Calcutta High Court
Vinod Kumar Jain vs Rajesh Jindal on 4 March, 2022
Author: T. S. Sivagnanam
Bench: T.S. Sivagnanam, Hiranmay Bhattacharyya
OD - 1
IN THE HIGH COURT AT CALCUTTA
SPECIAL JURISDICTION (CONTEMPT)
ORIGINAL SIDE
CC/8/2022
VINOD KUMAR JAIN
VS.
RAJESH JINDAL, PRINCIPAL COMMISSIONER OF CUSTOMS (PORT)
AND ORS.
BEFORE :
THE HON'BLE JUSTICE T.S. SIVAGNANAM
AND
THE HON'BLE JUSTICE HIRANMAY BHATTACHARYYA
Date : March 4, 2022.
[Via Video Conference]
Appearance :
Mr. Sudhir Mehta, Adv.
Mr. Anurag Bagaria, Adv.
... for the petitioner
Mr. K.K. Maiti, Adv.
Mr. Abhradip Maity, Adv.
... for the respondents
The Court : Reference may be made to the order dated 17th February 2022. Two directions issued in the said order first of which being a direction to release the goods based on the test report dated 6th January, 2022. This direction has been complied with by the department and an order to the said effect has been passed on 19th February 2022. The second direction issued in the order was to issue detention certificate for waiver of detention charges and other charges as the petitioner has stated that such waiver was granted only for a partial period.
Taking note of the submission and also the legal position, the respondent/contemnor was directed to issue detention certificate 2 for the entire period of detention i.e. till the goods are released in terms of the direction issued by us.
The respondent/contemnor has issued a detention certificate dated 18th February, 2022 addressed to M/s. PIL India Private Limited and the Manager, Century Ply (JJP) CFS, Calcutta. In the said certificate it has been stated that import of consignment covered under bill of entry dated 15th September, 2020 imported by the petitioner was detained and lying at the CFS - Century Ply (JJP), Calcutta for the period from 22nd September, 2022 to the date of release of goods ("Out of Charge date") due to testing/investigation and adjudication/court proceedings by the office of SIB (Port) Customs House, Calcutta. Further, it has been stated that the detention certificate is being issued for compliance of the order dated 17th February, 2022 passed by this Court.
It is not in dispute that the said certificate has been served on M/s. PIL India Private Limited and Century Ply (JJP) CFS, Calcutta. In spite of such certificate being issued, the CFS/Shipping Line were not permitting the petitioner to clear the goods and insisting upon payment of demurrage and other charges. This issue was brought to the notice of the respondent/contemnor by the petitioner through his Advocate's letter dated 22nd February, 2022. The respondent/contemnor sent an e-mail dated 23rd February, 2022 to the said two companies stating that detention certificate dated 18th February, 2022 has been issued by the department and necessary action is pending at their end and action may be taken on an urgent basis in the light of the order passed by this Court. Thereafter on 25th 3 February, 2022 once again a reminder letter was sent to the PIL India Private Limited and Century Ply (JJP), CFS Calcutta. In spite of this communication and also having been aware of detention certificate issued by the department the cargoes were not released and the petitioner is being called up to pay detention and other charges.
The argument of the revenue before us is that the relationship between the petitioner and the container freight station /shipping liner is contractual and, therefore, it is for the petitioner to work out its remedies in accordance with law and the department cannot be hauled up for contempt. In support of such contention the learned Counsel for the revenue placed reliance on a decision of the Hon'ble Supreme Court in Mumbai Port Trust Vs. M/s. Shri Lakshmi Steels and Ors. etc.; Civil Appeal Nos. 9831-32 of 2017 dated 27th July 2017 and the decision of the Division Bench of High Court at Bombay in J.J. Polyplast Pvt. Ltd. Vs. Ministry of Shipping, Mumbai ; 2015 (325) ELT 594 (Bom.).
The issues which arose for consideration in Mumbai Port Trust are (i) whether any direction could be given to the Mumbai Port Trust to waive the demurrage charges and (ii) whether the liability to pay the demurrage/detention charges in respect of the imported goods could be fastened upon the DRI/Customs Authorities. As rightly pointed out by the learned Counsel for the petitioner the said decision arose under the provisions of the Major Port Trust Act, 1963 and considering the scheme of the enactment the Court, answered both the issues against the importer. Therefore, the said decision is clearly distinguishable on facts. So far as the decision in J.J. Polyplast Pvt. 4 Ltd. (supra), the petitioner therein approached the court alleging that the CFS was insisting upon compliance of certain conditions which according to the petitioner therein could not be insisted upon. Taking note of the factual position, the Court held that the grievances made by the said petitioner does not indicate that it is in any manner within the scope and ambit of the facility notice issued by the department where the department can exercise their statutory authority and power conferred under the Customs Act, 1962 to issue appropriate direction to the shipping lines/clearing agents. Therefore, the decision in J.J. Polyplast Pvt. Ltd. is also distinguishable on facts. Therefore, the argument of learned Counsel that the dispute between the petitioner and the CFS/Shipping Line is purely contractual cannot be accepted and the same stands rejected. We substantiate this finding with the following additional reasons:-
The decision in J.J. Polyplast Pvt. Ltd. was rendered in 2015 i.e. much prior to coming into force of the Sea Cargo Manifest and Transhipment Regulations, 2018. The said regulations have been notified in exercise of the powers under the Customs Act, 1962 and in supersession of Import Manifest (Vessels) Regulations, 1971 by the Central Board of Indirect Taxes and Customs. The regulations came into force on 1st August, 2019. Undoubtedly, the regulation being the statutory regulation binds not only the department but also the person who has been granted licence under the said regulation.
Regulation 10 of the said regulation deals with responsibility of the authorised carrier under the regulations. Clause (l) of Regulation 10 (1) states that an authorised carrier shall not demand 5 any container detention charges for the containers laden with the goods detained by customs for the purpose of verifying the entries made under Section 46 or Section 50 of the Act, if the entries are found to be correct.
The Central Board of Excise and Customs had notified Handling of Cargo in Customs Areas Regulations, 2009. Regulation 6 of the 2019 Regulations deals with responsibilities of Customs Cargo Service Provider. Regulation 6(1)(l) states that the Customs Cargo Service Provider shall subject to any other law for the time being in force, shall not charge any rent or demurrage on the goods seized or detained or confiscated by the Customs Authorities.
Thus, the statutory regulations clearly provide for waiver of these charges which the petitioner cannot be compelled to pay. In the instant case the CFS/Shipping Line have not complied with the requirements that they are to fulfil pursuant to issuance of detention certificate. The question would be is the respondent/department powerless or can it be said that they will be a mute spectator to the non-compliance of their directions by the CFS/Shipping Line. The answer to this question lies in 2018 - 2019 Regulations wherein under Regulation 11 provides for action being taken for suspension of operations or revocation of registration of an authorised carrier. In the 2019 Regulations under Regulation 11 similar power has been provided. It is not for this Court to inform the respondent/department as to what the powers are under the statutory regulations.
The learned standing Counsel for the respondent/contemnor would submit that appropriate direction may be issued. The Court 6 fails to understand as to why directions are to be issued to the department to exercise their power under the statutory regulation. If they fail to do so the Court can draw adverse inference against them and also come to a conclusion that the department is trying to indirectly make the order and direction by this Court unworkable. If the same is established, then the officials of the department are liable for contempt.
We find that CFS and the shipping line are not parties to this application. Therefore, we grant liberty to the petitioner to take appropriate steps in this regard. In the meantime, we leave it to the respondent/department to sort out the issues, failing which the Court may be constrained to draw adverse inference and pass stringent orders.
List this matter on 11th March, 2022.
(T. S. SIVAGNANAM, J.) (HIRANMAY BHATTACHARYYA, J.) GH/RS