Anuma Precision Tool Pvt. Ltd. vs Collector of Cus.

K. Sampath, J.—The prayer is for a Mandamus to the first respondent to pay the petitioner a sum of Rs. 84,169/- with interest at 18% per

annum from 11-2-1992 till the date of payment.

The basis of the claim is as follows :

The Government of India granted permission to the petitioner, which is a 100% export oriented unit engaged in the manufacture of high precision

tools, etc., to import grinding machines for the above purpose. By letter No. E.0.133 (87)/Misc, Government of India, Ministry of Industry,

Department of Industrial Development Secretariat. By another letter from the Chief Controller of Imports Exports F. No. 2/400/87/M7AC/374

dated 25-7-1990, the petitioner was asked to step up its export to enrich the foreign exchange reserve of our country. The machines were

imported by the petitioner on 16-7-1990 under a Bill of Entry No. 028980, dated 16-7-1990. When the machines were about to be released for

home consumption, the goods were taken over by the Special Investigation Branch of Custom House on 16-7-1990. After examining by the

Special Investigation Branch on 31-7-1990, these were about to be released. But, on 1-8-1990, the goods were seized by the Department of

Revenue Intelligence (DRI) u/s 110 of the Customs Act. They were examined by Department of Revenue Intelligence and Hindustan Machine

Tools Ltd., on 30-11-1990. Based on the report of the DRI, the Collector of Customs issued a show cause notice on 23-4-1991 seeking to

confiscate the goods on the ground that they were not validly imported. The petitioner waived its right for cross-examination and filed the reply on

28-6-1991. After hearing the petitioner on 1-8-1991, the first respondent passed an order on 20-8-1991 releasing the goods holding that the

goods have been validly imported. The Customs House afterwards issued a Demurrage Waiver Certificate for the period from 16-7-1980 to 20-

8-1991. It was certified by the Customs that the detention was not due to fault or negligence on the part of the petitioner. However, when the

petitioner applied to the Traffic Manager of the second respondent for waiver of demurrage charges, it was informed by him vide his letter

Ll/124/6756/91/TC, dated 23-10-1991 that under the scale of rates concessional demurrage charges were permissible only for 150 days and for

the remaining period normal rates were charged. The repeated pleas made by the petitioner, for waiver of demurrage in entirety, were of no avail.

The delay was wholly due to the proceedings initiated by the first respondent. Under these circumstances, the present writ petition came to be filed

for the relief already mentioned.

The first respondent has not filed any counter. Only the second respondent has filed a counter stating that the detention was due to no fault or

negligence of the petitioner or of the second respondent, that this respondent informed the clearing agent that under the provisions of the Scale of

Rates which was statutory in nature, only 150 days were allowed for levy of concessional demurrage and advised the clearing agent to clear the

consignment after availing the concession allowed by this respondent. The consignment was finally cleared on 25-10-1991 on payment of Rs.

82,478 as demurrage charges after availing the concession allowed for detention for Import Trade Control formalities.

There is, absolutely, no doubt that the petitioner enjoyed the benefit of import concession and the machines in question were imported by the

petitioner as per the rules and in any event the first respondent was not justified in seizing the goods and seeking to confiscate them on the ground

that they were not validly imported.

So far as the second respondent is concerned, the Scale Rates are statutory in nature and only 150 days are allowed for leavy of concessional

demurrage. The period, over and above 150 days, of detention of the imported goods was not on account of the second respondent. The first

respondent had taken his own time in conducting the enquiry with regard to validity of import.

It has been held in Padan Kumar Agarwal v. Additional Collector of Customs - AIR 1972 SC 542 that where the person has been unlawfully

deprived from the possession of his valuable goods because of the illegal Action of the Customs Authorities and thereby he could not fulfil the

terms of his contract with another person, as a result of which he had suffered loss, it was only fair and just that the Customs Authorities who were

responsible for this situation should bear the burden.

In S.A. International Vs. Collector of Customs, the Customs authorities had seized the goods and the importer was made to pay the

warehousing and demurrage charges. It was found that the Customs Authorities had acted improperly and had unnecessarily fastened the petitioner

therein with the proceedings and it was held that the Customs Authorities were liable to refund to the petitioner therein the warehousing and

demurrage charges paid by him.

In Surabhi Leathers Pvt. Ltd. Vs. Collector of Customs, and Om Shankar Biyani Vs. Collector of Customs, the decision in Padan Kumar

Agarwal v. Additional Collector of Customs and S.A. International v. Collector of Customs were followed and it was held that the detention

proceedings ended in favour of the petitioner and the Department must reimburse the petitioner on the loss suffered by the petitioner therein.

There is, absolutely, no doubt that the petitioner is entitled to the relief prayed for.

Mr. Udayakumar, learned Counsel for the first respondent, submitted that the entire correspondence relied on by the petitioner had been only

with the second respondent and not with the first respondent and if the first respondent had been put on notice earlier, the liability could have been

avoided. The contention by the learned counsel for the first respondent cannot be accepted. When once it was found that the goods had been

properly imported but the first respondent had taken its own sweet time to complete the investigation and enquiry, the loss suffered by the

petitioner has to be borne by the first respondent. As has been pointed out in the decisions already referred to the Department cannot take

advantage of its own wrong.

The petitioner is entitled to the amount which it had paid towards demurrage charges. As regards the rate of interest the petitioner has claimed

18% per annum. The same cannot be allowed. The petitioner is entitled to interest at 12% per annum.

The rule Nisi is made absolute.