9911796707
TMI Blog2002 (6) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... orities there was mis-declaration of the value of goods which is an offence under the Customs Act, 1962 and rendered such goods liable to confiscation under Section 111 of the said Act. The Customs Officer thus having reason to believe that the goods were liable to confiscation seized the same in exercise of the power conferred on him by Section 110(1) of the Customs Act, 1962. According to the petitioner such adjudication was made ex parte on May 9, 1995 and thereupon a writ application was filed questioning the aforesaid ex parte adjudication order passed by the Commissioner of Customs. The said writ petition was disposed of by an order dated July 11, 1995 with a direction upon the petitioner to prefer an appeal against the ex parte order. Accordingly, an appeal was filed by the petitioner and by an order dated February 7, 1997 the appeal was allowed by the Customs, Excise Gold (Control) Appellate Tribunal (for short CEGAT). Aggrieved against the said orders, Customs authorities preferred an appeal before the Supreme Court which was disposed of by an order dated July 24, 1997 remanding the matter back to the Commissioner of Customs to decide the matter afresh after giving an op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s as specified opposite, each such account the petitioner seeks reimbursement thereof from the respondent Customs authorities. However, when the matter was heard Mr. Samit Talukdar, learned Advocate appearing along with Mr. S. Mukherjee for the petitioner confined the claim of the petitioners to amounts on accounts specified in items at Serial Nos. 2, 5 and 7 of Annexure P-13. The petitioner's claim is thus confined to the expenses towards container charges, warehousing and storage charges for the period from September, 1994 to March, 2001 when the goods were stored in the Bonded Warehouse in the West Bengal State Warehousing Corporation. We are thus not concerned in this proceeding with regard to other expenses said to have been incurred by petitioner towards loading and loading charges lorry trailer retention charges or other expenses incurred in connection with the said goods save and except those pertaining to OPT Rent (item at Serial No. 2), expenses towards warehousing paid to WBSWC (item at Serial No. 5) and storage charges with WBSWC (item at Serial No. 7) of Schedule Annexure P-13. 6.Mr. Samit Talukdar, learned Advocate for the petitioner referred to the various averment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The goods and the relevant documents in connection therewith were examined by the concerned Customs Officer who formed the opinion that the goods had been undervalued. The concerned Customs Officer having reason to believe that the goods were liable to confiscation, seized the same in exercise of powers conferred on him by Section 110(1) of the Customs Act, 1962. Relying upon Section 110(2) of the Customs Act, 1962 it was submitted that the Customs authorities are bound to return the seized goods, if no notice in respect thereof is issued under Section 124 (a) of the Customs Act, 1962 within 6 (six) months of the seizure of the goods. In the present case, it was submitted that on April 17, 1995 such notice was issued by the Customs authorities to the writ petitioner asking it to show cause as to why the goods should not be confiscated. Thus, according to Mr. Ghosh the requisite notice within the time period stipulated was issued and therefore there is no illegality in the seizure of the said goods by the Customs authorities. During the period between April, 1995 until February 16, 2000 there were protracted adjudication proceedings under the Act initiated by the said show cause not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner contended that the detention was on account of the Customs authorities as they had initiated proceedings and finally passed order of confiscation but that order was ultimately set aside and it is held by a competent Tribunal (CEGAT) that the detention was illegal and therefore the importer of the goods (petitioner) cannot be made liable to pay demurrage/detention charges. The action of the Customs authorities in detention/confiscation of the goods having been declared illegal, the said authorities are liable to pay the demurrage charges. This is for the reason contends Mr. Samit Talukdar, ld. Advocate for the petitioner that the final order has the effect of making entire detention illegal i.e. from the date of seizure till the dates the goods were released to the petitioner. 11.Mr. Dipankar Ghosh, ld. Additional Solicitor General, appearing for the Customs authorities, on the other hand, contended that the aforesaid contention is unsound and should be rejected. According to Mr. Ghosh the law is that the legality of a seizure must be determined with reference to the facts and circumstances existing at the time of the seizure and not with reference to any subsequent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ] the concept of jurisdiction has acquired new dimensions. The original or pure theory of jurisdiction which meant "the authority to decide" the same was determinable at the commencement and not at the conclusion of the enquiry. The said approach has been more or less given a go-bye in the Anisminic's case. In M.L. Sethy v. R. P. Kapoor [AIR 1972 (S.C.) 2379] Mathew J. explained the legal position after Anisminic's case as under : 'The word "jurisdiction" is a verbal cast of many colours. Jurisdiction originally seems to have had the meaning which Lord Reid ascribed to it in Anisminic Ltd. v. Foreign Compensation Commission [1969 (2) AC 147] namely, the entitlement "to enter upon the enquiry in question". If there was an entitlement to enter upon an inquiry into the question, then any subsequent error could only be regarded as an error within the jurisdiction. The best known formulation of this theory is that made by Lord Denman in R.V. Bolton (1841) 1 QB 66. He said that the question of jurisdiction is determinable at the commencement, not at the conclusion of the enquiry. In Anisminic Ltd. [1969 (2) AC 147] Lord Reid said : "But there are many cases where, although the tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atter with which they have no right to deal", "imposing an unwarranted condition" or "addressing themselves to a wrong question". The majority opinion in the case leaves a Court or Tribunal with virtually no margin of legal error. Whether there is excess of jurisdiction or merely error within jurisdiction can be determined only by construing the empowering statute, which will give little guidance. It is really a question of (emphasishow much latitude the Court is prepared to allow.' supplied) 14.While on this aspect of the matter it will be useful to extract a relevant portion from the book "Principles of Statutory Interpretation" by Justice G.P. Singh; "Cases of nullity may also arise during the course or at the conclusion of the inquiry. These cases are also cases of want of jurisdiction if the word 'jurisdiction' is understood in a wide sense. Some examples of these cases are : (a) when the Tribunal has wrongly determined a jurisdictional question of fact or law; (b) when it has failed to follow the fundamental principles of judicial procedure, e.g., has passed the order without giving an opportunity of hearing to the party affected; (c) when it has violated the fundamental ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imbursement against C (Customs authorities). Keeping in view, said contention of Mr. Dipankar Ghosh let us now examine the judgments of the Supreme Court dealing with the liability of the importer to pay demurrage charges. 17.On behalf of the Customs authorities Mr. Bhaskar Sen, ld. Counsel, placed the case of International Airport Authority of India v. Grand Slam International Ors. reported in [1995 (77) E.L.T. 753 = 1995 (3) SCC 151]. This case has been placed before the Court in detail at the time of hearing by Mr. Sen and with particular reference to the following statement in para 36 of the judgment of Bharucha J. (as His Lordship then was); "The judgments aforementioned do not only hold that the importer is liable to pay demurrage though he is not responsible for any delay in clearing his goods." 18.To the similar effect are the observations of Venkatachala J. (as His Lordship then was) in para 66 of his judgment. 19.This Grand Slam International's case was followed by the Supreme Court in [1995 (80) E.L.T. 241 (S.C.) = 1995 (3) SCC 241] (Trustees of Port of Madras v. Nagavedu Lungi Co.). In para 4 of the judgment, the court referred to the Grand Slam Internationa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of detention and directing that no demurrage may be charged for the specified period goods were subject matter of adjudication proceedings). Such detention certificate had been issued to International Airport Authority of India (for short IAAI), Central Warehousing Corporation (for short CWC) where the goods had been in their respective custody. The IAAI or the CWC instead of treating the entire period as 'free' period granted rebate and calculated demurrage in accordance with the Rate Schedule framed by them. The amount of demurrage in each case came to be two or three times more than the value of the goods. The respondent-importer/consignee in that bunch of cases thereupon approached the Delhi High Court by way of writ petitions under Article 226 of the Constitution of India. The petitions were allowed and it was held by the Delhi High Court that the IAAI or the CWC being custodian of the Customs department could not ignore the detention certificate, therefore, no demurrage could be charged for the period the proceedings were pending with the Customs authorities. The Delhi High Court relied upon Trishul Impex v. Union of India [1992 (58) E.L.T. 182 (Del.) = 1991 (2) Del. Lawyer 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ein 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." and further in para 44 (SCC), it was observed as under : It"44. cannot be gainsaid that, by reason of unjustified detention of his goods by the Customs Authorities, the importer is put to loss by having to pay demurrage charges for the periods of such detention. The Central Government is empowered by Section 35 of the International Airports Authority Act, 1971 and Section 111 of the Major Port Trusts Act, 1963 to issue to the Authority and Board of Trustees, respectively, directions on questions of policy after giving them an opportunity, as far as practicable, of expressing their views. The Central Government can, if so advised, after giving to the Authority and the Board of Trustees the opportunity of expressing their views, direct them, under the aforemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r General have, therefore, to be upheld in so far as the liability of the petitioner to pay demurrage charges are concerned for the period up to adjudication process, the petitioner can have no cause of action either on the ground of trespass to goods or under Section 69 of the Contract Act. 29.The next question that would arise for consideration is whether such liability of the importer/consignee would be indefinite in duration i.e. to say beyond the adjudication process. The answer to that is dependant upon the question whether the detention of goods by the Customs authority on and after February 16, 2000 (when the judgment of CEGAT was delivered) was wholly unjustified and, therefore, without jurisdiction. The disability/inability of the importer to clear the consignments during the adjudication period is covered by the judgment of the Supreme Court in the Grand Slam International's case. In the judgment of the Supreme Court in Grand Slam International's case, as noticed supra, it was also held that an importer can clear the imported goods only after completion of the Customs formalities that until Customs clearance the importer is not permitted to remove his goods from the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... up to adjudication process. Petitioner can have no cause of action for the reliefs as prayed for against the Customs authorities. For the period subsequent that is to say on and after the culmination of adjudication process that is the date when the CEGAT passed the order, the legal consequences flowing from that order must be given effect to by the Customs authorities. They are bound by the said order and had statutory obligation to give effect to that order by directing release of the imported consignments forthwith. There can be no reason justifying the detention of the goods beyond the adjudication period. If the Customs Authorities were aggrieved by the judgment of the CEGAT and had preferred an appeal before the Supreme Court, as they did, the petitioner cannot be made liable for the period during which the matter was pending before the Supreme Court until it was dismissed by an order dated November 10, 2000. The position would have been entirely different had the Supreme Court entertained the appeal and/or granted relief to the Customs Authorities. That, however, did not happen. The adjudication proceedings concluded when the CEGAT passed the orders dated February 16, 2000. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... There is no explanation offered by the Customs authorities for the delay in making the assessment only on March 1, 2001 when the order of CEGAT was passed on February 6, 2000. 35.It must, therefore, be held that the liability of the Customs authorities in respect of the 4 (four) consignments and entitlement of the petitioner to claim demurrage charges for the inaction on the part of the Customs authorities and/or for illegal detention of the goods on and from February 17, 2000 to December 12, 2000 stand established. 36.In respect of the other 2 (two) consignments the Customs authorities, it must be held, are liable on account of delay on their part in making the assessment on March 1, 2001. Petitioner shall accordingly be entitled to reimbursement of demurrage charges for the period from February 17, 2000 up to February 28, 2001. 37.In the facts and circumstances of the case and for the reasons aforestated the claim of the petitioner for the period up to February 16, 2000 is hereby rejected. In so far as the period commencing February 17, 2000 is concerned, the petitioner it is hereby declared shall be entitled to the reimbursement of charges incurred by him towards storage o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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