Case Note & Summary
The dispute arose from three sets of appeals filed by International Airports Authority of India (IAAI) and Central Warehousing Corporation (CWC) against the High Court of Delhi's direction to release imported goods without payment of demurrage for periods covered by detention certificates issued by Customs Authorities. In Appeal No. 798 of 1992, the respondent imported printing papers valued at Rs. 17,846, but the Additional Collector enhanced the value and ordered confiscation. The Customs, Excise & Gold (Control) Appellate Tribunal quashed that order, leading to a detention certificate for 7.8.1989 to 12.7.1990. IAAI waived only Rs. 79,364 of Rs. 1,49,100 demurrage, leaving Rs. 69,736 payable. In Appeal No. 4227 of 1992, wool waste was seized under Section 110 of the Customs Act, 1962, and a show cause notice was issued. After chemical testing of 71% of the consignment proved it was wool waste, the goods were ordered released, and the Assistant Collector requested waiver of demurrage from 29.4.1986 to 29.12.1990. IAAI only agreed to consider waiver for a later period and insisted on entry fee, handling, insurance, and ground rent after 29.12.1990. In Appeal No. 3971 of 1992, multi-cable-transit/cable sealing system was subject to a tariff classification dispute; the importer paid Rs. 3,26,645 as demurrage under provisional clearance and later sought refund after its classification was accepted, but refund was denied. The importers approached the Delhi High Court under Article 226, which allowed the writ petitions, holding that IAAI and CWC as custodians of the Customs Department could not ignore detention certificates and therefore could not charge demurrage for the period of adjudication proceedings. The High Court relied on M/s Trishul Impex v. Union of India and Trans Asia Carpets v. Union of India. IAAI and CWC obtained special leave under Article 136. Before the Supreme Court, the appellants argued that their power to levy demurrage derived from the International Airports Authority Act, 1971, and could not be regulated by the Customs Act; that Customs Authorities could neither levy nor waive demurrage; and that detention certificates could not compel them to treat the entire period as free. The respondents contended that as custodians appointed under Section 45 of the Customs Act, they were bound by the detention certificates. The Supreme Court examined Section 45 of the Customs Act, 1962, and noted that imported goods in a customs area remain in custody of a person approved by the Collector of Customs and cannot be removed except with permission of the proper officer. The court observed that the customs area is under statutory control of the Customs Department, and the detention is to enable the Customs Department to proceed in accordance with law. The court also considered the definition of demurrage in Regulation 2(g) of IAAI Regulations and analogous Port Trust Act cases, stating that demurrage signifies a charge levied after expiration of free days. The court's analysis indicated that the period covered by a detention certificate should be treated as free from demurrage because the custodian's detention of goods at the instance of the Customs Department is not a fault of the importer and the custodian is bound by the certificate. However, the provided judgment text ends before the final operative order, so the ultimate decision and directions are not available in the extracted portion.
Headnote
A) Customs Law - Demurrage and Detention Certificate - Binding Nature on Custodian - Customs Act, 1962, Section 45(2), Section 2(11) - Imported goods kept in customs area remain under control of Customs Department; custodian cannot permit removal without proper officer's permission. Detention certificate issued by Customs Authorities for period of adjudication proceedings indicates that detention was due to customs process; custodian being statutory appointee under Section 45 cannot ignore certificate, and no demurrage may be charged for that period. High Court view that IAAI/CWC as custodian of Customs Department were bound by detention certificate was based on this principle. Held that the period covered by detention certificate is to be treated as free from demurrage (Paras 2, 6, 8-9). B) Customs Law - Definition of Demurrage - Scope and Application - International Airports Authority Regulations, Regulation 2(g); Port Trust of Madras Act, 1905 - Demurrage means rate or amount payable to airport by shipper, consignee or carrier for not removing cargo within time allowed. The word is not used in strict mercantile sense but signifies a charge levied after expiration of free days. Question whether period of customs adjudication can be considered free days is governed by statutory control of customs area and detention certificate, not by importer's fault. Held that detention due to customs proceedings does not attract demurrage for that period (Para 8). C) Constitutional Law - Writ Jurisdiction - Exercise of Power Under Article 226 - Constitution of India, Article 226 - High Court allowed writ petitions filed by importers against levy of demurrage despite detention certificates, holding that custodians of customs area cannot ignore certificates. The decision relied on earlier Delhi High Court decisions in Trishul Impex and Trans Asia Carpets. Held that custodian as agent of Collector of Customs is bound by detention certificate and must release goods without demurrage for specified period (Paras 6-7). D) Precedent - Binding Precedent on Custodian's Obligation - Customs Act, 1962, Section 45; International Airports Authority Act, 1971 - Earlier decisions in Trishul Impex v. Union of India and Trans Asia Carpets v. Union of India established that container depot or airport authority as custodian for Customs Authorities is bound by detention certificate and liable to release goods without demurrage. The Supreme Court was called upon to examine correctness of this principle. Held that the principle is consistent with statutory scheme of Section 45 (Paras 6-7).
Issue of Consideration
What is the nature of detention certificates issued by Customs Authorities? Whether they are binding on International Airports Authority of India and Central Warehousing Corporation? Is there any conflict between Public Notice issued by Customs Authorities and Regulations framed by IAAI? Whether period during which adjudication proceedings were pending before Customs Authorities can be considered free days for demurrage.
Final Decision
Not mentioned in provided text (judgment text truncated before final operative order).
Law Points
- Detention certificate issued by Customs Authorities indicates period goods detained for customs adjudication
- Customs area is under statutory control of Customs Department
- custodian cannot ignore certificate
- demurrage is charge for not removing cargo within time allowed
- period of adjudication proceedings may be treated as free days
- custodian under Section 45 of Customs Act
- 1962 must follow Customs Authorities' directions.
