BE Office Automation Products Ltd. vs Union of India

Rajive Bhalla, J.—The petitioner prays for issuance of writ of certiorari quashing order dated 4-5-2012 (Annexure P-9) and 23-5-2012 (Annexure P-10) and for refund of demurrage charges recovered from the petitioner by respondents No. 3 and 4, at the time of release of his goods. Counsel for the petitioner relies upon Regulation 6(1) of Handling of Cargo in Customs Area Regulations, 2009 to contend that as sub-clause (1) thereof provides that the custom cargo service provider shall not charge any rent or demurrage on goods seized, detained or confiscated, the petitioner is not liable to pay demurrage charges on goods seized and detained by customs authorities. It is further contended that as respondents No. 3 and 4 operate under the aforesaid regulations and are granted licenses in accordance therewith, they cannot levy demurrage and are, therefore, obliged to refund the amount paid by the petitioner at the time of release of goods.

Counsel for the Union of India submits that the Regulation, as notified, applies to the case in hand and, therefore, respondents No. 3 and 4 are required to refund demurrage charges to the petitioner.

Counsel for respondents No. 3 and 4 submits that as goods were seized on 15-1-2008 prior to notification of the Regulation, and controversy in the present case is squarely covered against the petitioner by a Division Bench judgment of this Court in "CWP No. 1825 of 2011 decided on 13-5-2013, M/s. Dewan Steel Industries v. Union of India and Others".

We have heard counsel for the parties, perused the Regulation, the impugned orders as well as the judgment in M/s. Dewan Steel Industries (supra) and are not inclined to grant any relief to the petitioner. The Regulation that prohibits respondents No. 3 and 4 from recovering demurrage on detained or seized goods came into effect after the goods in the present case were seized on 15-1-2008. The Regulation would, therefore, not apply to the present case. The controversy herein is squarely covered against the petitioner by the judgment M/s. Dewan Steel Industries (supra). A relevant extract from the judgment reads as follows:

The guidelines framed vide Circular dated 14-12-1995 are in respect of allowing to open CFSs and ICDs in private sector, which were called as "Custodian". It was the Custodian, who was not to charge any rent or demurrage on the goods detained by the Customs Department. But the Customs Department was required to pay the rent to the Custodian after the ownership of the goods vested in the Revenue after confiscation. Such provision though is between the Custodian and the Revenue; still it does not absolve the petitioner to pay the demurrage charges. The payment of demurrage charges is not a pre-condition for storage of goods as per clause 15. But after the goods vests with the Revenue, the rent of the goods has to be paid by it. It does not contemplate the situation where after adjudication process the goods do not vests with the State, but vests with the importer. In such a situation, the importer would be liable to pay demurrage charges, as owner of the goods stored in the Warehouse. The guidelines do not provide for demurrage free storage even for the revenue.

The scope of the Regulations is wider than the Circular, as it prohibit the Customs Cargo Service Provider to charge any amount on the goods seized or detained. But since the goods were seized in the year 2000, such Regulations will not come to the rescue of the petitioner. Even the said Regulations are to determine the relationship between the service provider and the Revenue and not in respect of services availed by the importer.

In view of the precedents of the Supreme Court in International Airports Authority of India and Others Vs. Grand Slam International and Others, ) and Trustees of Port of Madras Vs. Nagavedu Lungi and Co. and Others, we do not find any merit in the present petition. The same is accordingly dismissed.

In this view of the matter, finding no merit in the writ petition, the same is dismissed.