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Navneet Kumar Didwania vs Commissioner Of Customs (Port) … on 17 June, 2002

Calcutta High Court
Navneet Kumar Didwania vs Commissioner Of Customs (Port) … on 17 June, 2002
Equivalent citations: (2002) 3 CALLT 601 HC, 2003 (86) ECC 182, 2002 (145) ELT 6 Cal
Bench: M H Ansari


JUDGMENT

Mahemmad Haheeb Shams Ansari, J.

1. The case of the petitioner, in brief is as under:

Petitioner is carrying on business in the name and style of Hanuman Trading Corporation as sole proprietor. He is an exporter and importer of plastic granules and non-ferrous metal. Petitioner purchased a portion of an advance licence bearing No. P/L/ 1523922/C dated February 15, 1993. On the basis thereof, petitioner imported 959.515 metric tons Copper Wire Bars in six consignments from Singapore. After the said goods were ‘discharged’, they were initially kept in Dock area in the possession of the Port Authorities. Thereafter in December 19, 1994 and according to the petitioner after several representations in that behalf the goods were allowed to be ‘destuffed’ from the containers and kept in the Bonded Warehouse as is permissible under Section 49 of the Customs Act. The goods and relevant documents given therewith were examined by the concerned customs office. According to the Customs authorities there was mis-declaration of the value of goods which is an offence under the Customs Act, 1962 and rendered such goods liable to confiscation under Section 111 of the said Act. The Customs Officer thus having reason to believe that the goods were liable to confiscation seized the same in exercise of the power conferred on him by Section 110(1) of the Customs Act, 1962. According to the petitioner such adjudication was made ex-parte on May 9, 1995 and thereupon a writ application was filed questioning the aforesaid ex-parte adjudication order passed by the Commissioner of Customs. The said writ petition was disposed of by an order dated July 11, 1995 with a direction upon the petitioner to prefer an appeal against the ex-parte order. Accordingly, an appeal was filed by the petitioner and by an order dated February 7, 1997 the appeal was allowed by the Customs, Excise & Gold (Control) Appellate Tribunal (for short CEGAT). Aggrieved against the said orders, Customs authorities preferred an appeal before the Supreme Court which was disposed of by an order dated July 24, 1997 remanding the matter back to the Commissioner of Customs to decide the matter afresh after giving an opportunity of hearing to the parties. Thereafter, Commissioner of Customs passed an order dated July 28, 1998 holding that the Imported goods had been undervalued and directed confiscation of the goods. However, option was given to the petitioner to pay a fine in lieu of the confiscation and personal penalty was imposed upon the petitioner.

2. Aggrieved by the said orders dated July 28, 1998 petitioner preferred an appeal before CEGAT which was disposed of by an order dated February 16, 2000. By its order CEGAT allowed the appeal directing the declared CIF values to be accepted. Directions of the Commissioner (Customs) for confiscation of the goods and imposition of penalty were set aside by CEGAT in its said order dated February 16, 2000. Customs authorities having preferred an appeal against the said order before the Supreme Court, the same was dismissed by an order dated October 28, 2000.

3. According to the petitioner the Customs authorities did not release the imported goods even in terms of the order dated February 16, 2000 passed by the CEGAT, despite requests made in that behalf by the petitioner for release of the said material. Thereupon, petitioner filed W.P. No. 1596 of 2001 praying for direction upon respondent-Custom authorities to release consignment of 959.515 metric tons of Copper Wire Bars and also for payment of the amount by way of reimbursement on account of warehousing charges on and from February 16, 2000 till the dated of release. The said writ petition was disposed of by an order dated November 10, 2000 directing release of the material to the petitioner and granting liberty to the petitioner to proceed in accordance with law for recovery of the amount which petitioner had incurred on account of demurrage for the wrongful detention of the imported consignment of 959.515 M.T.

4. It is the case of the petitioner that though orders were passed by CEGAT dated February 16, 2000 consignments were not released and even after the Supreme Court dismissed the appeal on October 20, 2000 petitioner was only allowed to obtain clearance of the said imported consignments during the period January to March 2000.

5. The claim of the petitioner in the instant writ application is for payment of sum of Rs. 9,64,85,167/- particulars whereof are given in schedule annexure P-13. In the said schedule, annexure P-13, as many as on 8 (eight) accounts, amounts as specified opposite, each such account the petitioner seeks reimbursement thereof the respondent Customs authorities. However, when the matter was heard Mr. Samit Talukdar, learned advocate appearing along with Mr. S. Mukherjee for the petitioner confined the claim of the petitioners to amounts on accounts specified in items at serial Nos. 2, 5 and 7 of annexure P-13. The petitioner’s claim is thus confined to the expenses towards container charges, warehousing and storage charges for the period from September 1994 to March 2001 when the goods were stored in the Bonded Warehouse in the West Bengal State Warehousing Corporation. We are thus not concerned in this proceeding with regard to other ejpenses said to have been incurred by petitioner towards loading and loading charges lorry trailer retention charges or other expenses incurred in connection with the said goods save and except those pertaining to OPT Rent (item at serial No. 2), expenses towards warehousing paid to WBSWC (item at seiral No. 5} and storage charges with WBSWC (item at serial No. 7) of schedule annexure P-13.

6. Mr. Samit Talukdar learned advocate for the petitioner referred to the various averments in the writ application and its annexures in support of the prayer of the petitioner. The detention of the consignments by the Customs authorities was illegal, it is contended. For the delay and laches on the part of the Customs authorities and despite letters of the petitioner to allow destuffing of the imported consignments no action was taken between September 1994 to December 1994. On account of the said delay petitioner had to pay container charges to the shipping agent namely, Shipping Corporation of India and International Clearing and Shipping Agency before the consignments could be removed from containers and stored in the Customs Bonded Warehouse under Section 49 of the Customs Act 1962. Mr. Talukdar further submitted that despite orders having been passed by CEGAT dated February 16, 2000 and even thereafter the consignments were not released to the petitioner and therefore the aforesaid writ application had to be filed by the petitioners. Even after the order on October 20, 2000 passed by the Supreme Court dismissing the appeal filed by the Customs authorities, petitioner was allowed to obtain clearance of the said consignments only during the period January to March 2001. Petitioner has incurred huge liabilities on account of the illegal action of the respondent authorities firstly on account of illegal detention and secondly on account of delay in release of the said goods. The claims pertaining to container charges before shifting of the goods to Bonded Warehouses and thereafter the charges paid for storage with WBSWC are therefore liable to be reimbursed to the petitioner, it was strenuously urged. Reliance has been placed by Mr. Samit Talukdar, learned counsel for the petitioner, upon the judgment in S.A. International v. Collector of Customs 1988(36) ELT (Cal). Shipping Corporation of India Ltd. v. C.L. Jain Woolen Mills .

7. An affidavit-in-opposition has been affirmed on behalf of the Customs authorities. Various averments in the writ application have been traversed.

8. Mr. Dipankar Ghosh, learned Additional Solicitor General appearing along with Mr. M.B. Sarkar and Mr. Bhaskar Sen, advocates, submitted that at the request of the writ petitioner the goods were allowed to be ‘destuffed’ from the containers and kept in the Bonded Warehouse as is permissible under Section 49 of the Customs Act, 1962. The goods and the relevant documents in connection therewith were examined by the concerned Customs Office who formed the opinion tat the goods had been undervalued. The concerned Customs Officer having reason to believe that the goods were liable to confiscation, seized the same in exercise of powers conferred on him by Section 110(1) of the Customs Act, 1962. Relying upon Section 110(2) of the Customs Act, 1962 it was submitted that the Customs authorities are bound to return the seized goods, if no notice in respect thereof is issued under Section 124(a) of the Customs Act, 1962 within 6 (six) months of the seizure of the goods. In the present case, it was submitted that on April 17, 1995 such notice was issued by the Customs authorities to the writ petitioner asking it to show cause as to why the goods should not be confiscated. Thus, according to Mr. Ghosh the requisite notice within the time period stipulated was issued and therefore there is no illegality in the seizure of the goods by the Customs authorities. During the period between April 1995 until February 16, 2000 there were protracted adjudication proceedings under the Act initiated by the said show cause notice dated April 17, 1994. Ultimately by its order dated February 16, 2000, CEGAT held that the seizure of the goods was not justified. In its said order of CEGAT it is held that in respect of 4 (four) of the 6 (six) consignments imported by the writ petitioner, no duty was payable as the value of those consignments was within the permissible limit of its duty-free import entitlement under the DEEC Scheme. In respect of the remaining 2 (two) consignments it is held that the petitioner was liable to pay duty on the value of the goods covered by those consignments.

9. Mr. Dipankar Ghosh, learned Additional Solicitor General, contended that in so far as seizure is concerned it was clearly with authority of law. The condition precedent namely formation of the opinion by the concerned Officer under Section 110 of the Act as also the condition subsequent namely issuing of a show cause notice under Section 124(a) of the Act within the stipulated period have been complied with in the instant case. Mr. Ghosh would urge that it is not the case of the petitioner either in the pleadings or in the oral submissions made on behalf of the petitioner by their learned advocate that Seizure Officer acted malafide or there was any failure to comply with the provisions of law. In fact, no malafides, it was urged has been attributed to the respondent authorities. It was further contended that during the pendency of the adjudication proceedings the detention of the goods by or at the instance of the Customs authorities cannot be said to be illegal. Relying upon the judgment of the Supreme Court in The State ofGujarat v. Memon Mahomed Haji Hasam, reported in AIR 1967 SC 1885, it was submitted by Mr. Ghosh that during the pendency of the adjudication proceedings the position of the Customs authorities is that “of a bailee of the goods”. If the department succeeds in the adjudication proceedings, it will be entitled to confiscate the seized goods; if the person from whom the goods were seized succeeds then the Customs authorities are bound to return the seized goods to him. Mr. Ghosh further elaborated his submission by submitting that as bailee, until the question is decided one way or the other, the detention or retention of the goods during the entire period of adjudication proceeding is under lawful authority and cannot be said to be illegal.

10. Mr. Samit Talukdar, learned counsel for the petitioner contended that the detention was on account of the Customs authorities as they had initiated proceedings and finally passed order of confiscation but that order was ultimately set aside and it is held by a competent Tribunal (CEGAT) that the detention was illegal and therefore the importer of the goods (petitioner) cannot be made liable to pay demurrage/detention charges. The action of the Customs authorities in detention/confiscation of the goods having been declared illegal, the said authorities are liable to pay the demurrage charges. This is for the reason contends Mr. Samit Talukdar, learned advocate for the petitioner that the final order has the effect of making entire detention illegal i.e. from the date of seizure till the dates the goods were released to the petitioner.

11. Mr. Dipankar Ghosh, learned Additional Solicitor General, appearing for the Customs authorities, on the other hand, contended that the aforesaid contention is unsound and should be rejected. According to Mr. Ghosh the law is that the legality of a seizure must be determined with reference to the facts and circumstances existing at the time of the seizure and not with reference to any subsequent fact or event. In other words, contends Mr. Ghosh that the ultimate finding of CEGAT in the year 2000 that the confiscation was not justified does not “relate back” to the date of the seizure of the goods at which point of time the concerned Officer had bona fide reasons to believe that the goods were liable to confiscation. In his usual manner Mr. Ghosh elucidated his aforesaid submission relying upon certain judgments of English Court of Appeal, by submitting that doctrine did exist in an earlier period of development of the law in England when “forms of action” were in force. According to that doctrine, the trespass could be void ab initio even though it was by reason of a subsequent event. This doctrine of “relation back” has long become obsolete. It was declared by Denning M.R. in Wiltshire v. Barrett (1996 1 QB 312) that the general rule is that an act which is lawful at the time is not to be rendered unlawful afterwards by the doctrine of “relation back”. Lord Denning M.R., in Chic Fashions (West Wales) Ltd. v. Jones 1968 2 QB 299 described the said doctrine as dead and buried. In his words “The Six Carpenter’s case was a by-product of the old forms of action now that they are buried it can be Interred with their bones”. Lord Diplock has held the doctrine to be ‘antiquarian’. In His Lordship’s words “what application, if any, the rule applied in the Six Carpenters’ case (8 Co. Rep. 146) has in the modern law of tort, may some day call for re-examination, but it has no relevance to the present case if the original seizure of the goods was lawful”.

12. Mr. Ghosh, learned Additional Solicitor General, thereupon contended that the petitioner has no cause of action for the reliefs prayed for in the instant writ application against the Customs authorities. The cause of action for damages arising from trespass to goods (now a days commonly classified as wrongful interference with the goods of another and other wise referred to as illegal detention) falls in the realm of law of torts. If the detention was not illegal at the inception petitioner can have no claim by the subsequent event pleaded by him as that will not relate back, it was contended.

13. Before we consider the rival contentions it would be appropriate at this stage to observe that since the landmark decision in Anisminic Ltd. v. Foreign Compensation Commission 1969 1 All ER 208 the concept of jurisdiction has acquired new dimensions. The original or pure theory of jurisdiction which meant “the authority to decide” the same was determinable at the commencement and not at the conclusion of the enquiry. The said approach has been more or less given a go-bye in the Anisminic’s case. In M.L. Sethy v. R.P. Kapoor Mathew J. explained the legal position after Anisminic’s case as under;

“The word “jurisdiction” is a verbal cast of many colours. Jurisdiction originally seems to have had the meaning which Lord Reid ascribed to it in Anisminic Ltd. v. Foreign Compensation Commission (1969) 2 AC 147, namely, the entitlement “to enter upon the enquiry in question”. If there was an entitlement to enter upon an inquiry into the question, then any subsequent error could only regarded as an error within the jurisdiction. The best known formulation of this theory is that made by Lord Denman in R.V. Bolton (1841) 1 QB 66. He said that the question of jurisdiction is determinable at the commencement, not at the conclusion of the enquiry. In Anisminic Ltd. (1969) 2 AC 147 Lord Reid said:

“But there are many cases where, although the tribunal had jurisdiction to enter on the enquiry, it has done or failed to do something in the course of the enquiry which is of such a nature that its decision is a nullity. It may have given its decision in bad faith. It may have made a decision which it had not power to make. It may have failed in the course of the enquiry to comply with the requirements of natural justice. It may in perfect goods faith have misconstrued the provisions giving it power to at act so that it failed to deal with the question remitted to it and decided some question which was not remitted to it. It may have refused to take into account something which it was required to take into account. Or it may have based its decision on some matter which, under the provisions setting it up, it had no right to take into account. I do not intend this list to be exhaustive.”

In the same case, Lord Pearce said:

“Lack of jurisdiction may arise in various ways. There may be an absence of those formalities or things which are conditions precedent to the tribunal having any jurisdiction to embark on an enquiry. Or the tribunal may at the end made an order that it has no jurisdiction to make. Or in the intervening stage while engaged on a proper enquiry, the tribunal may depart from the rules of natural justice; or it may ask itself the wrong questions’ or it may take into account matters which it was not directed to take into account. Thereby it would step outside its jurisdiction. It would turn its inquiry into ‘ something not directed by Parliament and fail to make the inquiry which the Parliament did direct. Any of these things would cause its purported decision to be a nullity.”

The dieta of the majority of the House of Lords, in the above case would show the extent to which ‘lack’ and ‘excess’ of jurisdiction have been assimilated or, in other words, the extent to which we have moved away from the traditional concept of ‘jurisdiction’ The effect of the dieta in that case is to reduce the difference between Jurisdictional error and error of law within jurisdiction almost to vanishing point. The practical effect of the decision is that any error of law can be reckoned as Jurisdictional. That comes perilously close to saying that there is jurisdiction if the decision is right in law but none if it is wrong. Almost any misconstruction of a statute can be represented as “basing their decision on a matter with which they have no right to deal”, “imposing an unwarranted condition” or addressing themselves to a wrong question”. The majority opinion in the case leaves a Court or tribunal with virtually no margin of legal error. Whether there is excess of jurisdiction or merely error within jurisdiction can be determined only by construing the empowering statute, which will give little guidance. It is really a question of how much latitude the Court is prepared to allow”.

14. While on this aspect of the matter it will be useful to extract a relevant portion from the book “Principle of Statutory Interpretation” by Justice G.P. Singh :

“Cases of nullity may also arise during the course or at the conclusion of the inquiry. These cases are also cases of want of jurisdiction if the word ‘jurisdiction’ is understood in a wide sense. Some examples of these cases are; (a) when the tribunal has wrongly determined a Jurisdictional question of fact or law; (b) when it has failed to follow the fundamental principles of judicial procedure, e.g., has passed the order without giving an opportunity of hearing to the party affected; (c) when it has violated the fundamental provisions of the Act, e.g., when it fails to take into account matters which it is required to take into account or when it takes into account extraneous and irrelevant matters; (d) when it has acted in bad faith; and (e) when it grants a relief or makes an order which it has not authority to grant or make; as also (f) when by misapplication of the law it has asked itself the wrong question.”

15. The order of the Customs authorities is not the subject matter of judicial review in these proceedings. The validity of the said order has been adjudicated upon by the appellate authority namely, CEGAT. That order has attained finality. What legal consequences flow from the order passed by the CEGAT is the subject of consideration in these proceedings. According to Mr. Ghosh, learned Additional Solicitor General, the liability for payment of demurrage charges is that of the importer and the said contention is sought to be sustained by relying upon the judgments of the Supreme Court.

16. Before, however, we refer to the judgments of the Supreme Court it would be appropriate to refer to another submission of Mr. Ghosh founded on the ’cause of action’. Even if it is assumed, it is contended by Mr. Ghosh, that the detention of the goods by or at the instance of the Customs authorities is unlawful, as has been held in the judgments reference to which shall be made shorty, it is to be held that the importer/consignee and not the Customs authority, which is liable to pay demurrage charges to the Warehousing authority in respect of the period of detention. What then would be the position if the petitioner were to found the cause of action for the relief as prayed for under Section 69 of the Contract Act. Chapter 5 of the Indian Contract Act is styled thus: “Of certain relations resembling those created by contract”. The chapter contains five sections-Sections 68 to 72. The rights and liabilities dealt with in those sections accrue from relations resembling those created by contract. It is not a real contract, but one implied in law or a quasi contract. Under Section 69 of the Contract Act if A pays B a sum of money for which C is liable to pay B, then A is entitled to be reimbursed by C the amount paid by A to B. In other words, if the liability (demurrage charges) discharged is that of A (petitioner himself) then contends Mr. Ghosh, A (petitioner) has no right of reimbursement against C (Customs authorities). Keeping in view, said contention of Mr. Dipankar Ghosh let us now examine the Judgments of the Supreme Court dealing with the liability of the importer to pay demurrage charges.

17. On behalf of the Customs authorities Mr. Bhaskar Sen, learned counsel, placed the case of International Airport Authority of India v. Grand Slam International and Ors., . This case has been placed before the Court in detail at the time of hearing by Mr. Sen and with particular reference to the following statement in para 36 of the judgment of Bharucha J. (as His Lordship then was):

“The judgments aforementioned do not only hold that the importer is liable to pay demurrage though he is not responsible for any delay in clearing his goods.”

18. To the similar effect are the observations of Venkatachala J. (as His Lordship then was) in para 66 of his judgment.

19. This Grand Slam International’s case was followed by the Supreme Court in 1995{3) SCC 241 (Trustees of Port of Madras v. Nagavedu Lungi and Ors.). In para 4 of the judgment, the Court referred to the Grand Slam International case and interpreted that judgment as having ruled:

“………….that the importer-consignee of goods cannot avoid liability to pay demurrage charges and other incidental charges in respect of its goods illegally detained in the customs area of the Airport by the Customs Authorities under the Customs Act. The said ruling of this Court as regards liability for demurrage charges and other incidental charges by the importer-consignee of goods illegally detained in the customs area of the airport by the Customs Authority applies to the liability to pay demurrage charges or incidental charges by the exporter-consignor of the goods illegally detained in the customs area………”

20. In Sun Export Corporation and Anr. v. Board of Trustees of the Port of Bombay , the Supreme Court construed the definition of ‘owner’ in Section 3(5) of the Bombay Port Trust Act and Section 2(o) of the Major Port Trust Act to include a ‘consignee’. In that case the consignment was to be cleared from the warehouse of docks at the Port of Bombay. That, however, was not done. The Collector of Customs confiscated the goods. The Port Trust demanded demurrage charges upto the date of confiscation. The right of the Port Trust to recover the demurrage charges was upheld. The submission that since the goods stood already confiscated they could have been sold to offset the demurrage charges were rejected as fallacious.

21. Thus, on the authority of the above judgments of the Supreme Court it can be stated that the legal entities such as the IAAI/Warehousing Corporations are entitled to charge demurrage for the imported goods in its custody and the importer/consignee is liable for the same even for the periods during which it was unable to clear the goods due to fault on the part of the Customs authorities and even when goods have been confiscated by the Customs authorities. These judgments, as we shall presently see, however, have not dealt with the liability of the Customs authorities for reimbursement of the said charges for detention of the goods with respect to post adjudication period.

22. The Grand Slam International’s case, it must be noticed, was considered by the Supreme Court along with a bunch of appeals. In those cases, the Customs department had issued detention certificate (which in effect certifies the period of detention and directing that no demurrage may be charged for the specified period goods were subject matter of adjudication proceedings). Such detention certificate had been issued to International Airport Authority of India (for short IAAI), Central Warehousing Corporation (for short CWC) where the goods had been in their respective custody. The IAAI or the CWC instead of treating the entire period as ‘free’ period granted rebate and calculated demurrage in accordance with the Rate Schedule framed by them. The amount of demurrage in each case came to be two or three times more than the value of the goods. The respondent-importer/ consignee in that bunch of cases thereupon approached the Delhi High Court by way of writ petitions under “Article 226 of the Constitution of India. The petitions were allowed and it was held by the Delhi High Court that the IAAI or the CWC being custodian of the Customs department could not ignore the detention certificate, therefore, no demurrage could be charged for the period the proceedings were pending with the Customs authorities. The Delhi High Court relied upon Trishul Impex v. Union of India (1991)2 Del Lawyer 1. This decision in its turn relied on an earlier decision given in Trans Asia Carpet v. Union of India. The decision in Trans Asia proceeded on the basis that Airport Authority being an agent of the Collector of Customs was bound by the detention certificate granted by the Collector of Customs. In Trishul Impex it was held that the container depot where the goods were deposited being the custodian for the Customs authorities, it was bound by the certificate and was liable to release the goods without any demurrage. The judgments of the Delhi High Court were subject matter of the appeals before the Supreme Court. In the majority view leading judgment being of Bharucha. J. (as His Lordship then was) His Lordship after referring to and relying upon the judgments of the Supreme Court in the Board of Trustees of the Port of Bombay v. Indian Goods Supplying Company and Trustees of the Port of Madras v. Aminchand Pyarelal interpreted the said judgments as under:

“32. This Court in the cases aforementioned, therefore, held that the Board of Trustees of a port was, under the statute that created it, entitled to charge demurrage even in respect of periods during which the importer was unable to clear goods from its premises for no fault or negligence on his part. It was held that the Board were entitled to charge demurrage even in respect of periods during which the importer was unable to clear goods because of the detention thereof by the Customs Authorities or the authorities under the Import Trade Control Regulations, which detentions were thereafter found to be unjustified. This Court also recognised that the Boards were entities in their own right so that the Courts could not direct the Customs Authorities to issue a detention certificate without hearing the Board concerned. This was because the issuance of a detention certificate had the effect of reducing the amount of demurrage that the Board would otherwise have charged.”

23. His Lordship upon considering the various contentions including the policy for the waiver of demurrage declared as under:

“……..An importer must land the imported goods at a seaport or airport. He can clear them only after completion of customs formalities. For this purpose, the seaports and airports are approved and provide storage facilities and Customs Officers are accommodated therein to facilitate clearance. For the occupation by the imported goods of space in the seaport or airport, the Board or the Authority which is its proprietor is entitled to charge the importer. That until customs clearance the Board or the Authority may not permit the importer to remove his goods from its premises does not imply that it may not charge the importer for the space his goods have occupied until their clearance.”

and further in para 44 (SCC), it was observed as under:

“44, It cannot be gainsaid that, by reason of unjustified detention of his goods by the Customs Authorities, the importer is put to loss by having to pay demurrage charges for the periods of such detention. The Central Government is empowered by Section 35 of the International Airports Authority Act, 1971 and Section 111 of the Major Port Trusts Act, 1963 to issue to the Authority and Board of Trustees, respectively, directions on questions of policy after giving them an opportunity, as far as practicable, of expressing their views. The Central Government can, if so advised, after giving to the Authority and the Board of Trustees the opportunity of expressing their views, direct them, under the aforementioned provisions, not to levy demurrage charges for periods covered by detention certificates.”

24. Venkatachala, J. (as His Lordship then was), in his concurring judgment held that the importer or consignee is liable to pay demurrage for the imported goods even for the periods during which he was unable to clear the goods from the customs area, due to fault on the part of the Customs Authorities or of other authorities who might have issued detention certificates owning such default.

25. The judgments of the High Court were held to be not sustainable including the judgment in the case of Trishul Impex.

26. In Shipping Corporation of India v. C.L. Jain Woolen Mills upon which much reliance has been placed by Mr. Talukdar, learned advocate for the petitioner, a three Judge Bench observed that there is no apparent inconsistency between the decision of the Supreme Court in Grand Slam International case and that of the Sanjeva Woolen Mills’ case [1998 (100) ELT 323 (SC)]. It was observed that “in view of the specific undertaking given by the Customs Authorities” the Supreme Court had held (in Sanjeve Woolen Mills’ case) that from the date of detention of the goods till the Customs Authorities intimated the importer, importer would not be required to pay the demurrage charges.

27. True, as contended by Mr. Samit Talukdar, learned counsel for the petitioner, the Supreme Court in Shipping Corporation of India v. C.L. Jain Woolen Mills’ case did not interfere with the order of the Delhi High Court absolving the importer of the liability to pay demurrage charges. The reasons therefore are as stated in para 4 of the judgment namely, that there was specific direction of the Delhi High Court in that regard and that decision having reached finally by the dismissal of the special leave petition, the liability of the importer to pay the demurrage charged ceased and that question, it was held, cannot be reopened.

28. Thus, on the authority of Grand Slam International and Sun Export Corporations’s case, it can be stated that the law laid down by the Supreme Court is that the importer/consignee of goods cannot avoid liability to pay demurrage charges to the Warehousing authorities even though the goods may have been illegally detained in the Customs Area/Bonded Warehouse by the Customs authority. The contentions of Mr. Ghosh, learned Solicitor General have, therefore, to be upheld in so far as the liability of the petitioner to pay demurrage charges are concerned for the period upto adjudication process, the petitioner can have no cause of action either on the ground of trespass to goods or under Section 69 of the Contract Act.

29. The next question that would arise for consideration is whether such liability of the importer/consignee would be indefinite in duration i.e. to say beyond the adjudication process. The answer to that is dependant upon the question whether the detention of goods by the Customs authority on and after February 16, 2000 (when thejudgment of CEGAT was delivered) was wholly unjustified and, therefore, without jurisdiction. The disability/ inability of the importer to clear the consignments during the adjudication period is covered by the judgment of the Supreme Court in the Grand Slam International case. In the judgment of the Supreme Court in Grand Slam international’s case, as noticed supra, it was also held that an importer can clear the imported goods only after completion of the custom formalities that until Customs clearance the importer is not permitted to remove his goods from the premises of the Warehouse.

30. Not all acts of the Customs authorities can constitute unlawful means for the purpose of establishing liability in tort. Although it was contended on behalf of the petitioner that once the action of confiscation (statutory function) was held unjustified the same would constitute unlawful means for the purpose of establishing liability in tort. The said contention as already noticed has been rejected while upholding the contention of Mr. Ghosh, learned Solicitor General, appearing for the Customs authorities. Customs authorities acted in exercise of the powers vested in them and it is, therefore, not possible to contend that the conduct of the Customs authorities enjoyed no statutory immunity. One of the essential ingredients in the tort thus have not been established. The “interference” to the goods of the petitioner must involve interference by unlawful means to constitute an act of interference that would be actionable. For the period of covered by adjudication proceedings the conduct of the Customs authorities in detention/retention of the goods pursuant to the statutory powers vested in it would attract immunity qua tort, the same conduct would constitute the use of unlawful means for the purpose of establishing liability in tort where the aforesaid action was unjustified on and after the said dated of adjudication, in the case on hand when CEGAT passed the orders in exercise of its appellate jurisdiction.

31. In the case on hand the appeal against the orders of confiscation and penalty imposed by the Customs authorities was allowed. CEGAT set aside the order of confiscation as also the order imposing penalty upon the petitioner. It can therefore be said that the proceedings initiated by the Customs authorities were within their jurisdiction and they suffered from mere error of law within jurisdiction which could be corrected and was so corrected in terms of the remedy available under the statute. The adjudication process from the stage of proceedings initiated by the Seizure Officer upto the CEGAT has taken sufficiently long time. For the period covered by the adjudication process that is upto the date of the order passed by the tribunal (CEGAT) the Customs authorities cannot be said to have acted either illegally or unlawfully. As already held supra, it is the liability of the petitioner to pay demurrage charges for the period upto adjudication process. Petitioner can have no cause of action for the reliefs as prayed for against the Customs authorities. For the period subsequent that is to say on and after the culmination of adjudication process that is the date when the CEGAT passed the order, the legal consequences flowing from that order must be given effect to by the Customs authorities. They are bound by the said order and had statutory obligation to give effect to that order by directing release of the imported consignments forthwith. There can be no reason justifying the detention of the goods beyond the adjudication period. If the Customs authorities were aggrieved by the judgment of the CEGAT and had preferred an appeal before the Supreme Court, as they did, the petitioner cannot be made liable for the period during which the matter was pending before the Supreme Court until it was dismissed by an order dated November 10, 2000. The position would have been entirely different had the Supreme Court entertained the appeal and/or granted relief to the Customs authorities. That, however, did not happen. The adjudication proceedings concluded when the CEGAT passed the orders dated February 16, 2000. With the culmination of the adjudication proceedings the Customs authorities as the ‘bailee of the goods’ were under an obligation to release the goods forthwith. The retention of the goods on and after that dated, it must be held, was without authority of law and the action of the Customs authorities in not releasing the goods cannot but be illegal and wholly without jurisdiction. The petitioner has been unlawfully deprived of the possession of his imported goods because of the illegal action of the Customs authorities. Petitioner could not take possession of the goods even after culmination of the adjudication process and that too after paying demurrage charges. The cause of action for the petitioner to claim damages arising from trespass to goods would and has accrued on and from the date the adjudication proceedings culminated viz, on the date the order was passed by CEGAT.

32. In my view, therefore, for the period on and from February 17, 2000 the Customs authorities have rendered themselves liable for payment of the demurrage charges incurred by the petitioner which was solely on account of the inaction on the part of the respondent-Customs authorities and without any lawful justification, detaining the goods. It must also be stated here that the claim of the petitioner in the writ application W.P. No. 1596 of 2001 was only for payment of amounts on account of warehousing charges on and from February 16, 2000. That petition was disposed of by an order dated November 10, 2000 i.e., to say after the order of the Supreme Court passed on October 20, 2000.

33. According to the Customs authorities 4 (four) bills of entry viz. Nos. 1768, 1769, 1770 and 1771 were filed on September 28, 1994. The petitioner furnished duty free-licence in respect of the said goods covered by the said 4 (four) bills and these goods according to the Customs authorities were released “immediately” on December 12, 2000.

34. With respect to goods covered by the other 2 (two) bills of entry viz. bearing Nos. 1540 and 1541 it is the case of the Customs authorities and not disputed by the petitioner that the petitioner could not produce any duty-free licence. However, the contention of the petitioner is that despite repeated reminders the Customs authorities did not care to assess and release the goods and assessment was made only on March 1, 2001 and duty was paid on March 7, 2001. There is no explanation offered by he Customs authorities for the delay in making the assessment only on March 1, 2001 when the order of CEGAT was passed on February 6, 2000.

35. It must, therefore, be held that the liability of the Customs authorities in respect of the 4 (four) consignments and entitlement of the petitioner to claim demurrage charges for the inaction on the part of the Customs authorities and/or for illegal detention of the goods on and from February 17, 2000 to December 12, 2000 stand established.

36. In respect of the other 2 (two) consignments the Customs authorities, it must be held, are liable on account of delay in their part in making the assessment on March 1, 2001. Petitioner shall accordingly be entitled to reimbursement of demurrage charges for the period from February 17, 2000 upto February 28. 2001.

37. In the facts and circumstances of the case and for the reasons aforestated the claim of the petitioner for the period upto February 16, 2000 is hereby rejected. In so far as the period commencing February 17, 2000 is concerned, the petitioner it is hereby declared shall be entitled to the reimbursement of charges incurred by him towards storage of the imported goods until the date/s as specified hereinbefore. For the said purpose the Customs authorities shall within a period of 3 (three) months from date of communication of a copy of this order consider the claim of the petitioner and determine the charges upon verification of the concerned bills in that behalf which shall be placed by the petitioner before the Customs authorities within three weeks from the date hereof. The Customs authorities shall determine the amount payable to the petitioner for the said period from February 17, 2000 upto the dates namely December 12, 2000 (in re: 4 consignments) and February 28, 2001 (in re: 2 consignments). A reasoned speaking order shall be passed and which shall be communicated to the petitioner within the said stipulated period of three months.

38. The amount to be determined by the Customs authorities shall be paid to the petitioner within 30 (thirty) days thereafter. In case of delay or default the petitioner shall be entitled to interest calculated at the rate of 9% p.a. (simple) from the said date till date of realization.

39. It shall be open to the petitioner, if aggrieved by decision of the Customs authorities in the matter of determination of the aforesaid amount, to have recourse to such proceedings as may be open to the petitioner in law.

40. By way of clarification it must be stated here that the aforesaid determination shall be completed within a period of 3 (three) months from the date of communication of a copy of this order by the Customs authorities namely, the Commissioner of Customs, Calcutta Port or such other person/ authority as may be nominated in that behalf by the Commissioner of Customs specifically as his nominee.

41. Writ application is accordingly allowed in part and Rule is made absolute in terms of the directions, as above.

In the facts and circumstances of the case there shall, however, be no order as to costs.

Let urgent xerox certified copy of this order and judgment, if applied for, be furnished to the appearing parties on priority basis.

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