SUGUNA STEELS LTD Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) The main question that arises for our consideration and decision in this writ petition is whether the Central Warehousing Corporation is obliged in law to release the goods in question stored in Inland Container Depot (I.C.D.), Hyderabad to the petitioner-Company without payment of storage and demurrage charges by force of the Final Order No.1568/99 dated 29-6-2000 of the Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT), South Zonal Bench at Madras, wherein it was held that the petitioner- Company is not responsible for the detention of storage of goods from 16-10-1996 and as per the Certificate for Clearance dated 5-10-1999 issued by the Assistant Commissioner of Customs, Container Freight Station, Kukatpally, Hyderabad.

(2.) The background facts out of which the above question arises for decision be firstly noted in brief. They are: The petitioner- Company during the course of their trade activity, negotiated with M/s. Techno Imports & Exports, Dubai for import of 43.43 M.T. of M.S. Scrap valued at Rs.10,857.50 U.S. Dollars (C & F) and the consignor has despatched the said goods to LCD., Hyderabad through two containers as per the invoice No.TTE/240/06-3-96. On receipt of the said goods at the destination, the petitioner-Company has filed a Bill of Entry No.486/16-10-96 under Customs Tariff No.7204.29 furnishing the particulars as per Bill of Lading received from the consignor which described the goods as M.S. Scrap and the same is intended for melting purposes in the induction furnace and claimed concessional rate of duty exemption as per the notification No.36/96 dated 23-7-1976 (SI. item No.116) which envisages payment of 5% basic duty, additional duty (CVD) of 5% and special duty of 3% ad valorem. However, on visual examination of the said goods, the Customs Authorities found that the goods in question are in the shape of pipes and in that view of the matter came to the conclusion that the said goods fall under Tariff Item 7306.90 and accordingly, the Customs Authorities classified the goods as M.S. pipes resulting in confiscation of the goods worth Rs.3,97,556/- (CIF) under Section 111(d) and (m) of Customs Act, 1962 (for short 'the Act') for importing second hand goods without an import licence and misdeclaration of imported goods and in that view of the matter imposed a penalty of Rs.40,000/- and allowed to redeem goods on payment of redemption fine of Rs.2,00,000/- within one month from the date of receipt of the order vide proceedings F.No.S/8/Adjn/012/96-ICD/O.R.No.24/ 96-CUS (Adjn) Order-in-Original No.CUS 37/96, dated 17-12-1996 of the Commissioner of Customs and Central Excise, Hyderabad, second respondent herein. The petitioner-Company preferred appeal A.No.1/97(H)CUS to the Commissioner of Customs and Central Excise (Appeals), Hyderabad, first respondent herein, against the above adjudication order of the second respondent dated 17-12-1996. The first respondent by his proceedings dated 24-1-1997 dismissed the appeal while confirming the adjudication order of the second respondent dated 17-12-1996. The petitioner-Company further preferred appeal to the CEGAT under Section 129-A of the Act praying for restoration of classification of goods as claimed by the petitioner-Company and for extension of benefit of Notification No.36/96 dated 23-7-1996 while seeking setting aside of the order of confiscation, penalty and fine. In the said appeal, it was also prayed that the petitioner-Company be granted Certificate of Detention for claiming waiver of demurrages. The CEGAT by its final order No.1568 of 1999 dated 29-6-1999 opined that the declaration given by the petitioner- Company and the report of the physical examination showed the goods to be rusted and used pipes and as such it satisfies the definition of waste and scrap under Note No.8 of Chapter XV of Customs Tariff Act. It is also held by the CEGAT that the goods in question are not new and fresh goods in terms of the value and, therefore, the second respondent ought to have accepted the declaration of the petitioner-Company. The CEGAT further in its order held that the petitioner-Company is entitled to Certificate for clearance of the goods without payment of demurrages.

(3.) On receipt of the copy of the order of the CEGAT dated 29-6-1999, the petitioner- Company vide its letter dated 10-8-1999 approached the third respondent requesting him to grant certificate for non-imposition of demurrage charges. The third respondent vide his letter dated 5-10-1999 granted such a Certificate. But, the Warehousing authorities represented by the Manager, CFS, Hyderabad, the fourth respondent herein did not release the goods, and on the other hand, insisted vide letter No.CWC/ CFS/KKP/Cus. Corresp.99-00/599 dated 12-10-1999 that unless all storage charges are paid by the petitioner-Company delivery of the goods cannot be made. In that view of the matter, the third respondent vide his letter C.No.S/8/Adjn./ 012/96-ICD dated 20-11-1999 informed the petitioner-Company that there is no provision in the Rules framed by the Central Warehousing Corporation for waiver of storage charges and directed the petitioner-Company to clear the goods immediately. Thereafterwards, the petitioner-Company vide its order dated 6- 12-1999 informed the third respondent that the petitioner-Company is not responsible for detention of the goods from 16-10-1996, and that it is entitled to the goods released without payment of demurrage charges in the light of the order of the CEGAT dated 29-6-1999 and also the Certificate for Clearance issued by the third respondent dated 5-10-1999 waiving the demurrage charges in obedience to the directions of the CEGAT. There was no response from the third respondent. Under those circumstances, this writ petition is filed by the petitioner-Company praying for any writ, order of direction, particularly one in the nature of mandamus directing the respondents to give effect to the Final Order No.1568/99 dated 29-6-1999 of the CEGAT and release the goods in question without payment of demurrage and storage charges or in the alternative to direct the respondents 1 to 3 to pay the demurrage and storage charges as the wrongful detention of the goods is solely attributable to the respondents 1 to 3 to the fourth respondent.