NEENA BANSAL KRISHNA, J. (ORAL)

1. The petitioner has sought release of its goods for home consumption from respondent No.1-The CEO, the Delhi Cargo Services Pvt. Ltd. without incurring any demurrage charges in terms of Regulation 6(I) and 6(q) of Handling of Cargo in Customs Areas Regulations, 2009 (hereinafter referred to as ‘Customs Regulations, 2009’).

2. The petitioner imported goods namely Chinese back cover, Chinese tempered glass for mobile, etc through Airway Bill No.77545-189944 for which he filed Bill of Entry No.2963662 and self assessed the values of goods as Rs.4,62,856/- which attracted Custom duty in the sum of Rs.1,59,528/- which was paid vide TR-6 Challan No.2026777493 dated 24th April, 2019. SIIB, ACC Import, New Delhi conducted hundred per cent examination of the goods and found misdeclaration of quantity in the consignment. A Panchnama was drawn on 26th April, 2019 and the goods were confiscated under Section 110 of the Customs Act on 01st May, 2019 and seizure memo was issued. Since, the investigations were to take some time, petitioner requested respondent No.2-Commission of Customs (SIIB) vide letter dated 01st May, 2019 for warehousing the imported goods under Section 49 of the Customs Act. The respondent No.2 sought direction from respondent No.4-Directorate General of Revenue Intelligence, which vide letter dated 03rd May, 2019 declined the request of respondent No.2 for warehousing under Section 49 but directed the same to be kept in the warehouse of the Custodian. On the directions of respondent No.4, respondent No.2 handed over the goods to respondent No.1 for safe custody vide letter dated 6th May, 2019 directing respondent No.1 as under :

“As per letter received form DRI, Jaipur above said three consignments shall remain in your custody till the completion of investigation. As investigation will take some time, there shall not be any demurrage charges on the above said consignments from the date of holding of these Bills of Entry i.e. 22.04.2019 and 24.04.2019 till the finalization of the investigation as informed by the competent authority of Customs.”

3. In the mean while, since the petitioner was under pressure to honour the commitments towards buyers of the goods, he requested respondent No.2 to decide the cases without issuing any Show Cause Notice. The investigation was finalized vide Order dated 08th July, 2019. The petitioner has stated that once the investigations had been completed and an order dated 08th July, 2019 was passed by respondent No.2, the petitioner had a right for release of goods on payment of differential duty, redemption fine and penalty. However, on account of its financial hardship, it represented that the amount to respondent No.2 shall be paid immediately before release of goods. The petitioner approached respondent No.1 for release of goods but it refused to do so unless the demurrage charges were paid till date. The petitioner approached respondent No.2 vide letter dated 11th July, 2019 about illegal demand of full charges for demurrage, but to no avail. Aggrieved the petitioner has filed the present petition seeking directions to be issued to respondent No.1 not to collect any demurrage charges and release the subject goods for home consumption.

4. The respondent No.1-CEO, Delhi Cargo Services Pvt. Ltd. in its counter affidavit has explained that regulation 6(I) of Customs Regulations, 2009 itself is subject to any other law for the time being in force. The demurrage charges are levied by respondent No.1 under the policy framed under Airport Authority of India (Storage and Processing of Cargo, Courier and Express Goods and Postal Mail) Regulations, 2003 (hereinafter referred to as ‘AAI Regulations, 2003’). Regulation 10.1.10 provides that demurrage charges shall not be waived where fine, penalty or warning is imposed by the Custom Authority. In the present case, the petitioner has been found guilty of mis-description and mis-declaration and penalty has been levied and therefore, in accordance with the policy framed under AAI Regulations, 2003, demurrage charges cannot by waived. The Customs Regulations, 2009 are framed in exercise of powers conferred by sub-Section (2) of Section 141 read with Section 157 of Customs Act, 1962. On the other hand, AAI Regulations, 2003, are framed in exercise of powers conferred by clause B of Sub-Section 2 of Sub-Section 42 of Airport Authority Act, 1994. It is asserted that the Customs Authorities are not concerned with the upgradation, modernization, finances operation, maintenance and management of the provisions of services at the Cargo Terminal of the Airport which is the function of Airport Authority of India. The AAI Regulations, 2003 specifically deals with Storage and Processing of Cargo Couriers, Express Goods and Postal Mail. The Authority fixes the charges for processing the cargo and has formulated a policy of waiver of such demurrage charges under AAI Regulations 2003. The Regulation 6 (1) of Customs Regulations, 2009 itself postulates that these regulations are subject to any other law for the time being in force. The Regulations, 2003 specifically provides that demurrage charges shall not be waived in case penalty/ fine is imposed by the Customs Authority. The Customs Authority is not concerned with the responsibility of providing and fixing demurrage charges in respect of storage, processing and handling of cargo at the Terminal which is the responsibility of the Airport Economical Regularity Authority constituted under Airport Economic Regulatory Authority of India Act, 2009. The interpretation of Regulation 6(1) as proposed by the petitioner nullifies all other rules and regulations which is erroneous and fallacious. Furthermore, no Detention Certificate had been issued by the Customs Authority in favour of the petitioner and its reliance on letter dated 16th May, 2019 issued by Assistant Commissioner is of no benefit as it was a letter issued by the Customs during the investigations and not after the conclusion of enquiry. The case of the petitioner stands distinguished in view of Clause 10.1.10 of Customs Regulations, 2003. The petitioner is not entitled to any waiver of demurrage charges.

5. The respondent No.2-Commission of Customs (SIIB) in its counter affidavit has submitted that the adjudication order dated 08th July, 2019 has already been made wherein option has been given to the petitioner to get the goods released on payment of Government dues. The respondent No.1 vide letter dated 08th May, 2019 was requested not to charge any demurrages as the subject consignment was held by DRI/SIIB for investigations. It is further submitted that as per Regulations, 2009 it was conveyed to Delhi International Airport Ltd. (hereinafter referred to as DIAL) vide letter dated 15th March, 2019 that the custodian shall not charge any demurrage charges in compliance of Regulation 6(1) of Customs Regulations, 2009 which was accepted by M/s DIAL vide its office letter dated 13th June, 2019.

6. The respondent No.4-Directorate General of Revenue Intelligence on behalf of DRI, Jaipur has submitted that the goods were initially detained under Panchnama dated 24th April, 2019 and the detention was converted into seizure under Section 110 of Customs Act, 1962 on 01st May, 2019. It was admitted that Respondent No.4 had sent a letter dated 03rd May, 2019 stating that when SIIB has taken over the custody of goods on seizure, goods may be deposited in malkhana, warehouse or provisionally released as per the rules and procedures of Air Cargo Complex, New Delhi. It is claimed that DRI, Jaipur did not give any directions to respondent No.1 or to respondent No.2. It had merely advised the respondent vide its letter dated 18th June, 2019 to follow the rules and procedures in place at Air Cargo Complex, New Delhi regarding the goods which were detained and seized.

7. Submissions heard.

8. The Airport Authority of India (hereinafter referred to as AAI) was constituted by Airport Authority of India Act, 1994 (hereinafter referred to as AAI Act). Section 12 of the AAI Act stipulated that it shall be the function of the AAI to manage the Airports. Clause G of sub-section 3 of Section 12 specifically empowered AAI to establish warehouses and cargo complexes at airports for storage and processing of goods. Section 42 of AAI Act empowered AAI to make regulations specifically for the storage and processing of goods in any warehouse established by AAI under Section 12 (3) (g) and for charging of fee for such storage and processing. In exercise of the said powers, AAI notified AAI Regulations, 2003 which came into effect on 13th June, 2003. Clause 1 of Regulation 2 defined Cargo Handling Agency as “a person, firm or company handling cargo as an agent of the Authority or a licencee and may include the Authority”. Regulation 3 (b) stipulated that AAI shall deliver the consignments to the consignee or the authorized agent “after collecting applicable charges and after obtaining of valid receipt from the consignee or the authorized agent on having receipt the goods.” It further provided that till the charges are paid, AAI “shall have a lien on cargo of goods”.

9. The short question for consideration is whether the Custom Authorities can direct waiver of demurrages otherwise recoverable by AAI in terms of AAI Regulation, 2003. This aspect was considered in detail by this Court in Global Impex and Ors. Vs. Manager, Celebi Import Shed and Ors., W.P. (C) 7577/2019 decided on 20th December, 2019, where after analyzing a catena of judgments the principles which emerged from aforesaid decisions were narrated as under :

“(i) The custodian has a lien over the imported goods, consigned to its custody. This lien may be statutory, as provided under the IAA Act, all the Major Port Trusts Acts, or contractual. It may also be relatable to Sections 170 and 171 of the Indian Contract Act, 1872.

(ii) This lien entitles the custodian to retain hold of the goods, consigned to its custody, till all its dues, including ground rent and demurrage, are paid.

(iii) The Customs authorities have no power, or the jurisdiction, to issue any instruction, to the custodian, requiring the custodian to waive, in whole or in part, the demurrage chargeable by it, of course this would be subject to any stipulation, in the statutory or other instrument governing the affairs of the custodian, to the effect that, where the detention certificate was issued by the Customs authorities, the importer would be entitled to waiver of demurrage, in whole or in part. In the absence of any such stipulation, statutory or otherwise, the Customs authorities could not, by issuance of the detention certificate, or by any other communication, direct the custodian not to charge demurrage, or to waive the whole, or part, of the demurrage chargeable by it.

(iv) In applying the above principles, the issue of whether the goods in question had been licitly, or illicitly, imported, as also the detention of the goods, by the Customs authorities, was justified or unjustified, bona fide or mala fide, are entirely irrelevant.

The liability to pay the demurrage is on the importer, irrespective of the justifiability, or unjustifiability, of the seizure and detention of the goods by the Customs authorities. Even in a case in which the seizure is entirely unjustified, the importer would, in the first instance, have to pay demurrage, to the custodian and, thereafter, pursue, with the Customs authorities, for obtaining reimbursement of the amount.

(vi) The only exception, to the application of the above principles, is in a case in which the custodian himself is guilty of unconscionable delay, or of continuing to hold onto the goods without good reason or authority.

(vii) Rates of demurrage were deliberately made prohibitive, so as to discourage importers from consigning goods to the custody of the Port Trust or other custodian, and to avoid congestion at the port.”

10. Similar issue arose in the case of Mate (India) Pvt. Ltd. Vs. Commissioner of Customs, Inland Container Deport and Ors. 2020 (373) ELT 666 (Del.), wherein similar facts were involved and it was thus concluded by this Court that the Custom Authorities cannot direct waiver of demurrage charges which can only be done by the custodian under AAI Act. Merely because the Custom Authority expends a reasonable time in dispensation of their sovereign functions of search, seizure and investigation, cannot lead to transference of liability to pay demurrage to the Customs Authority.

11. In view of the aforesaid discussion, it is evident that the Customs Authorities cannot direct waiver of demurrage which can only be done by the Custodian. Moreover, in the present case the decision was given on 6th May, 2019 vide which the fine and penalty were levied upon the petitioner. Admittedly, despite the aforesaid decision, the petitioner has not paid the penalty on the pretext that he would pay the same simultaneous to the release of goods. The appellant is thus, not entitled to waiver of demurrage charges.

12. There is no merit in the writ petition, and is accordingly dismissed.