JUDGMENT
1. Petitioner No. 1, M/s. Gaurisons, a registered partnership firm and petitioner No. 2, one of its registered partners have brought this writ petition under Article 226 of the Constitution of India praying for quashing the order dated 28th March, 1987 of International Airport authority of India, respondent No. 1 and for directions that respondent No. 1 should accept and act upon the Detention Certificate issued by respondent No. 2, the Collector of Customs, mentioning the period of detention as 10th June, 1986 to 11th February, 1987 on account of I.T.C. formalities and to release the goods imported by the petitioners lying with the respondent No. 1 without payment of any demurrage charges for the period w.e.f. 12th May, 1986 till the date of the actual release of the goods. In the alternative the prayer is made that demurrage charges be permitted – not to be paid w.e.f. 10th June, 1986 till the date of the release of the goods.
2. The undisputed facts leading to the filing of the present petition are that the petitioners who are engaged in import and export of diverse items had imported goods described as Haemodialyser Accessories (Outlet Venous sets) from Hongkong through its foreign supplier M/s. S. Framjee & Co. Ltd. This import was effected by the petitioner under Open General license and was stated to be covered by Item No. 16 of List No. 2 of Appendix 6 of the Import & Export Policy, 1985 – 88 as amended up to date and not liable to payment of duty in view of Notification NO. 208/81 covered by item at Sl. No. 8 of List B, dated 22nd September, 1981. It is averred in the petition that vide letter dated 29th May, 1986 Air India authorities intimated the petitioners that the said cargo in question had landed at Delhi airport and this letter was received by the petitioners on 31st May, 1986 and within the stipulated period of 10 days the petitioners presented the Bill of Entry NO. 28929 on 10th June, 1986 for clearance of the said goods. The goods were not cleared as certain clarifications were sought from the petitioners which were furnished. However, the Deputy Collector of Customs did not agree that these goods could be imported free of duty and thus had served a notice dated 25th August, 1986 on the petitioners under Section 124 of the Customs Act mentioning that the goods are liable to be confiscated under Section 111(d)(1)(m) & (o) of the Customs Act, 1962. The petitioners then furnished reply to the show cause notice and adjudication proceedings took place and the Customs authorities withdraw payment of any Customs duty mentioning that the goods are covered by item at Sl. No. 21 of List No. 2 of Appendix 6 of the Import & Export Policy, 1985 – 88 as per the clarification issued by Director General Health Services vide their letter dated 10th January, 1987. Along with the order withdrawing the show cause notice the Customs authorities issued the Detention Certificate mentioned above.
3. It is averred that in spite of the fact that petitioners approached the respondent NO. 1 for releasing the goods – after waiving demurrage charges in consonance with the Detention Certificate respondent No. 1 after protracted proceedings refused to release the goods without payment of demurrage charges claiming that demurrage charges are not liable to be waived unless and until the goods have been detained on account of I.T.C. formalities which did not pertain to appreciation stage for determination of the tariff classification of the goods. It is alleged by the petitioner that respondent No. 1 was legally bound to honour the Detention Certificate and had no power to sit in judgment over the reasons for detention of the goods given in the Detention Certificate by the Customs authorities. It was also pleaded that another ground mentioned by respondent No. 1 was that the petitioners should have exercised the option available to them under Section 49 of the Indian Customs Act for shifting the goods to some private warehouse and as that option was not exercised by the petitioners so the goods could not be released without payment of the demurrage charges. It is also mentioned in the petition that respondent No. 2 on being approached by the petitioners in regard to objections raised by respondent No. 1 the respondent No. 2 made an endorsement again on the letter and 9th March, 1987 that the waiver of demurrage charges is not to be denied on account of failure of the party to exercise the option under Section 49 of the Act. Hence, pleading that the act of the respondent No. 1 in refusing to release goods without waiving demurrage charges is violative of fundamental rights of the petitioners enshrined in Article 19 of the Constitution of India and is wholly illegal and hence the aforesaid writ of Certiorary and Mandamus were prayed for.
4. Respondent No. 1 has contested this petition and a counter affidavit has been filed by Shri K.S. Rajan, Deputy Director of respondent No. 1. In this affidavit a mention has been made to various provisions of the International Airport Authority Act, 1971 and to the regulations framed there under and also to the directives issued by respondent No. 1 with regard to remission/waiver of demurrage charges and has asserted that in view of the said provisions the demurrage charges could not be waived as the delay in clearing the goods by Customs authorities did not pertain to any ITC formalities but he delay occurred because there was a dispute regarding the tariff classification of goods. Inter alia it was also pleaded that in order to avoid incurring huge demurrage charges the petitioners could have sought permission under Section 49 of the Customs act for transferring the goods from the custody of the respondent No. 1 to any public or private warehouse where warehouse charges are less. It was asserted that the petitioners having used storage facilities provided by the respondent No. 1 in respect of the goods in question are liable to and legally bound to pay the demurrage charges before they get the goods released from respondents No. 1.
5. Before I deal with the various contentions raised in this writ petition I may refer to the provisions of Import and Export Policy for the year 1985 – 86 Volume I, Appendix 6, List II which refers to import of life saving item and equipment which can be imported under the Open General license. Item 16 pertains to Hemafilteration instrument/Haemodialyers and accessories/spares thereof. Item No. 21 reads as follows :
“21. Intravenous candle and tubing (for long term use).”
If the case in question was covered by either of the items it is common case of the parties that the goods were exempt from the payment of duty as per notification mentioned in the order. The Bill of Entry reveals that the petitioners have mentioned that the goods in question were covered by items which are in Sl. No. 16 but ultimately the Customs authorities held that the said goods were covered by item at Sl. No. 21. However, in the show cause notice issued under Section 124 of the Indian Customs Act which was accompanied by grounds which had induced the issuance of Show Cause notice it was made clear the goods in question were not covered by said Items 16 or 21 at all and those were not exempted from payment of duty and they were liable to payment of Customs duty and as no special license had been taken for importing those goods they are liable to be confiscated. It is obvious that if the goods in question were not covered by Item 16 & 21 of List 2, Appendix 6 of Import & Export Policy, in question, then a special license was liable to be obtained for importing those goods and they would have been subject to payment of duty under the Customs Tariff Act, 1975, Item 9018.90 of Chapter 90 at 60% of the value and as they were not covered by the Open General license and no license had been obtained goods could be confiscated and could be got redeemed by the petitioners under Section 125 of the Indian Customs Act.
6. Now I may refer to the provisions of International Airport Authority Act, 1971. Preamble of the Act shows that this act has been framed for the Constitution of an authority for the management of certain airports whereon international air transport is operated and the matters connected therewith. Under Section 16 of the Act the said authority inter alia has to be established as per clause ‘D’ Warehouses at the Airports for the storage or processing of the goods. Under Section 37 of the Act Authority can make regulations as per clause ‘D’ regarding the storage or processing of goods in any warehouse established by authority and fixing the charges for such storage or processing. So respondent No. 1 is an independent statutory body constituted to manage the Aerodromes and is not subordinate to any other statutory body like the Customs authorities in any manner. The said authority has framed regulations providing for the charges to be levied for storage of the goods and regulation No. 6 empowers the Chairman of respondent NO. 1 in its discretion for reasons to be recorded to waive the storage charges for goods in deserving cases. On or about 10th December, 1979 certain directives have been issued in this connection and the clauses 2, 3 and 4 of the same are as follows :
“2. At airports where handling charges, cartage charges or minimum terminal charges have been laid down irrespective of the free period allowance, these would not be waived/remitted. In other cases, waiver/remission could be sanctioned in full or in part, for the whole or part of the period of storage.
3. Waiver/remission of demurrage charges on import consignments could be considered under the following circumstances :-
(a) on receipt of Detention Certificate from the Customs authorities;
(b) when the importation is for non – commercial purpose and the consignee is a recognised charitable, educational or research institution, relief organisation, Government Hospital or diplomatic mission;
(c) in cases of extreme compassionate nature;
(d) in case of misplacement of packages or related documents by airport staff or Ground Handling Agency; and
(e) in case of packages landed empty or damaged.
Customs Detention Certificate
4. When a detention certificate is issued by competent Customs Officer that the goods were detained for special examination involving analytical or technical test or in connection with Import Trade Control (I.T.C.) formalities without any fault of the importer, the Airport General Manager may waive the demurrage charges for the period covered by the detention certificate. Where the delay is due to analytical or scientific test, 100% of the demurrage for the period covered by the detention certificate. Where the delay is due to analytical or scientific test, 100% of the demurrage for the period covered by the detention certificate may be waived. In case of delay due to ITC formalities, 80% of the demurrage for the relevant period may be waived. Detention Certificate is not issued and will not be considered in case of delays in ordinary course of appraisement such as for determination of the Tariff Classification of the goods or their assessable value, in I.T.C. cases where detention is due to the time – lag involved in revalidating or correcting the import by Customs Officials. Detention Certificate up to three to six months by Dy. Collector of Customs and beyond six months by Collector or Additional Collector of Customs. Financial limits would not be applicable in cases of waiver on the basis of detention certificate.”
7. Under Section 45 of the Indian Customs Act, 1962 all imported goods unloaded in the customs area are to remain in the custody of such officer as may be approved by the Collector of Customs unless they are cleared for home consumption. The person having custody of imported goods in customs area has to keep record of such goods and send a copy thereof to the proper officer and shall not permit such goods to be removed from the customs area or otherwise deal with and part with custody except in accordance with permission in writing of the proper officer. It is undisputed fact that the goods in question are being kept in custody of the respondent No. 1 by virtue of Section 45 of the Customs Act, 1962 and in view of Section 45(2)(b) of the Customs Act, 1962 respondent No. 1 would not permit such goods to be removed except in accordance with the permission in writing of the proper officer.
8. It has been argued vehemently by learned Counsel for the petitioner that in view of the provisions of Section 45 of the Customs Act the respondent No. 1 is an agent of the Customs Authorities and respondent No. 1 is bound by the orders issued by Customs Authorities for release of the goods and so the detention certificate issued by respondent No. 2. Customs Authorities has to be honoured by the respondent No. 1 without demur. On the other hand the learned Counsel for respondent No. 1 has submitted that keeping in view the various provisions of the International Airport Authority Act it cannot be inferred that respondent No. 1 is the Agent of Customs Authorities for all intents and purposes. He has urged that respondent No. 1 is to run its organisation in business like fashion and for the facilities provided by respondent NO. 1 it is statutory duty of the respondent No. 1 to fix the necessary charges and realise the same in accordance with its Rules and Regulations. It has been argued that respondent No. 1 cannot be treated as an agent of another statutory authority so as to circumvent Rules and Regulations of respondent No. 1. It is contended that it is the sole duty of respondent No. 1 to fix the charges of storage of the goods and to receive the same before – releasing the goods. The exemption from payment of demurrage charges is also to be granted by respondent No. 1 in accordance with the rules and regulations and directives, if any, issued under the provisions of the International Airport Authority Act. It is argued that even though Customs Authorities mention some ground for delay in releasing the goods and issue a detention certificate in that respect even then it is open to respondent No. 1 to examine whether the grounds mentioned in the detention certificate are valid grounds and fall within the scope of the directives mentioned above to allow the waiver of demurrage charges.
9. I have gone through the various provisions of the International Airport Authority Act under which the respondent No. 1 is constituted and it is obvious – that in performance of statutory duties respondent No. 1 is not supposed to act blindly by the directions of any other statutory body. The Customs Officers have to perform their duties under the Indian Customs act, 1962 and the rules framed there under. If there arise any conflict with regard to a matter of fact between the Customs Authorities and the respondent No. 1 and if that dispute lies in a field of area where respondent No. 1 has the jurisdiction then it is for the respondent No. 1 is competent to decide whether demurrage charges should be waived or not and if so to what extent, keeping in view its rules and regulations. Obviously, respondent No. 1 being a statutory body cannot possibly, arbitrarily act and if it acts arbitrarily the Court had power to set right any such wrongful act of respondent No. 1. As a matter of fact, there is no provision under the Customs Act and the rules to enable the Customs Authorities to issue any detention certificate. The detention certificate is obviously issued in view of the direction issued by the respondent No. 1 as reproduced above. However, Counsel for the petitioners has brought to may notice the judgment given in CCP – 97/87 M/s. Trans Asia Carpets Ltd. v. Shri S. Mukhopadhyay decided on 28th July, 1987 by Division Bench of this Court in which these directives of respondent No. 1 and the provisions of Section 45 of Indian Customs Act came up for consideration. In the cited case also under the orders of the court made in C.W. No. 2248/86 a detention certificate was issued in which the cause of detention given was that delay has occurred due to bona fide operation of the ITC formalities and the Bombay Port Trust authorities had refused to honour this certificate on the ground that it is not mentioned that delay has not occurred due to any fault of the petitioners and a contempt petition was brought and it has been held by Division Bench that the Bombay Port Trust authorities are to be treated as Agents of Customs Authorities by virtue of Section 45 of the customs Act, 1962 and they have to accept the reasons given in the detention certificate without question and have to release the goods by waiving demurrage charges. Sitting singly I am bound by the ratio laid down by the Division Bench of this Court. However, in the present case this particular aspect may not be examined further because as I go to the merits and the reasons given in the detention certificate I am of the view that delay had occurred due to ITC formalities. The perusal of the show cause notice and the grounds accompanying the said notice make it clear that Customs Authorities were of the prima facie view that the goods in question are liable to be confiscated as they have been imported without obtaining an import license. However, ultimately the Customs Authorities have altered their views but that is not the real issue. in accordance with the directives issued by respondent No. 1 once it is shown that there was a delay due to ITc formalities and those formalities did not pertain to appraisement of the goods for the purpose of tariff classification then the respondent No. 1 was duty bound to waive demurrage charges in accordance with its directives. In the present case it is not the question whether ultimately Customs Authorities changed their view and withdraw the show cause notice. The question is whether a dispute had been raised or not with regard to the fact whether the goods in question required a special import license or could be imported under Open General license. The prima facie view of Custom Authorities was that goods in question were not covered by Open General license and required a special license and as no license had been obtained before importing the goods they were liable to be confiscated. It is also not material that the goods could be redeemed by the petitioner by payment of necessary redemption duty, plus penalty. The fact remains that there had arisen a delay in release of the goods on account of dispute raised by the Customs Authorities in a bona fide manner regarding ITC formalities. ITC formalities come into play when there arises a bona fide dispute regarding the import of the goods. Once that dispute is settled only thereafter the question arises whether the goods are liable to payment of any duty or are exempt from payment of any duty. Therefore, it has to be held that there were bona fide disputes with regard to the import of the goods as to whether they have been validly imported under Open General license or a special license was required for import of these goods. Hence, the reason given in the detention certificate that delay has occurred due to ITC formalities cannot be construed irrelevant. In view of this finding I have to hold that respondent No. 1 is bound to grant waiver of demurrage charges to the extent mentioned in its directives, i.e. 80% of the charges.
10. Counsel for respondent No. 1 has cited M/s. Oswal Woollen Mills Ltd. and Another v. Union of India and Others, . I have gone through this judgment and find that it is of no help in deciding the present case. He has also made reference to Trustees of Port of Madras v. M/s. Aminchand Pyarelal & Others, . In this judgment considering the provisions of Madras Port Trust Act, 1905 it has been held that power to levy charges for storage of the goods at the port rests with the Port Trust Authorities and it is only Port Trust Authority which can waive such charges in accordance with its rules. I have considered this case keeping in view that it is respondent No. 1 who is competent authority to decide whether the demurrage charges should be waived in this case or not.
11. Counsel for respondent No. 1 also made a reference to a decision of a Division Bench of this court in C.W. No. 759/87 decided on May 19, 1987. I have gone through this judgment. This judgment does not deal with the points arising in the present case. The question which arose for decision was whether the Customs Authority should or should not issue a particular detention order in accordance with the directives of respondent No. 1. It was also held that the importer was at fault so no detention certificate should be issued in this favor by the Custom Authorities. That is not the situation in the present case.
12. The counsel for respondent No. 1 has also made reference to Section 49 of the Customs Act, 1962 where Customs Authorities can permit that goods may be stored in a public warehouse or in private warehouse. It was urged that in order to avoid incurring of heavy demurrage charges as levied by respondent No. 1 in view of paucity of space available at the warehouse of respondent No. 1 it was incumbent upon the petitioners to have obtained orders from the Customs Authorities for transferring the goods to any public warehouse or any private warehouse where the charges are much less. Mere fact that this option has not been exercised by the petitioners is no ground to deprive the petitioners of their right to get the demurrage charged waived from respondent No. 1, if in law, they are entitled to such waiver.
13. In view of the discussion above, I make the rule absolute and allow the writ petition and quash the impugned order of respondent No. 1 and direct respondent No. 1 to release the goods of petitioner forthwith after waiving the demurrage charges in accordance with its own directives for the period mentioned in the detention order and also for the subsequent period till release of the goods.
14. In view of the legal questions involved I leave the parties to bear their own costs in this writ petition.