MUMBAI PORT TRUSTversusMIS. SHRI LAKSHMI STEELS AND ORS. ETC.

                         [20 l 7] 11 S.C.R. 470



A                         MUMBAI PORT TRUST
                                      v.
             MIS. SHRI LAKSHMI STEELS AND ORS. ETC.
                     (Civil Appeal Nos. 9831-32 of 2017)
B                              JULY27,2017
           [MADAN B. LOKUR AND DEEPAK GUPTA, JJ.]
          Major Port Trusts Act, 1963:
          ss.47A and 53 - Detention of guods uf imporrers - By the
c Customs Departme/l/ at the instance of Directorate of Revenue
  lmelligence (DR!) - Demand of demurrage! detention charges by
  the Port Tnist and Shipping Line - Demand challenged - Mala fide
  alleged against the ofjicials of DR! - High Court held that the
  importers were not liable to pay demurrage charges to the Port
D trust nor were liable to pay the detention charges to the Shipping
  Line; that DRE/Customs authorities were liable to pay the detention
  charges and that Port Tnist was 1101 entitled to charge demurrage
  in view of Regulation 6(1) of 2009 Regulations - Port Trust was
  directed to waive the demurrage charges - On appeal, held: Mumbai
  Port Trust has the power and authority to levy rates includi11g
E demurrage as fl.red by Tiiriff Authority ui.f.47A - The right is not
  affected by the provisions of Customs Act or by the 2009 Regulations
  in view ofs. 160(9) of Customs Act -Even if the importer is not at
  fault, it is importer alone who is liable to pay the demurrage charges
  - Su fi1r as detention charges are concerned, it bdng a private
  contract between the importer and carrier (Shipping Line), importer
F
   is liable to pay the same - DR!!Customs Authorities can be directed
   to pay detemionl demurrage charges on(v whe11 it has been proved
  that the action of DRE/Customs Authorities was mala fide - !11 the
  presellt case allegation of mala fide has not been proved - Even if
   importer feels that it has been 111y11stly dealt with, it must clear the
G goodv by paying the due charges and then claim reimbursement
  from Customs Authority - The importers are free to approach the
   Port Trust in terms of s.53 - Customs Act, 1962 - s. 160(9) -
   Handling of Cargo in Customs Areas Regulations, 2009 - Regn.
   6(1).

H
                                   470
   MUMBAI PORT TRUST v. MIS. SHRI LAKSHMI STEELS                    471


      Allowing the appeals, the Court                                A
      HELD: 1.1 The question whether the. Port Trust is a
custodian of the .Customs Department u/s. 45(1) of the Customs
Act, 1962, is pending for considscration before this Court in
another case. Therefore, this issue cannot be addressed. Even
assuming that Mumbai Port Trust is a custodian or cargo service      B
proviclcr, the question that arises is whether Handling of Cargo
in Customs Areas Regulations, 2009 apply to the Mumbai Port
Trust. These Regulations have been framed u/s.157 of the
Customs Act. Section 160(9) of the Customs Act clearly lays
down that nothing in the Act shall affect the power of the Port
Authority in a Major Port, as defined in the Major Port Trusts       c
Act, 1963. The Mumbai Port Trust (appellant) is a major port.
(Paras 28, 29][49-A-H; 491-A-B)
        1.2 The Mumbai Port Trust has the power and authority to
 levy rates including demurrage us fixed by the Tariff Authority
  uncler Section 47A of the Major Port Trusts Act. This right of D
  the Port Trust is not affected either by the provisions of the
 Customs Act or by the Regulations of 2009. Section 160(9) of
 the Customs Act clearly lays clown that the provisions of the
. Customs Act shall not in any manner affect the constitution and
  powers of any port authority in a major port. This will include the E
  right of the major port authority that is a Major Port Trust to levy
  and charge rates uncl clcmurragc. 2009 Regulations arc framed
  under the Customs Act. Regulations arc in the nature of
  subordinate legislation. There can be no manner of doubt that
  subordinate legislation that loo a legislation framed by a Board
  unclcr the Customs Act cannot in any manner affect the power F
  and authority of the Major Port Trust, statutorily vested in it.
  (Paras 30, 31)[491-B-D]
       1.3 Neither the Regulations nor the provisions of the
Customs Act can impinge or in any manner affect the statutory
power of the Major Port Trusts to levy rates under the Act. In       G
fact, the Authority that framed the Regulations was itself aware
of this because Regulation 6(1) itself begins with the words""
subject to any .other law for the time being in force". It is,
therefore, obvious that the Regulations are subject to any other
law including the Major Port Trust Act. Therefore, these             H
472           SUPREME COURT REPORTS                     (2017] 11 S.C.R.


A     Regulations cannot in any manner affcctthe right of the Port Trust.
      [Para 32)(491-E-F]
            1.4 Reliance placed by the Union of India on Section 128 of
      the Major Port Trusts Act is totally misplaced. This provision
      only deals with the right of the Central Government to collect
B     customs duties. It docs not deal with the rights of the Port Trust
      to collect rates including demurrage. [Para 32)(491-G-H]
            Trustees of the Port of Madras v. Mis Ami11chand
            Pyare/a/ (1976) 3 SCC 167: [1976] 1 SCR 721; Board
            of Trustees of the Port of Bombay v. Jndia11 Goods
 c          Supplyi11g Co (1977) 2 SCC 649 : [1977] :t SCR 343;
            Board of Trustees of the Port of Bomhay v. Jai Hind Oil
            Mills Cump011y (1987) 1 SCC 648: [1987] 1 SCR 932;
            lnternatio11a/ Airports Authority v. Grand Slam
            International (1995) 3 SCC 151 : [1995) 2 SCR 149;
            Union of India v. R. C. Fabrics (P) Ltd. (2002) 1 SCC
 D          71 : [2001] 4 Suppl. SCR 263; Om Prakesh Biyani v.
            Board of Trustees, Port of Calcutta (2002) 3 SCC 168:
            [2002] 2 SCR 19; Shipping Corporation of India v.
            CL.Jain Woolen Mills (2001) 5 SCC 345 : [2001) 2
            SCR 1080 - relied on.
 E          Unio11 of India v. Sa1yeev Woolen Mills 1998 (100) ELT
            323 - distinguished.
         2.1 Even if the importer is not at fault, it is the importer
   alone who is liable to pay the demurrage charges. As far as
   detention charges arc concerned, this is a private contract
 F between the importer and the carrier, i.e. Shipping Line. The
   ORI/Customs authorities can be directed to pay the dcmurragc/
   detention charges only when it has proved that the action of the
   ORI/Customs Authorities is absolutely ma/a fide or is such a gross
   abuse of power that the officials of the DRI/Customs should be
 G asked to compensate the importer for the extra burden which he
   has to bear. Even if an importer feels that it has been unjustly
   dealt with, it must clear the goods by paying the charges due and
   then claim reimbursement from the customs authority. [Para
   34)[492-B-O]
            2.2 [n the present case allegations of ma/a fit/es were
 H
    MUMBAI PORT TRUST v. MIS. SHRI LAKSHMI STEELS                       473


  levelled that since the respondent-importers had filed writ A
  petitions before the High Court wherein the officials (respondent
  Nos. 7 and 8) had been summoned to appear in person, they had
  acted mala fide against the respondent-importers. Charges of
  discrimination have also been levelkd against them. The High
  Court itself did not go into this aspect in detail.There is no specific
                                                                          B
  finding of 11111/a fides. However, the High Court held that the
  respondent-importers suffered a loss because of delay on the
  part of Revenue staff to clear the goods and the executive
  instructions of the Department were violated. The Revenue was
  justified in apprehending that the imported goods may have been
· mis-declared and, therefore, they must be thoroughly checked c
  and verified. [Para 35][492-E-H; 493-A]
        2.3 The respondent-importers did not take the benefit of
 provisional assessment offered on two grounds:- (1) that all other
 importers were only asked to furnish PD Bonds whereas the
 importers herein were asked to furnish some bank guarantee D
 also. (2) That the demurrage and detention charges had piled
 up. The stand of the DRI is that all other importers were
 importing sheets/scrap and not coil. It was only the respondent-
 importers who were importing coils. Safeguard duty is applicable
 only in relation to coils and not in relation to sheets. Therefore
 the original respondent-importers were asked to furnish bank E
 guarantees also. The respondent-importers were required to
 furnish bank guarantee only to the extent of 20% of the.
 provisional assessment and the bank guarantee demanded was
 only Rs. 18. 71 lakhs. It is thus obvious that importers even at
 this stage could have got the goods released only by furnishing F
  the bank guarantee for Rs.18.71 lakhs and furnishing PD Bonds.
 All other importers took benefit of this offer given by the DRI/
  Customs and got their goods released but the respondent-
. importers for the reasons best known to them did not take the
  benefit of this offer. If they had taken the benefit of this offer,
  there could have been a reduction of the demurrage as was done G
  in the case of other importers. [Para 44][495-C-F)
       2.4 From. the record it is apparent that the Revenue sent
 samples of the goods imported for second test. As per the reports
 of the second test, eight of these consignments were hot rolled
                                                                         H
474            SUPREME COURT REPORTS                     [2017] l l S.C.R.


A     coils and not cold rolled coils. The allegation of the petitioner is
      that the report of the first test of samples was not accepted and
      the goods sent to the second laboratory for analysis even though
      that laboratory did not have the requisite facilities to carry out
      the tests. The Revenue cannot be barred from asking for a second
      test. Whether the second labortory was competent to carry out
 8
      the test or not, is not for this Court to decide. However, in these
      tests, eight of the consignments were found to be violating the
      import guidelines. Even thereafter, offer were given to the
      assessee to de-stuff the goods and also to get the goods released
      for provisional assessment which offer was not accepted by the
 C    assessec. [Para 45)(495-G-H; 496-A]
             2.5 Therefore, even though there may be some delay on
      the part of the ORI and the customs authorities, the respondcnt-
      importcrs have also been guilty of delaying the matter and,
      therefore, they n111not claim that they are not liable to pay
D     dcmurrage and detention charges. The respondent-importers
      arc l'ree to approach the Mumbai Port Trust in terms of Section
      53 of the Act for exemption and remission of demurragc and other
      charges and the Board may take a sympathetic view while
      considering the case of the respondent-importers under Section
 E    53. [Para 46][496-B-CJ
          2.6 The High Court could not, in writ proceedings, have
   directed the ORI/Customs to pay the detention charges to the
   Shipping Line since these were to be paid on the basis of a contract
   between the respondent-importers and the shipping line. [Para
   47][496-0]
 F                           Case Law Rcfcrem«·
   [I976) 1 SCR 72I              relied on                Para 20
   [1977] 3 SCR 343              relied on                Para 21
   [1987] 1 SCR 932              relied on                Para 22
 G [1995) 2 SCR 149              relied on                Para 24
   [2001) 4 Suppl. SCR 263       relied on                Para 25
   [2002) 2 SCR 19               relied on                Para 25
   [200 I) 2 SCR 1080            relied on                Para 26
   1998 (100) ELT 323            distinguished            Para 27
 H
   MUMBAI PORT TRUST v. MIS. SHRI LAKSHMI STEELS                              475



      CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 9831-                   A
32 of2017.
      From the Judgment and Order dated 23.12.2016 of the High Court
of Punjab and Haryana at Chandigarh in CWP No. 10021 of2016 and
CWP No. 10036 of2016
                                 WITH                                         B

      C. A. Nos. 9833-34 of2017.
       Maninder Singh, ASG, K.K. Vcnugopal, Parag P. Tripathi,
P. Chidambaram, Sr. Advs., A. V. Rangam. Buddy A. Ranganadhan,
Ms. Mishica Bajpai. Col. R. Balasubramaniam, Tara Chandra Sharma,             c
Prabhas Bajaj, Akshay Amritanshu, Roh it Rathi, B. Krishna Prasad, Kap ii
Arora, Ms. Manjula Baxla, Karan Khanna, (for Mis. Cyril Amarchand
Mangaldas), Saurabh Kapoor, Prashant Bhushan, Ms. Neha Rathi, Sunil
Kumar Jain, Ashok Mathur, Shrcc Pal Singh, Advs .. for the appearing
parties.
                                                                              D
      The J udgmcnt of the Court was dcliwrcd by
      DEEPAK GUPTA, J. I. Leave granted.
       2. These civil appeals filed by the Union oflndia and the Mumbai
Port Trust arc directed against the judgment dated 23.12.2016 passed
by the High Court of Punjab & Haryana at Chandigarh in CWP No.                E
10021 of2016 and CWP No. 10036 of2016. whereby the High Court
allowed the writ petitions and held that the detention ofthe goods imported
by the writ petitioners/importers (respondent-importers herein) by the
Customs, at the instance of the Directorate of Revenue Intelligence (for
short 'DR!'), was totally illegal. The High Court directed that the goods
                                                                              F
impmtcd by the respondent-importers be released to them on payment
of custom duty. It further directed that the Port Trust was not entitled to
charge any demurrage in view of Regulation 6( I) of the Handling of
Cargo in Customs Areas Regulations, 2009 (in short '2009 Regulations')
since the Customs had issued detention certificate. The detention charges
demanded by the Shipping Line were ordered to be borne by the DR!             G
and/or the Customs. The writ petitioners/importers were also held entitled
to costs of Rs.50,000/- each to be paid by the Dcpaitmcnt.
      3. The facts of the case arc that the respondent-importers are
two sister concerns viz., - (I) Imler International, a partnership firm,
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476            SUPREME COURT REPORTS                          (2017] ll S.C.R.



A     and (2) Mis Shri Lakshmi Steels, a proprietorship firm. These firms deal
      in the import and trading of cold rolled coils and sheets (primary and
      secondary). Both the importers had imported various consignments of
      cold rolled coils. We are concerned only with ten consignments imported
      on three dates. The first batch of consignments of coils was imported
      vide bills of entry dated 04.12.2015 and the goods imported were declared
 B
      to be cold rolled sheets/coils. The bills of entry for the second and third
      consignments were presented on l l.12.2015 and 29.12.2015 respectively.
             4. On 14.12.2015, DR! wrote a letter to the Commissioner of
      Customs (Import), Mumbai to place the consignments of the respondent-
      importers, as well as some other importers, on hold. The DR! was of the
 c    view that these consignments required I 00% examination before these
      could be released. On 28.12.2015, another letter was written by the
      DRl to the Customs in which it was mentioned that specific intelligence
      had been received that the firms had been importing consignments in
      violation ofnotifications issued by the Customs to evade provisional duty
 D    imposed on their imports. By this letter, the Customs Authorities were
      requested to get the goods examined I 00% with the assistance of the
      Cha11ered Engineer with regard to the nature of the imported goods,
      including the description thereot: quality. thickness and width, along with
      supporting safeguards. In the meanwhile, on 18.12.2015, the respondent-
      importers in respect of the bills of entry dated 04.12.2015 and 11.12.2015
 E    prayed that the duty be assessed under Section 18 of the Customs Act,
      1962 (for short '1962 Act') and the goods be released, so as to avoid
      payment of demurrage and detention charges. Thereatler, a reminder in
      this regard was sent by the respondent-importers on 22.12.2015. Atler
      the third consignment was received on 29.12.2015, another letter was
 F    written by the respondent-importers on 31.12.2015 followed by one more
      letter dated 01.01.2016, praying that the duty be assessed and the goods
      be released on payment of duty.
             5. Since no action was taken by the Customs Authorities on the
      letters written by the respondent-importers, they filed writ petitions in
 G    the High Court of Punjab & Haryana praying that the goods be released.
      Thereafter, samples of the goods were drawn between 05.01.2016 and
      11.01.2016 and sent to one Shri Rajendra S. Tambi, Chmtered Engineer,
      for inspection. Shri Tambi got these samples tested from a Government
      approved laboratory Mis Perfect Laboratory Services and, as per the
      certificates issued by Shri Tambi on 19.01.2016, it was certified that the
 H
    MUMBAI PORT TRUST v. MIS. SHRI LAKSHMI STEELS                                 477
                 [DEEPAK GUPTA. J.]

goods imported appeared to be cold rolled coils. This supported the case          A
of the impmters.
       6. On 19.01.2016, ORI wrote to the Customs Authorities to assess
the provisional custom duty. Thereafter, on 28.01.2016, the Commissioner
of Customs sent a letter to the respondent-importers asking them to
produce PD Bond for release of goods and also to furnish bank guarantee           B
of 20% of the provisional duty on the imported goods. Similar letters
were written to other importers also, but no bank guarantee was
demanded from them and only PD Bonds were sought. All the other
importers took advantage of this offer and after furnishing PD Bonds
they got the goods released alter payment of customs duty.
                                                                                  c
      7. The case of the respondent-importers herein is that they were
informed about the letter dated 28.01.2016 only in Court on 03.02.2016
when a copy of the letter was handed over to them. According to the
counsel for the respondent-importers, by this time, lakhs of rupees were
due as demurrnge and detention charges and, hence, they could not take
advantage of the offer given by this letter. Moreover, the rcspondcnl-            D
importers were asked to furnish bank guarantee whereas the other
importers were not asked to do so.
         8. It would also be pertinent to mention that DR! was not satisfied
with the report of the Chartered Engineer. DR! was also not satisfied
with the report of Mis Perfect Laboratory Services: according to ORI              E
the samples sent to this laboratory were not taken in the presence of the
officials ofDRI and the reports sent by this laboratory were false. Hence,
the Customs Authorities decided to get the consignments checked again
from another laboratory. Thereafter, samples of the goods were taken
again and sent to another laboratory Mis TCR Engineering Services                 F
(for short 'TCR') on 20.01.2016. On 28.01.2016, this laboratory submitted
its report. It opined that out of the ten consignments, the goods of eight
consignments appeared to be hot rolled and goods of two consignments
appeared to be cold rolled. However, bill of entry numbers were not
mentioned and a fresh report was called from TCR and they were asked
to give numbers of the bills of entry. Even the two consignments which            G
were found to be cold rolled were not released. The grievance of the
respondent-importers is that there was no provision for carrying out a
second test and, in any event, the laboratory in question did not have any
 facilities to carry out test to distinguish between hot rolled and cold rolled
coils.
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478            SUPREME COURT REPORTS                          [2017] ll S.C.R.



A            9. On 01.02.2016, the respondent-importers wrote to the
      Commissioner of Customs for issuance of detention certificates so that
      they could secure waiver of demurrage and detention charges. According
      to the respondent-importers, though vi de letter dated 28.01.2016,
      provisional release of the goods had been permitted on furnishing of PD
      bond and bank guarantee, there was no reason for discriminating between
 B
      respondent-importers and other importers, who were also under
      investigation and were not asked to furnish any bank guarantee. Further,
      according to the respondent-importers, on 04.02.2016, the Commissioner
      of Customs sent a communication to the Deputy Commissioner to the
      effect that he had received telephonic call from DR! directing that the
 c    samples should be drawn again from all the consignments and, for this
      purpose, the name ofthe laboratory would be informed latcron. He was
      also told that the goods be released only after the process of sampling
      was complete. On 23.02.2016, the goods were seized and the respondent-
      importers were directed to approach the concerned authority for
      provisional release of the goods.
 D
              I 0. In the meantime on 05.02.2016, DR! wrote to the respondent-
      importers rejecting the request for issuance of detention certificate. The
      DR! also directed that the thickness of the coils be also measured to
      ensure that the respondent-importers were not evading import duty.
      However, on 05.03.2016, DR! sent another letter that provisional release
 E
      be allowed without waiting for measurement of goods. The fact however
      is that for one reason or the other the goods were not released. Both the
      parties blamed each other for the delay in release of the goods.
             11. On 04.04.2016, the High Court of Punjab and Haryana passed
      orders in the writ petition filed by the respondent-importers directing the
 F    Customs Authorities to de-stuff the consignments within one week and
      the respondent-importers undertook to cooperate with the Customs
      Authorities during this process. According to the respondent-importers,
      the officials of the DR! with a view to harass them did not permit release
      of the goods, whereas, according to the Union of India and DR!, the
 G    representatives of the respondent-importers did not cooperate and violated
      the undertaking. Thereafter, on 22.04.2016, the Shipping Line issued
      notice to the respondent-importers that it proposed to auction the goods
      to recover the detention charges. On 09.05.2016, the respondent-
      importers withdrew the writ petitions filed by them with liberty to file
      fresh writ petitions.
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    MUMBAI PORT TRUST v. MIS. SHRI LAKSHMI STEELS                               479
                 [DEEPAK GUPTA, J.]

         12. Thereafter, fresh writ petitions were filed. An order was passed A
  by the High Court on 03.06.2016 directing that samples of the imported
 goods be sent to the Steel Authority oflndia Ltd. (for short 'SAIL'),
  Bokaro for testing.After testing, it was opined that the goods appeared ·
  to be cold rolled coils but there was also a finding that the thickness of
  the coil was at'variance with the declaration given by the respondent- B
  importers in respect of some of the consignments. Thereafter, the High
  Court, on 12.07.2016, directed that the goods be released on payment of .
  due duty and the issue of detention and demurrage charges would be
  decided later. The order of the High Court dated 12.07.2016 was
  challenged before this Court by way ofSLP (C) Nos. 23479-80of2016,
  which was allowed on 15 .092016 setting aside the order dated 12.07.2016 C
  passed by the High Com1 and the High Court     ' was requested to dispose
  of the writ petition at an early date and release/auction of the imported
· goods was stayed pending disposal of the writ petition.
        13. Respondent-importers had also levelled allegations of ma/a
fide against the Officials of DRI. It was alleged that these officials D
were inimical towards respondent-importers since they were summoned
 to Court and the Court had made certain oral observations against such
 officials. As far as the allegations of ma/a fide are concerned, the High
 Court has not given any clear-cut finding. The High Court however
 came to the conclusion that the respondent-importers were hara.ssed by
                                                                           ·E
 the officials ofDRI and ordered that the respondent-importers were not
 liable to pay any demurrage and, even with regard to detention charges
 io be paid to the Shipping Line, held that it is DR! or the Customs
 Authorities who are liable to pay the same. The Port Trust was directed
 to waive the demurragc charges.
       14. Two issues arise before us - (I) whether any direction could         F
 be given to the Mumbai Port Trust to waive the dcmurrage charges and
 (2) whether the liability to pay the demurrage/detention charges in respect
 of the imported goods could be fastened upon the DRI/Customs
 Authorities.
         15. As far as the first issue is concerned, it would be pertinent to   G
  point out that the Mumbai Port Trust is a statutory authority created
  under the Major Po11 Trusts Act, 1963 (for short 'the Act'). A Major
. PortTrusfis managed by the Board ofTrustees appointed under Section
  3 of the Act. The works and services to be provided by the Trust at the
  Major Ports are set out in Chapter V of the Act. Chapter V-A ~hich            H
480             SUPREME COURT REPORTS                         (2017] l l S.C.R.



A     was introduced with effect from 09.01.1997 provides for fixation of tariff
      for Major Port Trusts. The tariff to be charged by the port trust is
      determined by an independent statutory authority, called the Tariff
      Authority fl,r Major Ports, under Section 47 A of the Act.
              16. Shri P. Chidambaram, learned senior counsel appearing on
 B    behalfofthe Mumbai Port Trust, submitted that the High Court gravely
      erred in relying upon Regulation 6(1) of the 2009 Regulations, framed by
      the Central I3uard uf Excise and Custums. He submitted that this
      subordinate legislation i.e., regulations framed by the Central Board of
      Excise and Customs cannot supersede the statutory provisions of the
      Major Port Trusts Act and the judgments of this Court. The stand of the
 c    Mumbai Port Trust is that it is entitled to recover the statutory tarift;
      including demurrnge charges, from the respondent-importers and neither
      the High Court nor the Union of India, can direct it to release the goods
      without payment of such statutory charges. The second contention is
      that the High Court gravely erred in holding that the Port Trust is the
D     custodian of the Customs Department under Section 45( I) of the Customs
      Act, 1962. In the alternative, he submitted, that even if the Port Trust is
      held to be a custodian, it is still entitled to charge dcmurrage on goods
      detained by the customs. Even if the Customs Authorities or DR! arc at
      fault. the Port Trust cannot be barred from claiming the charges which
      arc charged statutorily. It is submitted that Regulation 6(1) is subject to
 E
      other laws including the Major Port Trust Act and it was also submitted
      that Section 160(9) of the       ,\oms Act. 1962 provides that nothing in
      the Customs Act shall affect ally htw for the time being in force relating
      to the constitution and powers of any Port authority in a major port as
      defined in the Indian I' .>rts Act, 1908.
 F             17. Shri Maninder Singh, learned Additional Solicitor General
      appearing for the Union oflndia submits that the High Court erred in
      directing the customs authorities and the ORI to pay the demurrage and
      the detention charges. He submits that the officials did not act mala fide.
      They had specific intelligence inputs that the respondent-importers were
 G    misdeclaring ihe goods to avoid payment of duty. He submits that even
      if it is found that the intelligence inputs were not correct, action cannot
      be said to be mala fide. He also submits that the respondent-importers
      did not exercise their option to pay provisional duty or get the goods de-
      stuffed. Therefore, no relief could have been given to the respondcnt-
      importers.
H
   MUMBAI PORT TRUST v. MIS. SHRI LAKSHMI STEELS                               481
                [DEEPAK GUPTA, J.]

       18. On the other hand the stand of the respondents is that once a       A
detention order is passed by the Customs Authorities, the Port Trust has
to waive the dcmurragc and reliance has been placed on Section 128 of
the Act and 2009 Regulations. The stand of the respondent-importers is
also that in terms of the regulations the Mumbai Port Trust is not entitled
to claim any demurrage charges for the period when the goods were
                                                                               B
under detention of the Customs Authorities. In the alternative, it is
submitted that even if, for any reasons, the Mumbai P011 Trust is held
entitled to recover the demurragc charges, the liability of the same should
be fastened upon the Customs AuthoritiesiDRI.
       19. Bdore dealing with these issues, it would be relevant to refer
to the provisions of the Act. As already mentioned above, the Tariff           C
Authority for Major Ports is constituted under Section 47A of the Act
and the imposition and recovery of rates at Major Po11s arc fixed by the
Tariff Authority. Section 48( l) of the Act provides that the authority
shall, by notification in the Official Gazette, frame a scale of rates and a
statement of conditions umkr which, any of the services specified              D
hereunder shall be performed by a Board in relation to a port. Sub-
section ( 1)(ct) of Section 48 deals with wharfoge, storage and dcmurrage
of goods. Section 53 of the Act empowers the Board to exempt, either
wholly or partially. any goods or vessels or class of goods of vessels
from the payment of any rate or of any charge leviablc in special case,
for the reasons to be recorded in writing. Section 58 deals with time for
payment of rates on goods. Section 59 of the Act provides that the Board
shall have a lien on the goods which arc kept in the po1t in respect of the
amount due to the Board under the provisions of the Act.
       Sections 48, 53, 58 and 59 of the Act read as follows:
                                                                               F
       "48. Scales of rntes for ser>"ices performed by Board or other
       person.- (/) The Authority shall from time to 1ime, by
       norification in the Oj}icia/ Gazelle. .fame a scale of roles al
       which, and<! statement of" conditions 1111der which, m~v vf the
       services specified /1ere11nder shall be pe1jim11ed by a Board
       or any other person authorised under section 42 at or in                G
       relation to the port or port approaches-
       (a) trans hipping of passengers or goods between vessels in
       the port or port approaches;

                                                                               H
482     SUPREME COURT REPORTS                        [2017] 11 S.C.R.


A     (h) landing and shipping of passengers or goods from or to
      such vessels to or from any wharf. quay, jetty, pier, dock,
      berth. mooring, stage or erection, land or building in the
      possession or occupation of lhe Board or at any place within
      the limits of the port or port approaches;
 B    (c) carnage or porterage of goodv on any such place;
      (d) wharfage, storage or demurrage of goods on any such
      place;
      (e) any other service in respect of vessels, passengers or
      goods,
 c
      (2) Different scales and conditions may be framed for different
      classes of goods and vessels.
      53. Exemption from, and remission of, rates or charges.- A
      Board may, in special cases and for reasons to be recorded in
D
      writing, exempt either wholly or partially any goods or vessels
      or class of goods or vessels ji"0111 the payment of any rate or
      of any charge leviahle in respect thereof according 10 any
      scale in force under this Act or remit the whole or any portion
      of such rate or charge so levied.
      58. Time for paymelll of rates on goods.- Rates in respect of
 E
      goods to be landed shall be payable immediately on lhe
      landing of the goods and rates in respect of goods to he
      removed fi"om the premises of a Board. or to be shipped for
      export. or to be transhipped, shall be payable before the goods
      are .w removed or shipped or lranshipped.
 F
      59. Board's lien for rates.- (/) For the amoullf of all rates
      leviable under 1his Act in respect of any goodv, and for the
      rent due to the Board for any buildings, plinths stacking areas.
      or other premises on or in which any goods may have been
      placed, the Board shall have a lien on such goods, and may
 G    seize and detain the same until such rates and rents are fi1lly
      paid.
      (2) Such lien shall have priority over all other liens and claims,
      except for general average and for ship-owners lien upon
      the said goods fi>r freight and other charges where such lien
 H
   MUMBAI PORT TRUST v. MIS. SHRI LAKSHMI STEELS                             483
                [DEEPAK GUPTA. J.]

      exists and has been preserved in the manner provided in sub-           A
      section (I) o.fsection 60, and for money payable to the Central
      Government under any law for the time being in force relating
      to customs, other than by way of penalty or fine."
The Union oflndia relics upon the provisions of Section 128 of the Act,
which read as follows:                                                       B
      "128. Savi11g of right of Ce11tral Gover11111e11t a11d
      1111111icipa/ities to use wharves, etc., for collecti11g duties a11d
      ofpower of Customs Officers.- Nothing in this Ac/ shall ajfect-
      (1) the right of the Central Government to collect customs
      duties ur of any 1111inicipali1y to collect tuw11 duties at any        c
      dock, berth, whwj; quay, stage, jetty or pier in the possession
      of a Board, or
       (2) any power or authority vested in the customs authorities
     . under any law for the time being in force."
                                                                             D
As far as the Customs Act is concerned, we may refer to Section 45
and Section 160(9) of the Act, which read as follows:
      "45. Reslriclions on cuslody and removal of imported goods. -
      (I) Save as otherwise provided in any law for the time being
      in force, all imported goods, unloaded in a customsoarea shall
                                                                     E
      remain in the custody of such person as may be approved by
      the Principal Commissioner of Customs or Commissioner of
      Customs until they are cleared for home consumption or are
      warehoused or are transhipped in accordance with the
      provisions of Chapter VIII.
      (2) The person having cuslody of" any imported goods in a F
      customs area, >vhether under the provisions of sub-section
      (I) or under any law for the time being in force, -
      (a) shall keep a record of such goodv and send a copy thereof
      to the proper officer;
                                                                             G
      (b) shall not permit such goods to be removed ji"om the
      customs area or otherwise dealt with, except under and in
      accordance with the permission in writing of the proper officer.
      (3) Notwithstanding anything contained in any law for the
      time being in force, if any imported goods are pilfered afier          H
484            SUPREME COURT REPORTS                            (2017] 11 S.C.R.



A           unloading thereof in a custom' area while in the custody of a
            person referred to in suh-section ( 1), that person shall he
            liahle to pay duty on such good1· at the rate prevailing on the
            date of deli wry of an impon manifest VI; as the case may be,
            an import report to the proper officer under section 30 for
            the arrival of the conveyance in which the said good' were
 B
            carrie(/. "
            "160. ReJJl!lll 1111d savi11gs.-
                  xxx              xxx            xxx
            (9) Nothing in this Act shall af]'ec:t any law for the time being
 c          in force relating to the constitution and powers of any Port
            authority in a major port as dejined in the Indian Ports Act,
            1908 (/ 5 of 1908). "

      Regulations 2(b) and 6(1) of the 2009 Regulations arc also relevant and
      the same read as follows;
D
            "2. Definitions.- xxx xxx xxx
            (b) "Customs Cargo Services provider" means any person
            re.SJ-'Onsible.lor receipt, storage. delive1:11. c/ispalch or otherivise
            handling of imported goods and export goods and includes
            a custodian as r~/'erred to in section 45 of the Act and persons
 E
            as referred to in sub-section (2) of section 141 of the said
            Act."
            "6. Respo11sibilities of tire Customs Ct1rgo Service prm•itle1:-
            (JJ The Customs Cargo Service provider shall -
 F                xxx             .rxx            xxx
            (/) sul1ject lo any other law for the time being in .force, shall
            not charge an)' rent or de11111rrage 011 the goocls seized or
            detained or confiscated by the Superintende/11 of Customs or
            Appraiser or lnspeclor of Customs or Preventil'e officer ur
 G          examining officer. as the case may be. "
             20. The issue whether an importer is liable to pay dcmurrage
      charges even when the imported goods have been detained by the
      Customs Authorities and later it is found that the version of the imponcr
      is correct, has been the subject matter of a number of decisions. In the
H
    MUMBAI PORT TRUST v. MIS. SHRI LAKSHMI STEELS                                485
                 [DEEPAK GUPTA, J.]

case of Trustees of the Port of Madr11s v. Ml.~ Ami11cl11111d PJ•11relal',       A
the Customs Authorities had issued detention certificate ofimported goods.
There was no fault or negligence on the part of the imp011cr. The Truskcs
of the Port of Madras waived demurragc charges for the period of
detention; thl' impo1tcr paid the balance amount and cleared the goods.
Later. the Board wrote to the Customs Authorities that the detention
                                                                                 B
ce11ilicatc had been wrongly issued. Thereafter, the Board sued the
importer for recovery of the balance dcmurrage charges. It was urged
that the Board could not charge demurrnge for the period during which
the goods had been detained for no fault orncgligenee of the impo1tcr or
his agent. This Court, alter noticing the provisions of the Madras Port
Trust Act. especially Sections 42, 43 and 43A thereof. which are similar         c
to the provisions of the Major Po1t Trusts Act, 1963 referred to above,
he Id that the Board was entitled to claim the rates as framed under the
provisions of the said Act. This Court held that the Port Trusts were
public representative bodies entrusted by the Legislature with authority
to frame the scak of rates and the conditions subject to which these
                                                                                 D
rates and services were to be rendered. These rates were approved by
the Central Government and, thereafter. the rates had the force of the
 law. It was held that the Port Trusts were under a statutory obligation to
render services of various kinds in the larger public and national interest.
ln case there is congestion in the port it would affect the free movement
 of ships and of essential goods. Therefore, the scale of rates had to be        E
 framed in such a manner that it worked both as an incentive to the
 impo1ters to remove the goods as expeditiously as possible from the
transit areas and also acted as a disincentive to keep the goods in the
 premises of the Bcnm\ for a long time, thereby increasing the dcmurrage
 charges substantially with passage of time. This Court held that the High
 Court was in error in holding that the Board's power to charge demurragc
                                                                                 F
\,·as limited to cases where the goods were not removed from its premises
 due to some fault or negligence on the part of the importer.
     21. In Bo11ril ofTr11.1·tees of tire Port of Bo111/u1y v. /11di1111 Goods
Supplying Co', this Court held that it was the duty of the Board to
rc·cover rates: the Board had a lien on the goods and the right to seize         G
and detain the goods, until the rates were fully paid and to sell the goods
if the rates were not paid and recover the same. It was held that ce1tain
concessions may be given taking into account the hardship of the
'\t976)3SC'C t67
'\1977) 2 sec 649                                                                H
486                  SUPREME COURT REPORTS                    [2017] ll S.C.R.



A     importers, but the legality of the rates cannot be questioned. This Court
      went on to hold that the importer of the goods was liable to pay the
      demurrage charges even if the importer was not responsible for any
      delay, nor any fault could be attributed to the importer.
             22. In Board of Trustees oftlte Port ofBombay" Jai Hi11d Oil
 B    Mills Co111pa11y', this Com1 noted that the provisions of the Major Port
      Trust, 1963 were pari materia to the acts governing the Individual Port
      Trusts prior thereto. It was held that the demurragc charges arc levied
      in order to ensure quick clearance of the cargo from the harbour and the
      rntes are fixed in such a way that they would make it unprofitable for
      the importer to use the port premises as a warehouse.
 c
            23. In all these cases, this Court took the view that the Board of
      Trustees of the Pm1s, which arc creations of a statute, arc entitled to
      charge dcmurragc and other charges from the importer even in respect
      of those pl'fiods during which the importer was unable to clear goods
      from the premises of the Board, for no fault or negligence on the part of
D     the importer. It was further held that the Boards were entitled to charge
      demurrage from the importer even when the importer was unable the
      clear the goods because of the detention thereof by the Customs
      authorities, which detention may lateron have been found to be unjustified.
              24. The provisions of the International Airport Authority Act, 1971
 E    arc similar in nature and these provisions came up for consideration
      before this Court in /11tematio11al Airports Authority v. Gra11d Slam
      /11fer1111tio11al4. In that case, this Court took note of Section 45 of the
      Customs Act and held as follows:
               "41. None of these provLvions entitles the Collector of Customs
 F              to debar /he collection of demurrage for llte storage of
                imported goods. They do 1101 entitle him lo impose conditions
                upon tlte proprielors of ports or airports before they can be
               approved as Customs ports or Customs airports. Section 45
               provides that all imported goods imported in a customs area
 G             must remain in the custody of the person who has been
               approved by the Callee tor of Customs until they are cleared
               and such person is obliged 1101 lo permit them to be removed
               fi"am the customs area or otherwise dealt with except under
                and in accordance with the permission of tlte Customs
      1
          (1987) 1   sec 648
H     '11995)JSCCl51
MUMBAI PORT TRUST v. MIS. SHRI LAKSHMI STEELS                    487
             [DEEPAK GUPTA, J.)

 Officer. Section 45 does not state that such person shall not    A
 be entitled to recover charges from the importer for such
 period as the Customs Authorities direct.
 42. The 'purpose of the Gus toms Act 011 the one hand and
 the Major Port Trusts Act and the International Airports
 Authority Act on the .other hand are different. The former deals B
 with the collection of Customs duties on imported goods. The
 latter deals with the maintenance of seaports and airports.
 the facilities to be provided thereat and the charges lo be
 recovered therefo1: An importer must land the imported goods
 at a seaport or airport. He can clear them only <!fter C
  completion of customs formalities. For this purpose, the
 seaports and airports are approved and provide storage
 facilities and Customs officers are accommodated therein to
 ji1cilitate clearance. For the occupation by the imported goods
 of space in the seaport or airport, the Board or the Authority
  which is its proprietor is entitled to charge the importer. That D
  until customs clearance the Board or the Authority may not
 permit the importer to remove his goods from its premises does
 1101 imply.that it may not charge the importer for the space his

  goods have occupied until their clearance.
           xxx            xxx              xxx                    E
 44. It cannot be gainsaid that, by reason of unjust!fied
 detention of his goods by the Customs Authorities, the importer
 is put to loss by having to pay demurrage charges for the
 periods of such detention. The Central Government is
 empowered by Section 35 of the International Airports F
 Authority Act, 1971, and Section 111 of the Major Port Tnists
 Act. 1963 to issue to the Authority tmd the Board of Trustees,
 respectively, directions on questions ofpolicy ajler giving them
 an opportunity, as far as practicable, of expressing their views.·
 The Cen/ral Government can, if so advised, after giving to
 the Authority and the Board of Trustees the opportunity of G
 expressing their views, direct them, under the aforementioned
 provisions. not to levy demurrage charges for periods covered
 by detention cer.tificates. "


                                                                  H
488            SUPREME COURT REPORTS                             [2017] 11 S.C.R.



 A    Justice Venkatachala, m his concurringjmlgmcm. after referring to the
      various judgments of this Coun cited hereinabove, held as follows:
            '"66. Frum the ab<Jl'e decisiuns uf this Cuurt it becomes clear
            that an authorit_v created under a statute even if is the
            c11S10dian of the imported goods because of rhe provisions uf
B           the Cusloms Act. 1961, would be entitled to charge demurrages
            for the imported goods in its custody and make the importer
            or consignee liable for the same even for periods during
             which he/it was unable to clear lhe goods from the customs
            area, d11e lo fault on the part of the Cusloms Authorities or of
            other authorities who might have issued detention certificates
 c          owning such fault.
                      xxx               xxx                xxx
            6Y. Tht!re,fore, 111)' ans1ver to the question considerecl hy 11u: is
            in the negative i.e. the Cullectur uf' C11stun1s en1pu1t'erell u11c/er
D           sub-section {l) of Section 45 of the Customs Act, 196:! lo
            approve persons to be c11stodia11s of imported goods in
            rnstums areas until they are cleared as provided fur therein,
            while approving the lnternatiunal Ai1porls Aurhority of lndia
            to be the cuswdian of such imported goods in the customs
            area of Indira Gandhi International Airporl, New Delhi and
 E          Central Jforehousing Corporation to be the cusrodians uf
            such imported goods received at the customs area - the
            Container Freight Starion. CWC Complex. Pragati Maidan,
            New Delhi, hy issue of public notice or otherwise in that
            regard, if' by such notice or othenl'ise directs such custodians
 F          not to collect custoc~v charges fi-0111 the consignees <~(such
            goocls - "the Cargo", because oj· cletenriun cerl!ficate.\· issue,-/
            by him or his delegates. will 1101 be acting wi1hin the powers
            conj'i!rrecf UjJOll hin1 un(fer the Act, its I?ules or its l?egulatiuns
            an'i hence clirections given b_l' the C11stun1s Cu/lec1or or his
            lie/egatees to release the goods of i111porlers or consignees
 G          without col/ecti11g demurrage charges ji·om them cannot be
            enforced hy courts either against IAAl or CWC. ··
      This Court clearly held that Section 45 of the Customs Act did not, in
      any manner, affect the rights to the International Airport Authority to
      collect charges from the importer.
 H
      MUMBAI PORT TRUST v. MIS. SHRI LAKSHMI STEELS                            489
                   (DEEPAK GUPTA, J.]

       25. In U11io11 of blditr v. R.C. Fabrics (P) Ltd.'. this Court          A
followed the law laid down in Grand Slam (supra). Thereafter, in Om
Slumkar Biya11i v. Board of Trustees, Port of Calcutta•, this Court,
after referring to Section 58 of the Major Port Trust Act, held as follows:
        "8 ............ Thus the charges of the Isl Respondent are tu be
        paid before the goods are removed. The High Court seriously B
       ·erred in permilfing removal of the goods without payment of
        the port charges. To be noted that it was never disputed that
        the charges were payable. The I st Respondent was not
        concerned with the dispute as to who had to pay the charges.
        it was the appellant who was imerested in clearance of the
        goods. It was for him to have paid the charges and cleared c
        the goods. Even if' it was the appellant's case that the Customs
        Authorities had to pay the charges, the appellant should lun·e
        firs/ cleared the goods by paying charges due to the /st
        respondent and then claimed reimbursement Ji"om the Customs
        Authorities."                                                       D
        26. The High Court in the impugned judgment has made reference
to the aforesaid judgments, but has distinguished them only on the ground
that these j udgmenl~ were rendered prior to the promulgation of the
2009 Regulations and, therefore, held these to be inapplicable. We shall
deal with this issue later on, but we may first refer to the judgment of
this Court in Shipping Corporatio11 ofl11dht v. C.L. Jai11 lf'oo/e11 Mills' E
relied upon by the High Court. It would be pertinent to mention that this
judgment docs not deal with the Major Port Trust Act, nor docs it deal
with the International Airports Authority oflndia Act. In that case, the
issue before this Court was with regard to demurragc charges levied by
the Shipping Corporation of India: This Court in fact affirmed the law F
 laid down in Gnmd Slam (suprn). It would be apposite to make reforcncc
to the following portion of the j udgmcnt:
         "7............... Having scr111inized the provisions of the Customs
         Act, we are unable to find out any provision which can be
         remote(v construed to have conferred power on the Customs
                                                                               G
         Authorities lo prevent the proprietor of the space from levying
         the demurrage charges and, thereby absolving the importer
         of the good~ from payment of the same.
'(10021 1 sec 11
'2002) 3 sec 168
1
    pou1) s sec 345                                                            H
490             SUPREME COURT REPORTS                         (2017] I I S.C.R.


A     In that case, this Court gave certain directions in the peculiar facts of
      the case, but the law laid down in Grand Slam {supra) has not been
      whittled down.
             27. The High Court also placed reliance on certain observations
      made by this Court in the case of U11io11 of India v. Sanjeev Woolen
B     Mills', wherein the directions were given by the Delhi High Court that
      the demurrage and container detention charges should be borne fully by
      the Customs Department. It would be pertinent to mention that the matter
      before this Court arose out of the Contempt Proceedings and no challenge
      had been made to the earlier judgment of the Delhi High Court directing
      the Customs Authorities to pay the demurrage and container detention
c     charges. That order had become final and it was under these
      circumstances that this Court refused to interfere with the orders passed
      in contempt proceedings. This case has no bearing on the facts of the
      present case.
             28. The High Comt has mainly relied upon Section 45 of the Indian
D     Customs Act read with Regulation 2(1) of the 2009 Regulations while
      issuing directions to the Mumbai Port Trust not to collect demurrage
      from the importers.. The first contention on behalf of the Trust is that the
      Port Trust is not a custodian of the Customs Department under Section
      45( I) of the Customs Act. We arc not going into this issue in view of the
 E    fact that the notifiuation dated 11. l 0.2000 issued by the Commissioner
      of Customs under Section 45( I) of the Customs Act, 1962 approving the
      Mumbai Port Trust as Custodian under Section 48 of the Customs Act
      was challenged by the Mumbai Port Trust before the Bombay High
      Comt and the High Court by its judgment dated 22.07.2009 has quashed
      the said notification. The judgment of the Bombay High Court is under
 F    challenge before this Court. For the purpose of this case, we are
      proceeding on the assumption that the Mumbai Port Trust is a custodian
      within the meaning of Section 45 of the Customs Act. Regulation 2(b) of
      the 2009 Regulation lays down that the Custom Cargo Service Provider
      is" person responsible for receipts, storage, delivery, despatch, handling
 G    etc. of the imported goods and includes the custodian referred to in
      Section 45 of the Customs Act.
          29. Assuming for the purpose of the decision of this case that
      Mumbai Port Trust is a custodian or cargo service provider. the question

      '1998 \tOO) ELT 323
H
    MUMBAI PORT TRUST v. MIS. SHRI LAKSHMI STEELS                              491
                 [DEEPAK GUPTA, J.]

that arises is whether these Regulations apply to the Mumbai Port Trust.       A
These Regulations have been framed under Section 157 of the Customs
Act. Section 160(9) of the Customs Act clearly lays down that nothing
in the Act shall affect the power of the Port Authority in a Major Port, as
defined in the Indian Major Port Trusts Act, 1963. It is not disputed
before us that the Mumbai Port Trust is a major pqrt.
                                                                               B
       30. As already explained hcrcinabovc, the Mumbai Port Trust has
the power and authority to levy rates including dcmurragc as fixed by
the Tariff Authority under Section 47 A of the Act. This right of the Port
Trust is not affected either by the provisions of the Customs Act or by
the Regulations of2009. Sccti.on 160(9) of the Customs Act clearly lays
down that the provisions of the Customs Act shall not in any manner            c
affect the constitution and powers of any port authority in a major port.
This will include the right of the major port authority that is a Major Port
Trust to levy and charge rates and demurrage.
      31. As far as 2009 Regulations are concerned, these are the
Regulations framed under the Customs Act. Regulations arc in the nature D
of subordinate legislation. There can be no manner of doubt that
subordinate legislation that too a legislation framed by a Board under the
Customs Act cannot in any manner affect the power and authority of
the Major Port Trust, statutorily vested in it.
       32. Neither the regulations nor the provisions of the Customs Act E
can impinge or in any m•mner affect the statutory power of the Major
Port Trusts to lcly rates under the Act. In fact, the Authority that framed
the Regulations was itself aware of this because Regulation 6(1) itself
begins with the words" subject to any other law for the time being in
torce". It is, therefore, obvious that the Regulations are subject to any F
other Jaw including the Major PortTmstAct. Therefore, these Regulations
cannot in any manner affect the right of the Port Trust. We are, therefore,
of the view that the High Court erred in holding that the law settled by
this Court in a catena of judgments referred to above was no longer
applicable in view of the 2009 Regulations. Reliance placed by the Union
ofindia on Section 128 of the Major Port Trusts Act is totally misplaced. G
This provision only deals with the right of the Central Government to
collect customs duties. It does not deal with the rights of the Port Trust
to collect rates including demurrage.


                                                                               H
492             SUPREME COURT REPORTS                           [2017) l l S.C.R.


A           33. The next issue which arises is whether any direction could be
      issued to the ORVCustoms Authorities to pay the demurrage charges to
      the Port Trust and the detention charges to the Shipping Linc.
              34. We have already referred to a number of decisions wherein
      the law has been clearly laid down that even if the importer is not at
B     fault, it is the importer alone who is liable to pay the demurrage charges.
      As far as detention charges arc concerned, this is a private contract
      between the importer and the carrier, i.e. Shipping Linc. The ORI/
      Customs authorities can be directed to pay the dcmu1rngc/dctention
      charges only when it has proved that the action of the ORI/Customs
      Authorities is absolutely ma/a fide or is such a gross abuse of power
c     that the officials of the ORI/Customs should be asked to compensate
      the importer for the extra burden which he has to bear. Even if an importer
      feels that it has been unjustly dealt with, it must clear the goods by
      paying the charges due and then claim reimbursement from the customs
      authority.
0            35. In the present case allegations of ma/a fides were levelled
      against Respondent Nos. 7 & 8, Santokh Singh and Roopesh Kumar.
      The allegation is that since the respondent-importers had filed writ petitions
      before the High Court wherein the said officials had been summoned to
      appear in person these two officials had acted ma/a fide against the
E     respondent-importers. Charges of discrimination have also been levelled
      against them. These persons were arrayed as Respondent Nos. 7 and 8
      in the writ petition. Initially, a written statement was filed by Respondent
      Nos.1-3 and 5-8 which was not signed by these two persons. Thereafter,
      these two persons filed an application for permission to file written
      statement which was filed on 07.11.2016 probably atler arguments have
 F    been heard. These written statements have not been taken into
      consideration by the High Court. Charges of ma/a jide arc serious and
      these charges were denied in the first written statement and with the
      second written statement, an affidavit was filed by Respondent Nos. 7
      & 8 denying the same charges. Therefore, the second affidavit should
G     not have been brushed aside. In any event, it would be important to note
      that the High Court il~df did not go into this aspect in detail and observed
      as follows :-
             " ... This Court is not going into much detail on this aspect,
             but ii can safe(v be opined that the aclion was not bona jide,
H
             if no! slrict(v malafide..... "
   MUMBAI PORT TRUST v. MIS. SHRI LAKSHMI STEELS                              493
                [DEEPAK GUPTA, J.]

Therefore, there is no specific finding of malafides. However, the High A
Court held that the respondent-importers suffered a loss because of
delay on the part of Revenue staff to clear the goods and the executive
instructions of the Department were violated.
        36. We arc not in agreement with the judgment of the High Com1.
Both the respondent-impo1ters imported consignments on 04.12.2015,            B
 l l.12.2015 and 29.12.2015. The case of the Revenue is that it had prior
information that the respondent-importers along with other importers of
Ludhiana were evading safeguard duty imposed on hot rolled steel
products by mis-declaring their goods to be cold rolled products. They
were also allegedly using the method of pickling and oiling to make the
products appear like hot rolled products. The Revenue also had intelligence   c
reports that in respect of previous transactions the importers had declared
the goods to be cold.rolled to the Customs Authorities but hot rolled
before the ExciscAuihoritics. On 14.12.2015 search was carried out in
the business premises of one of the importers namely M/s lnder
International and ch sh amounting to Rs. 63,30,000/- was recovered. 50        D
MT of imported sheets were also detected. The DR! had some
intelligence inputs that certain consignment of coils earlier cleared by
the importers from Mumbai Sea Port and which had been declared as
secondary, defective CR coils were declared to be hot rolled coils before
the Excise and Taxation Department. Even with regard to the thickness
of the sheets/coils large number of discrepancies were found in the earlier   E
consignments imported by the same importers. These may be separate
trnnsactions but the Revenue was justified in apprehending that the
imported goods may have been mis-declared and, therefore, they must
be thoroughly checked and verified.
       37. It would also be pe1tinent to mention that the DRI, Ludhiana       F
issued summons to Shri Indresh Jain, who is a partner in M/s Imler
International asking him to be present in the Office of the DR! on
15.12.2015. He 'did not appear and summons were again sent to him on
17.12.2015 to appear on 18.12.2015 when again he did not appear.
Meanwhile, a letter was sent on 14.12.2015 by DR! to Mumbai Customs           G
asking them to withhold the release of the imported consignments. A
letter was also sent to the Shipping Linc on 17.12.2015 requesting them
not to allow any change in the description of the import of goods.
      38. On 21.12.2015, search was conducted in the premises of the
respondent-importers and, according to the Rcwnuc the respondent-
                                                                              H
494             SUPREME COURT REPORTS                        (2017] ll S.C.R.


A     importers allegedly admitted that they had earlier imported certain sheets
      of secondary and defective nature from !CD, Sonepat, Haryana, thereby
      violating the Import Licensing Note.
             39. On 22.12.2015, the respondent-importers requested that their
      goods be released by assessing customs duty under Section 18 of the
B     Customs Act. Sirn:c the respondent-impmters apprehended that the DR!
      had asked the Shipping Linc not to release the goods, a clarification was
      issued on 23.12.2015 by the DR! to the Shipping Line that it had not
      instructed the Shipping Linc not to issue delivery orders but had only
      asked that no changes should be made in the Bill of Lading with regard
      to the description of goods.
c
            40. It would be impo1tant to note that the duty was discharged by
      the importer in respect of Bills of Entry dated 04.12.2015 and 11.12.2015,
      only on 23.12.2015. Therefore, prior to that date there could not have
      been any release of goods. In fact, in respect ofonc of the Bills of Entry
      dated 04.12.2015, the same was presented to the Customs Authorities
D     and customs duty was paid after 30th December, 2015.
            41. Shri Indrcsh Jain appeared before the DR! on 28.12.2015. On
      the one hand the respondent-importers were praying for the release of
      goods and on the other hand their rcprcscntati vc was not appearing
      before the Authorities. Herc it would be important to note that the third
 E    consignment was received only on 29.12.2015 and, thereafter, the goods
      were examined from 05.01.2016 to 11.01.2016. In the meantime, the
      importer filed writ petitions in the Punjab and Haryana High Court.
            42. The Customs Authorities drew the samples of the goods from
      05.01.2016 to 11.01.2016. These were sent to Mr. Tambi, Chartered
 F    Engineer. Shri Tambi also procured the test repmt from Mis Perfect
      Laboratories and issued a certificate on 19.01.2016. According to him
      the goods were cold rolled coils as declared by the respondent-importers.
      Therefore, wc arc of the opinion till this stage there was no unnecessary
      delay on the part of the DR!.
G           43. After 19.01.2016, there arc allegations and counter allegations
      made by both the parties against each other. It is however clear that the
      ORI was nol satisfied with the report given by Shri Tambi. Even ifthat
      be so, now since the Chartered Engineer appointed by the Revenue
      authorities had held the goods to be cold rolled goods, the DR! should
      have released the goods. It is the case of the DR! that on 25.01.2016 a
 H
   MUMBAI PORT TRUST v. M/S. SHRI LAKSHMI STEELS                                495
                [DEEPAK GUPTA, J.]

decision was taken that these consignments and future imported                  A
consignments of the respondent-imp011ers be released by resorting to
provisional assessment under Section 18 of the Customs Act. A letter in
this behalf was sent on 28.01.2016 and it was received by the Customs
Authorities on the same date i.e. 28.01.2016. The case of the ORI is
that the letter was also communicated to the respondent-importers but,
                                                                                B
according to the respondent-importers they came to know about the
lctteronly on 03.02.2016.
       44. The respondent-importers did not take the benefit ofprovision<il
assessment offered on two grounds :- ( l) that all other importers were
only asked to furnish PD Bonds whereas the importers herein were
asked to furnish some bank guarantee also. (2) That the demurrage and
                                                                                c
detention charges had piled up. The stand of the DR! is that all other
importers were importing sheets/scrap and not coil. It was only the
respondent-imp011crs who were importing coils. Safeguard duty is
applicable only in relation to coils and not in relation to sheets. Therefore
the original respondent-importers were asked to furnish bank guarantees         D
also. The respondent-importers were required to furnish bank guarantee
only to the extent of 20% of the provisional assessment and the bank
guarantee demanded was only Rs. 18.71 lakhs. It is thus obvious that
importers even at this stage could have got the goods released only by
furnishing the b;mk guarantee for Rs.18.7 J lakhs and furnishing PD
Bonds. All other importers took benefit of this offer given by the ORI/         E
Customs and got their goods released but the rcspondcnt-impo11ers for
the,reasons best known to'them did not take the benefit of this offer. We
may also add that if they had taken the benefit of this offer there could
hi1ve been a reduction of the demurrage as was done in the case of
other importers.                                                                F
       45. As far as the period after the first week of February is
concerned, from the record it is apparent that the revenue sent samples
of the goods imported to Mis. TCR. As per the reports ofTCR eight of
these consignments were hot rolled coils and not cold rolled coils. The
allegation of the petitioner is that the report of Mr. Tambi was not accepted   G
and the goods sent to Mis. TCR for analysis even though Mis. TCR did
not have the requisite facilities to carry out the tests. The revenue cannot
be barred from asking for a second test. Whether Mis. TCR were
competent to carry out the test or not is not for us to decide. However,
in these tests, eight of the consignments were found to be violating the
                                                                                H
496             SUPREME COURT REPORTS                         [2017] 11 S.C.R.


A     import guidelines. Even thereafter, offer were given to the assessee to
      de-stuff the goods and also to get the goods released for provisional
      assessment which offer was not accepted by the assessce.
             46. We arc. therefore, clear! y of the view that C\ en though there
      may be some delay on the part of the ORI and the customs authorities,
B     the respondent-importers have also been guilty of delaying the matter
      and. therefore, they cannot claim that they arc not liable to pay dcmurragc
      and detention charges. We may, however, darify that the respondcnt-
      impo1ters arc free to approach the ~umbai Port Trust in terms of Section
      53 of the Act for exemption and remission of demurrage and other
      charges and the Board may take a sympathetic view while considering
c     the case of the respondent-importers under Section 53.
             47. As far as detention charges ofthc Shipping Linc arc concerned,
      in addition to what we have observed above. we arc of the view that the
      High Court could not in writ proceedings have directed the DRVCustoms
      to pay the detention charges to the Shipping Line since these were to be
D     paid on the basis of a contract between the respondent-importers and
      the shipping line.
            In view of the above discussion, the appeals are allowed. The
      judgment of the High Court is set aside and the writ petitions filed by the
      respondent-importers are dismissed. No order as to costs. Pending
 E    application(s), if any, stand(s) disposcdo[


      K11\pana K. Tripnthy                                         App~als allowi.:J.