By TIOL News Service

CHENNAI, MAY 13, 2016: ACCORDING to the petitioner, they were appointed as Agent for clearing the cargo Muriate of Potash imported by M/s. Indian Potash Limited, Chennai. The Customs Department, by their Examination Order, had released 80% of the cargo and retained 20% on site for verifying the description with all the original bank attested documents and to verify the analytical certificate/technical literature. The cargo was off-loaded from the Vessel and stored in the E1 Shed on transit basis in the Port area. The remaining 20% of the cargo had to be detained by the petitioner in the transit shed on account of the direction issued by the Customs Department.

In terms of Chapter IV of the Scale of Rates, demurrage charges are chargeable on goods left at Chennai Port Trust's transit sheds or yards beyond the expiry of free days. Clause 9(a) provides that the first 45 days will be free days for the period of detention during which the goods were detained by the Commissioner of Customs for the purpose of special examination involving analytical or technical tests other than the ordinary process of appraisement and certified by the Commissioner of Customs to be attributable to any fault or negligence on the part of the importers.

According to the petitioner, 20% of the cargo could not be moved by the petitioner on account of the restraint imposed by the Customs Authorities. Therefore, the petitioner contended that they are entitled for 45 free days, however, the respondents 1 & 2 Port Trust insisted and collected demurrage charge of Rs 9,39,867/- and are neither returning the demurrage charges not releasing the cargo.

The High Court held:

+ When the 3rd respondent, Customs Department had specifically stated that the goods were detained for conducting verification and tests and that the detained goods were released on 13.01.2016 after the receipt of the report from the Regional Fertilizer Control Laboratory on 04.01.2016, the contention of the respondents 1 & 2 that unless the goods were detained by the Customs Department, the petitioner is liable to pay the demurrage charges, cannot be accepted. When the counter filed by the Customs Department clearly says that the goods were detained, the respondents 1 & 2 cannot take a different stand stating that the goods were not detained by the Customs Department. Even by the order of the Customs Department dated 07.12.2015, they ordered for the release of only 80% of the cargo and 20% of the cargo was not released by the said order. Therefore, it also implies that 20% of the goods were detained by the Customs Department without issuing an order for release. Since it is clear that the goods were detained by the Customs Department, the stand taken by the respondents 1 & 2 cannot be accepted. The respondents 1 & 2 are liable to release the cargo stored in E1 Shed pursuant to the bill of entry dated 03.12.2015 without insisting for any payment towards demurrage charges. The respondents 1 & 2 should also refund the amount received by them towards the demurrage charges for the 20% of the cargo.

(See 2016-TIOL-930-HC-MAD-CUS)