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Case Law Details

Case Name : Polytech Trade Foundation Vs Union of India (Delhi High Court)
Appeal Number : W.P.(C) 3029/2020
Date of Judgement/Order : 10/08/2021
Related Assessment Year :
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Polytech Trade Foundation Vs Union of India (Delhi High Court)

Conclusion: These are all issues involving disputed questions of fact, not amenable to adjudication under Article 226 of the Constitution of India. It is not open to the Court – just as it was not open to the executive authorities – to approach the matter solely from the point of view of the importers or exporters, unmindful of the difficulties which were faced by the ICDs and CFSs during the lockdown, and the constraints under which they operated. Equity inherently inheres in the exercise of jurisdiction under Article 226, and we are not persuaded to hold that the equities of the present case are entirely in favour of the petitioner importers/exporters, and to the prejudice of the respondent ICDs/CFSs/shipping lines, as would warrant our inference under Article 226 of the Constitution of India.

Held: Assessee was concerned with the penal charges levied by ICDs/CFSs, for the period, beyond a certain number of “free days”, during which the goods continue to remain in their premises, and levied by shipping lines, in the event the containers were not returned to them within a fixed number of “free days”. Assessee sought across-the-board amnesty from paying penal charges to CFSs, ICDs and Shipping lines, during the entire period of lockdown enforced by the Government consequent on the COVID-19 pandemic. Inability to move or transport their export/import goods, during the said period, was pleaded as the justification. It was a matter of record that some importers did, in fact, clear their consignments even during this period. Assessment of the extent to which any particular importer or exporter was impacted would, by its very nature, involved, inherently disputed questions of fact. Assessees’ stand was that, irrespective of the individual facts of each case, orders and circulars issued by the MOS, DGS and CBIC entitled all importers and exporters to amnesty as sought, across the board. It was held that ICDs and CFSs had come on record to state that many importers did actually have the goods released, even during the period of lockdown, at times availing the discounts provided by the ICDs and CFSs. This indicated that there was no inherent impossibility, even during the lockdown period, in securing the release of the imported goods. The fact that some importers did manage to secure such release indicated that, if other importers were unable to do so, the reason for such inability would have to be assessed on a case-to-case basis. Apart from the fact that the ICDs and CFSs themselves had, in place, a mechanism for such aggrieved importers and exporters to approach them, this exercise could not be conducted by a writ court, exercising jurisdiction under Article 226 of the Constitution of India. These were all issues involving disputed questions of fact, not amenable to adjudication under Article 226 of the Constitution of India. It is not open to the Court – just as it was not open to the executive authorities – to approach the matter solely from the point of view of the importers or exporters, unmindful of the difficulties which were faced by the ICDs and CFSs during the lockdown, and the constraints under which they operated. Equity inherently inheres in the exercise of jurisdiction under Article 226, and we are not persuaded to hold that the equities of the present case are entirely in favour of the petitioner importers/exporters, and to the prejudice of the respondent ICDs/CFSs/shipping lines, as would warrant our inference under Article 226 of the Constitution of India.

FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT

1. Between the time when imported goods land on Indian soil, and the Customs authorities release them from their charge so that they become part of the “commercial land mass” of the country, they suffer various financial exactions, statutory as well as contractual. It is not necessary for us, in these petitions, to enter into the intricacies of the procedures followed before the applicable duties or taxes are paid and the goods, are released by the Customs. We are concerned with the amount which the importers (or exporters, in the case of export goods) pay, during this period, to the shipping lines, Inland Container Depots (ICDs) and/or Container Freight Stations (CFSs). ICDs and CFSs are Customs Cargo Service Providers, who permit storage of imported goods, prior to their being released by the Customs after payment of duty, against pre-fixed and pre-determined charges. These charges involve various elements with which, too, we need not concern ourselves. The petitioners in these petitions are concerned with the penal charges levied by ICDs/CFSs, for the period, beyond a certain number of “free days”, during which the goods continue to remain in their premises, and levied by shipping lines, in the event the containers are not returned to them within a fixed number of “free days”. Ordinarily, therefore, after containers are unloaded from the vessel in which they arrive, the containers are required to be returned to the shipping lines within a contractually stipulated number of days. If they are so returned, no additional charge is levied on the importer. If they are not returned to the shipping lines within such “free days”, they suffer detention charges, levied by the shipping lines in accordance with the contract executed between the shipping lines and the importers. Similarly, ICDs and CFSs also permit the imported goods to be stored within their premises for a number of “free days”, on payment of normal charges. If the goods remain in their premises beyond such “free days”, they suffer penal charges, chiefly ground rent at much higher rates than is ordinarily charged.

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