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TMI Blog2020 (5) TMI 476X X X X Extracts X X X X X X X X Extracts X X X X ..... an innovation by the Customs Authorities. This was introduced much prior to Handling of Cargo in Custom Areas Regulations, 2009. Regulation 6(1)(l)of the Handling of Cargo in Customs Area Regulations, 2009 mandates that the Customs Cargo Service provider shall 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 - As per Regulation 6(1)(l) of the Handling of Cargo in Customs Area Regulations, 2009, a Customs Cargo Service Provider which includes the Air Port Authority of India cannot charge any rent or demurrage on the seized or detained or confiscated goods by the Superintendent of Customs or Appraiser or Inspector of Customs or Preventive officer or examining officer, as the case may be. This was perhaps framed in line with Public Notice No.111 of 1985 dated 29.07.1985 of Bombay Customs House. The Superintendent of Customs or the Appraiser or the Inspector of Customs or the preventive officer or examining officer as the case may be can exercise the power to recomm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re are sufficient indications to show that there was a complete disruption of service at the Air Cargo Complex during the relevant period due to alleged arrest of the officers. In absence of the officers to receive the transshipment application, there could have been total disruption and no application was received which perhaps may have led to the delay - If there were no proper officers or there were only few officers to handle the workload due to alleged arrest and the delay in receiving the transshipment application for being processed by the 1st respondent should not be at the cost of the petitioner. If indeed there was a complete breakdown due to alleged arrest and resulted in disruption of the operations at the Air Cargo Complex, the petitioner should be compensated as such delay cannot be attributed by the petitioner. This would require proper facts being established by the petitioner. This aspect would require proper verification - Issue is therefore left open for the petitioner to establish that Customs Department is liable to compensate the petitioner - Petition allowed by way of remand. - HON'BLE MR. JUSTICE C.SARAVANAN For Petitioner: Mr. Hari Radhakrishnan For R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties and as a result of which there was delay and therefore the petitioner has been visited with additional burden of transshipment and demurrage charges by the Airport Authority of India (hereinafter referred as AAI) represented by 3rd / 4th respondent. 9. It is stated that the Customs Department refused to take applications pending and the goods were allowed to be trannsshipped only from 30.11.2009 to 05.01.2010. 10. The petitioner therefore requested the 1st and 2nd respondents to issue of Detention Certificate to claim waiver / remission from payment of demurrage charges from the 3rd/4th respondent at the earliest. 11. The petitioner submits that it sent a representation dated 11.12.2009 to the 2nd respondent, to permit transshipment of the imported cargo. In the said letter, the petitioner had specifically complained that it transshipment cargo has been stopped and that they are incurring huge demurrage charges in the hands of the 4th respondent. 12. The 2nd respondent by its letter dated 14.12.2009 merely queried the reasons for bringing the subject cargo to Chennai Airport instead of taking directly to Trivandrum. 13. The petitioner submits that the 2nd respondent s letter d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances, W.P.No.3317 of 2010 was withdrawn and thereafter, the present Writ Petition was filed. 21. The 3rd respondent vide separate letter dated 19.03.2010 also rejected the request of the petitioner to waiver of demurrage charges on the ground that the Customs Department had not informed that the consignment was detained by them. The petitioner has not challenged the said order. 22. During the course of the hearing, for the 1st time, the learned counsel for the petitioner submitted that during the same period, 9 out of 11 customs officers who were serving at the Chennai Air Cargo Complex and handling transshipment of cargo were arrested and 8 of them were middle level officials and there was a complete disruption of the activities on account of arrest. 23. It is further submitted that couple of dealers were also arrested who were allegedly in cohorts with some of the arrested officers who had facilitated evasion of Customs duty and that the CBI had raided the residence of some of these officials and recovered a sum of ₹ 17 lakhs of unaccounted cash and 25 lakhs worth jewellery apart from recovery of a sum of ₹ 59,000/- in cash from the office premises. 24. To th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was a delay on the part of the Customs Authority, though which is not the case here, the petitioner was guilty of not filing the transshipment application in time and there is no evidence to substantiate the delay and therefore the petitioner cannot claim any waiver from payment of demurrage and detention charges. 30. It was further submitted that it was however open for the petitioner to approach the 3rd and the 4th respondents for waiver in accordance with provisions of the Airports Authority of India (Storage and Processing of Cargo, Courier and Express Goods and Postal Mail) Regulations, 2003. The said application was also rejected by the 3rd / 4th respondent which fact has been suppressed in this Writ Petition. 31. He drew my attention to paragraph 37 of the decision in Mumbai Port Trust Vs. Shri Lakshmi Steels, 2017 (352) E.L.T.401 (S.C), wherein, the Hon ble Supreme Court held that it is the importer alone is liable to pay the demurrage charges. It is submitted that Regulation 6 of the Handling of Cargo in Customs Area Regulations, 2009 is not applicable. 32. He further submits that the 3rd and the 4th respondents are entitled to collect the charges under the provision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... empty import container to the steamship liner or carrier as the case may be and the consignee takes more than three days to return this container, the steamship/carrier may charge for such Detention. 40. As far as transshipment of imported cargo is concerned, it is governed by Chapter VIII of the Customs Act, 1952. As per Section 54(3) of the said Act, a proper officer may allow the goods to be transshipped, without payment of duty, subject to such condition as may be prescribed for the new arrival of such goods at the Customs station to which transshipment is allowed. 41. The Airport Authority of India and Port Authorities have been appointed as custodians of imported goods under Section 45 of the Customs Act, 1962. Over a period of time, private operators have been allowed to be operated as custodians to decongest the ports and airports. 42. An elaborate procedure has been prescribed for being followed by custodians of the goods appointed under Section 45 of the Customs Act, 1962. 43. As far as imported cargoes which are to be transshipped by a motor vehicle, such transshipment shall be made only on the permission in writing of the Commissioner of Customs as is evident from a rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransshipment of import cargo will be governed by the provisions of Chapter VIII of the Customs Act, 1962 and the Goods Imported (Conditions of Transshipment) Regulations, 1995. (iii) The cargo to be trannsshipped should have been manifested as for transshipment in the incoming international carrier who has landed the cargo. In respect of console cargo where the Master Airway Bill does not show the final destination, the Airlines filing transshipment application should keep a copy of both Master Airway Bill and House Airway Bill to indicate that the particular consignment sought for transshipment is for other inland customs Airport/ICD/CFS/ACC. (iv) The custodian should execute a suitable running bond with a bank guarantee for an amount approved by Commissioner of Customs concerned for proper accountal of cargo. The amount will be debited from this bond when the transshipment cargo is taken by the custodian and it will be credited when the proof of handing over of the cargo to customs at final destination is produced. The custodian will be responsible for any shortage or pilferage of the cargo. The custodian will insure such goods for full value as well as the customs duty involved. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the transshipment permission the custodian/airlines will shift the goods from AAI warehouse to the make-up area earmarked for the purpose of palletisation/containerisation or shift the goods from their warehouse into the container/truck within the premises of the warehouse under the supervision of the Customs Officer posted for the purpose. After loading of the goods, the Customs Officer will seal the container/truck with Customs Bottle Seal and endorse all T.P. copies are as : Supervised the loading of ..No. of packages on container/ truck No. . destined to . airport/ACC/CFS/ICD and sealed with Customs Bottle Seal No. on (date) covered by Transshipment Permit No. Name and Signature of Customs Officer (xi) Original copy of T.P. application will be forwarded to the Import Freight Officer (IFD) of Customs at the Inland Airport/ACC/CFS of destination. Duplicate copy will be retained by T.P. Officer. Triplicate copy of T.P. application will be handed over to the Airlines / custodian. The 4th copy will remain with the Customs Officer posted in the Airlines/custodian warehouse and supervising the loading of cargo. The 5th copy will be sent in sealed cover along with the truck/container t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer of the custom for permission to transship the imported goods. However, permission has to be granted by the 1st respondent. 46. Airlines or the carrier or its agent is required to pay application fee for transshipment of imported goods under the aforesaid Rules. Such transshipment is subject to permission in writing of the Commissioner of Customs. 47. Certificate for waiver of demurrage referred to as Detention Certificate is being now issued by the customs authorities to an importer to claim waiver from demurrage for the Port. 48. Only after appropriate permissions are granted by the 1st respondent, the imported cargo can be moved to the bonded trucks/designated vehicles of the petitioner for being transhipped. At that stage the petitioner as a transshipper also becomes the custodian of the imported cargo and it bound by the bond. 49. By not filing the application, the petitioner would not have gained any advantage. There is no explanation as to why the officers refused to receive the application for transshipment and clear the cargo immediately when the petitioner addressed letter dated 11.12.2009 to the 2nd respondent. 50. It is not as if the petitioner was transshipping su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ricity charges, insurance premium, security charges, terminal charges electronic data interchange and electronic data interchange service centre charges, Value-Added Network service charges, charges for heavy cargo, and cargo requiring special care such as hazardous, perishable, live animals, valuable and express cargoes et cetera and license fee. 57. The expression Transshipment Cargo has been defined in Regulation 2(zd), to mean cargo which is unloaded from one carrier and loaded or intended to be loaded on the same or another carrier or vehicle for on-carriage to its final destination. 58. The expression demurrage also has been defined in Regulation 2(2) of the aforesaid Regulation. It means the rate or amount of charges payable to the authority by the shipper or consigning or carrier or agent or passenger for utilising storage facility at the Cargo Terminal, for storage of cargo, goods, unaccompanied baggage, stores, Courier bags, express parcels, postal mail etc. for extended period beyond the stipulated period for clearance or removal from the Cargo Terminal or of the Customs at the Cargo Terminal. 59. During the relevant period, the cargo had to be cleared within 72 hours of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 66. The procedure for issue of Detention Certificate was contained in Public Notice No. 111 of 1985 dated 29.07.1985 of the Bombay Custom House. Issue of Detention Certificate was an innovation by the Customs Authorities. This was introduced much prior to Handling of Cargo in Custom Areas Regulations, 2009. Though a copy of the Public Notice No.111 of 1985 is not traceable, para 2 of the said Public has been reproduced by the Hon ble Supreme Court in BOARD OF TRUSTEES OF THE PORT OF BOMBAY Vs. JAI HIND OIL MILLS COMPANY, (1987) 1 SCC 648. Same extracted here under from the said judgment:- Paragraph 2 of the said notice sets out the circumstances under which a regular detention certificate could be issued by the Customs House for facilitating the importers to get remission of demurrage charges. They are as under:- (a) Where the goods are detained by Customs House for bona fide operation of import control formalities without any default on the part of the importers. (b) Where the goods have been released on caution (a regular detention certificate and not a recommendatory letter). (c) Where the goods are detained [by] the Custom House pending test report and the facility of clearance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntive officer or examining officer, as the case may be. This was perhaps framed in line with Public Notice No.111 of 1985 dated 29.07.1985 of Bombay Customs House. 69. The petitioner is insisting for the detention certificate from the 1st respondent so that the 3rd and the 4th respondents can be persuaded to not to charge any rent or demurrage on the imported goods which transshipment from the Chennai Airport. 70. The Superintendent of Customs or the Appraiser or the Inspector of Customs or the preventive officer or examining officer as the case may be can exercise the power to recommend waiver of demurrage and other charges that are chargeable by the custodian of the goods in whose place/premises the goods are stored before being transshipped. 71. In Trustees of the Port of Madras Vs. M/s. Aminchand Pyarelal, (1976) 3 SCC 167, the Hon ble Supreme Court has held that the Port Trusts were under a statutory obligation to render services of various kinds in the larger public and national interest. 72. The Hon ble Supreme Court also observed that the demurrage charges are levied in order to ensure quick clearance of the cargo from the harbour and the rates are fixed in such a way that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Customs Authorities direct. 42. 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 seaports and airports, the facilities to be provided thereat and the charges to be recovered therefore. An importer must land the imported goods at a seaport or airport. He can clear them only after completion of Customs formalities. For this purpose, the seaports 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 seaport 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. *** 44. It cannot be gainsaid that, by reason of unjustified detention of his goods by the Customs Auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, its Rules or its Regulations and hence directions given by the Customs Collector or his delegatees to release the goods of importers or consignees without collecting demurrage charges from them cannot be enforced by courts either against IAAI or CWC. This Court clearly held that Section 45 of the Customs Act did not, in any manner, affect the rights of the International Airport Authority to collect charges from the importer. 77. In Mumbai Port Trust Vs. Shri Lakshmi Steels, 2017 (352) E.L.T.401 (S.C) : (2018) 14 SCC 317 , the Hon ble Supreme Court held as follows:- 32. Assuming for the purpose of the decision of this case that Mumbai Port Trust is a custodian or cargo service provider, the question that arises is whether these Regulations apply to the Mumbai Port Trust. These Regulations have been framed under Section 157 of the Customs Act. Section 160(9) of the Customs Act clearly lays down that nothing in the Act shall affect the power of the Port Authority in a major port, as defined in the Indian Major Port Trusts Act, 1963. It is not disputed before us that the Mumbai Port Trust is a major port. 33. As already explained hereinabove, the Mumbai Port Trust has the power an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not at fault, it is the importer alone who is liable to pay the demurrage charges. As far as detention charges are concerned, this is a private contract between the importer and the carrier i.e. shipping line. The DRI/Customs Authorities can be directed to pay the demurrage/detention charges only when it has proved that the action of the DRI/Customs Authorities is absolutely mala fide or is such a gross abuse of power that the officials of the DRI/Customs should be asked to compensate the importer for the extra burden which he has to bear. Even if an importer feels that it has been unjustly dealt with, it must clear the goods by paying the charges due and then claim reimbursement from the Customs Authority. * Handling of Cargo in Customs Areas Regulation, 2009. 78. The Hon ble Supreme Court while giving the above decision has however not considered the provisions of the Airport Authority of India (Storage and Processing of Cargo, Courier and Express Goods and Postal Mail) Regulations, 2003. Perhaps the Hon ble Supreme Court may have come to a different conclusion if it had considered the 2003 Regulation. 79. Para 34 of the above decision has practically rendered Regulation 6 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the petitioner. 85. Though, it is not the case of the abuse by the officers of the Customs, there are sufficient indications to show that there was a complete disruption of service at the Air Cargo Complex during the relevant period due to alleged arrest of the officers. In absence of the officers to receive the transshipment application, there could have been total disruption and no application was received which perhaps may have led to the delay. 86. If there were no proper officers or there were only few officers to handle the workload due to alleged arrest and the delay in receiving the transshipment application for being processed by the 1st respondent should not be at the cost of the petitioner. If indeed there was a complete breakdown due to alleged arrest and resulted in disruption of the operations at the Air Cargo Complex, the petitioner should be compensated as such delay cannot be attributed by the petitioner. This would require proper facts being established by the petitioner. 87. Therefore, this aspect would require proper verification. Issue is therefore left open for the petitioner to establish that Customs Department is liable to compensate the petitioner in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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