Legal principle

A Customs Cargo Service Provider or custodian cannot charge rent or demurrage on goods seized, detained or confiscated by the proper officer of customs for the certified detention period, must release the goods on production of the proper officer's certificate, and unlawful retention beyond that period disentitles it to any rent or demurrage.

Court decision

The Bombay High Court allowed the writ petition and directed respondent No. 1 to forthwith release the goods imported under bill of entry No. 7540462 dated 07.08.2018 in container No. TTNU9895081 to enable the petitioner to re-export them in terms of the Deputy Commissioner's letter dated 28.11.2018. The Court held that respondent No. 1 could not charge rent or demurrage for the certified detention period 14.08.2018 to 06.02.2019, and that its failure to release the goods by 06.02.2019 disentitled it from claiming rent and demurrage for the period beyond 06.02.2019 till release. The submission relegating the petitioner to a civil suit was rejected; there was no order as to costs.

Facts

Sahaj Impex, an Indore-based importer, imported plastic regrind from Dubai under bill of entry No. 7540462 dated 07.08.2018 in container No. TTNU9895081. On arrival at Nhava Sheva the cargo was put on hold by the Special Investigation and Intelligence Branch (SIIB) of customs for investigation and kept in the container freight station of respondent No. 1 (Balmer Lawrie & Co Ltd), the customs custodian. The adjudicating authority approved re-export of the goods on furnishing a bond of full value plus a bank guarantee of Rs. 4 lacs, and the petitioner furnished the bank guarantee and a Provisional Duty Bond of Rs. 15,24,000. The Superintendent of Customs, SIIB issued a certificate dated 31.01.2019, as per public notice No. 26/2010 dated 02.03.2010, certifying that the goods were detained by customs from 14.08.2018 to 06.02.2019. Despite this, respondent No. 1 refused to release the goods and demanded rent and demurrage exceeding Rs. 17 lacs, citing the pending CFS Association writ petition challenging Regulation 6(1)(l) in which no interim order had been passed.

Key provisions

• Section 45, Customs Act, 1962 — Restrictions on custody and removal of imported goods
• Section 141, Customs Act, 1962 — Conveyances and goods in a customs area subject to control of officers of customs
• Section 157, Customs Act, 1962 — General power to make regulations
• Regulation 6(1)(l), Handling of Cargo in Customs Areas Regulations, 2009 — Responsibilities of Customs Cargo Service provider