(Per: HONOURABLE MS.JUSTICE HARSHA DEVANI) 1. By this petition under Article 226 of the Constitution of India, the petitioner seeks the following substantial relief:
“32. It is, therefore, respectfully prayed as under:
i) This Hon'ble Court be pleased to issue writ of certiorari or any other appropriate writ, order or direction quashing all demands of demurrages, penalty, rent as is being claimed and sought to be recovered for clearance of subject goods i.e. 582 MTs as contained vide letters dt. 23.5.2006 (Annexure P-8), read with letter dt. 12.6.2006 (Annexure P-9) pertaining to the petitioner only.
ii) This Hon'ble Court be pleased to issue writ of mandamus or any other appropriate writ, order or directions while commanding respondents, its officials, employees directing them to clear the subject consignment of about 582 MTs of Stainless Steel Angles of the petitioner on payment of levy of duty as permissible in law but without payment of demurrages, rent, penalty or interest or any other charges on this account.
(iii) In alternate and without prejudice to the above and subject to all the rights and contentions, this Hon'ble Court be pleased to issue writ of Mandamus or any other appropriate writ, order or direction directing Respondents, its officials to clear the above referred goods of Stainless Steel Angles of the quantity of about 582 MT of the petitioner on payment of duty as leviable and permissible in law and on payment of rent which have been calculated by the officials of respondent No.4 of the amount of about 22 lacs (Approximately) on the subject goods as per their letter dt. 23rd May 06 (Annexure P-8) read with letter dt 12th June 06 (Annexure P-9) and on calculating the rent upto date, in the manner as referred to therein, subject to waiver of the said amount by Respondent no.2 & 4 & without payment of any penalty/interest or any other amounts.“
2. The facts giving rise to the present petition are that the petitioner Company, at the relevant time, was an export house. Pursuant to a contract dated 14th December 1981, between the petitioner and the foreign supplier, the petitioner imported two consignments of total quantity of 582 metric tonnes of stainless steel angles which were discharged at Kandla Port Trust in the year 1982. As per the averments made in the petition, the petitioner filed two bills of entry seeking clearance of the goods for home consumption against bill of entry No.F.79 dated 28.5.82 for clearance of the first consignment of 364.292 metric tonnes and against another bill of entry No.F.148 dated 19.7.82 for clearance of consignment of 217.853 metric tonnes. It may be noted that at the relevant time when the petitioner entered into the contract, the basic duty leviable on such goods was 60% ad valorem which was increased to 300% on 15.4.82 by the Customs Tariff Amendment Bill 1982 with retrospective effect from 1.1.81. It may also be noticed that subsequently, the petitioner has filed an affidavit stating that the bills of entry had been filed for warehousing and not for home consumption and has also annexed copies of the bills of entry to substantiate its say.
3. A show cause notice dated 16.6.82, came to be issued to the petitioner in relation to the first consignment of 364.292 metric tonnes, alleging that the subject goods were unlawfully imported as the same were canalized which was contested by the petitioner. The adjudicating authority, however, by an order dated 4.8.82, held against the petitioner and directed confiscation of goods holding that the subject goods are stainless sheets and not angles with an option to redeem the same on payment of redemption fine of Rs.20 lacs. Penalty of Rs.2 lacs also came to be imposed. The petitioner challenged the said order before the Central Board of Excise and Customs (hereinafter referred to as “the Board”) which was the appellate authority at the relevant time. By an order dated 21.9.82, the Board set aside the order passed by the adjudicating authority and held that the import is lawful. Accordingly, the order of confiscation, levy of redemption fine and penalty came to be quashed. The aforesaid order passed by the Board came to be challenged by the revenue before the Central Excise and Gold (Control) Appellate Tribunal (CEGAT) which came to be dismissed by an order dated 9.8.89. The revenue did not carry the matter any further. The said order, therefore, attained finality.
4. In respect of the other consignment of 217.853 metric tonnes, a show cause notice dated 10.12.82 came to be issued to the petitioner. During the course of the said proceedings, the petitioner drew the attention of the adjudicating authority to the above order passed by the Board on 21.9.82 in relation to the first consignment and requested that the adjudication proceedings be dropped. The adjudicating authority, however, did not accede to such request and by an order dated 16.3.82 held that import was unlawful and directed confiscation of the goods with option to redeem the same on payment of Rs.10 lacs. Penalty of Rs.1 lac also came to be imposed. The said order of the adjudicating authority came to be challenged by the petitioner before the Delhi High Court in Civil Writ Petition No.200/83. In the said petition, the petitioner also challenged the increase in the rate of duty from 60% to 300% ad valorem with retrospective effect from 1.1.81. Alternatively it was prayed in case the levy is held to be lawful retrospectively, the petitioner be permitted to get the goods mutilated in terms of section 24 of the Customs Act, 1962 (hereinafter referred to as “the Act”) and clear the goods on payment of duty. By an order dated 16.3.83, the Delhi High Court restrained the Customs Authorities from selling alienating or otherwise parting with the possession of the goods. It appears that another importer M/s. Jain Shudh Vanaspati Ltd. had also filed a writ petition being CWP No.199/83 before the Delhi High Court which came to be heard along with the writ petition filed by the petitioner. Both the aforesaid petitions came to be disposed of by an order dated 30.4.04 on the ground of lack of territorial jurisdiction. The High Court, however, observed that it would be open for the petitioner to approach the appropriate forum against the orders impugned before it for appropriate relief. As regards mutilation of goods, it was left open for the petitioner to approach the Collector of Customs and Central Excise. Subsequently, the petitioner preferred an appeal before the Customs, Excise and Service Tax Appellate Tribunal which came to be allowed vide order dated 14.7.06 whereby, it was held that confiscation was bad in law. Accordingly, the order of confiscation, levy of penalty and redemption fine, etc. came to be quashed.
Subsequently, by a communication dated 2nd May 2006, addressed to the Traffic Manager, Kandla Port Trust, the petitioner requested the Kandla Port Trust to recalculate the amount payable by it on the basis of demurrage till 11.10.82 and for the period subsequent thereto, on the basis of storage charges so as to enable it to take steps for clearance of the subject goods. It is the case of the petitioner that initially the goods were lying at the Port/Wharf from 21.5.82 till 11.10.82 when those goods were shifted to warehouse. It is further the case of the petitioner that when the goods are at the Port, demurrages are liable to be paid whereas when the goods are warehoused, nominal amount of rent is liable to be paid. Accordingly, the petitioner had requested the Kandla Port Trust to bifurcate the amount on both the counts. The petitioner has averred in the petition that it had been given a copy of an inter-office communication memo, which appeared to have been prepared pursuant to the letter dated 2.5.06. By means of letter dated 23.5.06, it was stated that in fact, it is a case of rent and the maximum is Rs.44,61,600/- and equal amount of penalty is being claimed for total goods of both parties, that is, for 1200 metric tonnes (approximately). The amount of rent was calculated on the quantity of about 1200 metric tonnes which also represented the quantity imported by another importer namely, Jain Shudh Vanaspati Ltd. Insofar as the petitioner is concerned the total quantity imported by it was 582 metric tonnes. However, no bifurcation was provided to the petitioner despite request made by the petitioner vide letter dated 2.5.2006. Subsequently, the petitioner received a letter dated 12/13.6.06 in reply to the letter dated 2.5.06 computing demurrage at Rs.47.77 crores for the total quantity of 1200 metric tonnes. It was also stated in the said letter that in case the petitioner desired waiver of the charges, it should approach the Ministry of Shipping. The petitioner made separate representations dated 11.9.06 to the Hon'ble Minister for Shipping, Road Transport and Highways as well as to the respondent No.4, Kandla Port Trust. Since nothing was heard from the respondents, the petitioner by a letter dated 18.6.07, reminded them to consider its submissions and grant the relief prayed for by it. Since there was no response, the petitioner has filed the present petition seeking the relief noted herein- above.
5. In response to the petition, respondent No.3 has filed an affidavit in reply contending that the time spent by the petitioner from 1983 to 2004 cannot be attributed to be a fault on the part of the respondent authority since during the said period the petitioner had filed a writ petition before the Delhi High Court wherein by an order dated 8th April, 1983 the court had restrained the Customs Authorities from auctioning/alienating or selling the consignments of stainless steel angles in question. The said writ petition came to be dismissed on 30.4.2004 on the ground of availability of alternative statutory remedy. Under the circumstances, in the light of the fact that from 1983 to 2004, there was an injunction operating against the authorities not to transfer/alienate or auction or dispose of the imported goods, the customs authorities cannot be faulted with. It is further contended that the matter of demurrages falls with the functional and jurisdictional purview of Kandla Port Trust and therefore, the Customs Department does not come into picture. It is also averred that the petitioner was free to remove 364.292 metric tonnes of goods on or after 9.8.89 as CEGAT had dismissed the appeal of the revenue on 9.8.89. The said order of CEGAT was not carried further and, therefore, had attained finality. The petitioner has not chosen to clear 364.292 metric tonnes of goods till date and therefore, the delay cannot be attributed to the revenue authorities. That if there is any dispute as regards demurrage, rent, penalty or interest between Kandla Port Trust and the petitioner, the revenue cannot be held accountable for the same.
6. The respondent No.4 has also filed an affidavit in reply dated 25th October 2007, wherein it has been averred that the deponent has gone through the records in relation to the petitioner available with the respondents, but the annexure at annexure P-8 at page 130 and 131 has not been found. That the annexure as produced is not authenticated by the respondent Trust nor does it appear to be an authenticated document of the respondent Trust. It is alleged that the petitioner has deliberately suppressed that in the writ petition filed before the Delhi High Court being WPC No.200/82, the petitioner had filed an application bearing CA No.11959/98 for impleading the Kandla Port Trust as party and had claimed various reliefs including a direction to the Kandla Port Trust to clear the goods of the petitioner without payment of any amount of demurrage/pending charges. It is submitted that the prayers made by the petitioner were not entertained and that the factum of liability for payment of demurrage charges in relation to the goods/consignment was within the clear knowledge of the petitioner. It is contended that what has been charged to the petitioner is demurrage and other incidental charges and the nature of charge was within the knowledge of the petitioner since almost 25 years. The petitioner was aggrieved by and dissatisfied with the nature of charges and as such challenged the same before the Delhi High Court in the year 1988. It is further averred that on the consignment being landed in the transit area, for the reasons known to the petitioner, since the same was not shifted/taken by the petitioner though requested, had to be put in the present place. The goods stored continued to be in the transit area of the port and have been occupying valuable commercial space in the transit area of the port. Though it is the within the knowledge of the petitioner that it is liable to pay demurrage, it has chosen to sleep over its rights for almost 25 years. It is alleged that a fabricated document has been produced by the petitioner in the name of the respondent Trust. It is further averred that in fact the goods/consignment of the petitioner continued to remain in the transit area of the port and since the amount levied upon the petitioner was not paid, the goods of the petitioner were put up for public auction. The auction, however, was not concluded in view of the fact that interim relief was granted by the Delhi High Court. It is alleged that the petitioner itself is to be blamed for the delay caused since it had filed the above petition which remained pending for 21 years before a court which had no jurisdiction.
7. The petitioner has filed a rejoinder affidavit in response to the affidavit filed by the fourth respondent. Subsequently, an affidavit in support of the petition has been filed by the petitioner placing on record the bills of entry for warehousing which have been referred to hereinabove. The fourth respondent has filed a further affidavit in reply adhering to the averments made in the affidavit in reply filed by it earlier. It is reiterated that since the goods of the petitioner are stored/placed in the transit shed within the port area of the Kandla Port Trust, it is only the demurrage which is to be charged and to be paid by the petitioner. It is also stated that the petitioner has produced bills of entry for warehousing which are illegible and as such the respondent is not in a position to reply to the same.
8. Mr. G. L. Raval, Senior Advocate, learned counsel for the petitioner vehemently submitted that pursuant to the show cause notice issued by the Customs authorities, the petitioner had ultimately succeeded before the Tribunal. Accordingly, there was no default on the part of the petitioner on account of which the goods could not be cleared from the warehouse. It was submitted that non-clearance of the goods was on account of the acts and omissions on the part of the revenue authorities. Despite the fact that in respect of the first consignment, the order-in-original passed by the adjudicating authority had been set aside by the Board, vide order dated 21.9.82, which was brought to the notice of the adjudicating authority, in the proceedings in relation to the second consignment, the adjudicating authority in utter defiance of the law laid down by the Apex Court in Union of India v. Kamlakshi Finance Corporation Ltd., AIR 1992 SC 711, did not follow the decision of the Board and confirmed the show cause notice. Under the circumstances, during the said period, the goods in question had been kept at the port or warehoused without any default on the part of the petitioner and as such no amount of damages or rent was payable by the petitioner.
8.1 Referring to the affidavit dated 8th May 2008 filed by the petitioner in support of the petition, it was submitted that in fact the bills of entry were filed for warehousing and not for seeking clearance of goods for home consumption. Once the goods were warehoused, it was not permissible for the Kandla Port Trust to recover demurrages from the petitioner. If at all, the petitioner would be liable to pay only rent. Attention was invited to annexure P-8 dated 23.5.06 at page 130 as well as the calculation sheet showing rental charges at page 131, to submit that as per the calculation of the fourth respondent, the amount of rent was Rs.44,61,600/- and that the said fact has been suppressed by the said respondent. It was contended that in the light of the fact that the goods had been warehoused, there was no question of charging demurrage as computed in the calculation at page 130. Referring to the affidavit of the Traffic Manager of the Kandla Port Trust filed in response to the petition, it was argued that he has not dealt with the calculation of rent which is not bonafide and that the respondents have not denied the quantification made in the above referred statement at pages 130 and 131.
8.2 The learned counsel further submitted that the Tribunal decided the matter in respect of the second consignment in favour of the petitioner on 17th April 2006 whereupon the petitioner within a short period of two weeks, that is, on 2nd May 2006, approached the Kandla Port Trust to clear the goods, despite the fact that the liability does not fall on the petitioner as there was default on the part of the Customs authorities in not clearing the goods. The Kandla Port Trust was requested to calculate the warehousing charges with effect from 11.10.82 when the goods were warehoused and demurrage charges from 21st May 1982 till 10th October 1982. According to the learned counsel, even at that stage, if the Kandla Port Trust had acted lawfully and calculated the rent/warehousing charges with effect from 11.10.82, the demurrage charges which now come to more than Rs.47 crores could have been obviated.
8.3 Referring to the decision of the Supreme Court in Union of India v. Sanjeev Woollen Mills, 1998 (100) E.L.T. 323 (S.C.), wherein the court had confirmed the decision of the Delhi High Court directing the appellant therein to issue detention certificate and bear the demurrage and container detention charges, the learned counsel submitted that in the facts of the present case, the subject goods were required to be kept in the custody of the fourth respondent on account of the default on the part of the Customs authorities and therefore, it would be the Customs authorities who would be liable to bear the demurrage charges, etc. Reliance was placed upon the decision of the Delhi High Court in Om Petro Chemicals v. Union of India, 2002 (140) E.L.T. 353 (Del.) wherein it was held that when the petitioner therein had not committed any illegality in importing the goods in question, it cannot ordinarily be saddled with the liability to pay demurrage.
8.4. The decision of the Delhi High Court in Agrim Sampada Ltd. v. Union of India, 2004 (168) E.L.T. 15 (Del.), was relied upon wherein the court placing reliance upon its earlier decision in Om Petro Chemicals (supra) held that as the petitioner had not committed any illegality in importing the goods in question, it could not be saddled with the liability of payment of the demurrage and that it was the Customs Department which should be directed to bear the demurrage.
Reliance was also placed on the decision of the Punjab and Haryana High Court in Patiala Castings Private Limited v. Union of India, 2003 (156) E.L.T. 458 (P&H), the decision of the Calcutta High Court in Donald & Macarthy (P) Ltd. v. Union of India, 1997 (89) E.L.T. 53 (Cal.), the decision of the Calcutta High Court in Kumar Trading Co. LLC v. Union of India, 2007 (132) E.L.T. 578 (Cal.), the decision of the Madras High Court in Anuma Precision Tool Pvt. Ltd. v. Collector of Customs, Madras, 2000 (121) E.L.T. 309 (Mad.), the decision of the Andhra Pradesh High Court in Sujana Steels Ltd v. Commissioner of Customs & C.Ex. (Appeals), Hyderabad, 2002 (141) E.L.T. 343 (A.P.), for a similar proposition of law. It was submitted that demurrages had mounted on account of default on the part of the Customs authorities and as such the liability to pay the same would be of the Customs authorities and that the petitioner cannot be saddled with the same.
8.5 It was submitted that in any case, if at all the petitioner is held to be liable to pay the charges, the petitioner can be fastened with the liability to pay demurrages only for the period from 21st May 1982 to 11th October 1982 and rent from 11th October 1982 till 2nd May 2006 when the request was made to the fourth respondent to calculate demurrages and rent so as to enable the petitioner to take steps for clearance of goods. It was, accordingly, urged that the petition deserves to be allowed by quashing the demand raised by the respondents and issuing direction to the respondents to clear the goods in question.
9. Opposing the petition, Mr. Dhaval Vyas, learned advocate for the fourth respondent, Kandla Port Trust, submitted that the subject goods were lying in the transit area of the Port since the year 1982. Insofar as the Kandla Port Trust is concerned, the petitioner is liable to pay demurrage charges. As to whether the petitioner is liable to bear the demurrage charges or the Customs authorities is a dispute inter-se between the petitioner and the Customs authorities. However, insofar as the Kandla Port Trust is concerned, the petitioner is liable to pay the outstanding charges. In support of the said submission, reliance was placed upon the decision of the Supreme Court in the case of International Airports Authority of India v. Grand Slam International, 1995 (77) E.L.T.753 (S.C.), wherein the court after referring to its earlier decisions observed that it is clear 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 demurrages for the imported goods in its custody and make the importer or the consignee liable for the same even for the periods 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 of other authorities who might have issued detention certificates owning such fault.
9.1 Referring to the documents annexed at annexure P- 8 to the petition, it was submitted that the same are fabricated documents which have been filed with a view to mislead the court. It was urged that after going through the records in relation to the present petitioner available with the said respondent, the documents annexed at annexure P-8 have not been found. The said documents are not authenticated by the respondent Trust nor do the same appear to be any authenticated document of the Trust. It was argued that no demand for rent had ever been made to the petitioner and that the petitioner, right from the beginning was aware that it was liable to pay demurrage charges for the storage of its goods within the area of the port trust. It was vehemently contended that since the goods were lying in the transit area and were not warehoused, the petitioner is liable to pay demurrages and not rent as claimed by it. It was pointed out that in fact the goods of the petitioner continued to remain on the transit area of the port and since the amount levied upon the petitioner was not paid, in the light of the provisions of the Customs Act and the Major Ports Trust Act, which permit the fourth respondent to dispose of the goods if the dues have not been paid within the prescribed period, the fourth respondent after issuing a notice to the petitioner put up the subject goods for public auction. However, in view of the order passed by the Delhi High Court restraining the respondents from disposing of the goods, the Customs authority had not granted necessary clearance for auctioning the goods. The goods in question are, therefore, still lying in the transit area and are occupying valuable commercial space of the fourth respondent and the petitioner is liable to pay the demurrage charges in relation to the subject goods.
10. Opposing the petition, Ms. Amee Yajnik, learned Senior Standing Counsel for the Customs authorities submitted that the order-in-original in respect of the first consignment came to be passed on 12th August 1982. The appeal against the said order came to be allowed by the Board vide order dated 21.9.82. The Department’s appeal against the order of the Board came to be dismissed by CEGAT by an order dated 9.8.89, which order was not carried any further by the Department and as such, had attained finality. However, despite the aforesaid position, the petitioner did not take any steps for clearing the goods at the relevant time. Under the circumstances, no fault can be attributed to the Customs authorities in respect of the period after 9.8.89. It was further submitted that insofar as the second consignment is concerned, against the order in original dated 16th March 1983, the petitioner had filed a petition before the Delhi High Court wherein an interim order was passed restraining the respondents from dealing with the goods in question. The said petition came to be disposed of by order dated 30th April, 2004 after a period of almost twenty years on the ground of lack of jurisdiction. It was argued that since it was the petitioner who was prosecuting the matter before a wrong forum, the respondent authorities cannot be saddled with the demurrages which have mounted on account of the period of twenty years which was consumed in the said proceedings. Inviting the attention of the court to the reliefs prayed for in the petition, it was pointed out that no relief has been claimed against the third respondent nor are there any averments in the petition to the effect that it is the Customs authorities who are liable to bear the demurrage charges. Under the circumstances, in the absence of any averments to that effect, such contention which has been advanced only during the course of arguments has not been dealt with in the affidavit in reply filed on behalf of the third respondent. It was argued that such contention having been raised only during the course of arguments, without corresponding prayers in the petition, the petitioner is not entitled to the grant of such relief.
11. After the matter was heard, the learned counsel for the petitioner tendered written submissions wherein it has, inter alia, been contended that admittedly bills for warehousing were filed; that the goods were warehoused is not disputed during the course of hearing and that it is not disputed that the same were warehoused on 11th October 1982. It is also submitted that the first parcel was not cleared on the strength of the order in appeal on 21st September 1982 for the reason that huge demurrage was claimed by the respondent authorities and the prayer in the writ petition before the Delhi High Court was also for non-payment of the demurrages by the petitioner.
12. Before adverting to the merits of the rival contentions, it may be necessary to note certain facts as emerging from the record. By the order in original dated 12.8.82 passed in respect of the first consignment, the adjudicating authority ordered confiscation of 364.292 metric tonnes of the subject goods with an option to the petitioner to redeem the imported goods on payment of fine of Rs.20 lacs in lieu of confiscation in addition to appropriate duties leviable thereon. Penalty of Rs.2 lacs also came to be imposed. Despite the aforesaid position, the petitioner did not redeem the goods. The petitioner succeeded in its appeal before the Board, which by an order dated 21.09.82 set aside the order dated 4.08.82 passed by the adjudicating authority. The appeal preferred by the revenue against the order of the Board before CEGAT came to be dismissed vide order dated 9.8.89 on the ground that the Collector cannot file appeal against the order of the Board. After the dismissal of the appeal, no steps had been taken by the petitioner to get the goods released thereafter. By the order-in-original dated 16.3.83 made in respect of the second consignment of 217.853 metric tonnes of stainless steel angles, the adjudicating authority ordered the goods to be confiscated with an option to redeem the same upon payment of Rs.10 lacs. The said order came to be challenged by the petitioner before the Delhi High Court by way of a writ petition, which came to be dismissed on 30th April 2004. In the interregnum, no effort was made by the petitioner for getting the subject goods released. In the meanwhile, during the pendency of the proceedings before the Delhi High Court, by a notice dated 2.11.98, the Kandla Port Trust called upon the petitioner to pay demurrages failing which it would be constrained to take necessary action to auction the cargo under section 62 of the Major Port Trusts Act, 1962. In response to such notice, the petitioner by a communication dated 11th November 1998 stated that the goods were transferred to the warehouse on 11th October 1982, therefore, demurrage charges would be applicable for the period from 21.5.82 up till 11.10.82 and thereafter only warehousing charges would be applicable. The calculation of demurrage charges was, therefore, not correct. It was brought to the notice of the fourth respondent that by its order dated 8th April 1983 the Delhi High Court, had restrained the Customs authorities from auctioning, alienating or selling the consignments of stainless steel angles in question and request was made the goods should not be auctioned and that the demand be reworked on the basis of warehousing charges with effect from 11.10.82. It was also requested that demurrage/warehousing charges to the tune of 90% be waived.
13. It appears that pursuant to the aforesaid demand notice raised by the fourth respondent, the petitioner filed an application in the proceedings of C.W.P. No.200 of 1983 before the Delhi High Court for impleading the Kandla Port Trust as a respondent in the said proceedings and sought quashing of the demand contained in the communication of the fourth respondent. It was also prayed that the fourth respondent viz., the Kandla Port Trust, be directed to clear the goods of the petitioner without payment of any amount of demurrages/bonding charges. Thus, the notice dated 2nd November 1998 issued by the Kandla Port Trust calling upon the petitioner to pay demurrage charges for the period up till 30th September 1998 was challenged before the Delhi High Court in the said proceedings. While disposing of the petition, the court did not express any opinion on the merits of the case including the question of demurrage.
14. It appears that even at the relevant time when such notice came to be issued to the petitioner by the Kandla Port Trust in the year 1998, the petitioner did not take any steps for getting the subject goods released. Subsequently, after the appeal preferred by the petitioner before the CESTAT came to be allowed, the petitioner requested the Kandla Port Trust by the communication dated 2nd May 2006 to recompute the demurrage charges as already noted hereinabove.
15. It may be noted that the relief claimed in the petition is for quashing all demands of demurrages, penalty, rent and for clearance of the subject goods, that is, 582 metric tonnes, as contained vide letters dated 23.5.2006 (annexure P- 8) read with letter dated 12.6.2006 (annexure P-9) pertaining to the petitioner only. Annexure P-8 dated 23.5.2006 is a disputed communication inasmuch as the fourth respondent has denied having ever communicated the same to the petitioner and has also categorically averred in the affidavit in reply that no such document is found on its record. By the impugned letter dated 12th June 2006, the fourth respondent has informed the petitioner that three lots of import steel cargo of MV Colombo Venture arrived during 17.5.82, 8.6.82 and 9.7.82 and are lying balance in as is where is condition as per their records. That an amount of approximately Rs.47,77,28,815/- is required to be paid by the petitioner towards demurrage charges for the period upto 23.5.2006. The petitioner was informed that regarding its request for waiver of demurrage charges, remission of demurrage of this nature could be considered by the Ministry of Shipping on the recommendation of the Board of Trustees of the Kandla Port Trust, that too after the petitioner takes delivery of the cargo on completion of the custom formalities and payment of port charges for which it would have to make a separate representation to the Board.
16. The petitioner instead of completing the customs formalities and making payment of port charges, made two representations dated 11th September 2006, one to the Hon’ble Minister for Shipping, Road Transport and Highways and another to the Board of Trustees, Kandla Port Trust. Subsequently, as there was no response, the petitioner has filed the present petition.
17. The main contention raised by the learned counsel for the petitioner is to the effect that the goods in question have been warehoused with effect from 11th October 1982 and therefore, if at all, the petitioner is liable to pay charges to the fourth respondent, it would be liable to pay only warehousing charges and not demurrages as claimed by the fourth respondent. The basis of such submission is the bills of entry for warehousing, copies whereof have been annexed at annexure P-13 and P-14. In this regard, it may be noted that the fourth respondent has categorically denied that the goods have been warehoused and its specific stand is that the consignment was landed in the transit area and was not shifted and that the goods continued to be stored in the transit shed within the “Port Area” of the Kandla Port Trust and are occupying valuable commercial space in the transit area of the port. Thus, as to whether the goods have been warehoused or were lying in the transit area is a disputed question of fact which cannot be adjudicated in a writ petition under Article 226 of the Constitution. It may further be noted that under section 45 of the Act, there are restrictions on custody and removal of imported goods. The section provides that once the goods are unloaded in a customs area, the same shall remain in the custody of such person as may be approved by the Commissioner of Customs (in the present case 4th respondent) until they are cleared for home consumption or are warehoused or transhipped in accordance with the provisions of Chapter VIII. The person having custody of the imported goods in the customs area cannot permit such goods to be removed from the customs area or otherwise dealt with except under and in accordance with the permission in writing of the proper officer. Section 46 of the Act makes provision for entry of goods on importation and postulates that the importer of any goods other than goods intended for transit or transshipment shall make an entry thereof by presenting to the proper officer a bill of entry for home consumption or warehousing in the prescribed form. Section 47 of the Act provides for clearance of goods for home consumption. Section 59 of the Act makes provision for “warehousing bond” and lays down that an importer of any goods specified in sub-section (1) of section 61 which have been entered for warehousing and assessed to duty under section 17 or 18 shall execute a bond as prescribed therein. Section 60 makes provision for permission for deposit of goods in a warehouse and lays down that when the provisions of section 59 have been complied with in respect of the goods, the proper officer may make an order permitting the deposit of goods in a warehouse. Section 61 of the Act provides for the period for which the goods may remain warehoused. Section 63 makes provision for rent and warehouse charges. Thus, there are specific provisions under the Customs Act in respect of warehousing of goods. Under the circumstances, if as per the say of the petitioner, the subject goods had been warehoused, the petitioner could have at least placed on record some documents evidencing the fact that the goods had in fact been warehoused. In the absence of any documentary evidence or necessary averments being made in the petition to the effect that any of the provisions as contemplated under the Act for warehousing of goods have been followed or complied with, it is not possible for the court to accept the contention of the petitioner that the subject goods had been warehoused and that therefore, the fourth respondent can recover only warehousing charges and not demurrages.
18. It may also be pertinent to note that the relief claimed in the petition is mainly against the fourth respondent, Kandla Port Trust. Insofar as the demand of demurrages and other charges by the Kandla Port Trust is concerned, the issue has been settled by the Supreme Court way back in the year 1995, in International Airports Authority of India v. Grand Slam International (supra), wherein the court after considering its earlier decisions in this regard has held that an authority created under the statute even if is a custodian of the imported goods because of the provisions of the Customs Act, 1962, would be entitled to charge demurrages 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 of other authorities who might have issued detention certificates owning such fault. In the present case, admittedly no such detention certificate has been issued by the Customs authorities owning such fault. Besides, irrespective of the fact as to whether it is on account of the fault of the petitioner or the Customs authorities due which the liability to pay demurrages has arisen, insofar as the Kandla Port Trust is concerned, the petitioner is liable to pay demurrages as held by the Supreme Court in the above referred decision. Under the circumstances, the challenge to the impugned letter dated 12.6.06 must necessarily fail.
19. Insofar as the second relief prayed for in the petition is concerned, whereby the petitioner seeks a direction to the respondents to clear the subject consignment of about 582 metric tonnes of Stainless Steel Angles on payment of levy of duty as permissible in law but without payment of demurrages, rent, penalty or interest or any other charges on this ground, for the reasons stated hereinabove, the petitioner would be liable to pay demurrage charges to the fourth respondent in accordance with law, under the circumstances, no such direction as prayed for by the petitioner can be granted in the facts and circumstances of the present case.
20. As regard the alternative relief prayed for by the petitioner, namely, that the respondents be directed to clear the subject goods on payment of duty as leviable and permissible in law and on payment of rent which have been calculated by the officers of the fourth respondent of the amount of Rs.22 lacs approximately on the subject goods, as per the letter dated 23rd May 2006, as noticed earlier, the fourth respondent has categorically denied the computation of Rs.22 lacs as placed on record by the petitioner. Apart from the aforesaid, as discussed hereinabove, the question as to whether the subject goods have been warehoused or not, is a disputed question of fact inasmuch as the fourth respondent has categorically denied the same. It is settled legal position that this court in exercise of its extraordinary jurisdiction under Article 226 of the Constitution would not embark upon an inquiry into disputed questions of fact and give a finding of fact one way or the other. The petitioner is, therefore, not entitled to the grant of such relief.
21. The learned counsel for the petitioner made a faint attempt to argue that in view of the provisions of section 62 and 63 of the Major Port Trusts Act, the Port Trust could have disposed of the subject goods and prevented the mounting demurrages. In this regard it may be recalled that against the order of the adjudicating authority in relation to the second consignment the petitioner had approached the Delhi High Court by way of a writ petition, wherein the court had granted interim relief restraining the customs authorities from disposing of the goods. Also, the Port Trust did attempt to put the subject goods for auction, but was not granted necessary permission by the Customs authorities in the light of the stay granted by the High Court. At this juncture reference may be made to the decision of the Supreme Court in the case of Sun Export Corporation v. Board of Trustees of the Port of Bombay, (1998) 1 SCC 142, wherein it has been held thus:
“15. We do not find any merit in the submission of Mr Tripathi that the Port Trust could have put the goods in question to sale to offset the demurrage since they had a lien over those goods before making any claim on the appellants. The goods, as already noticed, stood confiscated by the Customs authority vide order dated 28-2-1976 un- der Section 111(d) of the Customs Act, 1962 read with Section 3(2) of the Imports and Exports (Control) Act, 1947.The option to redeem the goods on payment of fine/penalty of Rs 2 lakhs in lieu of such confis- cation under the provisions of Section 125 of the Customs Act, 1962 was to be exercised by the appellants, to whom notice was issued by the Customs authority within a fortnight to redeem the goods. That op- tion was never exercised. Since the goods stood already confiscated, the submission that those goods could have been sold to offset the demurrage charges is fallacious. The goods confiscated by the Cus- toms authority were not available to the Port Trust for appropriation to- wards their dues. Section 63 of the Major Port Trusts Act, 1963, in the facts and circumstances of this case, does not come into play at all.”
22. As noted earlier, the learned counsel for the petitioner has placed reliance upon various decisions referred to hereinabove, for the purpose of contending that it would be the Customs authorities who are liable to pay the demurrages as goods were lying in the custody of the fourth respondent on account of default on the part of the Customs authorities. However, except for the submissions advanced before this court, no factual foundation has been laid down in this regard in the memorandum of the petition. Only a vague averment has been made in paragraph 25 (i) of the petition which reads thus:
“ i. Because the ld Respondent did not appreciate that there was no fault on the part of the Petitioner in clearing the goods. Despite order made by the ld Appellate Authority vide order dt 21st Sept. 1982, which was also upheld later on by the order of ld Tribunal vide order dt 9th August 1989. Goods could not be cleared because of order of Hon. High Court. Though, no doubt, order dt 9th August 1989 came much later, but order dt 21st Sept. 1982 but was placed before the ld Collector of Customs, Kandla while bringing to his notice that it was held by the Appellate Authority that the import was lawful and erroneously order of confiscation, levy of penalty and redemption fine was passed on the alleged uncalled for premises that the order is under appeal. Admittedly there was no stay. Hence, fault is on the part of the Revenue itself and as such burden of payment of alleged demurrages/rent and so called penalty in not manner can be thrown to the petitioner.”
Except for the above, there are no averments to the effect that the goods have been lying in the custody of the fourth respondent on account of the default on the part of the Customs authorities and that therefore, the Customs Authorities are liable to pay demurrages. Similarly, no relief to the effect that the Customs authorities be held liable for payment of demurrages in respect of the subject goods on the ground that it is on account of their default that the goods have been detained has been claimed. At this juncture it may be apposite to refer to the decision of the Supreme Court in State of Orissa v. Mamata Mohanty, (2011) 3 SCC 436, wherein it has been held thus:
“Relief not claimed — cannot be granted
55. Pleadings and particulars are required to enable the court to de- cide the rights of the parties in the trial. Thus, the pleadings are more to help the court in narrowing the controversy involved and to inform the parties concerned to the question in issue, so that the parties may ad- duce appropriate evidence on the said issue. It is a settled legal proposi- tion that “as a rule relief not founded on the pleadings should not be gran-
ted”. Therefore, a decision of a case cannot be based on grounds outside the pleadings of the parties. The pleadings and issues are to ascertain the real dispute between the parties to narrow the area of conflict and to see just where the two sides differ. [Vide Sri Mahant Govind Rao v. Sita Ram Kesho, (1897-98) 25 IA 195 (PC), Trojan & Co. v. Nagappa Chettiar,AIR 1953 SC 235, Ishwar Dutt v. Collector (L.A.), (2005) 7 SCC 190 and State of Maharashtra v. Hindustan Construction Co. Ltd., (2010) 4 SCC 518]”
Thus, unless there are necessary pleadings in this regard, the petitioner cannot base its case on grounds outside the pleadings. Since no relief has been claimed against the third respondent seeking to make the customs authorities liable for payment of demurrages, such relief cannot be granted merely on the basis of the oral submissions advanced by the learned counsel for the petitioner. It may also be pertinent to note that in the decisions on which reliance has been placed by the learned counsel for the petitioner for contending that it is the liability of the customs authorities to pay the demurrages, viz., Union of India v. Sanjeev Woollen Mills, 1998 (100) E.L.T.
323 (S.C.), Om Petro Chemicals v. Union of India, 2002 (140) E.L.T. 353 (Del.) Agrim Sampada Ltd. v. Union of India, 2004 (168) E.L.T. 15 (Del.), Om Petro Chemicals (supra) Patiala Castings Private Limited v. Union of India, 2003 (156) E.L.T. 458 (P&H), Donald & Macarthy (P) Ltd. v. Union of India, 1997 (89) E.L.T. 53 (Cal.), Kumar Trading Co. LLC v. Union of India, 2007 (132) E.L.T. 578 (Cal.), Anuma Precision Tool Pvt. Ltd. v. Collector of Customs, Madras, 2000 (121) E.L.T. 309 (Mad.), Sujana Steels Ltd v. Commissioner of Customs & C.Ex. (Appeals), Hyderabad, 2002 (141) E.L.T. 343 (A.P.), it was either prayed that the Customs authorities issue a detention certificate or specific contentions were raised regarding the liability of the customs authorities to pay the demurrages.
Accordingly, in each case the decision had been rendered in view of the controversy that had arisen on the basis of the pleadings therein. In the present case, the petitioner has claimed relief only qua the Kandla Port Trust challenging the demand of demurrages, penalty and rent and seeking clearance of its goods without payment of demurrages, penalty, interest or rent and in the alternative seeking a direction against the respondents to permit it to clear the goods on payment of rent and not demurrages. No liability is sought to be fastened on the Customs authorities. Under the circumstances, in the absence of any such controversy being raised, none of the said decisions would be applicable to the facts of the present case.
23. It may also be noted that as regards the first consignment of 364.292 metric tonnes, despite the fact that vide order-in-original dated 12th August, 1982 the petitioner was given an option to redeem the subject goods upon payment of redemption fine of Rs.20 lacs, the petitioner did not opt for the same. Thereafter, though the appeal preferred by the Department against the order passed by the Board in favour of the petitioner came to be dismissed on 9th August 1989, for reasons best known to the petitioner, it did not take any steps to get the subject goods released and remained indolent and negligent. It was only after CESTAT decided the appeal of the petitioner in respect of the second consignment that the petitioner woke up from its deep slumber and for the first time in the year 2006, after a delay of about seventeen years, sought to get the goods released. Under the circumstances, insofar as the first consignment is concerned, with effect from 9th August 1989, there was no valid reason for the petitioner for not approaching the fourth respondent for release of the goods in question. Thus, for the period beyond 9th August, 1989 no fault can be found on the part of any of the respondents so as to make them liable for payment of demurrages. Insofar as the second consignment of 217.853 metric tonnes is concerned, by the order-in-original dated 16th March, 1983 the petitioner was given an option to redeem the goods upon payment of Rs.10 lacs. However, the petitioner did not opt for the same. Instead, the petitioner challenged the said order before the Delhi High Court by way of a writ petition which ultimately came to be disposed of on 30th April, 2004 on the ground of lack of jurisdiction. Thus for a period of twenty years, the petitioner was prosecuting the matter before a wrong forum. Under the circumstances, by no stretch of imagination can the delay of twenty years be attributed to any of the respondents. If at all the Customs authorities could be liable for payment of demurrages, it would be only for the period during which the proceedings were pending before the adjudicating authority and the appellate authority. However, the Customs Department cannot be made liable for the entire period during which the proceedings were pending before the Delhi High Court. Moreover, from the conduct of the petitioner it appears that it was never serious about getting the goods released. This may be because of the fact that by time when the petitioner filed the bills of entry on 28.05.82 and 19.07.82, the rate of duty which was 60 per cent at the time when the petitioner entered into the contract for purchase of the subject goods came to be increased to 300 percent advalorem by the Customs Tariff Amendment Bill on 18.4.1982. The petitioner, therefore, may not have been very keen on getting the goods released. It may be noticed that in the writ petition filed by the petitioner before the Delhi High Court in relation to the second consignment, the petitioner had also challenged the enhancement of the rate of duty being retrospective in nature. Apart from the above, as noted earlier, no relief has been claimed against the Customs Department seeking to make them liable for the demurrage charges raised by the fourth respondent, under the circumstances, the question of granting such relief does not arise.
24. It may be noted that subsequent to the order of CESTAT, the petitioner by a communication dated 2nd May 2006, had requested the Kandla Port Trust to recompute the amount payable to it which was followed by representations made to the Ministry of Shipping as well as to the Board. Thereafter, the petitioner filed the present petition some time in July 2007. By an order dated 9th October 2007, this court had granted interim relief to the effect that goods if not sold should not be sold. The said interim relief came to be continued from time to time and was ultimately confirmed. Under the circumstances, from the said date also, the goods have been lying in the custody of the fourth respondent on account of the present petition filed by the petitioner and the interim relief granted therein. Therefore, the delay in getting the goods released for the period between filing the present petition till its disposal also cannot be attributed to the respondents.
25. To summarize:
(i) In the light of the decision of the Supreme Court in the case of International Airports Authority of India v. Grand Slam International (supra), the petitioner is liable to pay demurrages to the respondent No.4-Kandla Port Trust. Consequently the prayer for quashing the demand raised by said respondent does not merit acceptance.
(ii) Similarly the petitioner is not entitled to clear the subject goods without payment of demurrages, rent, penalty or interest and other charges on this account.
(iii) The petitioner has failed to establish that the subject goods were warehoused on 11.10.1982, under the circumstances the prayer that the goods be cleared on payment of rent as calculated in terms of letter dated 23.05.2006 read with letter dated 12.06.06 cannot be granted. Besides as noted hereinabove, the fourth respondent has disputed the veracity of the letter dated 23.05.2006 (Annexure P-8) and has contended that the same is fabricated.
(iv) In the absence of any specific pleadings and prayers against the customs authorities seeking to make them liable for payment of demurrages, no such relief can be granted against them. Moreover, if at all, the customs authorities could be held liable only till 9th August, 1989 in respect of the first consignment. Whereas in respect of the second consignment, the order of the adjudicating authority was passed on 16.03.1983, which was challenged by the petitioner before a wrong forum, resulting in a delay of more than twenty years, which delay cannot be attributed to the customs authorities.
25. For the foregoing reasons, the court does not find any merit in the petition, so as to entitle the petitioner to grant of any of the reliefs prayed for in the petition. The petition, therefore, fails and is, accordingly, dismissed. Rule is discharged. Interim relief granted earlier shall stand vacated.
26. At this stage, the learned counsel for the petitioner seeks extension of the interim relief which was operating so far, so as to enable the petitioner to approach the higher forum. Having regard to the request made on behalf of the petitioner, the interim relief granted earlier is extended for a further period of eight weeks from today.
(Akil Kureshi, J.) (vjn) (Harsha Devani, J.)