Sanchayita Lahkar

The High Court of Delhi Single Bench of Justice Manoj Kumar Ohri has directed the refund of demurrage charges levied on an importer by a public sector enterprise operating a customs facility. The court held that once goods are found to be in accordance with declared entries and no penalty or adjudication is carried out against the importer, the benefit of refund as per the applicable customs regulations must be extended. The respondent authority has been directed to process the refund of demurrage charges within four weeks of the order.

The petitioner had imported several consignments of 'Ferrite Ring Magnets' during February to April 2010. These consignments were spread across 21 containers and covered by nine Bills of Entry. The containers arrived at the Inland Container Depot, Tughlakabad, New Delhi. On February 1, 2010, the containers were detained by the Customs authorities on the basis of instructions issued by the Directorate of Revenue Intelligence (DRI) on grounds of an ongoing investigation regarding the imported items.

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Following this, officials of the DRI examined seven out of the 21 containers and found that the goods matched the descriptions and values declared in the Bills of Entry. Accordingly, the DRI issued a letter on April 8, 2010, directing Customs authorities to assess the consignments as per the declared value and release them upon payment of the applicable customs duty. Consequently, the goods were released in April 2010 upon payment of the demurrage charges.

Subsequent to the release, the petitioner approached the authorities to obtain Detention Certificates, which were necessary for claiming a refund of the demurrage charges. Initially, the petitioner was advised to approach the DRI, which redirected the petitioner to the Customs authorities. This process repeated multiple times between the DRI and Customs offices.

Due to inaction from the authorities, the petitioner filed W.P.(C) No. 1007/2015 before the High Court of Delhi. By order dated February 3, 2015, the court directed issuance of the Detention Certificates. These certificates were issued by Customs and submitted by the petitioner to the respondent on February 23, 2015, followed by multiple reminders over the years. As the refund remained unpaid, the petitioner filed the present writ petition in 2018.

The petitioner relied on Clause 6(1)(l) of the Handling of Cargo in Customs Area Regulations, 2009, which stipulates that no rent or demurrage shall be charged on goods detained, seized, or confiscated by Customs officials. It was submitted that since the import was found legitimate and no fault was found with the importer, the benefit of the regulations should be extended.

The respondent, Container Corporation of India Ltd., opposed the petition on grounds of non-joinder of the DRI and Customs authorities. It was further argued that the claim was time-barred and the applicable regulations could not override provisions under Section 63 of the Customs Act, 1962. Reliance was also placed on the decisions in Mumbai Port Trust v. Shri Lakshmi Steels, Global Impex v. Manager, Celebi Import Shed, and Bhavik S. Thakkar v. Union of India.

The respondent distinguished the petitioner’s reliance on Trip Communication P. Ltd. v. UOI, arguing that the judgment applies to waiver policies of warehousing companies and cannot be applied retrospectively. It was also submitted that the waiver policy had a time-bound requirement of three months from payment of charges, which the petitioner allegedly did not comply with.

In response, the petitioner argued that the delay was solely due to inaction by the Customs authorities and that all efforts were made in time, culminating in a court-mandated issuance of Detention Certificates. It was further submitted that Section 63 of the Customs Act applied only to warehoused goods, which was not the case here. The petitioner contended that the goods had not been warehoused, and thus the provision was inapplicable.

The Court examined the issue of refund of demurrage charges under Clause 6(1)(l) of the 2009 Regulations and stated: "The Custom Cargo Service provider shall … not charge any rent or demurrage on the goods seized or detained or confiscated by the Superintendent of Customs or Appraiser or Inspector of Customs or Preventive officer or examining officer, as the case may be."

It further examined Circular No. 13/2009 issued by the Ministry of Finance: "These regulations shall apply to handling of imported goods and export goods in customs area specified under section 8 of the Customs Act, 1962. This would cover all customs facilities such as ports, airports, Inland Container Depots (ICDs), Container Freight Stations (CFSs) and Land Customs Stations (LCSs)."

The Court found no evidence from the respondent that the Inland Container Depot was not a customs area and noted that the cited Section 63 of the Customs Act had been repealed in 2016. It stated: "Section 63 would not be of any help. In fact, Section 49 of the Customs Act gives the custom authorities the power to store imported goods, dutiable or not in public warehouses for a short period of time... Chapter IX, pertaining to warehoused goods which contained Section 63, shall not apply."

In reference to Trip Communication (Supra), the Court observed: "In cases where the importer is found innocent and there is no imposition of any fine, penalty, personal penalty and/or warning by the Customs authorities, the policy for waiver would be applicable and the importer would be entitled to be considered for its benefit provided a certificate entitling him to be so considered is issued by the Customs authorities."

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Regarding the delay, the Court found that the petitioner had acted diligently: "As is evident from the perusal of the overall factual matrix, there were no delay or laches on account of the petitioner. Rather it was the inaction at the hands of, first the custom authorities and then the respondent that his application for refund has not been processed till date."

The Court concluded the matter by issuing the following direction: "In view of the above facts and circumstances, the present petition is allowed and the respondent is directed to process the refund of demurrage charges due to the petitioner within 4 weeks from today."

"The present petition is disposed of along with pending applications."

Advocates Representing the Parties

For the Petitioners: Ms. S. Sapra and Mr. Abhinav Jain, Advocates

For the Respondents: Mr. Arun Kumar and Mr. Abhinav Kumar, Advocates

Case Title: M/s Ankit Electronics v. Container Corporation of India Ltd.

Neutral Citation: 2025: DHC:4281

Case Number: W.P.(C) 10055/2018

Bench: Justice Manoj Kumar Ohri

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