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TMI Blog2020 (2) TMI 1384X X X X Extracts X X X X X X X X Extracts X X X X ..... murrage is paid. Keeping in view, clause (iii) of para 104 in Global Impex, we reiterate that the Customs authorities cannot direct waiver of demurrage, which can only be done by the custodian (the DCSC here). Moreover, merely because the Customs authority expends a reasonable time in dispensation of their sovereign functions of search, seizure and investigation, cannot lead to transference of liability to pay demurrage, to 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, thereafter, pursue, with the Customs authorities, for obtaining reimbursement of the amount. Petition dismissed. - W.P.(C) 9219/2019 - - - Dated:- 3-2-2020 - MR. D. N. PATEL AND C. HARI SHANKAR, JJ. For Petitioner : Ms. Anjali Manish, Mr. Priyadarshani Manish Ms. Shweta Dhaka, Advs For Respondents : Ms.K.Enatoli Sema, Adv for R-1, R-2 and R-4. Mr. Aditya Singla, Sr. Standing Counsel with Mr.Ravi Pathak, Adv. for R-3 Mr. Alok Shukla, Adv. For R-5 JUDGMENT This writ petition has been preferred by the petitioner seeking an issuance of a writ of mandamus to pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rential duty if any by the importer may also be intimated to this office. 6. Pursuant thereto, on 6th May, 2019, the Assistant Commissioner (SIIB), Air Cargo (import), New Delhi, wrote to the CEO (DCSC), Import shed, ACC, New Delhi, stating with respect to the bills of entry numbered 2933826 and 2934936 dated 22nd April, 2019, that as per the letter received from DRI, Jaipur, the consignments would remain in the custody of the DCSC, and no demurrage shall be charged till the finalization of the investigations as informed by competent authority of Customs . The communication further stated that this direction was issued with the approval of the Joint Commissioner (SIIB). The said communication is reproduced hereunder: To The CEO (DCSC), Import Shed, ACC, Near IGI Airport, New Delhi-110037. Sir, Sub: Investigation against M/S J P Impex, M/s Mint Logistics i.r.o Bills of Entry no. 2933826 dt 22.04.2019, 2934936 dt 22.04.2019 2963662 dt 24.04.2019 Reg. Please refer to DRI/ SIIB alerts wherein imported goods vide Bills of Entry no. 2933826 dt 22.04.2019, 2934936 dt 22.04.2019 2963662 dt 24.04.2019 were kept on hold for investigation from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or Standing counsel for the Directorate of Revenue Intelligence and Mr. Alok Shukla, counsel for the DCSC, at length. 11. Ms. Anjali J. Manish, places her firm reliance on the letter dated 6th May, 2019, written by the Assistant Commissioner (SIIB), to the DCSC, submitting that this communication entitles her client from waiver of any demurrage charged. 12. The pleadings of Respondents no. 1, 2 and 4, conform with the communication dated 6th May, 2019, by the Assistant Commissioner (SIIB), to the DCSC, that keeping in mind Regulation 6(1)(l) of the Handling of Cargo Regulations, demurrage should be not be charged until the investigation is complete. 13. To buttress the direction for waiver of demurrage by the Assistant Commissioner (SIIB), reliance is placed on the communication dated 15th March, 2019, whereby the Joint Commissioner of Customs, ACC Import, New Delhi had renewed the custodianship of the Delhi International Airport Ltd, under the Handling of Cargo in Customs Areas Regulations, 2009 issued under Section 141 (2) of the Customs Act, and, that one of the conditions contained therein, was that the Custodian shall not claim any demurrage charges in compliance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arges cannot be waived, especially, merely on the direction by the Customs authorities. 19. It is pleaded by the DCSC, that by virtue of section 12A of the Airport Authority of India Act, 1994, the Authority of India (AAI) has entered into a joint venture and granted the functions of the AAI as defined under Section 12 of the AAI Act to the Delhi International Airport Pvt. Ltd. (DIAL) under the Operation, management and Development Agreement (OMDA) dated 4th April, 2006. Thus, DIAL became the Cargo Handling Agency under Regulation 2(i) of the Regulations, 2003 and was conferred with the rights, obligations and powers as that of AAI. 20. It has been further pleaded that, the DCSC by virtue of the of the Concession agreement dated 19th November, 2009, has been granted the right and the authority by DIAL while exercising its right granted to it by AAI under OMDA, thereby authorizing DCSC to discharge the function of upgradation, modernization, financing, operation, maintenance and management and for providing Services at the Cargo Terminal of the Indira Gandhi International Airport, New Delhi. To buttress this submission, reliance is placed on clauses 7.1.2 and 7.1.3 of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the imported goods, consigned to its custody. This lien may be statutory, as provided under the IAA Act, all the Major Port Trusts Acts, or contractual. It may also be relatable to Sections 170 and 171 of the Indian Contract Act, 1872. (ii) This lien entitles the custodian to retain hold of the goods, consigned to its custody, till all its dues, including ground rent and demurrage, are paid. (iii) The Customs authorities have no power, or the jurisdiction, to issue any instruction, to the custodian, requiring the custodian to waive, in whole or in part, the demurrage chargeable by 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 appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to provide for the Constitution of the AAI, and for the transfer and vesting of the undertakings, of the IAAI and National Airports Authority, in the AAI. (ii) Section 3 (1) of the AAI Act declared that the AAI stood constituted vide Notification, in the Official Gazette, issued by the Central Government. Section 13(1) transferred to, and vested in, the AAI, the undertakings of the IAAI and National Airports Authority. All rights, powers, authorities and privileges, earlier vested in the IAAI, stood transferred, by sub-section (2) of Section 13, in the AAI. (iii) Section 12 of the AAI Act stipulates that it shall be the function of the AAI, to manage the airports. Clause (g) of subsection (3) of Section 12 specifically empowers the AAI to establish warehouses and cargo complexes, at airports, for the storage and processing of goods. (iv) Section 42 of the AAI Act empowers the AAI to make regulations, 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 (S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perations of Brake-bulk or consolidation of cargo and handling of Postal Mail, etc. (x) Regulation 6 of the AAI Regulations provides for Waiver of Charges , and empowers the AAI to, from time to time, lay down the procedure and policy for waiver of demurrage charges under the said Regulations. (xi) Section 12A of the AAI Act empowers the AAI to, in public interest or the interest of better management of airports, make a lease of the premises of an airport (including buildings and structures thereon and pertaining thereto) to carry out some of its functions under section 12 as the Authority may deem fit . The proviso, to the said sub-section (1), however, clarifies that the said lease shall not affect the functions of the Authority under section 12 which relates to air traffic service or watch and ward at airports in civil enclaves . Functions, other than air traffic, and watch and ward services can, therefore, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and uninterrupted possession and control of the Airport Site and the Existing Assets for the purpose of providing Aeronautical Services and NonAeronautical Services; (iii) determine, demand, collect, retain an appropriate charges from the users of the Airport in accordance with Article 12 hereto; and (iv) Contract and/or sub contract with 3rd parties to undertake functions on behalf of the JVC, and sub-lease and/or license the Demise Premises in accordance with Article 8.5.7. (Emphasis supplied) (xv) It was, Mr. Tiku points out, in exercise of the power conferred by Article 2.1 of the OMDA, that CELEBI was assigned the function of managing cargo, vide Concession Agreement dated 24th August, 2009, executed between the DIAL and CELEBI. The introductory paras of the said Agreement contained, inter alia, the following recitals: WHEREAS A. The Airport Authority of India and DIAL 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, des ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 35,00,00,000/- per year. This being the financial outlay, on CELEBI, Mr. Tiku voices his undisguised chagrin at the Customs authorities directing CELEBI not to charge any demurrage from the petitioner. 124. Mr. Tiku also draws our attention to clauses 6.1.2 and 6.1.3 of the Concession Agreement, regarding development and up-gradation of the cargo terminal, which read thus: 6.1.2 The Concessionaire shall at its own cost and responsibility upgrade, modernize, finance, operate, maintain and manage the Cargo Terminal including but not limited to providing; maintaining and upgrading all such equipments and materials necessary for operating, maintaining and managing the same for rendering the Services. 6.1.3 The Concessionaire shall, while upgrading, modernizing, financing, operating, maintaining and managing the Cargo Terminal, take into consideration and be responsible for compliance with all relevant provisions 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the mere fact that, by reason of the investigative exercise conducted by the Customs authorities, it has not been possible for the importer to clear its goods, cannot, ipso facto, lead to transference of liability to pay demurrage, to the Customs authorities. (Emphasis Supplied) 29. At this juncture, drawing from Global Impex [MANU/DE/4351/2019] there are four significant principles, we would like to reiterate: a. Firstly, charging of demurrage by the CELEBI, being in terms of the concessionaire agreement, between the DIAL and CELEBI, was entered into, in terms of the OMDA. b. Secondly, the agreement was in accordance with Article 2.1 of the OMDA which, again in turn, was authorised by Section 12A of the AAI Act. c. Thirdly, this, therefore, clearly constituted, law for the time being in force , within the meaning of the expression, as employed in Regulation 6(1)(l) of the Handling of Cargo Regulations. d. Fourthly, it is expected that the Customs authorities, shall take a reasonable amount of time while exercising their power of search, seizure and investigation, and merely this, thus, cannot lead to transference of liability to pay demurrage, to t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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