Legal principle

Public notices that merely offer importers and exporters an optional facility, in furtherance of Section 143AA of the Customs Act, 1962, to pay terminal handling charges directly to port terminals are neither arbitrary nor compulsive and cannot be struck down for want of delegation under Section 152 or a minor, undemonstrated procedural infraction.

Court decision

The Madras High Court dismissed all the writ petitions with no costs and closed the connected miscellaneous petitions, upholding the impugned public notices issued by the Customs Commissionerates.

Facts

Shipping-line petitioners (MSC, CMA CGM and the Container Shipping Lines Association (India)) challenged Public Notices issued in January–February 2020 by the Commissioners of Customs, Chennai IV and Thoothukudi, which allowed importers having AEO status and availing the Direct Port Delivery (DPD) facility to pay Terminal Handling Charges and other port charges directly to port/terminal operators instead of through the shipping lines. The notices were issued pursuant to a D.O. letter dated 13.01.2020 (D.O.No.CH(IC)/02/2020) of the Chairman, CBIC, circulated to Principal Chief Commissioners/Commissioners of Customs nationwide, following importer representations that shipping lines collected handling charges in excess of what was actually paid to terminals. A parallel challenge to a verbatim Kerala public notice was dismissed by the Kerala High Court at admission on 11.03.2020, with a writ appeal pending before its Division Bench.

Key provisions

• Section 143AA, Customs Act, 1962 — Power to simplify or provide different procedure etc to facilitate trade
• Section 152, Customs Act, 1962 — Delegation of powers
• Section 151A, Customs Act, 1962 — Instructions to officers of customs
• Section 151, Customs Act, 1962 — Certain officers required to assist officers of customs
• Section 143, Customs Act, 1962 — Power to allow import or export on execution of bonds in certain cases
• Section 2, Customs Act, 1962 — Definitions