In Muscles Fusion Fze V. The Principal Commissioner Of Customs (Import), Air Cargo Complex, Newdelhi & Ors, the Delhi High Court ruled that the exporter of prohibited goods not entitled to waive demurrage/rent charges on re-export under the Customs Act, 1962.
The petitioners, a Dubai based trading company, exported some health products from Abu Dhabi to Delhi. Upon the arrival of the consignment in Delhi, the importer Visha Enterprises did not file any bill of entry and also did not send any remittance for such consignment since they were not aware of the consignment and had not placed an order for the said goods.
Upon request of the DRI, the airport authorities kept the goods for further examination. Later, the petitioners approached the department stating that the consignment had been wrongly despatched to India and since this was a case of bona fide mistake, requested to allow them to re-export the goods. The Additional Commissioner of Customs (Imports), ordered to confiscate the goods as imports of health products were barred under Section 22 of the Food Safety and Standards Act, 2006. He, however, did not levy any fine or penalty.
Relying on the above order, the petitioners sought waiver of ground rent and demurrage charges, which was rejected by the department.
Aggrieved by this, the petitioners approached the High Court for relief.
The question before the Court was that whether the petitioners are permitted to re-export its consignment of health products without payment of demurrage/rent charges owed to the Cargo handling company?
Justice Prathima M Singh rejected the petitioners’ contention that the consignment was wrongly despatched to India and the same was a bonafide mistake.
With regard to non-levy of penalty, the Court said that “mere non-imposition of penalty/fine, which is the mandate under Section 125 of the CA in case of confiscated goods, cannot automatically result in letting the Petitioner go scot-free.”
The Court said that the imposition of fine under Section 125 was a logical and mandatory consequence once the goods were confiscated. Once the fine is imposed, the owner of goods is liable to any duty and charges payable in respect of the said goods under Section 125 (2) of the CA.
Relying on the decision in Trip Communication Pvt. Ltd. v. Union of India, the bench said that the Petitioner would not be entitled to waiver of demurrage/rent charges. “The Petitioner, having accepted the finding that the consignment contained prohibited goods and was liable for confiscation, cannot claim waiver of demurrage/rent charges to the detriment of CELEBI, which was not even heard by the ACC (Imports).”
Read the Full Text of the Judgment Below