K.Steamship Agencies Pvt. Ltd. Vs Balaji Dekors (Madras High Court)
Summary: The Madras High Court, while deciding a large batch of writ petitions and writ appeals concerning detention, demurrage and storage charges on imported goods, held that writ petitions under Article 226 are maintainable against Customs Cargo Service Providers (CCSPs) because they discharge functions governed by statutory customs regulations. The Court held that the Handling of Cargo in Customs Areas Regulations, 2009 and the Sea Cargo Manifest and Transhipment Regulations, 2018 prevail over inconsistent contractual terms between importers/exporters and CFSs, shipping lines or steamer agents. However, a detention/waiver certificate is not to be issued merely because goods were detained: entitlement depends upon the final adjudication. Where adjudication ends in favour of the importer/exporter without duty, fine or penalty, the statutory waiver must be honoured; where the importer/exporter is found guilty of misdeclaration, prohibited/restricted imports or another violation, demurrage is payable and any contrary waiver certificate is invalid. The Court further held that Customs authorities must adhere to statutory timelines and may be liable to compensate the importer/exporter or CCSP for departmental delay, including delay in adjudication or re-export. Importers who paid charges to secure release pending adjudication do not thereby waive their statutory entitlement and, if they ultimately succeed, are entitled to refund. CCSPs are not entitled to a prior hearing before issuance of waiver certificates, though due process must precede penal action for non-compliance. The Court issued time-bound directions for provisional-release applications, pending adjudications, waiver requests, re-export clearances and refunds, and directed the Board to issue instructions fixing responsibility for official delay.
