The Calcutta High Court held that Central Warehousing Corporation (CWC) has a vested right to demand and recover rent from the date on which goods are in custody under Section 68 of the Customs Act.
The appellant, Mumtaz Mehboob Munshi had filed a writ petition praying for the return of the interest amount of Rs. 13 lakhs which according to the appellant has been illegally collected in the name of rent, insurance and GST charges which are not payable by the appellant.
After the payment of the amounts as quantified in the order, seven out of the eight containers which were in the custody in the DRI were released to the appellant however one of the containers was not released as it was in a bonded warehouse of the Central Warehousing Corporation (CWC).
The Assistant Commissioner of Customs directed the appellant to pay the charges since the goods were kept from October 2002 and the amendment to Section 68 of the Customs Act made in 2016 would not be applicable. The appellant had accordingly paid the amount under protest and thereafter filed the writ petition.
The question would be as to whether this right of CWC to demand and collect rent from the date on which the goods were warehoused stands extinguished in its entirety after the amendment. The case of the appellant is that the amendment to Section 68 of the Customs Act by which the term “rent” has been deleted by way of substitution is retrospective in nature and not prospective on and from 14.05.2016 when the substitution took place.
The Coram comprising Acting Chief Justice TS Sivagnanam and Justice Hiranmay Bhattacharyya observed that “The goods having detained and kept in the custody of the warehouse from 2002, a vested right accrues in favour of CWC to recover the rent payable to them and therefore the demand made on the appellant by CWC, at least up to the date when the provision was amended is valid and proper.”
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