Gujarat High Court
M/S Sumit Enterprise vs Principal Commissioner/Commissioner ... on 29 September, 2022
Author: Bhargav D. Karia
Bench: N.V.Anjaria, Bhargav D. Karia
C/SCA/12703/2022 ORDER DATED: 29/09/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 12703 of 2022
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M/S SUMIT ENTERPRISE
Versus
PRINCIPAL COMMISSIONER/COMMISSIONER OF CUSTOMS
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Appearance:
PRATEEK S BHATIA(8629) for the Petitioner(s) No. 1
AADITYA D BHATT(8580) for the Respondent(s) No. 3
CHANDNI S JOSHI(9490) for the Respondent(s) No. 3
MR NIKUNT K RAVAL(5558) for the Respondent(s) No. 1,2
NOTICE SERVED for the Respondent(s) No. 4
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CORAM:HONOURABLE MR. JUSTICE N.V.ANJARIA
and
HONOURABLE MR. JUSTICE BHARGAV D. KARIA
Date : 29/09/2022
ORAL ORDER
(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)
1. Heard learned advocate Mr.Prateek S. Bhatia for the petitioner, learned advocate Mr. Param Shah, Standing Counsel for learned advocate Mr. Nikunt Raval and learned advocate Mr. Aditya D. Bhatt for the respondents.
2. By this petition under Article 226 of the Constitution of India, the petitioner has prayed Page 1 of 18 Downloaded on : Sun Dec 25 02:53:16 IST 2022 C/SCA/12703/2022 ORDER DATED: 29/09/2022 for the following reliefs :
"(A) Your Lordships may be pleased to issue a writ of certiorari or Mandamus or writ in the nature of Certiorari or Mandamus or or any other appropriate Writ, Order or Direction, directing the Respondents to clear the goods comprising of "Dry Dates" imported vide Bills of Entries Nos.7736875 Dated 04.03.2022 and 7737090 dated 04.03.2022 and hand over the physical possession of the goods to the Petitioner;
(B) Your Lordships may be pleased to issue a Writ of Certiorari or Writ in the nature of Certiorari or Mandamus or any other appropriate Writ, order or direction to the Respondent no.1 to initiate action against Respondent No.3 in terms of Sea Cargo Manifest Regulation 2018 in view of non-
compliance of Detention Memo dated 19.04.2022;
(C) Your Lordships may be pleased to issue a writ of certiorari or mandamus or writ in the nature of Certiorari or Mandamus or any other appropriate Writ, Order or direction to the Respondent no.4 to waive off the detention charges having been raised by Saurashtra Freight Pvt Ltd in view of Regulation 6(1)(I) of Handling of Cargo in Customs Area Regulations, 2009;
(D)Pending admission, hearing and final disposal of this petition, Your Lordships may be pleased to effect Page 2 of 18 Downloaded on : Sun Dec 25 02:53:16 IST 2022 C/SCA/12703/2022 ORDER DATED: 29/09/2022 physical delivery of the goods upon furnishing of Bond or any other condition, since the imported goods are subject to limited shelf life and deteriorating for each day passing;
(E) An ex-parte ad interim relief in
terms of prayer (B) above may be
granted; and
(F) Grant such other and further
relief(s) as may be deemed fit in the interest of justice and equity."
3. Brief facts of the case are as under :
3.1. The petitioner is a proprietory Firm of M/s.
Summit Kumar and engaged in the business of import and trading of food items, having its office and Godown at Mumbai. The petitioner is engaged in the import and trading of "Dry Dates"
falling under the chapter heading 08041030 of Custom Tariff Act, 1975 attracting Customs Duty/IGST @20% approx. and IGST of 12% respectively. The aforesaid goods are freely importable as per the Indian Tariff Code (ITC) HS.
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C/SCA/12703/2022 ORDER DATED: 29/09/2022 3.2. It is the case of the petitioner that during the course of business, it imported two consignment of "Dry Dates" from UAE and filed the Bills of Entry Nos.7736875 dated 04.03.2022 and 7737090 dated 04.03.2022 at the port of Mundra SEZ, Mundra, Gujarat. The said goods were detained by the respondent No.2 without executing any detention memo, which are still lying uncleared as the same has been illegally detained by the respondents.
3.3. For the purpose of import of Dry Dates, the same were accompanied with the important Documents namely Invoice, Packing List and Bill of Lading issued by the Foreign Supplier wherein, the description, quantity and value of the goods are being mentioned.
3.4. It is the case of the petitioner that for the purpose of clearance of "Food Items", whenever any goods namely Food Items are being Page 4 of 18 Downloaded on : Sun Dec 25 02:53:16 IST 2022 C/SCA/12703/2022 ORDER DATED: 29/09/2022 imported, the same are required to be accompanied with the Phytosanitary Certificate and Fumigation issued by the Exporting Country, certifying the imported food items have been fumigated. 3.5. The petitioner filed the Bills of Entries on the basis of the documents supplied by the foreign supplier and the Customs duty payable was self assessed by the petitioner. It is the case of the petitioner that the petitioner, at the time of filing of the Bill of Entry, it could not pay the Customs Duty since the goods were detained by the Customs. However, the Custom Duty as self assessed was levied and assessment was completed by the Respondents.
3.6. Despite the fact that the goods were examined by the Customs Officers, the same were ordered to be detained for further investigation. It is the case of the petitioner that the imported goods were detained without passing any Page 5 of 18 Downloaded on : Sun Dec 25 02:53:16 IST 2022 C/SCA/12703/2022 ORDER DATED: 29/09/2022 order of detention or without issuance of any seizure memo in terms of Section 110 of the Customs Act, 1962, which is the only enabling Section to detain the goods imported by the petitioner.
3.7. It is the case of the petitioner that in order to support the declaration made at the time of filing of the Bill of Entry, the petitioner furnished all the documents including the copies of Export Declaration issued by UAE Customs. 3.8. The petitioner vide letter dated 26.03.2022 requested respondent no.1 and 2 for provisional assessment of the said Bill of Entries and for the provisional clearance of the said imported goods, the same being perishable and subject to demurrage and detention charges. 3.9. It is the case of the petitioner that vide letter dated 11.04.2022, the respondent No.2 Page 6 of 18 Downloaded on : Sun Dec 25 02:53:16 IST 2022 C/SCA/12703/2022 ORDER DATED: 29/09/2022 issued No Objection Certificate for the purpose of release of goods covered under the siad Bill of Entries, since nothing adverse was found against the petitioner and thereafter, the siad letter dated 11.04.2022 was addressed to the Custodian i.e. Manager Saurashtra CFS, Mundra to waive off the detention charges in terms of Regulation 6(1)(I) of the Handling of Cargo in Customs Area Regulations, 2009.
3.10. Respondent no.2 thereafter issued Detention Memo dated 19.04.2022 addressed to respondent no.3 directing waiver of detention and demurrage charges in view of Regulation 10(1) of the Sea Cargo Manifest and Transhipment Regulations, 2018. The petitioner thereafter vide e-mail dated 22.04.2022 requisitioned implementation of the detention memo dated 19.04.2022.
3.11. It is the case of the petitioner that despite the fact that the goods were illegally Page 7 of 18 Downloaded on : Sun Dec 25 02:53:16 IST 2022 C/SCA/12703/2022 ORDER DATED: 29/09/2022 detained by the respondent No.1, and there being nothing amiss, the respondent after lapse of more than one month had issued No Objection for clearance of goods. It is the case of the petitioner that further no intimation for de stuffing was issued by the Respondent Nos.1 and 2 to the petitioner and now the Respondent Nos.3 who is the Shipping Line is demanding Container Detention Charges amounting to Rs.33,91,002 as on 09.05.2022 and Rs. 45,20,352.00 as on 09.05.2022 respectively. Further invoices have been raised by Saurashtra Freight Pvt. Ltd. amounting to Rs. 7,90,535/- as on 09.05.2022 and Rs. 10,54,047/- as on 09.05.2022.
3.12. Since the goods were already detained for more than one month and the free days as provided by the respondent No.4 were restricted to only 14 days from the date of filing of the Bills of Entries, the petitioner having requested the respondent Nos.1 and 2 to issue Detention Memos Page 8 of 18 Downloaded on : Sun Dec 25 02:53:16 IST 2022 C/SCA/12703/2022 ORDER DATED: 29/09/2022 in terms of Regulation 6(1)(l) of the Handling of Cargo in Customs Area Regulation, 2009 as well as Regulation 10 of the Sea Cargo Manifest Regulation, 2018. The respondent No.2 vide letter dated 25.03.2022 have issued Detention Memo under Sea Cargo Manifest Regulations, 2018, wherein it has been directed that the Shipping Lines shall not charge Container Demmurge Charges for the period of Detention.
3.13. It is the case of the petitioner that since respondent no.3 was not paying heed to the implementation of the Detention Memo dated 19.04.2022 and further invoices having been raised demanding detention charges, the petitioner vide letter dated 5.05.2022 requested the respondent no.1 to initiate action in terms of Regulations 11 and 12 of the Sea Cargo Manifest Regulation 2018 on account of failure of respondent no.3 to waive the detention and demurrage charges.
Page 9 of 18 Downloaded on : Sun Dec 25 02:53:16 IST 2022 C/SCA/12703/2022 ORDER DATED: 29/09/2022 3.14. It is the case of the petitioner that neither the respondent no.3 was replying to the representations requesting for implementation of detention memo dated 19.04.2022 to waive the detention charges nor has any action been initiated by respondent no.1 against respondent no.3 for failure to grant waiver in terms of detention memo dated 19.04.2022 and therefore, being aggrieved, the petitioner has filed this petition with the aforesaid prayers. 4.1. Learned advocate for the petitioner submitted that in spite of the fact that the Customs Authorities have directed the respondent No.3 for waiver of the detention/demmurage charges as per the Regulation 10(l) of the Sea Cargo Manifest and Transhipment Regulations, 2018 (for short 'SCMTR') for not demanding any detention and demmurage/storage charges for the container laden with the goods which were kept on hold for the purpose of Page 10 of 18 Downloaded on : Sun Dec 25 02:53:16 IST 2022 C/SCA/12703/2022 ORDER DATED: 29/09/2022 investigation/verification and in spite of such order dated 19.04.2022, the respondents are not ready to release the goods which are Dry Dates and perishable commodity.
4.2. It was submitted that respondents are demanding the container detention charges in spite of the order passed by the Customs Authorities for waiver of such charges under Regulation 10(1) of the SCMTR.
4.3. Relying upon the provisions of section 17, 18, 110, 110A, 111 and 119 of the Customs Act, 1962 it was submitted that whereever in case of import of any such goods any omission of the provisions of the Customs Act is being detected and if the goods are proposed to be detained/seized or confiscated under section 110 and 111 of the Customs Act, the goods unless prohibited for import under Indian Tariff Code (Harmonised system) are required to be released Page 11 of 18 Downloaded on : Sun Dec 25 02:53:16 IST 2022 C/SCA/12703/2022 ORDER DATED: 29/09/2022 provisionally under section 110A and section 18 of the Customs Act, which was not the case of the petitioner.
4.4 It was further submitted that CBEC vide its circular dated 16.08.2017 and 22.08.2006 have directed the respondent officers to permit provisional release of goods unless the same were found to be prohibited in terms of Indian Tariff Code (Harmonised System). It was submitted that the Office of the Chief Commissioner of Central Excise and Customs New Delhi vide instructions No.CCU(DZ)CZ/Legal/39/2006 dated 22.08.2006 had issued instructions directing that where it becomes necessary to detain goods, the importer must intimate in writing that he may shift the goods to a bonded warehouse under section 49 of the Customs Act with clear indication that if he does not want to avail this facility, the goods could incur demmurage charges etc. and the party would have to bear the demmurage charges as Page 12 of 18 Downloaded on : Sun Dec 25 02:53:16 IST 2022 C/SCA/12703/2022 ORDER DATED: 29/09/2022 charges by the custodian. It was therefore, submitted that respondent no.3 was bound by the Regulations as well as directions issued by respondent no.2 and failure on part of respondent no.1 to initiate action is arbitrary and illegal and against the provisions of the Customs Act. 5.1. On the other hand, learned advocate Mr. Param Shah for learned advocate Mr. Nikunt Raval for the Customs Authorities relied upon the affidavit-in-reply filed on behalf of the respondent Nos.1 and 2 and submitted that the Customs Authorities have already issued the order on 19.04.2022 directing the respondent Nos.3 not to charge any detention charges under Regulation 10(1)(I) of the SCMTR.
6.1. Learned advocate Mr.Aditya Bhatt for respondent No.3 relied upon the affidavit-in- reply filed on behalf of the respondent No.3 and submitted that the shipment in question had the Page 13 of 18 Downloaded on : Sun Dec 25 02:53:16 IST 2022 C/SCA/12703/2022 ORDER DATED: 29/09/2022 expected date of arrival of 05.03.2022, therefore being a shipping company, a Delivery Order was issued on 05.03.2022 with a validity of 15 days within which the importer is expected to get cargo Clearance from Customs and the same ws communicated to CHA of the importer, however, the importer i.e. the petitioner/its CHA could not get the Cargo cleared by 18.03.2020 and therefore, the validity of the Delivery Order issued on 5.03.2022 got over. It was submitted that respondent no.3 continued requesting the petitioner to take delivery of the cargo through the CHA of the petitioner.
6.2 Relying upon the provisions of Regulation 10(1)(I) of the SCMT Regulations, it was submitted that regulation makes it clear that the authorized carrier is not permitted to demand any container detention charges if the containers are detained by customs for the purpose of verifying the entries made under section 46 or Page 14 of 18 Downloaded on : Sun Dec 25 02:53:16 IST 2022 C/SCA/12703/2022 ORDER DATED: 29/09/2022 section 50 of the Act and if the entries are found to be correct. However, in case of the petitioner, it was not clear whether the containers were not detained by customs for the purpose of verifying the entries made under section 46 or for the verification of the Phytosanitary Certificate and Fumigation Certificate and therefore the said invoices were raised based on the customary practice of giving fourteen free days.
6.3 It was submitted that presuming that Regulation 10(1)(I) of SCMT Regulations is fully applicable to the consignment in question then also the petitioner is entitled to exemption from payment of detention charges only upto a period of sixty days and thereafter, as per the proviso clause, the respondent no.3 being an authorized carrier is still entitled to charge detention charges.
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C/SCA/12703/2022 ORDER DATED: 29/09/2022 6.4 It was further submitted that as on 21.08.2022 if the number of days is calculated which are permissible for levy of detention charges, after deducting 60 days as per Regulation 10(1)(I) of the SCMT Regulations, even then respondent no.3 was entitled to charge from the petitioner for the period of 110 days. 6.5 It was therefore, submitted that the benefits of Regulation 10(1)(I) of the SCMT Regulations are not available to the petitioner and respondent no.3 may be permitted to levy detention charges in full if the consignments were not detained for verifying the entries under section 46 or in the alternative, permit the respondent no.3 to levy detention charges deducting the initial period of 60 days which ends on 3.05.2022.
7. However, on a query made by the Court to the effect that whether the order dated 19.04.2022 is Page 16 of 18 Downloaded on : Sun Dec 25 02:53:16 IST 2022 C/SCA/12703/2022 ORDER DATED: 29/09/2022 challenged by the respondent No.3, it was submitted by the learned counsel for the respondent No.3 that such order is not challenged before any Forum.
8. In view of the above facts, the order passed by the Customs Authority dated 19.04.2022 is binding upon the respondents Nos.3 to 4 and therefore, respondent Nos.3 to 4 are required to implement the order dated 19.04.2022 passed by the Customs Authorities for waiver of the demmurage charges under Regulation 10(1)(l) of the SCMTR.
9. Hence, without going into further details and merits of the case, the respondent Nos.3 and 4 are hereby directed to release the goods which are under their custody and not under the detention of the Customs Authorities by implementing the order dated 19.04.2022 for waiver of the demmurage charges under Regulation Page 17 of 18 Downloaded on : Sun Dec 25 02:53:16 IST 2022 C/SCA/12703/2022 ORDER DATED: 29/09/2022 10(1)(l) of the SCMTR. Such exercise shall be completed within two weeks from the date of receipt of this order.
10. It is clarified that if the respondent No.3 is desirous to challenge the order of the Customs Authorities for waiver of the demmurage charges, this order shall not come in their way. However, we have not expressed any opinion in respect of any such proposed proceedings.
11. The petition is accordingly disposed of.
(N.V.ANJARIA, J) (BHARGAV D. KARIA, J) RAGHUNATH R NAIR Page 18 of 18 Downloaded on : Sun Dec 25 02:53:16 IST 2022