed to move the Port Trust authorities, insofar as its claim for payment/refund of demurrage/Port Trust charges, was concerned. The Supreme Court noted that the reluctance, of the Customs authorities, to permitting clearance of the goods imported by Jindal, was owing to a dispute rega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it. Of course, this would be subject to any stipulation, in the statutory or other instrument governing the affairs of the custodian, to the effect that, where the detention certificate was issued by the Customs authorities, the importer would be entitled to waiver of demurrage, in whole or in part. In the absence of any such stipulation, statutory or otherwise, the Customs authorities could not, by issuance of the detention certificate, or by any other communication, direct the custodian not to charge demurrage, or to waive the whole, or part, of the demurrage chargeable by it. (iv) In applying the above principles, the issue of whether the goods in question had been licitly, or illicitly, imported, as also the detention of the goods, by the Customs authorities, was justified or unjustified, bona fide or mala fide, are entirely irrelevant. (v) The liability to pay the demurrage is on the importer, irrespective of the justifiability, or unjustifiability, of the seizure and detention of the goods by the Customs authorities. Even in a case in which the seizure is entirely unjustified, the importer would, in the first instance, have to pay demurrage, to the custodian and, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave to establish that its entitlement, to charge demurrage, is relatable to any other law for the time being in force . 110. At this juncture, we may refer, profitably, to the judgment of the Supreme Court in Mumbai Port Trust v. Shri Lakshmi Steels 2017 (352) ELT 401 (SC), in which note, of Regulation 6(1)(l), has been taken. The respondent, before the Supreme Court, imported cold rolled sheets and coils. The DRI directed the consignment to be placed on hold, on 14th December, 2015. On 28th December, 2015, the DRI wrote, again, to the Customs authorities, stating that specific intelligence had been received, that Shri Lakshmi Steels (hereinafter referred to as SLS ), and its associated firms, had been importing consignments in violation of notifications issued by the Customs authorities. The Customs authorities were, therefore, requested to have the goods subjected to 100% examination. In the meantime, on 18th December, 2015, SLS requested that the goods, covered by Bills of Entry dated 4th December, 2015 and 11th December, 2015, be provisionally assessed and released, so as to avoid mounting demurrage the detention charges. Three reminders followed. Thereafter, samples ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Supreme Court, at the outset of its reasoning, extracted various provisions of the Major Port Trusts Act and the Customs Act and proceeded, thereafter, to refer to the various judgements, rendered by it earlier, to which allusion already stands made hereinabove. On issue (1) supra, as framed by it, the Supreme Court went on to answer the issue in the negative, i.e. by holding that the Mumbai Port Trust was entitled to charge demurrage, for the following reasons: (i) Section 160(9) of the Customs Act clearly laid down that nothing, in the said Act, shall affect the power of the Port Authority in a Major Port, as defined in the Major Port Trusts Act. There was no dispute about the fact that the Mumbai Port Trust was a Major Port. (ii) The Mumbai Port Trust had power and authority to levy rates, including demurrage, under Section 47A of the Major Port Trusts Act. This right of the Port Trust was not affected either by the provisions of the Customs Act, or by the Handling of Cargo Regulations. Besides, the Regulations were in the nature of subordinate legislation. Subordinate legislation, especially when framed by the CBEC under the Customs Act, could not affect, in any man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equally, there was delay on the part of the importer as well. The Supreme Court, however, clarified that the importers were free to approach the Port Trust, under Section 53 of the Major Port Trusts Act, seeking extension and revision of demurrage and other charges, and opined that the Board of Trustees could take a sympathetic view in the matter. 118. The Supreme Court also held though this may not be strictly relevant for the present proceedings that, insofar as the detention charges, payable to the Shipping Line, were concerned, the issue being one of contract, this Court could not, in writ proceedings, have directed the DRI, or the Customs authorities, to pay the said charges to the Shipping Line. 119. In any event, insofar as the right of the Mumbai Port Trust, to charge demurrage, was concerned, therefore, the Supreme Court has held, clearly and unequivocally, that the law, as laid down from Aminchand Pyarelal downwards, through Grand Slam4 and the judgements which followed it, continues to apply, despite Regulation 6(1)(l) of the Handling of Cargo Regulations having come into force. It has also been clarified, yet again, that the liability to pay demurrage was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egulations, specifically for the storage of and processing of goods in any warehouse established by the AAI under Section 12(3)(g), and for charging of fees for such storage and processing. In exercise of the said power, the AAI notified the Airports Authority of India (Storage and Processing of Cargo, Courier and Express Goods and Postal Mail) Regulations, 2003 (hereinafter referred to as the AAI Regulations ), which came into effect on 13th June, 2003. (v) Cargo Handling Agency is defined, in clause (i) of Regulation 2 of the AAI Regulations, as meaning a person, firm or company handling cargo as an agent of the Authority or the licensee and may include the Authority . As such, Mr. Tiku points out, the AAI Regulations permitted licensing/delegation, of the function of handling of the cargo, by the AAI, to its agent. (vi) Demurrage is defined, in clause (n) of Regulation 2 of the AAI Regulations, as meaning the rate or amount of charges payable to the Authority by the shipper or consignee or carrier or agent or passenger for utilising storage facility at Cargo Terminal, for storage of cargo, goods, unaccompanied baggage, stores, courier bags, express parcels, Post ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, be leased, by the AAI. (xii) Sub-section (4), of Section 12A, of the AAI Act, reads thus: (4) The lessee, who has been assigned any function of the Authority under sub-section (1), shall have all the powers of the Authority necessary for the performance of such functions in terms of the lease. (xiii) In exercise of the powers conferred by Section 12A of the AAI Act supra, the AAI entered into an Operation, Management and Development Agreement (hereinafter referred to as OMDA ), on 4th April, 2006, with the Delhi International Airport Pvt Ltd (hereinafter referred to as DIAL ). The said agreement has been placed on record. The agreement recites that the AAI in the interest of the better management of the Airport and/or overall public interest, is desirous of granting some of its functions, being the functions of operating, maintaining, developing, designing, constructing, upgrading, modernising, financing and managing the Airport to the JVC and for this purpose to lease the premises constituting the Airport Site in accordance with the terms and conditions set forth herein . JVC , it may be noted, is the acronym employed, in the OMDA, to refer to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AL have entered into an Operation, Management and Development Agreement dated April 4, 2006 ( OMDA ) whereby AAI has granted to DIAL the exclusive right and authority during the term of the OMDA (including any renewal thereof) to operate, maintain, develop, design, construct, upgrade, modernise, finance and manage the Airport. ***** B. Pursuant to the terms of the OMDA, DIAL is, inter alia, entitled to grant concession to 3rd parties for the purpose of upgradation, modernisation, finance, operation, maintenance and management of the Cargo Terminal at the Airport. ***** E. After evaluating all the Proposals received by DIAL, DIAL accepted the proposal submitted by Celebi and issued a Letter of Award to Celebi for award of the Concession. (xvi) Chapter 2 of the Concession Agreement dealt with the exact terms of the Grant of Concession , and Clause 2.1, thereunder, reads thus: In consideration of the Concession Fee, License Fee, Utility Charges and other payments as specified under this Agreement and the Concessionaire s governance hereinafter reserved and contained in this Agreement, DIAL hereby grants to the Concessionaire and the Concessionaire hereby ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of the Applicable Laws, parameters set out in the Business Plan and obtain all such Approvals as may be necessary for the implementation of the Concession including but not limited to complying with the relevant development standards as stipulated under the OMDA. For all the aforesaid reasons, Mr. Tiku submits that the entitlement, of CELEBI, to recover demurrage charges, from the petitioner, cannot be gainsaid. 125. Mr. Tiku has also endeavoured to submit, before us, that no case, meriting waiver of demurrage, can be said to exist, in view of the waiver policy of CELEBI. He draws our attention, in this context, to clause 10.1.10 of the waiver policy, which reads thus: 10.1.10 Demurrage charges shall not be waived where: (a) Any fine/penalty/personal penalty/warning is imposed by the Customs Authority (b) Delay arose by reason of dispute in the assessable value or for revalidating or correcting the license in ordinary course of appraisal. 126. Mr. Tiku points out that cases, in which fine/penalty/personal penalty, is imposed by the Customs authorities, stand, ipso facto, disentitled to waiver from demurrage. Even on merits, therefore, Mr. Tiku ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rce of law. In Raj Kumar Narsingh Pratap Singh Deo v. State of Orissa AIR 1964 SC 1793, the Supreme Court held that law generally is a body of rules which had been laid down for determining legal rights and regulations which are recognised by courts . 132. The expression law and, consequently, the expression any other law for the time being in force are, therefore, required to be compendiously interpreted, rather than infusing, into the said expression, any unwarranted restrictions. 133 . The charging of demurrage by the CELEBI, being in terms of the concessionaire agreement, between the DIAL and CELEBI, which was entered into, by them, in terms of the OMDA, which, in turn, stands sanctified by Section 12A of the AAI Act, in our opinion, the CELEBI must be treated as charging, and recovering, demurrage, in accordance with law for the time being in force . 134 . The inevitable sequitur would be that the injunction, engrafted in Regulation 6(1)(l) of the Handling of Cargo Regulations, on the charging of demurrage in respect of goods detained/seized, or confiscated by the customs authorities, would not apply to, or affect, CELEBI. It has to be remembered, in thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmunication cannot, in our view, result in compulsory abandonment, by CELEBI, of its right to recover demurrage. Indeed, as held by the Supreme Court in the authorities already cited hereinabove, the Customs authorities have no jurisdiction, whatsoever, to injunct CELEBI from recovering the demurrage charges, otherwise recoverable by it in law. 140. Mr. Manish also referred us to communications, dated 13th March, 2019, from the Chief Commercial Officer of DIAL to the Chief Commissioner of Customs, and dated 15th March, 2019, from the Joint Commissioner of Customs to DIAL, by way of response thereto. 141. The submission of Mr. Manish is that, in the letter dated, 13th March, 2019, there is a categorical undertaking, by DIAL, to the Chief Commissioner of Customs, to the effect that no demurrage would be charged, by the custodian, i.e. CELEBI, in the present case, for the period for which detention certificate was issued by the customs authorities, and that, in fact, it was subject to this undertaking, that the request, of DIAL, for renewal of its license to continue as a cargo service provider, under the Handling of Cargo Regulations, was accepted and allowed. 142. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the custodian, for the period covered by the detention certificate, was with respect to four specific cases, relating to (i) Md. Salim Chaiwala, (ii) M/s. Nanda Gum House, (iii) M/s. Overseas and (iv) M/s. Afzal Khan. The undertaking, therefore, has no application, whatsoever, to the petitioner before us and we are not, therefore, required to express any opinion regarding the said undertaking, or the effect, in law, thereof. 143. Mr. Manish next pointed out, to us, that the AAI Regulations of 2003 specifically stated that they superseded the earlier existing International Airport Authority of India (Storage and Processing of Goods) Regulations, 1993 (hereinafter referred to as the IAAI Regulations ). The waiver policy, to which Mr. Tiku had drawn our attention, it is sought to be pointed out, was issued under the IAAI Regulations of 1993 Act, therefore, had no application to the AAI Regulation of 2003. 144. We do not propose to enter into this controversy, as there is no prayer in the writ petition, by the petitioner, for being allowed the benefit of the waiver policy of CELEBI. It would be open to the petitioner to approach CELEBI, seeking waiver of demurrage charg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de under the Aircraft Act, 1934(22 of 1934); (d) to monitor the set performance standards relating to quality, continuity and reliability of service as may be specified by the Central Government or any authority authorised by it in this behalf; (e) to call for such information as may be necessary to determine the tariff under clause (a); (f) to perform such other functions relating to tariff, as may be entrusted to it by the Central Government or as may be necessary to carry out the provisions of this Act. 149. A reading of the aforesaid sub-section (1) of Section 13 of the AERA Act makes it abundantly clear that the AERA is basically concerned with fixing tariff, and not with other airport services, including actual collection of demurrage, for continued storage of the goods. The reliance, by Mr Manish, on the AERA Act is, therefore, misplaced. 150. Mr. Manish also relied on the judgment of the Supreme Court in Continental Carbon India Ltd. v. U.O.I. 2018 (361) ELT 193 (SC), the judgment of this Court in Trip Communication Private Ltd. v. U.O.I. 2013 (302) ELT 321 (Del), Delhi International Airport Private Ltd. v. U.O.I. 2016 (234) DLT 445 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Customs Authorities. It is in this backdrop that the question is to be decided as to whether relief of non-payment of charges should have been restricted till 15-1-2015. 157. It is clear that that the Supreme Court was not concerned with the entitlement, or otherwise, of the service provider, to charge demurrage. The High Court had held, on this issue, in the negative, and the service provider had not chosen to challenge it. 158. The only issue, on which the Supreme Court deliberated and delivered judgment, was as to whether the High Court was justified in restricting the relief, granted to the CCIL, for the period till 15th January, 2015. Neither of the issues which arise before us in these writ petitions, i.e. regarding the entitlement of CELEBI to demurrage charges, or the issue of whether the petitioner would be liable to pay the said charges, therefore, arose for consideration before the Supreme Court. The Supreme Court examined, and pronounced upon, an issue with which the present proceedings are not concerned, in any manner. 159. The reliance by Mr. Manish on the decision in Continental Carbon India Ltd., has, therefore, to be characterized as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent case, the Court notices that the power to frame regulations is located in Section 42(1) and (2) of the Airports Authority of India Act, 1994, which, by clause (d) (of sub-section [2]) provides the following specific regulation making power: (d) the storage or processing of goods in any warehouse established by the Authority under clause (g) of sub-section (3) of section 12 and the charging of fees for such storage or processing 18. Section 141(2), - of the Customs Act, inserted by Finance Act 18 of 2008 provides as follows: (2) The imported or 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 maybe prescribed. 19. This court has, in its preceding 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emurrage, as contained in Regulation 6(1)(l) stood statutorily subordinated to any other law for the time being in force. 166. It was for these reasons that the challenge to Regulation 6(1)(l), by DIAL, was repealed. 167. The contention, of Mr. Manish, that, by virtue of Regulation 6(1)(l) of the Handling of Cargo Regulations, CELEBI is not entitled to charge any demurrage from the petitioner, would, in fact, do disservice to the decision of this Court in Delhi International Airport Private Ltd., and the raison d etre thereof. 168. The above reasoning would apply, mutatis mutandis, to all the writ petitions before us, i.e. WP (C) 7577/2019, WP (C) 11264/2019, WP (C) 8659/2017, WP (C) 8668/2017 and WP (C) 8734/2017. Conclusion 169. For the aforesaid reasons, we are of the view that the prayer, of the petitioner, for issuance of directions to the respondents, not to collect any demurrage, in respect of the goods, imported by the petitioner and in the custody of CELEBI, is bereft of merit. 170. We confirm that CELEBI is entitled, despite Regulation 6(1)(l) of the Handling of Cargo Regulations, to charge demurrage in respect of the goods consigned t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
