Back
CESTAT Mumbai: NVOCC Cannot Charge on Customs-Seized Goods Despite 60-Day SCMTR Rule
In a significant ruling that clarifies the interplay between two key customs regulations, the , has held that a Non-Vessel Operating Common Carrier (NVOCC) acting as a Customs Cargo Service Provider (CCSP) cannot levy or on by customs authorities. The tribunal rejected the carrier’s attempt to rely on a 60-day period under the to continue charging fees after customs had issued a . The decision upholds the of ’s SCMTR registration for .
The Dispute: Copper Wire, Seizure, and a
The case arose from the import of two containers carrying Electrolytic Tough Pitch Copper Wire Rod from Jebel Ali, United Arab Emirates, to Nhava Sheva. The investigated the consignment and subsequently seized the imported goods. Following directions from the , the Customs authorities issued a detention and on , with an addendum on , recommending that all charges from the date the goods were held until delivery be waived.
Aegon Shipping, the NVOCC responsible for the containers, initially complied with the waiver but stopped doing so after 60 days. The company argued that under , an authorised carrier is permitted to recover container once 60 days have expired. Relying on this proviso, Aegon refused to extend the waiver beyond that period. In response, the ordered the of Aegon’s registration under , citing failure to comply with lawful directions.
CESTAT’s Legal Analysis: HCCAR Overrides the SCMTR Proviso
The central legal question before the tribunal was whether the 60-day limitation in the SCMTR could excuse an NVOCC from its separate obligation under the . The bench, comprising Judicial Member Ajay Sharma and Technical Member M.M. Parthiban, examined the two regulations in detail.
The tribunal noted that expressly provides: “A Customs Cargo Service Provider (CCSP) shall not charge any rent or on the or detained or confiscated by the Customs authorities.” Since the DRI had seized the goods, this prohibition applied squarely to Aegon Shipping. The tribunal distinguished this from , which deals with container in a different context—goods that are not seized, detained, or confiscated.
The bench observed: “Further, under , a Customs Cargo Service Provider (CCSP) shall not charge any rent or on the or detained or confiscated by the Customs authorities. It is fact on record, that the Directorate of Revenue Intelligence had investigated on the subject imported goods covered in this case and have seized the same. Therefore, in terms of the , the appellant is debarred from charging any detention or charges on the impugned goods held in two containers.”
The tribunal also rejected Aegon’s argument that it was not an “authorised sea carrier” but merely an “other notified carrier.” It referred to a public notice issued by the , which clarified that shipping lines, freight forwarders, and NVOCCs handling imported or exported goods in customs areas are CCSPs and must comply with the HCCAR.
with HCCAR Triggers SCMTR Violation
The tribunal further held that Aegon’s failure to comply with also amounted to a breach of , which requires an authorised carrier to abide by the and all regulations made under it. The bench stated:
“Since, as we have concluded that the appellant did not comply with the Regulation 6(1)(l) of HCCAR, the failure to fulfill the requirement of Regulation 10(1)(m) of SCMTR is attracted and therefore, the impugned order in ordering of the appellant's registration is legally valid and therefore the same is sustainable.”
The tribunal also found that the Commissioner had provided Aegon with an opportunity to make a representation after the suspension, satisfying the in the circumstances.
Rejection of Precedent
Aegon Shipping had relied on the ’s decision in to argue that customs authorities cannot override contractual arrangements between carriers and importers. The CESTAT distinguished the case, noting that it concerned a different provision of the and predated the HCCAR and SCMTR framework. The present regulatory scheme explicitly empowers customs to issue waiver certificates and requires CCSPs to comply.
Impact on the Shipping and Logistics Industry
This ruling has significant implications for NVOCCs, freight forwarders, and other CCSPs operating in customs areas. It establishes that the SCMTR’s 60-day provision does not grant a blanket right to charge detention or on goods that have been seized, detained, or confiscated by customs. The HCCAR’s prohibition is absolute in such cases, and any attempt to circumvent it through a narrow reading of the SCMTR will not be countenanced.
The decision also reinforces the authority of customs commissioners to suspend registrations for with lawful directions, including waiver certificates issued pursuant to court orders. Shipping operators must now carefully assess the status of goods in their custody—if customs has taken control through seizure or detention, all rent and claims are barred, regardless of how much time has elapsed.
Conclusion
By dismissing Aegon Shipping’s appeal, the CESTAT Mumbai has provided much-needed clarity on the hierarchy of regulations governing cargo handling in customs areas. The ruling underscores that the HCCAR’s protective intent—to prevent profiteering from goods under customs control—cannot be undermined by a time-limited exception in the SCMTR. For legal practitioners and logistics professionals, this case serves as a reminder that compliance with customs directions and the HCCAR is non-negotiable, and that registration under the SCMTR carries with it an obligation to adhere to the entire regulatory framework.
