The Punjab and Haryana High Court has directed the release of an importer’s consignment within two weeks, holding that the importer could not be made to suffer or bear demurrage and ground rent merely because the Customs authorities, shipping line and custodian were shifting responsibility among themselves.
The Bench of Chief Justice Ashwani Kumar Mishra and Justice Rohit Kapoor described the proceedings as a “classic case” demonstrating how an importer was unduly harassed because of inter-se disputes among the respondents.
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The Court directed the shipping line to issue the delivery order to the custodian within three days from the uploading of its judgment. It further ruled that the importer would not be liable for demurrage or ground rent from March 18, 2024, until the consignment was actually released.
The matter arose from the import of goods declared as “Low Alloy Scrap” by an importer engaged in the business of ferrous and non-ferrous scrap. The consignment arrived on December 18, 2023, and the corresponding Bill of Entry was filed before the Customs authorities on December 19, 2023.
Upon examining the goods on January 24, 2024, the Customs authorities formed the view that the imported material consisted of “Wire Bundles” rather than “Low Alloy Scrap”. The assessment was consequently revised on February 14, 2024, and additional Customs duty was imposed. The importer paid the additional duty determined under the reassessment.
Thereafter, on March 18, 2024, the Customs Department issued a communication stating that the consignment had been detained and that detention charges were required to be waived under the applicable provisions of the Sea Cargo Manifest and Transhipment Regulations, 2014, and the Handling of Cargo in Customs Areas Regulations, 2009.
The Customs authorities separately directed the issuance of a detention certificate covering the period from the detention of the consignment until the grant of “out of charge”. According to the respondents’ pleadings, the detention waiver certificate was issued on March 18, 2024, while the “out of charge” permission was granted on April 18, 2024.
Despite payment of the additional duty, issuance of the detention waiver certificate and grant of out-of-charge permission, the consignment continued to remain at the Inland Container Depot. The importer consequently approached the High Court in 2024, alleging arbitrary withholding of the goods.
During the pendency of the petition, the High Court passed an interim order on December 16, 2024, directing that the goods be released upon the importer furnishing surety bonds equivalent to their value. The importer subsequently initiated contempt proceedings, alleging that the order had not been complied with even after the surety bonds were furnished.
In the contempt proceedings, the custodian maintained that it could not release the goods unless a delivery order was issued by the shipping line. The shipping line, in turn, contended that it was unaware of the writ proceedings and questioned the validity of the interim release direction.
The High Court had initially recorded in its interim order that the goods were perishable. That observation was subsequently deleted after the petitioner’s counsel and the Customs Department clarified that no such submission had been made and that the reference to perishability had occurred inadvertently while relying upon earlier judgments.
The shipping line nevertheless refused to issue the delivery order, maintaining that the release direction had been obtained on an incorrect factual basis. It had also challenged the Customs Department’s order dated March 18, 2024, before the Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal. That challenge was dismissed on February 3, 2026.
Examining the sequence of events, the High Court found the respondents’ conduct wholly arbitrary. It noted that the Bill of Entry had been presented on December 19, 2023, but the goods were examined only on January 24, 2024.
The Bench referred to the instructions issued by the Chief Commissioner of Central Excise, Delhi Zone, on August 22, 2006, pursuant to an earlier High Court order. Under those instructions, the first appraisement of imported goods is required to take place within 48 hours and the assessment must thereafter be completed within 24 hours.
In cases involving a second appraisement, the assessment is to be carried out within 24 hours of filing the Bill of Entry and examination is to be completed within 48 hours. The instructions also require 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, 1962.
The Court observed that the Customs authorities were expected to conclude the proceedings within the timelines prescribed in the circular. However, the consignment was not promptly examined and the reassessment itself was completed only on February 14, 2024.
After the importer paid the additional duty, the detention waiver communication was issued on March 18, 2024. Yet, the goods remained unreleased despite subsequent judicial directions, including orders passed in the contempt proceedings.
The Bench said the manner in which the custodian shifted responsibility onto the Customs authorities and the shipping line showed that the importer had been made to suffer for more than two years solely because of disputes among the respondents.
The continued failure to release the consignment reflected “complete apathy” on the part of the respondents, the Court observed. It held that an importer could not be saddled with liability for demurrage or ground rent where the goods remained detained even after the additional Customs duty had been paid.
Accordingly, the Court ruled that the financial consequences arising from the delay after March 18, 2024, would have to be resolved and borne by the respondents among themselves.
The Bench issued a writ of mandamus directing the authorities to release the imported goods covered by the Bill of Entry dated December 19, 2023, within two weeks. The shipping line was ordered to issue the necessary delivery order to the custodian within three days of the judgment being uploaded.
The Court expressly clarified that the importer would not be liable for demurrage or ground rent from March 18, 2024, until the actual release of the goods.
Significantly, it also directed that the demurrage and ground rent relating to the period between December 19, 2023, when the Bill of Entry was filed, and January 24, 2024, when the consignment was examined, would have to be borne by the respondents.
The Bench refrained from imposing costs upon the shipping line after it gave an assurance that the delivery order would be issued within three days. It nevertheless recorded that the importer had been compelled to institute both the writ petition and contempt proceedings because of the respondents’ failure to release the goods.
The Court left open all inter-se disputes among the Customs authorities, shipping line, custodian and other respondents for adjudication in appropriate proceedings.
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