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TMI Blog2001 (4) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... t of discharge was Bombay in India; but the place of delivery of goods was ICD, Delhi. The goods thus being brought to the port of Bombay were discharged but there had been no customs clearance at Bombay and the sealed container was transhipped to ICD, Delhi, where it remained with the Container Corporation of India. The Shipping Corporation of India is engaged in the business of carriage of goods. On the terms and conditions contained in the Bill of Lading, in respect of the goods consigned to it, the Corporation claims that the goods cannot be released unless demurrage charges are paid. After the goods arrived in Delhi and remained in the custody of the appellant, the customs authorities being of the opinion that import of polyester filament yarn weighing 5,376 kgs. was unauthorised and directed confiscation of the same, valued at Rs. 11.5 lakhs under Section 111(d) of the Customs Act, 1962. The said customs authorities however permitted the owner to redeem the goods on payment of Rs. 7 lakhs. That apart, a penalty of Rs. 1 lakh was also levied under Section 112(a) of the Customs Act. The owner of the goods assailed the order before the Customs, Excise & Gold (Control) Appellate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the aforesaid writ petition. At this stage it may also be noticed that during pendency of the writ petition in the High Court, an interim order had been passed, entitling the owner to take release of the goods on payment of Rs. 5 lakhs to the customs authorities and a bank guarantee of Rs. 5 lakhs but the owner had not taken advantage of the said interim order and the goods continued to remain in the custody of the present appellant and demurrage charges went on accruing. The order of Delhi High Court was assailed in this Court by filing a Special Leave Petition by the Customs Authorities but that Special Leave Petition however stood dismissed on 13-11-1995 in SLP No. 5671/95, The owner of the goods having failed in his attempt to get the goods released, notwithstanding the orders of the High Court in CWP No. 1604/91, filed an application for initiating a contempt proceeding, which was registered as CCP No. 120/95. The High Court however came to hold that the authorities cannot be held to be guilty of disobeying the orders of the Court and accordingly, dismissed the contempt petition. While dismissing the contempt petition, the learned Judge granted liberty to the owner to move the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hearing the matters for sometime, the Bench felt that there appears to be some inconsistency between the decision of this Court in Union of India v. Sanjeev Woolen Mills, 1998 (100) E.L.T. 323 (S.C.) = 1998 (9) SCC 647 and the Grand Slam International's case reported in 1995 (77) E.L.T. 753 (S.C.) = 1995 (3) SCC 151 and as such observed that the cases should be placed before a Three Judge Bench and that is how, this batch of cases are before this Three Judge Bench. When these appeals by grant of special leave were placed before the Three Judge Bench on 1st March, 2001, we had directed the goods be released to the owner without any conditions but such release will be subject to the ultimate decision in these appeals. 3.The stand of the carriers in this Court is that in view of the provisions of the Bills of Lading Act as well as the terms and conditions under which the goods have been imported the corporation-carrier retains a lien over the goods until all the dues including the demurrage charges are paid and the order of the Delhi High Court in the writ petition to which these carriers were not parties, will not obliterate that right. The further contention of these corporations i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 re-opened. 5.The next question that arises for consideration which is a larger issue, namely if the customs authorities do not release the goods and initiates proceedings and finally passes order of confiscation but that order is ultimately set aside in appeal and it is held by Court of law that the detention of the goods was illegal, then in such circumstances whether the carrier of the goods who had lien 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. Needless to mention, demurrage charges are levied for the place the goods occupy and for the period it remains not being released, on account of lack of customs clearance. It may be noticed at this stage that the customs authorities exercise its power under the provisions of the Customs Act whereas the claim of the Corporation who acts as a carrier is based upon the terms and conditions of the contract between the importer and the carrier. So far as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner, until they are cleared for home consumption or are warehoused or are transhipped in accordance with the provisions of Chapter VIII. Section 47 of the Act is the provision to obtain clearance of goods for home consumption. Section 49 provides for storage of imported goods in public warehouse, or in a private warehouse, if permitted by the Deputy Commissioner of Customs or Assistant Commissioner of Customs. Under Chapter IX of the Act, the Deputy Commissioner or Assistant Commissioner of Customs may appoint public warehouses wherein dutiable goods may be deposited, as provided in Section 57 of the Act, Under Section 58, the Deputy Commissioner or Assistant Commissioner may even licence private warehouses wherein dutiable imported goods could be deposited. But all warehoused goods would be subject to the control of the proper officer of the customs department, as provided in Section 62 and the owner of the goods is required to pay the rent and warehouse charges to be fixed by the Commissioner of Customs, as provided in Section 63. No warehoused goods could be taken out of the warehouse except for clearance of home consumption or for removal to another warehouse, as stipulated in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s tariff applicable to the route over which the goods are carried. If unpacking the goods of container(s) is required for whatever reason and the contents cannot be identified as to the marks and numbers, cargo sweepings liquid residue and any unclaimed contents not otherwise accounted for shall be allocated for completing delivery to the merchant. The carrier shall not be required to separate or deliver goods in accordance with the brand, marks, numbers, size or types of packages as stated by the merchant in his particulars but only to deliver total number of containers (if same loaded by the merchant or packages or units) [if container(s) loaded by the carrier] shown on the face of this Bill of Lading." Clause (2) of the Bill of Lading defines 'Carrier's Tariff' as follows : "Clause (2) - Carriers Tariff : The terms of the carrier's applicable tariff are incorporated herein and copies of the relevant provisions of the applicable tariff are obtainable from the carrier or the agents upon request. In the case of inconsistency between this Bill of Lading and the applicable tariff, this Bill of Lading shall prevail." Clause (14) confers a lien on the goods for all sums payable unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms authorities, the appellant would not be bound by the same, particularly, when the appellant was not a party to the proceedings between the customs authorities and the importer. Learned Additional Solicitor General, Mr. Mukul Rohtagi however, on the other hand contends that Section 45(2)(b) of the Customs Act prohibits release of imported goods from the customs area, except in accordance with the permission in writing of the proper officer. The expression 'otherwise dealt with' in the aforesaid provision is also a restriction placed on the custodian and that is a complete embargo for the goods being released. The prohibition in question is in relation to removal of goods as well as dealing with the goods in any manner. This being the manner of restrictions imposed for removal of the goods and at the same time, conferring power on the customs authorities, if after initiation of adjudication proceedings, a Court of law nullifies the same and the customs authorities then issues a detention certificate, then the importer would not be liable for paying any demurrage charges, notwithstanding the contract between the importer and the appellant, and at any rate, the customs authorities c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 because of the orders issued by the customs authorities. The learned Additional Solicitor General, vehemently argued and pressed sub-Section 2(b) of Section 45 in support of his contention that the imported goods have to be dealt with in accordance with the permission in writing of the proper officer of the customs department and in exercise of such power when customs authorities initiate adjudication proceeding and ultimately confiscate and levy penalty, when such order is struck down and a detention certificate is issued, the said issuance of detention certificate would come within the expression "otherwise dealt with" used in Section 45(2)(b), and therefore, the proprietor of the space would be bound not to charge any demurrage charges. We are unable to accept this contention inasmuch as the expression "otherwise dealt with" used in Section 45(2)(b), in the context in which it has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the peculiar facts and circumstances of the case and the Court had clearly observed that the order in question is meant to do justice to the importer, looking to the totality of the circumstances and the conduct of customs authorities. Thus, we see no inconsistency between the ratio in Sanjeev Woolen Mills and the Judgment of this Court in Grand Slam, That apart, the judgment in Grand Slam was a three judge Bench judgment. In the case in hand; as has already been stated earlier, the earlier judgment of Delhi High Court dated 9-9-1994 in C.W.P. No. 1604/91, has become final, which entitles the importer to get the goods released without payment of the detention and demurrage charges. In the contextual facts, notwithstanding the judgment of the High Court, the goods not having been released, the impugned order and direction dated 18-1-1999, cannot be held to be infirm in any manner. In the absence of any provision in the Customs Act, entitling the customs officer to prohibit the owner of the space, where the imported goods have been stored from levying the demurrage charges, levy of demurrage charges for non-release of the goods is in accordance with the terms and conditions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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