M/S Sumit Enterprise vs. Principal Commissioner/Commissioner Of Customs

Held

The Court held that the order dated April 19, 2022, passed by the Customs Authority, directing the waiver of demurrage charges under Regulation 10(1)(l) of the SCMTR, is binding on Respondents Nos. 3 and 4. The Court found that Respondent No. 3 had not challenged this order before any forum. Therefore, Respondents Nos. 3 and 4 were directed to release the goods under their custody, which were not under Customs detention, by implementing the April 19, 2022 order for waiver of demurrage charges. This exercise was to be completed within two weeks of the order. The Court clarified that if Respondent No. 3 wished to challenge the Customs Authority's waiver order, this judgment would not impede them, and the Court expressed no opinion on any such potential proceedings. The petition was disposed of on this basis.

Facts

The petitioner, M/s. Sumit Enterprise, imported two consignments of "Dry Dates" from UAE, filing Bills of Entry Nos. 7736875 and 7737090 on March 4, 2022, at Mundra SEZ. The goods were detained by Customs (Respondent No. 2) without a formal detention memo or seizure order. The petitioner requested provisional assessment and clearance due to the perishable nature of the goods. Subsequently, on April 11, 2022, Respondent No. 2 issued a No Objection Certificate for release and directed the custodian (Respondent No. 4) to waive detention charges. On April 19, 2022, Respondent No. 2 issued a Detention Memo to Respondent No. 3 (Shipping Line) directing waiver of detention and demurrage charges under Regulation 10(1) of the Sea Cargo Manifest and Transhipment Regulations, 2018. Despite this, Respondent No. 3 demanded substantial container detention charges, amounting to over Rs. 33 lakhs and Rs. 45 lakhs as of May 9, 2022, and Respondent No. 4 also raised invoices for charges. The petitioner filed a writ petition seeking release of goods and waiver of charges.

Key Issues

1. Whether the detention of the imported goods by the Customs authorities (Respondent No. 2) was legal and in accordance with Section 110 of the Customs Act, 1962, and whether the subsequent detention charges raised by the Shipping Line (Respondent No. 3) and custodian (Respondent No. 4) are liable to be waived. Petitioner's arguments: The goods were illegally detained without a proper detention or seizure memo. The Customs authorities issued a No Objection Certificate and a Detention Memo directing waiver of charges. The Shipping Line and custodian are bound by these directions. The goods are perishable and incurring significant demurrage and detention charges. Revenue/State's arguments: The Customs Authorities (Respondent Nos. 1 & 2) submitted that they had already issued an order on April 19, 2022, directing Respondent No. 3 not to charge any detention charges under Regulation 10(1)(I) of the SCMTR. Shipping Line's arguments: The Delivery Order was issued on March 5, 2022, with a 15-day validity for customs clearance, which expired on March 18, 2022. While Regulation 10(1)(I) of SCMT Regulations exempts carriers from demanding charges if containers are detained by customs for verification and entries are found correct, it's unclear if the detention was for such purposes. Even if applicable, the exemption is for 60 days, after which charges can be levied. They calculated that they were entitled to charge for 110 days after deducting the initial 60 days.