Case Note & Summary
The petitioner, Apollo Paper Mills Ltd., imported second-hand machinery from the UK in 1995 to set up a paper manufacturing unit in Gujarat, seeking concessional duty under the Export-Import Policy. The policy required project clearance from the Ministry of Industry and registration under the Project Import Regulations. The petitioner obtained the necessary approvals. However, the Customs authorities delayed finalising the assessment for over a year, raising queries and alleging non-compliance. The goods remained in the custody of the Central Warehousing Corporation (CWC), accumulating demurrage charges. The petitioner filed a writ petition seeking a direction that the Customs department bear the demurrage charges or, alternatively, that CWC waive them. The court examined the facts and found that the delay was solely attributable to the Customs authorities, not the petitioner. The court held that the petitioner cannot be penalised for the inordinate delay by Customs. Accordingly, the court directed the Customs department to bear the demurrage charges, and in the alternative, directed CWC to waive the charges. The petition was allowed with these directions.
Headnote
A) Customs Law - Demurrage Charges - Liability for Delay - Customs Act, 1962 - Sections 17, 47 - The petitioner imported second-hand machinery under a concessional duty scheme requiring project clearance. Customs authorities delayed assessment for over a year due to queries and alleged non-compliance. The court held that the delay was attributable to Customs, not the importer, and thus the petitioner cannot be saddled with demurrage charges. The court directed Customs to bear the demurrage charges or alternatively directed CWC to waive them. (Paras 1-10) B) Customs Law - Project Import - Concessional Duty - Project Import Regulations, 1986 - The import of second-hand machinery at concessional duty required project clearance from the Ministry of Industry and registration under Project Import Regulations. The petitioner obtained necessary approvals but Customs raised queries and delayed assessment. The court held that once the project was cleared, Customs could not indefinitely withhold assessment. (Paras 2-5)
Issue of Consideration
Whether the petitioner should be saddled with warehousing charges for the inordinate delay on the part of the Customs authorities in finalising the assessment of the goods imported by the petitioner, and in the alternative, whether the Central Warehousing Corporation should be directed to waive/bear the warehousing charges.
Final Decision
The court allowed the petition and directed the Customs department to bear the demurrage charges, or in the alternative, directed CWC to waive the charges.
Law Points
- Demurrage charges
- Customs delay
- Warehousing charges
- Liability for delay
- Project Import Regulations
- Concessional duty
