Delhi High Court

Commissioner Of Customs & Ors. vs M/S Agrim Sampada Ltd. & Ors. on 13 December, 2012

Author: Rajiv Sahai Endlaw

          *IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                  Date of decision: 13th December, 2012

+                               LPA No.519/2004

       COMMISSIONER OF CUSTOMS & ORS.          ..... Appellants
                  Through: Ms. Sonia Sharma, Adv.

                                   Versus

    M/S AGRIM SAMPADA LTD. & ORS.      ..... Respondents

Through: None.

CORAM :-

HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

RAJIV SAHAI ENDLAW, J

1. This intra-court appeal impugns the judgment dated 16th January,

2004 of the learned Single Judge allowing W.P.(C) No.2438/2001 preferred

by the respondents no.1&2 (respondent no.2 being the Director of the

respondent no.1), by directing the appellant to register the Bill of Entry of

the subject goods in the name of the respondent no.1 and clear the same on

payment of appropriate duty. It was further directed that the appellant shall

bear the demurrage charges in respect of the goods.

2. Notice of the appeal was issued and on the application of the appellant

for interim relief, it was vide order dated 31 st May, 2004 directed that the

release of the consignment would be subject to the final outcome of the

appeal. Though during the hearing on 19th August, 2004 it was pointed out

that despite the order dated 31 st May, 2004, the consignment in question had

not been released, but it is recorded in the order dated 21st January, 2010 that

the goods stood released to the respondent no.1. In the subsequent order

dated 18th March, 2010, it is also recorded that the goods have already been

utilized by the respondent no.1

3. None appeared for the respondents when this matter was called on

29th November, 2012. None appears for the respondents today also.

Considering that the appeal is of the year 2004, it is not deemed expedient to

await the respondents any further and we have heard the counsel for the

appellants.

4. The writ petition from which this appeal arises, was filed by the

respondents No.1 & 2 pleading:-

(a). that the respondent no.1 had placed an order for 3000 MT of

special high grade zinc from M/s Allied Deals (S) Pte. Ltd.

Singapore (foreign seller), who offered to sell the said goods

lying in Inland Container Depot, Tuglakabad and which had

earlier been consigned by the foreign seller to respondent no.3

M/s Shiv Ganga Organic Chemicals Ltd. and who had not

retired the documents which were returned back to the said

foreign supplier;

(b). that the said foreign seller thus drew fresh Bill of Lading and

negotiated the same through the bank in the name of the

respondent no.1;

(c). that the respondent no.1 on receipt of the said fresh Bill of

Lading with respect to the goods aforesaid applied for

amendment of the Import General Manifest which originally

stood filed in the name of the respondent no.3;

(d). that after getting the Import General Manifest amended, the

respondent no.1 filed the Bill of Entry under Section 46 of the

Customs Act, 1962;

(e). that the appellant however did not register the Bill of Entry of

the respondent no.1 on the ground that the earlier Bill of Entry

with respect to the same goods had been filed by respondent

no.3 and the said Bill of Entry had been picked up by the

Directorate of Revenue Intelligence (DRI), as a sister concern

of respondent no.3 was found to be involved in some Customs

offence case;

(f). that though it was the contention of the respondent no.1 that it

is the holder of the original Bill of Lading and as per law is the

owner of the goods and is duty bound to file the Bill of Entry

and should be allowed to file the Bill of Entry so that

assessment could be made and duties could be paid on the said

goods as they were suffering heavy demurrage, but the

appellant did not allow the respondent no.1 to file the Bill of

Entry to get the goods assessed and pay the duties.

Impugning the aforesaid stand of the appellant, the writ petition was

filed seeking direction to the appellant to register the Bill of Entry and to

clear the goods and for waiver of demurrage.

5. The appellant contested the writ petition by pleading in its counter

affidavit that Import General Manifest was amended as a matter of routine

and on the correct facts of the earlier Bill of Entry having been filed in the

name of the respondent no.3, the amendment of the Import General Manifest

was withdrawn. It was further pleaded that DRI had intercepted a

consignment imported by M/s Shivalik Impex Pvt. Ltd. and the respondent

no.3, a sister concern of M/s Shivalik Impex Pvt. Ltd. was found to be

indulging in importing zinc ingots under DEEC Scheme with an obligation

to export 100% pure zinc oxide but diverting imported goods to local market

in violation of the said Scheme; thus the Bill of Entry filed by the respondent

no.3 with respect to the subject goods was seized to prevent evasion of

Customs duty. It was also pleaded that the Directors of respondent no.3 had

been absconding. We may at this stage notice that the respondent no.3 was

ex parte before the learned Single Judge and has inspite of service through

publication not appeared before us also. It was further the plea of the

appellants in their counter affidavit that in view of the cancellation of the

amendment to the Import General Manifest, the goods continued to belong

to the original importer i.e. respondent no.3 and the respondent no.1 was

nowhere concerned with the said import. It was further pleaded that the

respondent no.1 had gone into a non-bona fide deal and was trying to get the

goods cleared which were actually liable for confiscation under Section 111

(O) of the Customs Act. It was yet further pleaded that the respondent no.1

was in collusion with the foreign seller and the respondent no.3 was trying to

get the offending goods cleared fraudulently.

6. The learned Single Judge, in the impugned judgment found / observed

held:-

(i). that the subject goods were originally imported by respondent

no.3 and reached India sometime in February, 2001;

(ii). the import of the goods was not contrary to law;

(iii). however the respondent no.3 abandoned the goods and did not

make the payment to the foreign seller for the same;

(iv). thus the title in the goods in such a situation remained with the

foreign seller and it was within its rights to on such default of

the respondent No.3, sell the same to the respondent no.1;

(v). since the goods were sold to the respondent no.1 who held the

documents of title in respect thereof, it was a importer within

the meaning of Section 2(26) of the Customs Act and therefore

entitled to present the Bill of Entry and to have the goods

cleared for home consumption;

(vi). that since the title in the goods never stood transferred to the

respondent no.3, the appellants should have permitted the

respondent no.1 to clear the goods on filing of such Bill of

Entry and payment of appropriate duty of Customs and the

appellants ought not to have prevented the respondent no.1from

doing so;

(vii). that once it was held that the respondent no.1 was entitled to

clear the goods and had been wrongly prevented from doing so,

it is the appellant who should bear the demurrage.

7. Counsel for the appellant has confined the arguments only to the

extent the liability for demurrage has been foisted on the appellant. With

reference to Section 46(3) of the Customs Act, 1962, it is contended that the

appellant was not at fault in not registering the Bill of Entry of the

respondent No.1 on the ground that the earlier Bill of Entry with respect to

the same goods, had been filed by the respondent No.3 and since DRI

enquiry was underway against the sister concern of the respondent No.3. It is

further contended that the matter is no longer res integra. Attention in this

regard in invited to:

(i) International Airports Authority of India Vs. Grand Slam

International (1995) 3 SCC 151, holding that an authority created

under a statute even if is the custodian of the imported goods because

of the provisions of the Customs Act, 1962, would be entitled to

charge demurrage for the imported goods in its custody and make the

importer or consignee liable for the same even for the period during

which he / it was unable to clear the goods from the customs area, due

to fault on the part of the Customs Authorities or other authorities who

might have issued detention certificate owning such fault;

(ii) Judgment dated 28th March, 2012 of the Division Bench of this

Court in RFA (OS) Nos.6-7/2006 titled Union of India Vs. Navshakti

Industries P. Ltd., where reference was made to Shipping

Corporation of India Ltd. Vs. C.L. Jain Woolen Mills (2001) 5 SCC

345, which approved the law as laid down in Grand Slam

International (supra) and the aspect of bona fide of the Customs

Department was also taken into consideration.

8. We may in this regard notice that the respondents No.1 & 2 have not

pleaded the mala fides of the appellant in withholding the goods.

9. We thus find the matter to be no longer res integra and being covered

by the judgments aforesaid. Resultantly, the judgment of the learned Single

Judge cannot be sustained. Unfortunately, before the learned Single Judge,

attention to Grand Slam International was not drawn and the same does not

find mention in the impugned judgment.

10. The appeal is accordingly allowed and the judgment dated 16th

January, 2004, to the extent holding the appellant liable to bear the

demurrage charges in respect of the goods in question, is set aside. The

demurrage charges be accordingly recovered from the respondents No.1 &

2. If the appellant has already paid the demurrage charges, the respondents