A.K. Enterprises Through Its Prop. ... vs Principal Commissioner Of Customs

Gujarat High Court

A.K. Enterprises Through Its Prop. ... vs Principal Commissioner Of Customs on 9 April, 2025

Author: Bhargav D. Karia

Bench: Bhargav D. Karia

                                                                                                                NEUTRAL CITATION




                             C/SCA/2460/2025                                   JUDGMENT DATED: 09/04/2025

                                                                                                                 undefined




                                      IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                                        R/SPECIAL CIVIL APPLICATION NO. 2460 of 2025


                        FOR APPROVAL AND SIGNATURE:


                        HONOURABLE MR. JUSTICE BHARGAV D. KARIA
                        and
                        HONOURABLE MR.JUSTICE D.N.RAY

                        ==========================================================

                                     Approved for Reporting                   Yes           No

                        ==========================================================
                         A.K. ENTERPRISES THROUGH ITS PROP. MOHAMED AFAQ MOHAMED
                                            HASEEN KHANUBEGWALA
                                                    Versus
                                  PRINCIPAL COMMISSIONER OF CUSTOMS & ORS.
                        ==========================================================
                        Appearance:
                        AADITYA D BHATT(8580) for the Petitioner(s) No. 1
                        CHANDNI S JOSHI(9490) for the Petitioner(s) No. 1
                        MR ANKIT SHAH(6371) for the Respondent(s) No. 1,2
                        NIMIT Y SHUKLA(8338) for the Respondent(s) No. 4
                        NOTICE SERVED BY DS for the Respondent(s) No. 3
                        ==========================================================

                          CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
                                and
                                HONOURABLE MR.JUSTICE D.N.RAY

                                                          Date : 09/04/2025
                                                          ORAL JUDGMENT

(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)

1. Leave to amend.

2. Heard learned advocate Mr. Aditya Bhatt for the petitioner, learned advocate Page 1 of 48 Uploaded by JYOTI V. JANI(HC00213) on Wed Apr 23 2025 Downloaded on : Fri May 09 21:23:04 IST 2025 NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined Mr. Ankit Shah for respondent Nos. 1 and 2 and learned advocate Mr. Mohammad Rafiq for learned advocate Mr. Nimit Shukla for respondent No.4.

3. By this petition under Articles 226 and 227 of the Constitution of India, the petitioner has prayed for the following reliefs:

"A. Your Lordships may be pleased to direct Respondent No.1 and Respondent No.2 to take all necessary steps and ensure that the Detention cum Demurrage waiver dated 17.01.2025 issued under Handling of Cargo in Customs Area Regulation 2009 and Sea Cargo in Customs Area Regulation 2009 and Sea Cargo Manifest Regulation, 2018 is implemented by all concerned including Respondent No.3 and Page 2 of 48 Uploaded by JYOTI V. JANI(HC00213) on Wed Apr 23 2025 Downloaded on : Fri May 09 21:23:04 IST 2025 NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined Respondent No.4 and thereafter to physically release in the custody of the petitioner, the imported goods comprising of 10 containers of Soda Ash Dense Industrial Grade (HSN 28362010) imported by the petitioner.

B. Your Lordships may be pleased to issue a writ of certiorari or Mandamus or writ in the nature of Certiorari or Mandamus or any other appropriate Writ, order or direction to Respondent no.1 to initiate action against Respondent No. 3 and Respondent no.4 in terms of Sea Cargo Manifest Regulation 2018 in view of non-compliance of waiver dated 17/01/2025;

C. Your Lordships may be pleased to issue a writ of certiorari or Mandamus or writ in the nature of Certiorari or Mandamus or any other appropriate Writ, order or direction to the Respondent no. 4 to Page 3 of 48 Uploaded by JYOTI V. JANI(HC00213) on Wed Apr 23 2025 Downloaded on : Fri May 09 21:23:04 IST 2025 NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined waive off the detention and demurrage charges if any, in view of regulation 6 (1) (1) of the Handling of Cargo in Customs Area Regulation 2009 and Regulation of 10 (1) (l) Sea Cargo Manifest Regulation, 2018;.

D. Pending admission, hearing and final disposal of this petition, Your Lordships may be pleased to direct the Respondents to effect physical delivery of the goods upon any other condition, since the petitioner has limited funds for the smooth functioning of the business and since 1.5 months the goods are kept within the possession of respondent No.4 which is resulting into loss;

E. An ex parte ad interim relief in terms of prayer (B) above may be granted; and Page 4 of 48 Uploaded by JYOTI V. JANI(HC00213) on Wed Apr 23 2025 Downloaded on : Fri May 09 21:23:04 IST 2025 NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined F. To pass any other appropriate and just order/s as may be deemed just and proper in the interest of justice;"

4. Having regard to the controversy involved which is in narrow compass, with the consent of the learned advocates for the respective parties, the matter is taken up for hearing.

5. Rule returnable forthwith. Learned advocates for the respective parties for respondents waive service of notice of rule.

6. Brief facts of the case are that:

6.1 The petitioner is engaged in the business of Trading Soda Ash Dense Industrial Grade (HSN 28362010). It is the case of the petitioner that the shipping Page 5 of 48 Uploaded by JYOTI V. JANI(HC00213) on Wed Apr 23 2025 Downloaded on : Fri May 09 21:23:04 IST 2025 NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined line engaged respondent No.4 as delivery agent to unload the containers at the premises of the petitioner. The Bill of Lading No. ACLGEAMUN1250924 dated 16.12.2024 by one Allied Container Line as an agent of the carrier where name of the respondent No.4 is stated as delivery agent.

6.2 It is the case of the petitioner that during the course of business, it has imported the goods i.e. Soda Ash Dense vide Bill of Entry No. 738842 dated 21.12.2024 through a warehouse at Mundhra CFS.

6.3 It is the case of the petitioner that the goods in question were detained by the Custom Authorities for Page 6 of 48 Uploaded by JYOTI V. JANI(HC00213) on Wed Apr 23 2025 Downloaded on : Fri May 09 21:23:04 IST 2025 NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined verification/examination on 21.12.2024 and thereafter, by letter dated 10.01.2025, it was informed to the Deputy Commissioner, DOCKS Examination, Custom House, Mundra by the Deputy Commissioner (SIIB), Custom House, Mundra, that the import covered under the Bill of Entry No. 7388842 dated 21.12.2024 in respect of the goods of the petitioner was put on hold and based on the examination report submitted by Docks Examination, CH, Mundra, the said cargo has been found as declared and the goods may be released after completion of due customs procedure as prescribed under the Customs Act,1962 and other allied Acts and the Rules wherever possible.

6.4 It appears that thereafter, on 17.01.2025, respondent No.2-Deputy Page 7 of 48 Uploaded by JYOTI V. JANI(HC00213) on Wed Apr 23 2025 Downloaded on : Fri May 09 21:23:04 IST 2025 NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined Commissioner (SIIB), Customs House, Mundra informed respondent No.3-Manager, Mundhra, CFS for waiver of the rent and demurrage charges in respect of the Cargo/goods covered under Bill No. 7388842 dated 21.12.2024 as per Rule 10(1)(l) of Sea Cargo Manifest and Transhipment Regulations,2018 [for short 'the Regulations,2018) and Regulation 6(1)(l) of Handling of Cargo in Customs Area Regulations from the date of hold i.e. 24.12.2024 til the date of issuance of No Objection Certificate dated 10.01.2025.

6.5 The petitioner, on receipt of the aforesaid letter/order dated 17.01.2025 by Email dated 18.01.2025, requested respondent No.4 to do the needful in view Page 8 of 48 Uploaded by JYOTI V. JANI(HC00213) on Wed Apr 23 2025 Downloaded on : Fri May 09 21:23:04 IST 2025 NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined of the detention waiver letter issued by respondent No.2.

6.6 It is the case of the petitioner that, the petitioner through its Customs House Agent, by Email dated 20.01.2025, requested respondent No.4 to share the detention Invoice up to 21.01.2025 and further enquired for the confirmation of the implementation from the waiver of the charges for clearance of the shipment.

6.7 The respondent No.4 replied by Email dated 20.01.2025 with the proforma invoice for the subject shipment along with the list of documents to be submitted for the delivery order to be issued.

NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined 6.8 The petitioner therefore, through its Customs House Agent by Email dated 24.01.2025 again requested for waiver of the detention charges by implementation of the waiver certificate which was replied by respondent No.4 on the same day stating that reply from the Port of Loading is awaited.

6.9 The petitioner thereafter again by Emails dated 28.01.2025, 29.01.2025 and 30.01.2025 through its Customs House Agent enquired about the status of waiver from respondent No.4. However, the same reply was given by respondent No.4 that they are awaiting reply from the Port of Loading but the same has not yet received any waiver Email by them.

NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined 6.10 The petitioner, therefore, by letter dated 03.02.2025, requested respondent No.2 to look into the matter and direct the shipping line to release the containers alongwith goods.

As no action is taken by either of the respondents, the petitioner has filed this petition with the aforesaid prayers.

7. Learned advocate Mr. Aditya Bhatt for the petitioner submitted that the waiver letter dated 17.01.2025 is binding upon respondent No.4 and the respondent cannot ignore such waiver letter issued by respondent No.2 as the respondent No.4 is a delivery agent of the shipping line and is therefore, an authorized sea agent of the shipping line which is authorized Sea Carrier and therefore, as per the Page 11 of 48 Uploaded by JYOTI V. JANI(HC00213) on Wed Apr 23 2025 Downloaded on : Fri May 09 21:23:04 IST 2025 NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined Regulations, 2018, the respondent No.4 is bound by the waiver letter issued by respondent No.2 to deliver the Cargo to the petitioner.

7.1 It was submitted that the contention raised on behalf of the respondent in the affidavit-in-reply that respondent No.4 has not acted as Authorized Sea Carrier and therefore, the Regulations, 2018, are not tenable, is contrary to the contention raised by respondent Nos. 1 and 2 in the affidavit-

in-reply wherein, it is categorically stated that respondent No.4 is bound by the Regulations, 2018 and accordingly, the petitioner is entitled to delivery of the goods after waiver of the detention charges for the period from 24.12.2024 Page 12 of 48 Uploaded by JYOTI V. JANI(HC00213) on Wed Apr 23 2025 Downloaded on : Fri May 09 21:23:04 IST 2025 NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined till 10.01.2025 as per the waiver letter dated 17.01.2025.

8. Learned advocate Mr. Mohammad Rafiq with learned advocate Mr. Nimit Y. Shukla for respondent No.4 submitted that the respondent No.4 is a delivery agent of the shipping line and therefore, is not covered by the definition of the "Authorized Sea Carrier" as per the definition 2(1)(d) of the Regulations, 2018.

8.1 It was further submitted that respondent No.4 is the owner of the containers of the goods in question and have lien over the goods for recovery of their charges as per the terms and conditions of the Bill of Lading and Page 13 of 48 Uploaded by JYOTI V. JANI(HC00213) on Wed Apr 23 2025 Downloaded on : Fri May 09 21:23:04 IST 2025 NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined therefore, unless and until the said charges are paid to the respondent No.4, the respondent No.4 is not able to deliver the goods.

8.2 In support of his contention,reliance was placed on the following averments made in the affidavit-

in-reply filed on behalf of the respondent No.4:

"4. Considering the facts and grounds raised in the writ petition, the brief issues to be considered at a preliminary level by this Hon'ble Court are the following:

4.1. Whether the Waiver letter issued under Regulation 10(1)0) of the Sea Cargo Manifest and Transhipment Regulations, 2018 (SCMTR) legally binding on Respondent No. 4?

NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined 4.1.1. Respondent No. 4 has not acted as the "Authorised Carrier" as the defined under defined under 2(1)(c) and "Authorised Sea Carrier - ASC". The definition of "authorised Carrier"? under 2(d) of SCMTR, 2018 is given below for ready reference:

"2(1)(c) Authorised Carrier means an authorised sea carrier, authorised train operator or a custodian, registered under regulation 3 and postal authority 2(1)(d). Authorised Sea Carrier means the master of the vessel carrying imported goods, export goods and coastal goods or his agent or any other person notified by the central government."

4.1.2. Since the Respondent No. 4 is not "Authorised Carrier", the regulation 10 (1) Q) is not applicable to this Respondent. Regulation 10 (1) (1) reads as follows;

NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined "The Authorised Sea Carrier shall not charge any container detention charge for the containers lade, with the goods detained by customs for the purpose of verifying the entries made under section 46 or section 50 of the Act, if the entries are found to be correct.

Provided that the authorised carrier may demand, container detention charges for the period commencing after expiry of sixty days"

4.1.3. An authorised sea carrier defined under Regulation 2(1)(d) has to be : (i) Master of the vessel or their agent; and (ii) Any person notified by the Central Government. Regulations 3(1) and 3(1)(A) provide for the registration of authorized sea carriers and other notified persons, Tespectively. Respondent No. 4 is not a registered person under Regulation 3(1) or 3(1)(A). Their role in the import transaction was limited to acting as an agent for the overseas NVOCC, not as an agent for the master Page 16 of 48 Uploaded by JYOTI V. JANI(HC00213) on Wed Apr 23 2025 Downloaded on : Fri May 09 21:23:04 IST 2025 NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined of the vessel responsible for filing the arrival manifest or IGM.

4.1.4. Respondent No. 4 acted only as the Indian agent of a Non-Vessel Operating Common Carrier (NVOCC) (fie, M/s Allied Container Line) is just a container operator and not a vessel operator. As the principal of Respondent No. 4 has not operated vessels (M/s. MV VIRA BHUM - 120E), in this case, and that Import General Manifest for the Vessel was filed by the legally appointed third party agent of the vessel operator, Respondent herein is not "Authorized Sea Carriers," and hence are not bound by Regulation 10(1)(l)of the SCMTR, 2028. Consequently, the waiver certificate issued by the department under this regulation is not binding upon Respondent No. 4 or their principal.

4.1.5. The objective of the SCMTR, 2018 is to modernise and regulate the Page 17 of 48 Uploaded by JYOTI V. JANI(HC00213) on Wed Apr 23 2025 Downloaded on : Fri May 09 21:23:04 IST 2025 NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined Import & Export Manifest to be filed by the conveyance or their agents. The SCMTR, 2018 is aimed to supersede the existing Import Manifest (Vessels) Regulation, 1971 and the Export Manifest (Vessels) Regulation, 1976. In exercise of powers conferred by sub-section (2) of section 141 read with section 157 of the Customs Act, 1962, the Central Board of Excise and Customs has introduced the Sea Cargo Manifest and Transhipment Regulations 2018 (SCMTR, 2018). The SCMTR, 2018 and further public notices have introduced certain new nomenclature like " Authorised Sea Carrier - ASC", " Other Notified Carriers - ANC", "Authorised Terminal Operator - ATO", "Authorised Custodian - ACU" etc."

                                         ...      ... ... ...


                                         "5.1             The subject matter of the writ

petition is about a commercial contact admittedly concluded between private parties as a contract of carriage of Page 18 of 48 Uploaded by JYOTI V. JANI(HC00213) on Wed Apr 23 2025 Downloaded on : Fri May 09 21:23:04 IST 2025 NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined 20x20' containerised goods under B/L bearing no. ACLJEAMUN1250924, dated 16.12.2024. As per the contract of carriage, the Petitioner is bound to pay the container detention charges for the use of containers beyond 14 agreed free days at Mundra. Thus, detention charges are the direct consequences of a breach of the contractual term (non-return of the empty container) by the petitioner. Hence, the remedy if any, for the Petitioner is under the Code of Civil Procedure, 2908 or any law for the time being in force.

5.2 The contract of carriage constitutes a contract of bailment, entitling this respondent to exercise its contractual lien (on behalf of its principal) on the imported goods for the charges payable for the services rendered, in accordance with the agreed tariff, supported by Section 170 of the Indian Contract Act.

NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined 5.3 This Respondent had no notice or information about the alleged "wrong entry" made by the Petitioner while filing their Bill of Entry (BOE) on the import of goods. As per Section 46 of the Customs Act, 1962, the importer of the goods is bound to make the "entry" thereof by presenting to the proper officer a bill of entry for home consumption or warehousing. Since the Petitioner herein has made the entry, the responsibility of making a "wrong entry" shall also rest upon the importer and not on the agent of the NVOCC who has provided the containers for export.

5.4 As per Section 30 of the Customs Act, 1962, the "Person in charge of a vessel" is responsible for filing the Import General Manifest (IGM) on arrival of the conveyance. In the present case, as evident from records, the conveyance (vessel) Page 20 of 48 Uploaded by JYOTI V. JANI(HC00213) on Wed Apr 23 2025 Downloaded on : Fri May 09 21:23:04 IST 2025 NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined carried the 20x20' DC containers, vide B.L. No. ACLJEAMUN1250924, dated 16.12.2024 is M/s. MV VIRA BHUM (1220E), which has been handled by their Indian agent M/s. RCL Agencies (India) Pvt. Ltd. The IGM for the said container has been filed by M/s. RCL Agencies (India) Pvt. Ltd on behalf of the conveyance and hence Respondent No. 4 is not the person in charge of the conveyance, who is responsible for filing the IGM.

5.5 The Petitioner has also failed to prudently make use the benefit of Section 49 of the Customs Act, which is beneficially made for the importers for bonding the goods and to release the empty containers during any pending investigation, indicates a lack of prudent action to mitigate losses and failure to avail lawful waiver provisions. Thus, the pursuit of the detention certificate was an afterthought.

NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined 5.6 The following clauses as per the terms and conditions of the contract of carriage, i.e, the Bill of Lading. B/L. no. ACLJEAMUN1250924 dated 16.12.24 are crucial to be quoted:

"Clause 1. "Merchant means and includes the shipper, the consignor, the holder of this Bill of Lading, the receiver and the owner of the goods.

18. Freight and Charges (3) All dues, taxes and charges or other expenses in connection with the Goods shall be paid by the Merchant.

All Terminal Charges/Demurrage etc the port of discharge. Destination as per Line's Tariff & at the account of consignee"

5.7. SCMTR is a piece of delegated/subordinate legislation. Delegated legislation cannot override primary parent legislation. In Mumbai Page 22 of 48 Uploaded by JYOTI V. JANI(HC00213) on Wed Apr 23 2025 Downloaded on : Fri May 09 21:23:04 IST 2025 NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined Port Trust v. Shri Lakshmi Steels, ((2018) 14 SCC 317], the Apex Court, while interpreting provisions similar to Regulation 10(1)() in the Handling of Cargo in Customs Areas Regulations, 2009 made by the Board, has categorically held that the Regulations framed under the Customs Act are in the nature of subordinate legislation and that such subordinate legislation framed by a Board cannot, in any manner, affect the power and authority of the Port Trust flowing from the Major Port Trust Act. Therefore, upon applying the dictum so laid down, regulation 10(1)(1) cannot in any manner, take away the rights of the respondent in the instant case as a carrier governed by the Bill of Lading Act and Contract Act.

5.8. Reliance is placed on the judgment of the Apex Court in Indian Express Newspapers v. UOI {(1985) 1 SCC 641] and Council af Architecture v. Mukesh Goyal [(2020) 16 SCC 446].

NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined In Council of Architecture v. Mukesh Goyal {(2020) 16 SCC 446]:

"75. In India arbitrariness is not a separate ground since it will come within the embargo of Article 14 of the Constitution. In India, any enquiry into the vires of delegated legislation must be confined to the grounds on which plenary legislation may be questioned, to the ground that it is contrary to the statute under which it is made, to the ground that it is contrary to other statutory provisions or that it is so arbitrary that it could not be said to be in conformity with the statute or that it offends Article 14 of the Constitution."

8.3 It was further submitted that as per the sequence of events of the transactions in question, reliance was placed on the following averments in the affidavit-in-reply:

"6.4 From the sequences of events, the following notable points emerge;

NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined i. The Petitioner failed to file the BOE in advance,even though filing of BOE is permitted 30 days in advance as per S.46 of the Customs Act, 1962.

ii. The goods were found as declared as per the Docks Examination on 21.12.24 itself.

iii. The reason for not clearing the goods from 21.12.24 till 02.01.25 is not explained.

iv. Though a conditional commercial waiver was given to the Petitioner, they failed they failed to comply and return the empty containers to the this Respondent.

6.5. Since the Petitioner failed to return all the 20x20' empty containers to this Respondent within the agreed 14 free days, and the said container was lying at the customs bonded area, Mundhra CFS, respondent no.3 ("CFS"), Page 25 of 48 Uploaded by JYOTI V. JANI(HC00213) on Wed Apr 23 2025 Downloaded on : Fri May 09 21:23:04 IST 2025 NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined carrying the goods of the Petitioner therein, the detention and demurrage charges have accrued on the said container, therefore Respondent No. 4 issued the following invoices seeking payment of detention charges on the non-returned container. Copies of the above-mentioned invoice are annexed and marked hereto as Exhibit 3 (Colly).

6.6 On 18.01.2025, the CHA bes provided a copy of the alleged detention waiver letter to Respondent No. 4. However, the said waiver letter was addressed to the CFS (R3). Though it was miked copy to this Respondent and to the Petitioner. As the seed detention waver letter was addressed to the CFS, though there was a reference in the body regarding SCMTR, 2018, the specific direction for waiver was given to the CFS alone by invoking Regulation 6(1)(l) of the Handling of Cargo in Customs Area Regulations, 2009 (HCCAR, 2009), which Page 26 of 48 Uploaded by JYOTI V. JANI(HC00213) on Wed Apr 23 2025 Downloaded on : Fri May 09 21:23:04 IST 2025 NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined is only applicable for the Custodian (CFS). A copy of the waiver letter dated nil, signed om 17.01.2025 is annexed and marked hereto as Exhibit-

6.7 Subsequently, on 19.03.25, a letter seeking explanation as to why the waiver wes not granted wader provisions of SCMTR, 2018 was issued by Assistant Commissioner of Customs to Respondent No. 4. A copy of the letter dated 19.03.2025 is produced and marked hereto as Exhibit-5.

6.8 This respondent has replied in detail to the said letter dated 19.03.2025, justifying the actions of the Respondent No. 4. The copy of explanation dated 22.03.2025 is annexed and marked hereto as Exhibit-

6.9 On 22.03.2025, by reply to the above letter, it was clarified by this Respondent that, exclusively on Page 27 of 48 Uploaded by JYOTI V. JANI(HC00213) on Wed Apr 23 2025 Downloaded on : Fri May 09 21:23:04 IST 2025 NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined commercial considerations, the principal of this respondent have decided to waive detention charges till 02.03.2025 & secure the valuable 20x20 containers back in business. The same was only on condition of the consignee paying 10 lakhs detention charges for the use of containers, calculated till 11.03.2025, to be returned on or before 11.03.2025. 6.10. It was further clarified that since the goods are still idling at the CFS in our containers and the consignee has failed to return the empty on 11.03-2025 even after a conditional office, we have decided to charge a discounted rate @ 25 USD/day/ container towards detention charges from 12.03.2025 till 31.03.2025. A copy of the said clarification Email dated 22.03.2025 is annexed and marked hereto as Exhibit-7."

NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined 8.4 Referring to the above averments it was submitted that respondent No.4 is contractually entitled to collect the detention charges agreed and not bound to comply with the waiver letter on the ground that the respondent No.4 is not the Authorized Sea Carrier under the Regulations, 2018.

8.5 It was submitted that Regulation 10(1)(l) of the Regulation,2018 are also ultra vires to the provision of the Customs Act,1962 as no provision of the Customs Act provides for waiver of the detention charges for the containers laden with the goods detained by the Customs for the purpose of verifying the entries. In support of his submissions, reliance was placed on the decision of the Apex Court Page 29 of 48 Uploaded by JYOTI V. JANI(HC00213) on Wed Apr 23 2025 Downloaded on : Fri May 09 21:23:04 IST 2025 NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined in case of Indian Young Lawyers Association and others vs. State of Kerala and ors reported in (2019) 11 SCC page 1.

8.6 It was therefore, submitted that the waiver letter dated 17.01.2025 cannot be made applicable to the respondent No.4 for recovery of the detention charges of the containers as the respondent No.4 is not covered by the Regulations,2018. The petitioner is therefore, liable to pay detention charges for the delivery of the goods in question.

9. Learned advocate Mr. Ankit Shah for respondent Nos. 1 and 2 submitted that respondent No. 2 has issued waiver letter dated 17.01.2025 as per the Regulation 10(1)(l) of the Regulations,2018. It was Page 30 of 48 Uploaded by JYOTI V. JANI(HC00213) on Wed Apr 23 2025 Downloaded on : Fri May 09 21:23:04 IST 2025 NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined submitted that letter dated 11.03.2025 of respondent No.4 is contrary to the Regulations, 2018 as the respondent No.4 is bound by the Regulations, 2018. In support of his submissions, reliance was placed on the following averments made in the affidavit-in-reply filed on behalf of respondent Nos.1 and 2:

"10. With regards to reference to Counter Affidavit submitted by M/s. WINWIN Maritime Limited, Respondent No. 4, wherein they have questioned the applicability of Regulation 10(1) () of the Sea Cargo Manifest and Transhipment Regulations, 2018 (SCMTR, 2018) to them it is submitted that upon verification, it has been found that M/s. WinWin Maritime Limited is registered with Customs under SCMTR as an 'Authorized Sea Agent' (ASA). The said registration can be duly verified from the ICEGATE portal. A copy of Page 31 of 48 Uploaded by JYOTI V. JANI(HC00213) on Wed Apr 23 2025 Downloaded on : Fri May 09 21:23:04 IST 2025 NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined Snapshot attached hereto and marked as Annexure E.

11.Further it is respectfully submitted that, the contention of the M/s. WINWIN Maritime Limited, that they are not an "Authorized Carrier"

and hence not bound by Regulation 10(1)() is misconceived and contrary to the provisions of SCMTR, 2018, on the following basis:

a) The definition of "Authorized Carrier" under SCMTR explicitly includes an "Authorized Sea Carrier".

(b) The definition of "Authorized Sea Carrier" further includes "the master of the vessel or his agent".

(c) Authorized Sea Agents (ASAs) are agents employed by an Authorized Sea Carrier to Act on their behalf.

NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined

(d) M/s. WinWin Maritime Limited is registered as an Authorized Sea Agent (ASA) with Customs under SCMTR, 2018.

12. The contention that they merely acts as an agent for an NVOCC docs not exclude them from the applicability of SCMTR, 2018. As an Authorised Sea Agent, they are required to comply with the regulations applicable to an Authorised Sea Carrier under SCMTR, 2018.

13. That the assertion that the waiver letter issued under Regulation 10(1)

(l) is not binding on them is untenable in light of their registration as an ASA under SCMTR, 2018.

14.Further it is submitted that, M/s. WinWin Maritime Limited, in their letter dated 17.03.2025, had stated that they had waived all detention Page 33 of 48 Uploaded by JYOTI V. JANI(HC00213) on Wed Apr 23 2025 Downloaded on : Fri May 09 21:23:04 IST 2025 NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined charges till 02.03.2025, based on the waiver request letter issued by SIIB. This is an acknowledgement of the regulatory framework and acceptance of the fact that they are under its purview. Thus, the contention of M/s. WinWin Maritime Limited, is not acceptable.

15.In view of the above, it is evident that M/s. WinWin Maritime Limited, is bound by all the provisions of SCMTR, 2018, including Regulation 10(1)(l). The waiver letter issued under Regulation 10(1)

(l) of SCMTR, 2018 is therefore binding upon M/s. WinWin Maritime Limited. The contentions raised by the M/s. WinWin Maritime Limited, are based on an erroneous interpretation of SCMTR, 2018 and should be rejected outright."

9.1 Referring to the above averments, it was submitted that respondent No.4 is Page 34 of 48 Uploaded by JYOTI V. JANI(HC00213) on Wed Apr 23 2025 Downloaded on : Fri May 09 21:23:04 IST 2025 NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined bound by the waiver letter dated 17.01.2025 and accordingly, respondent No.4 is required to deliver the Cargo to the petitioner without claiming the detention charges from 24.12.2024 till the date of issuance of NOC dated 10.01.2025.

9.2 Learned advocate Mr. Ankit Shah also invited attention of the Court that respondent No.4 is registered as an Authorized Sea Agent with the Customs Department and a reference was made to the report of inquiry for SMTR registration status of respondent No.4 (page 98 Annexure E) which shows that respondent No.4 is registered as Authorized Sea Agent (ASA) and such registration was approved.

It was therefore, submitted that respondent No.4 having been registered as Page 35 of 48 Uploaded by JYOTI V. JANI(HC00213) on Wed Apr 23 2025 Downloaded on : Fri May 09 21:23:04 IST 2025 NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined Authorized Sea Agent is bound by Regulations, 2018.

10. Having heard learned advocates for the respective parties and considering the facts and material of case, it would be germane to refer to the relevant provisions of the Regulations,2018 which read as under:

"2 Definitions.-(1) In these regulations, unless the context otherwise requires,

(c) "authorised carrier" means an authorised sea carrier, authorised train operator or a custodian, registered under regulation 3 and postal authority;

(d) "authorised sea carrier" means the master of the vessel carrying imported goods, export goods and coastal goods Page 36 of 48 Uploaded by JYOTI V. JANI(HC00213) on Wed Apr 23 2025 Downloaded on : Fri May 09 21:23:04 IST 2025 NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined or his agent, or any other person notified by the Central Government;"

"3. Registration. - (1) Any person who is required to deliver arrival manifest or departure manifest shall apply to the jurisdictional Commissioner of Customs for registration in the Form- I. "Provided that the postal authority shall not be required to apply for the registration in case such authority intimates to the jurisdictional Commissioner of customs in writing, to transact business under these regulations.";

(1A) Any other person notified by the Central Government for the purposes of filing arrival or departure manifest, shall be required to enter into a bond of rupees ten lakh in Form- XI and furnish a bank guarantee, or a postal security or National Saving Certificate or a fixed deposit receipt Page 37 of 48 Uploaded by JYOTI V. JANI(HC00213) on Wed Apr 23 2025 Downloaded on : Fri May 09 21:23:04 IST 2025 NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined issued by a Nationalised bank, in the name of the Commissioner of Customs, for an amount of rupees ten lakhs alongwith Form-I:

Provided that any Authorised Economic Operator (AEO) shall not be required to furnish a bank guarantee, or a postal security or National Saving Certificate or a fixed deposit receipt issued by a Nationalised bank for an amount of ten lakh rupees.";

(2) Where the jurisdictional Commissioner of customs is satisfied with the information provided by the applicant in the Form-I, he shall register such applicant for transacting business under these regulations for a period of three years from the date of issue of such registration."

"10. Responsibilities of the authorised carrier under these Page 38 of 48 Uploaded by JYOTI V. JANI(HC00213) on Wed Apr 23 2025 Downloaded on : Fri May 09 21:23:04 IST 2025 NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined regulations. - (1) An authorised carrier shall:-

j. ensure electronic transmission of delivery orders to the importer or the consignee and intimation of the same to the custodian and the proper officer;

l. not demand any container detention charges for the containers laden with the goods detained by customs for purpose of verifying the entries made under section 46 or section 50 of the Act, if the entries are found to be correct. Provided that the authorised carrier may demand, container detention charges for the period, commencing after expiry of sixty days."

"11. Suspension of operations or revocation of registration of an authorised carrier. -

(1) The jurisdictional Commissioner of Customs may revoke the registration of Page 39 of 48 Uploaded by JYOTI V. JANI(HC00213) on Wed Apr 23 2025 Downloaded on : Fri May 09 21:23:04 IST 2025 NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined the authorised carrier, for failure to comply with any provisions of the regulations.

(2) The Commissioner of Customs of any customs station on reasonable belief that operations of such authorised carrier is detrimental to the interest of revenue, may suspend their operation in his jurisdiction by an order stating the grounds of suspension.

(3) The Commissioner of Customs shall, within fifteen days from the date of such suspension order, shall give an opportunity of hearing to the person and pass such order within fifteen days from the date of the said hearing, as he deems fit, either revoking the suspension or continuing it for a further period not exceeding ninety days from the date of suspension, as the case may be. Provided that where the suspension Page 40 of 48 Uploaded by JYOTI V. JANI(HC00213) on Wed Apr 23 2025 Downloaded on : Fri May 09 21:23:04 IST 2025 NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined against the authorised carrier has been continued, the Commissioner of Customs concerned shall intimate to the jurisdictional Commissioner of Customs, about the order within fifteen days from the date of issue of such order."

.... .... ...

"13. Imposition of Penalty. -An authorised carrier who contravenes any provision of these regulations shall be liable to a penalty which may extend to rupees fifty thousand."

11. On perusal of the above Rules which are framed in exercise of powers conferred by section 157 read with sections 30, 30A, 41, 41A, 53, 54, 56, sub-section (3) of section 98 and sub-section (2) of section 158 of the Customs Act,1962, it appears that the Regulations are framed while Page 41 of 48 Uploaded by JYOTI V. JANI(HC00213) on Wed Apr 23 2025 Downloaded on : Fri May 09 21:23:04 IST 2025 NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined exercising the general powers to make the Regulation read with section 158(2) which authorizes the Central Government or Board to make Rules or Regulations under the Act for levy of fees in respect of the application etc. and that for levy of penalty. Sub-section (2) of section 157 of the Customs Act,1962 provides for framing of Regulations which may provide, as per Clause (a), the forms and manner to deliver or present a bill of entry, shipping bill, bill of exports, import manifest, import report, departure manifest, export manifest, export report, bill of transhipment, declaration for transhipment, boat note and bill of coastal goods.

NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined

12. The Regulations, 2018, also refers to the provisions of sections 30 to 56 falling under Chapter-VI containing the provisions relating to Conveyances Carrying Imported or Exported Goods and Chapter VII-A containing Payments Through Electronic Cash Registration and Electronic Duty Credit Ledger and Chapter-VIII relating to Goods in Transit. Therefore, on conjoint reading of the provisions of the Customs Act,1962 the Regulations were framed for the requirements of import and export of the goods by the vessels.

13. As per the provisions of the Regulations, 2018, the 'Authorized Carrier' means an Authorized Sea Carrier, authorized train operator or a custodian, registered under Regulation 3 and postal authority.

NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined Respondent No.4 is registered under sub-

regulation (3) as Authorized Sea Agent which is apparent from the inquiry made by respondent Nos. 1 and 2 on the portal of the regulation [Annexure E Page 98].

Therefore, the contention of the respondent No.4 that the Regulations are not applicable to respondent No.4 cannot be accepted. The contention raised on behalf of respondent No.4 that the respondent No.4 is only a delivery agent appointed by authorized Sea Carrier as per the definition of section 2(1)(d), respondent No.4 is neither the authorized Carrier nor Authorized Sea Carrier nor an authorized train operator or a custodian as defined under section 2(1)(e) and 2(1)

(f) and therefore, the Regulations are not applicable to the respondent No.4 who is Page 44 of 48 Uploaded by JYOTI V. JANI(HC00213) on Wed Apr 23 2025 Downloaded on : Fri May 09 21:23:04 IST 2025 NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined only the owner of the containers and was asked to deliver the goods to the petitioner as a delivery agent of the Authorized Sea Carrier and therefore, the contention that, the impugned waiver letter dated 17.01.2025 is not binding upon the respondent No.4, is not tenable in view of the fact that respondent No.4 is already registered as an Authorized Sea Agent and was an agent of the Authorized Sea Carrier who has filed the Bill of Lading in question. The contention raised on behalf of respondent No.4 with regard to challenge to the vires of Rule 10(1)(l) also cannot be considered in these proceedings as respondent No.4 has not challenged the legality and validity of waiver letter dated 17.01.2025 before any forum. Therefore, the provision of Page 45 of 48 Uploaded by JYOTI V. JANI(HC00213) on Wed Apr 23 2025 Downloaded on : Fri May 09 21:23:04 IST 2025 NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined Regulation 10(1)(l) of Regulations, 2018 makes it clear that the Authorized Carrier is not permitted to demand any container detailed charges if the containers are detained by the customs for the purpose of verifying the entries made under section 46 and section 50 of the Act, if the entries are found to be correct. In the facts of the case by letter dated 10.10.2025, respondent No.2 has granted No Objection Certificate for release of the goods as the Bill of Entry was found correct and accordingly waiver letter dated 17.01.2025 was issued and accordingly, the petitioner is exempted from making payment of detention charges from 24.12.2024 to 10.01.2025.

NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined

14. In view of the above facts, the waiver order/letter dated 17.01.2025 issued by respondent No.2 is binding upon respondent No.4 and respondent No.4 is required to implement waiver order passed by the respondent No.2 as per the provisions of the Regulation 10(1)(l) of the Regulations,2018.

15. Hence, without going into further details and merits of the case, respondent No.4 is hereby directed to release the goods which is under their custody and not under the detention of the Customs authority by implementing waiver letter dated 17.01.2025 for waiver of the detention charges under Regulation 10(1)(l) Regulations, 2018 for the period from 24.12.2024 to 10.01.2025 as stated in the Page 47 of 48 Uploaded by JYOTI V. JANI(HC00213) on Wed Apr 23 2025 Downloaded on : Fri May 09 21:23:04 IST 2025 NEUTRAL CITATION C/SCA/2460/2025 JUDGMENT DATED: 09/04/2025 undefined waiver letter. Such exercise shall be completed within Four Weeks from the receipt of copy of the order.

16. It is clarified that if the respondent No.4 is desirous to challenge the order of the Customs of Authority for waiver of the detention charges, this order shall not come in its way. However, we have not expressed any opinion in respect of any such proposed proceedings. The petition is accordingly disposed of.

(BHARGAV D. KARIA, J) (D.N.RAY,J) JYOTI V. JANI Page 48 of 48 Uploaded by JYOTI V. JANI(HC00213) on Wed Apr 23 2025 Downloaded on : Fri May 09 21:23:04 IST 2025