The Punjab and Haryana High Court has directed the immediate release of two consignments of imported low-alloy steel scrap, holding that an importer cannot be made to bear detention charges, container charges, ground rent or demurrage for delays attributable entirely to Customs authorities and other service providers.
A Division Bench comprising Chief Justice Ashwani Kumar Mishra and Justice Rohit Kapoor described as “wholly untenable” the refusal to release the goods despite completion of Customs proceedings, payment of enhanced duty and issuance of detention waiver certificates.
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The Court directed the shipping line and the custodian to release and physically hand over the imported goods within two weeks from the receipt of a certified copy of the judgment. The shipping line was separately ordered to issue all necessary delivery orders within three days from the uploading of the decision.
The dispute concerned two consignments of “Low Alloy Steel Scrap” imported under Bill of Entry Nos. 9494291 dated January 1, 2024, and 9515603 dated January 3, 2024. The consignments were lying at ICD-Adani, Kila Raipur, Ludhiana.
According to the petitioner, the Customs authorities had completed the necessary proceedings and issued detention certificates. Nevertheless, the goods were not released because of disputes among the authorities, the shipping line and the custodian concerning the waiver of detention charges and demurrage and the issuance of delivery orders.
The goods were initially detained by the Customs authorities on January 24, 2024. They were subsequently seized on March 14, 2024, for detailed examination under Section 110 of the Customs Act, 1962.
Following the examination, the Bills of Entry were reassessed and the importer paid the enhanced Customs duty demanded by the authorities.
The Customs Department thereafter issued communications and detention certificates dated May 6, 2024, directing the waiver of detention charges and demurrage for the period during which the goods remained under Customs control. The certificates were addressed to both the shipping line and the custodian.
Despite these developments, physical possession of the goods was not handed over to the importer.
Saurabh Kapoor, the counsel for the petitioner submitted that the shipping line had failed to issue delivery orders despite receiving the detention certificates and repeated representations seeking release of the consignments.
The petitioner relied upon the Handling of Cargo in Customs Areas Regulations, 2009, and the Sea Cargo Manifest and Transhipment Regulations, 2018, to contend that detention charges and demurrage could not be recovered for the period during which the goods remained detained by Customs.
It was also argued that the respondents had not challenged the detention certificates dated May 6, 2024, before the appellate authority. The certificates had, therefore, attained finality.
The petitioner referred to another writ petition involving an identical issue, in which the shipping line had challenged a detention waiver certificate before the appellate authority. That appeal was dismissed on February 3, 2026.
The High Court had issued notice in the writ petition on May 30, 2024.
On October 3, 2024, the Court was informed that the imported goods were perishable in nature and that the petitioner had already paid the entire Customs and excise duty. The Court consequently directed the respondents to release the goods upon the petitioner furnishing surety bonds equivalent to their value.
The goods were required to be released forthwith after submission of the bonds.
The petitioner subsequently filed an application under Article 215 of the Constitution seeking the initiation of contempt proceedings against the respondents for alleged non-compliance with the October 3 order. It also sought a further direction for the release of the imported consignments.
Before the Court, the shipping line maintained that detention and container charges remained payable and that delivery orders could not consequently be issued. The custodian submitted that the goods could not be released without delivery orders from the shipping line.
Rejecting these submissions, the High Court referred to Regulation 6(1)(l) of the Handling of Cargo in Customs Areas Regulations, 2009. The provision stipulates that no rent or demurrage may be charged on goods detained by the Customs authorities.
The Bench also relied upon Regulation 10(1)(l) of the Sea Cargo Manifest and Transhipment Regulations, 2018, which prohibits the recovery of rent or demurrage in respect of goods that have been seized or detained.
The Court noted that the consignments had remained under detention at the instance of the Customs Department. Once the proceedings had culminated in reassessment and the importer had paid the additional duty, there was no justification for continuing to withhold physical delivery of the goods.
Under the instruction, the first appraisement of imported goods must ordinarily take place within 48 hours, with the assessment to be completed within the following 24 hours. In cases involving second appraisement, the assessment is to be completed within 24 hours of the filing of the Bill of Entry and the examination within 48 hours.
The circular further requires the importer to be informed in writing about the option of shifting the goods to a bonded warehouse under Section 49 of the Customs Act. If the importer declines to use that facility, the goods may become liable to demurrage.
Applying these directions, the Bench observed that the authorities were expected to conclude the proceedings within the stipulated timelines after being informed of the imports through the Bills of Entry.
In the present case, however, the goods were examined on January 24, 2024, while the reassessment orders were passed only on March 14, 2024. The petitioner paid the additional duty and a detention memo referring to the issuance of a detention waiver certificate was issued on May 6, 2024. Even after these steps, the goods remained unreleased.
The Court held that the petitioner could not be penalised for delays that were entirely attributable to the respondents.
“Any inter se dispute between the Customs authorities, the Shipping Line and the Custodian cannot become a ground to deny delivery of imported goods after completion of Customs formalities,” the Bench observed.
It further held that the conduct of the shipping line and the custodian in withholding the consignments despite the detention certificates and repeated requests from the petitioner was arbitrary and legally unsustainable.
Allowing the writ petition, the Court issued a writ of mandamus directing the shipping line and the custodian to release and physically hand over the goods covered by the two Bills of Entry within two weeks.
The Bench expressly clarified that the importer would not be required to pay detention charges, container detention charges, ground rent or demurrage for the period during which the consignments remained detained pursuant to the orders of the Customs authorities, as recorded in the detention certificates.
The Court kept open any claims or disputes among the Customs authorities, shipping line, custodian and other respondents for adjudication in appropriate proceedings.
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