Legal principle

The prohibition in Regulation 6(1)(l) of the Handling of Cargo in Customs Areas Regulations, 2009 on charging rent or demurrage on seized, detained or confiscated goods is 'subject to any other law for the time being in force', and therefore does not bar a custodian governed by other law (such as the AAI Regulations) from charging demurrage, which is payable by the importer, the custodian being entitled to retain custody of the goods until the demurrage is paid.

Court decision

The Delhi High Court (C. Hari Shankar, J., for the Bench of the Chief Justice and himself) dismissed all the writ petitions. It held that CELEBI is entitled, despite Regulation 6(1)(l) of the Handling of Cargo Regulations, 2009, to charge demurrage on the goods consigned to its custody and to retain custody of the goods until the demurrage is paid; that the demurrage is payable by the petitioners-importers and not by the Customs authorities; and it declined to decide the entitlement to waiver of demurrage, leaving the petitioners free to apply under CELEBI's policy, which CELEBI would decide in terms thereof. No order as to costs was made.

Facts

The petitioners, importers including Global Impex and Shree Shyam Enterprises, imported goods (e.g., unbranded ready-made garments) through the Air Cargo Complex, New Delhi, where the goods, after being held for examination, were seized by the Commissioner of Customs (Preventive) for misdeclaration of quantity and handed over to CELEBI, the custodian of the import shed, for safe custody by letter dated 10 May 2019 stating no demurrage would be charged till finalisation of investigation. An Order-in-Original dated 17 May 2019 passed by the Joint Commissioner confirmed a duty demand of ₹4,80,403 under Section 28, confiscated the goods under clauses (l) and (m) of Section 111 with an option of redemption on payment of a ₹50,000 fine under Section 125(1), and imposed an equal penalty under Section 114A. On the petitioners depositing the entire duty, penalty and redemption fine on 21 May 2019, Customs lifted its hold and had no objection to release of the goods. CELEBI, however, refused to release the goods until the accumulated demurrage was paid, and the petitioners challenged that demand in writ petitions under Article 226 before the Delhi High Court.

Key provisions

• Section 45, Customs Act, 1962 — Restrictions on custody and removal of imported goods
• Section 141(2), Customs Act, 1962 — Conveyances and goods in a customs area subject to control of officers of customs
• Section 49, Customs Act, 1962 — Storage of imported goods in warehouse pending clearance or removal
• Section 33, Customs Act, 1962 — Unloading and loading of goods at approved places only
• Section 34, Customs Act, 1962 — Goods not to be unloaded or loaded except under supervision of customs officer
• Regulation 6(1)(l), Handling of Cargo in Customs Areas Regulations, 2009 — Responsibilities of Customs Cargo Service provider
• Section 157, Customs Act, 1962 — General power to make regulations
• Section 160(9), Customs Act, 1962 — Repeal and savings
• Section 8, Customs Act, 1962 — Power to approve landing places and specify limits of customs area
• Section 28, Customs Act, 1962 — Recovery of duties not levied or not paid or short-levied or short- paid or erroneously refunded
• Section 111, Customs Act, 1962 — Confiscation of improperly imported goods etc
• Section 114A, Customs Act, 1962 — Penalty for short-levy or non-levy of duty in certain cases