2002 Supreme(Cal) 386

High Court Of Calcutta
Mahemmad Habeeb Shams Ansari
NAVNEET KUMAR DIDWANIA - Appellant
Versus
COMMISSIONER OF CUSTOMS, CALCUTTA (PORT) - Respondent
W. P.  1426  Of  2001
Decided On : 06/17/2002

The Customs authorities are liable for payment of demurrage charges incurred by the importer/consignee on and from the date of the order passed by the appellate tribunal (CEGAT), as the retention of the goods beyond that date was without authority of law and the action of the Customs authorities in not releasing the goods was illegal and wholly without jurisdiction.

Headnote:

CUSTOMS ACT - SEIZURE - DETENTION OF GOODS - LIABILITY FOR PAYMENT OF DEMURRAGE CHARGES - JURISDICTION - CAUSE OF ACTION - TORT - ILLEGAL MEANS - UNLAWFUL DETENTION - IMMUNITY - ADJUDICATION PROCESS - STATUTORY OBLIGATION - DELAY IN ASSESSMENT - REIMBURSEMENT OF CHARGES.

Fact of the Case:

Petitioner imported 959.515 metric tons of copper wire bars in six consignments from Singapore. After discharge, the goods were kept in the dock area in the possession of the Port Authorities. In December 1994, the goods were allowed to be 'destuffed' from the containers and kept in the Bonded Warehouse. The goods were examined by the customs office, and mis-declaration of the value of goods was found, rendering them liable to confiscation under section 111 of the Customs Act, 1962. The Customs Officer seized the goods in exercise of the power conferred on him by section 110 (1) of the Customs Act, 1962. Petitioner filed a writ petition challenging the ex-parte adjudication order passed by the Commissioner of Customs, which was disposed of with a direction to prefer an appeal against the ex-parte order. Petitioner filed an appeal, which was allowed by the Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT). Aggrieved, Customs authorities preferred an appeal before the Supreme Court, which was dismissed. CEGAT allowed the appeal directing the declared CIF values to be accepted and set aside the directions of the Commissioner (Customs) for confiscation of the goods and imposition of penalty. Customs authorities preferred an appeal against the said order before the Supreme Court, which was dismissed. Petitioner filed a writ petition praying for direction upon respondent-Custom authorities to release consignment of 959.515 metric tons of Copper Wire Bars and also for payment of the amount by way of reimbursement on account of warehousing charges on and from February 16, 2000 till the date of release. The said writ petition was disposed of by an order dated November 10, 2000, directing release of the material to the petitioner and granting liberty to the petitioner to proceed in accordance with law for recovery of the amount which petitioner had incurred on account of demurrage for the wrongful detention of the imported consignment of 959.515 M.T.

Finding of the Court:

1. Petitioner is liable to pay demurrage charges to the Warehousing authorities even though the goods may have been illegally detained in the Customs Area/bonded Warehouse by the Customs authority upto the adjudication process. 2. 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. 3. The retention of the goods on and after that dated, it must be held, was without authority of law and the action of the Customs authorities in not releasing the goods cannot but be illegal and wholly without jurisdiction. 4. For the period on and from February 17, 2000 the Customs authorities have rendered themselves liable for payment of the demurrage charges incurred by the petitioner which was solely on account of the inaction on the part of the respondent-Customs authorities and without any lawful justification, detaining the goods. 5. The Customs authorities are liable on account of delay in 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 upto February 28, 2001.

Issues: 1. Whether the petitioner is liable to pay demurrage charges to the Warehousing authorities even though the goods may have been illegally detained in the Customs Area/bonded Warehouse by the Customs authority? 2. Whether the Customs authorities are liable for payment of the demurrage charges incurred by the petitioner on and from February 17, 2000? 3. Whether the Customs authorities are liable on account of delay in their part in making the assessment on March 1, 2001?

Ratio Decidendi: 1. The liability of the importer/consignee of goods cannot avoid liability to pay demurrage charges to the Warehousing authorities even though the goods may have been illegally detained in the Customs Area/bonded Warehouse by the Customs authority. 2. The Customs authorities are liable for payment of the demurrage charges incurred by the petitioner on and from February 17, 2000, the date when the CEGAT passed the order, as the retention of the goods on and after that date was without authority of law and the action of the Customs authorities in not releasing the goods was illegal and wholly without jurisdiction. 3. The Customs authorities are liable on account of delay in their part in making the assessment on March 1, 2001.

Final Decision: Writ application is allowed in part and Rule is made absolute in terms of the directions, as above. In the facts and circumstances of the case there shall, however, be no order as to costs.