Legal principle

In case of repugnancy between a validly made subordinate legislation and a private contract, the contract must yield; a detention cum demurrage waiver certificate issued under Regulation 10(1)(l) of the SCMTR, 2018 binds the shipping line under Regulation 10(1)(m), which cannot plead the contract of carriage to escape it.

Court decision

The writ petition was allowed to the extent indicated, in favour of the petitioner. The court held the preliminary objections of respondent No. 4 legally untenable; the detention cum demurrage waiver certificate dated 16 November 2020 was validly issued, traceable to Regulation 10(1)(l) of the 2018 Regulations, and under Regulation 10(1)(m) the shipping line is under a legal obligation to comply, making the certificate binding on it. Holding the goods post-certificate and levying detention charges thereafter, including during the status-quo period, was held illegal and unlawful. Respondent No. 2 was directed to ensure implementation of the certificates by all concerned including respondent Nos. 4 and 5 and release of the imported goods within 15 days, to conclude the investigation into the petitioner's complaint of 3 November 2020 within three months with a copy of the enquiry report to the petitioner, and no cost was imposed on the customs authorities; there was no order as to cost.

Facts

Supreme Industries Ltd, an AEO-T2 certified plastics manufacturer, imported 1000 MT of PVC resin 1230P (CTH 39041020) from a Texas, USA supplier through Nhava Sheva, filing Bill of Entry No. 8389492 dated 6 August 2020 for home consumption on self-declared value with full duty. Customs officers raised queries alleging undervaluation because invoice prices were lower than S&P Global Platts rates and withheld the goods; the Additional Commissioner's order-in-original dated 4 September 2020 (signed and issued only on 24 September 2020) rejected the declared value, re-determined it at Rs. 2.63 crores, imposed Rs. 8 lakhs redemption fine under section 125 and Rs. 80,000 penalty under section 112(a) of the Customs Act. The High Court set aside that order on 27 October 2020, directed fresh adjudication by another officer, and ordered status-quo on the goods; the Joint Commissioner by fresh order-in-original dated 6 November 2020 held the valuation enhancement arbitrary, accepted the invoice value, and ordered release of the goods as such. Customs issued a Detention cum Demurrage Waiver Certificate (dated 16 November 2020, with an earlier certificate of 10 November 2020 under section 45 read with section 141(2) and Regulation 6(1)(l) of the Handling of Cargo in Customs Areas Regulations, 2009), but respondent No. 4 shipping line refused to waive detention charges, citing the contract of carriage, leading to this Article 226 petition.

Key provisions

• Section 157, Customs Act, 1962 — General power to make regulations
• 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 160(9), Customs Act, 1962 — Repeal and savings
• Regulation 6(1)(l), Handling of Cargo in Customs Areas Regulations, 2009 — Responsibilities of Customs Cargo Service provider
• Section 30A, Customs Act, 1962 — Passenger and crew arrival manifest and passenger name record information
• Section 41A, Customs Act, 1962 — Passenger and crew departure manifest and passenger name record information
• Section 50, Customs Act, 1962 — Entry of goods for exportation
• Section 53, Customs Act, 1962 — Transit of certain goods without payment of duty
• Section 125, Customs Act, 1962 — Option to pay fine in lieu of confiscation
• Section 46, Customs Act, 1962 — Entry of goods on importation
• Section 56, Customs Act, 1962 — Transport of certain classes of goods subject to prescribed conditions