IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 29.04.2011 CORAM: THE HON'BLE MR.JUSTICE T.RAJA W.P.No.29591 of 2010 M/s.Krishna International represented by its Manager, M.Varadarajan 21, Old No.11, V.V.Koil Street, Periamet, Chennai-3. ... Petitioner Vs. The Commissioner of Customs Exports – Seaport No.60, Rajaji Salai, Chennai-1. ... Respondent PRAYER : This Writ Petition is filed under Article 226 of the Constitution of India praying to issue a WRIT OF MANDAMUS directing the respondent to issue a detention certificate waiving the payment of the demurrage charges from the date of confiscation, till its release to the petitioner. For Petitioner : Mr.S.Krishnanand For Respondents : Mr.P.Mahadevan, CGSC ORDER The petitioner M/s.Krishna International has filed the present writ petition seeking a writ of mandamus to direct the respondent Commissioner of Customs, export-Seaport, Chennai, to issue a detention certificate waiving the payment of the demurrage charges from the date of confiscation till its release, to the petitioner. 2. The learned counsel appearing for the petitioner submits that the petitioner Company which is an international company doing an export business filed the bill of entry No.2535787 of 2006, for the export of 7422.25 sq.ft of cargo described as 'buff sole leather' (OTL) valued at Rs.5,02,000/-. The said cargo was detained by the respondent on the ground that it does not satisfy the export norms. Subsequently, show cause notice dated 23.04.2008, was issued after several notices were sent to the respondent by the petitioner. After receiving the explanation, order in original No.8314 of 2008 dated 29.11.2008 was passed by the Joint Commissioner of Customs, (Exports). The said order was challenged https://hcservices.ecourts.gov.in/hcservices/ before the Commissioner of Customs under Section 128 of the Customs Act. The Commissioner of Customs (Appeals) dismissing the appeal, passed an order in appeal No.1556 of 2009 dated 21.12.2009. Aggrieved by the said order, the matter was taken up for further appeal before the Customs Excise Service Tax Appellate Tribunal, CESTAT, Chennai. The CESTAT by considering the case of the petitioner was pleased to set aside the impugned order by allowing the appeal and passed final order No.830 of 2010 on 30.07.2010. 3. Therefore, the grievance of the petitioner is that after receipt of the order passed by CESTAT dated 30.07.2010, in order No.830 of 2010, the petitioner made a request to the respondent for implementing the said order with consequential direction to release the goods of the petitioner. But, there was no response. Therefore, he sent a reminder on 22.11.2010 in which the petitioner sought for issuance of detention certificate by the respondent. As they did not do so, the petitioner has approached this Court. 4. The learned counsel for the petitioner further submits that though the cargo carried out by the petitioner-company's ship was detained by the respondent, after proper enquiry, an order dated 29.11.2008 was passed by the Joint Commissioner of Customs (Exports) and the said order was subsequently confirmed in the appeal. But finally, the matter was taken up before the CESTAT. By an order dated 30.07.2010, the final order was passed in No.830 of 2010 giving the goods to the petitioner to carry out the cargo without paying any penalty. Therefore, he prayed that in terms of Section 126 of the Customs Act, the respondent is bound to issue a detention certificate to the petitioner, for the purpose of waiving the demurrage charges. The order passed by the CESTAT has completely gone against the respondent. Even as per Section 126(1) of the Customs Act if any goods are confiscated under this Act, such goods shall vest in the Central Government and the physical possession of the confiscated goods are deemed to be with the Central Government. Subsequently, if the goods are directed to be released by any customs Authorities as per Law, then for the period between the confiscation of goods and its release to the petitioner, no demurrage or detention charges shall be payable by the petitioner to the container freight Station. Therefore, in terms of Section 126(1) & 2 of the Customs Act, demurrage charges are levied for the space the goods occupy and for the period it remains not being released, on account of lack of customs clearance under Section 45 of Customs Act, 1962. Section 45 of the Customs Act, which is extracted hereunder has already been considered by the Apex Court in the case of Shipping Corporation of India v. C.L.Jain Woolen Mills reported in 2001 (129) ELT 561 (S.C.): "Section 45. Restrictions on custody and removal of imported goods; (1) Save as otherwise provided in any law for the time being in force, all imported goods, unloaded in a customs area shall remain in the custody of such person as may be approved by the Commissioner of Customs until https://hcservices.ecourts.gov.in/hcservices/ they are cleared for home consumption or are warehoused or are transhipped in accordance with the provisions of Chapter VIII. (2) The person having custody of any imported goods in a customs area, whether under the provisions of sub- section (1) or under any law for the time being in force- (a) shall keep a record of such goods and send a copy thereof to the proper officer; (b) shall not permit such goods to be removed from the customs area or otherwise dealt with, except under an in accordance with the permission in writing of the proper officer. (3) Notwithstanding anything contained in any law for the time being in force, if any imported goods are pilfered after unloading thereof in a customs are while in the custody of a person referred to in sub-section(1), that person shall be liable to pay duty on such goods at the rate prevailing on the date of delivery of an import manifest or, as the case may be, an import report to the proper officer under Section 30 for the arrival of the conveyance in which the said goods were carried". A mere reading of Section 45 shows that the imported goods would remain in the custody of the person approved by the Customs Commissioner, until they are cleared for home consumption or are warehoused or are transshipped in accordance with the provisions of Chapter VIII. After dealing with various provisions, namely, Section 47 which deals with obtaining clearance of goods for home consumption and Section 49 which provides for storage of imported goods in public warehouse, or in a private warehouse, if permitted by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, the Apex Court has finally come to the conclusion that under Section 45(2)(b) of the Customs Act, once a Court of law holds the detention of goods by the customs authorities as illegal, the Customs Authority would be bound to bear the demurrage charges in the absence of any provision in the Customs Act. In the case on hand also, the CESTAT, in its final order No.830 of 2010 dated 30.07.2010, has set aside the order passed by the Commissioner of Customs (Appeals) and thereby, cleared the deck to release of goods. 5. In a similar circumstances, the Calcutta High Court also in the case of Donald & Macarthy (P) Ltd. vs. Union of India reported in 1997 (89) ELT 53 (Cal.) has held that the persons or the authority responsible for the delay in lifting the goods, should be held responsible to pay the demurrage and port charges. Similarly, in the instant case also after the order passed by the CESTAT, the delay in clearing the goods has occurred only in view of non issuing the detention certificate for waiving the payment of demurrage charges from the date of confiscation, till its release to the petitioner. https://hcservices.ecourts.gov.in/hcservices/ 6. In view of the above settled position, I am of the considered view that the petitioner is entitled to get the detention certificate from the respondent. Though Mr.P.Mahadevan, Learned Central Government Standing Counsel for the respondent, sought time to file counter in terms of the order passed by the CESTAT, in final order No.830 of 2010 dated 30.07.2010, a direction needs to be given to the respondent to issue a detention certificate to the petitioner. Though the petitioner's goods were detained in the year 2006, subsequently, the order-in-original and order in Appeal were set aside by the CESTAT by its final order dated 30.07.2010. Thereafter, no appeal was filed by the respondent. However, since the petitioner is entitled to carry the goods without paying any demurrage charges for the period during which the goods were detained, the respondent cannot call upon the petitioner to pay the charges towards detention and demurrage. Therefore, the respondent is directed to issue detention certificate, specifically mentioning the period during which the petitioner's goods were detained. Since, the petitioner's representation is also pending, the respondent Commissioner of Customs, Central Excise, Chennai, is directed to consider the representation of the petitioner and issue the detention certificate to the petitioner, in accordance with law, within a period of eight weeks from the date of receipt of a copy of this order. 7. With the above observations, the writ petition is allowed. No costs. Sd/- Asst.Registrar. /true copy/ Sub Asst.Registrar. ssn To The Commissioner of Customs Exports – Seaport No.60, Rajaji Salai, Chennai-1. 1 cc to Mr.S. Krishnakumar, Advocate, Sr. 30558 1 cc to Mr.P. Mahadevan, Advocate, Sr. 30589 W.P.No.29591 of 2010 JP (CO) kk 30/5 https://hcservices.ecourts.gov.in/hcservices/