Legal principle

Demurrage/detention waiver under Regulation 6(1)(l) HCCAR, 2009 and the AAI Policy for Waiver must be harmoniously construed: an importer against whom fine, penalty, personal penalty and/or warning is imposed gets no waiver and must pay demurrage, while an importer found not at fault is entitled to be considered for waiver, and provisional release pending adjudication is subject to bond/security for the demurrage charges.

Court decision

The Court held that the AAI Policy for Waiver and the HCCAR can be harmoniously construed and coexist. Where adjudication concludes with no imposition of fine, penalty, personal penalty and/or warning, the Policy for Waiver applies and the importer is entitled to be considered for waiver (not automatically exempt), subject to other compliances. Where a provisional release order is issued pending adjudication, goods are released subject to furnishing bond/security that demurrage will be paid if any fine, penalty, personal penalty and/or warning is ultimately imposed. Accordingly, in WP(C) 7438/2012 (Trip Communication) the goods were to be released on a security bond and Bank Guarantee securing the demurrage charges with an undertaking to pay if penalised; in WP(C) 2200/2013 (Krishnaraj Imports), since fine and penalty had been imposed, the petitioner was not entitled to the benefit of the Policy for Waiver and the goods could be released only on payment of demurrage charges. The superdginama does not override the Policy and applies only where no fine/penalty is imposed. Writ petitions disposed of accordingly; no costs.

Facts

Two importers — Trip Communication Pvt. Ltd. (importer of Chinese-origin mobile phones, in which DRI found 2000 concealed 4GB memory cards and seized the goods on 17.04.2012 for mis-declaration) and M/s Krishnaraj Imports (importer of branded perfumes and accessories confiscated under Section 111 of the Customs Act for under-valuation, with duty, penalty and redemption fine imposed, reduced on appeal) — sought waiver of demurrage/detention charges levied by custodian CELEBI for the period the goods were in its warehouse pursuant to customs seizure. In both matters the customs authorities issued letters/certificates advising CELEBI to waive the charges under Regulation 6(1)(l) of the Handling of Cargo under Customs Area Regulations, 2009 (HCCAR). CELEBI refused, and in the perfume matter demanded Rs. 71,14,065 by its 'Receipt of Processing Charges' dated 15.03.2013. In the mobile-phone matter, provisional release had been directed on a provisional duty bond guarantee of Rs. 15,00,000/-, with adjudication still pending.

Key provisions

• Section 49, Customs Act, 1962 — Storage of imported goods in warehouse pending clearance or removal
• Section 57, Customs Act, 1962 — Licensing of public warehouses
• Section 58, Customs Act, 1962 — Licensing of private warehouses
• Section 141, Customs Act, 1962 — Conveyances and goods in a customs area subject to control of officers of customs
• Section 2, Customs Act, 1962 — Definitions
• Section 45, Customs Act, 1962 — Restrictions on custody and removal of imported goods
• Section 156, Customs Act, 1962 — General power to make rules
• Section 11, Customs Act, 1962 — Power to prohibit importation or exportation of goods
• Section 44, Customs Act, 1962 — Chapter not to apply to baggage and postal articles
• Section 43, Customs Act, 1962 — Exemption of certain classes of conveyances from certain provisions of this Chapter