Legal principle

Where delay in release of detained imported goods is attributable partly to the importer, the importer cannot claim exemption from demurrage and detention charges, the remedy for remission lying under Section 53 of the Customs Act, 1962, and detention charges owed to a shipping line being contractual in nature cannot be fastened on DRI/Customs in writ proceedings.

Court decision

The Supreme Court allowed the appeals of the Union of India and Mumbai Port Trust, set aside the High Court judgment and dismissed the writ petitions, with no order as to costs. It held that although there was some delay on the part of DRI and Customs, the respondent-importers were also guilty of delaying matters and therefore could not claim they were not liable to pay demurrage and detention charges, while remaining free to approach the Mumbai Port Trust in terms of Section 53 for exemption and remission (the Board being free to take a sympathetic view). The Court further held that the High Court could not, in writ proceedings, have directed DRI/Customs to pay the Shipping Line's detention charges, since those were payable on the basis of the contract between the importers and the Shipping Line.

Facts

M/s Shri Lakshmi Steels (proprietorship) and Inder International (partnership), two sister-concern importers, imported ten consignments of cold rolled coils under bills of entry dated 04.12.2015, 11.12.2015 and 29.12.2015. On specific intelligence that the consignments violated customs notifications to evade provisional/safeguard duty, DRI asked Customs to hold the goods for 100% examination, and the goods were eventually seized on 23.02.2016. A Chartered Engineer's report dated 19.01.2016 supported the importers (goods cold rolled), but DRI had samples re-tested at M/s TCR, which reported eight consignments as hot rolled. Customs offered provisional assessment under Section 18 against PD Bond plus a 20% bank guarantee (Rs. 18.71 lakhs), which these importers did not accept, though other importers took the benefit. The Punjab & Haryana High Court allowed the importers' writ petitions, holding the detention illegal, waiving demurrage under Regulation 6(1) of the 2009 Regulations on the strength of a detention certificate, and directing DRI/Customs to bear the Shipping Line's detention charges.

Key provisions

• Section 45, Customs Act, 1962 — Restrictions on custody and removal of imported goods
• Section 160(9), Customs Act, 1962 — Repeal and savings
• Section 48, Customs Act, 1962 — Procedure in case of goods not cleared, warehoused, or transhipped within thirty days after unloading
• Section 18, Customs Act, 1962 — Provisional assessment of duty
• Section 157, Customs Act, 1962 — General power to make regulations
• Regulation 6(1), Handling of Cargo in Customs Areas Regulations, 2009 — Responsibilities of Customs Cargo Service provider