Definitions

Related judgements & precedents

These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.

1. Commr. of Customs vs Sayed Ali

   Supreme Court of India 18 Feb 2011 Binding (SC) Reportable

   Court's Decision & Legal Precedent

   A proper officer under Section 2(34) of the Customs Act, 1962, is only such a customs officer who has been assigned the specific functions of assessment and reassessment of duty by the Board or Commissioner of Customs. Mere appointment as an officer of Customs with territorial jurisdiction over a port is insufficient to confer proper officer status. Accordingly, a show cause notice under Section 28 of the Act for reassessment of goods cleared for home consumption can only be issued by the officer assigned assessment functions in the jurisdictional area where the bill of entry was filed and the goods were cleared, not by any other officer even if he has territorial jurisdiction over that area. In the present case, since the Commissioner of Customs (Preventive), Mumbai, was never assigned the specific function of assessment or reassessment of goods entered for home consumption under Section 28, he was not competent to issue the show cause notice, notwithstanding his territorial jurisdiction.

   On this section: Defined proper officer as one assigned specific functions by Board or Commissioner; this is the cornerstone of the judgment. The court held that specific entrustment of function is the governing test to determine proper officer status.

   Read the full order on eCourts India

2. Union of India vs Mohit Minerals Pvt. LTD

   Supreme Court of India 19 May 2022 Binding (Supreme Court) Reportable Union Of India v. M/s Mohit Minerals Pvt. Ltd., (2022) 10 SCC 1

   Court's Decision & Legal Precedent

   While the impugned notifications are validly issued under Sections 5(3) and 5(4) of the IGST Act and the importer can be deemed the recipient of shipping services under Section 13(9) read with Section 2(93)(c) of the CGST Act, the separate levy of IGST on the service component of CIF contracts violates the principle of composite supply enshrined in Section 2(30) read with Section 8 of the CGST Act. Since the Indian importer is liable to pay IGST on the composite supply comprising goods and services of transportation and insurance, a separate levy on the service component would be in violation of the scheme of GST legislation.

   On this section: Definition of importer and point of levy of customs duties

   Read the full order on eCourts India

3. British Airways Plc vs Union of India

   Supreme Court of India 06 Nov 2001 Binding (SC)

   Court's Decision & Legal Precedent

   An aircraft carrier engaged in the business of international air transport, though not technically the 'person incharge' as defined in Section 2(31) of the Customs Act, 1962, can be held liable under Section 116 for penalties regarding shortage in unloaded cargo, when the carrier's representatives physically handle the cargo, prepare the segregation report, account for goods against the cargo manifest, and represent themselves to customs officers as agents of the person incharge and are accepted as such. The issuance of a departure order under Section 42(2)(e) does not preclude subsequent penalty proceedings under Section 116, as these sections address different contingencies and involve different authorities with different objects.

   On this section: Definition of 'person incharge' in relation to aircraft - commander or pilot-in-charge. The court noted this strict definition but interpreted it not to exclude others acting as their representatives.

   Read the full order on eCourts India

4. Chairman, Cochin Port Trust vs Seahorse Ship Agencies Pvt. Ltd.

   Supreme Court of India 05 Aug 2020 Binding precedent for all courts in India; Supreme Court judgment establishing a Reportable (2020) 5 SCC 1

   Court's Decision & Legal Precedent

   After the Port Trust takes charge of imported goods and issues a receipt therefor, liability for payment of storage charges and demurrage shifts exclusively from the steamer agent (who may remain liable only for unloading services up to custody point) to the owner of the goods, which may be the consignor, consignee, importer, or their agents. The passing of title in goods to the consignee, the endorsement of the bill of lading by the steamer agent, and whether delivery order is issued are all immaterial to determining demurrage liability post-custody. The steamer agent ceases all liability once goods are taken into Port custody as the statutory bailment relationship established between Port (as bailee) and shipowner (as bailor) is discharged by section 42(7) when receipt is given. Containers, being receptacles for goods and subject to return rather than consumption, are not themselves imported goods subject to demurrage in the same manner; demurrage ultimately charges against the cargo owner. Port Trust must exercise its discretion under sections 61-62 reasonably and within reasonable time (ordinarily four months) as required by Article 14 of the Constitution.

   On this section: Import defined as bringing goods into India from outside; importer includes owner, beneficial owner; determines when goods become subject to customs duties

   Read the full order on eCourts India

5. Chairman, Board of Trustees, C. P. T vs Arebee Star Maritime Agen. Pvt. L

   Supreme Court of India 05 Aug 2020 Binding Precedent For All Lower Courts In India And Persuasive For International Reportable (2020) 8 SCC 552 Or (2018) 4 SCC 592 For Reference Order

   Court's Decision & Legal Precedent

   The statutory scheme of the Major Port Trusts Act 1963 establishes a clear demarcation of liability for port charges at the critical juncture of Port Trust taking custody of goods and issuing receipt thereof. Prior to this point steamer agents may be liable for rates payable by vessel for services performed to the vessel including charges for landing and removal of goods to storage point. Subsequent to this point and for the entire period goods are stored in Port premises the only parties liable for demurrage and storage charges are the owner of the goods or other persons entitled to the goods whether beneficially entitled or not including importers consignees and consignors or their agents. The steamer agent is absolved of all liability for goods once Port Trust assumes custody as the master or owner of vessel stands relieved of responsibility for loss or damage to goods under section 42(7) of the Act. The passing of title to goods under general law or whether bill of lading is endorsed or delivery order issued are matters wholly irrelevant to determining post-custody liability as Port Trust takes charge from ship-owner becoming bailee to ship-owner as bailor not to consignee. Containers are merely receptacles in which goods are imported and must be distinguished from the goods themselves. Containers do not become part of the mass of goods within India for import duty purposes and must be returned to their owners once destuffing occurs. Accordingly containers themselves are not subject to demurrage or storage charges once destuffed. While sections 61 and 62 of the Act confer discretion on Port Trust to sell goods marked by word 'may' not mandatory word 'shall' the Port Trust as State under Article 12 Constitution is subject to Article 14 equality constraint and must exercise this discretion reasonably including implicit constitutional duty to sell goods within reasonable time ordinarily not exceeding four months from date of landing unless strong reasons exist justifying continued detention which must be capable of judicial review.

   On this section: Definition of import as bringing goods into India from outside. Court used to establish when import is complete.

   Read the full order on eCourts India

6. Board of Trustees Cochin Port. Trust vs Marine Container Ser. (south)p. L

   Supreme Court of India 05 Aug 2020 Binding (Supreme Court) Reportable

   Court's Decision & Legal Precedent

   After Port Trust takes custody of imported goods and issues receipt therefor, only the importer, owner, consignee or their authorized agents are liable to pay storage charges and demurrage levied by the Port Trust. The steamer agent (shipping agent) and shipowner are absolved of all liability for storage charges post-custody, even if bill of lading has not been endorsed by the steamer agent or delivery order issued. The passing of title to goods is irrelevant in determining liability to pay storage charges. Containers that require destuffing are not 'goods' for purposes of imposing demurrage; they are receptacles and must be returned to their owners (steamer agents/shipping lines) within a reasonable period. Port Trust is constitutionally bound to exercise its discretion to sell uncleared goods within a reasonable period, ordinarily not exceeding four months from date of assuming custody, and must destuff containers and return them when consignee/owner does not clear goods.

   On this section: Includes owner, beneficial owner or person holding himself out as importer; relevant for understanding who is liable to pay port dues post-landing

   Read the full order on eCourts India

7. Chairman, Cochin Port Trust vs A. P. Industries

   Supreme Court of India 05 Aug 2020 Binding (SC) - Landmark Three-Judge Bench Judgment Reportable (2020) 9 SCC 1

   Court's Decision & Legal Precedent

   After the Port Trust takes charge of imported goods and issues a receipt therefor, the steamer agent or vessel owner shall not be liable for demurrage, storage charges, or other dues to the Port Trust. Such liability passes exclusively to the importer, owner, consignee, or their agents. The point of time at which title to goods passes to the consignee is irrelevant in determining this liability. The Port Trust's duty is to recover such charges from persons beneficially entitled to the goods, which may be determined through the legal framework of the Customs Act (importer) or the Indian Bills of Lading Act (consignee). Containers fit for repetitive use are not 'imported goods' but mere receptacles and the Port Trust bears the duty to destuff such containers and return them within reasonable time. The discretion granted to Port Trust under Sections 61-62 of the MPT Act cannot be construed as a mandatory duty but must be exercised reasonably within approximately four months from the date of landing goods, subject to the constraints of Article 14 of the Constitution.

   On this section: Includes any owner, beneficial owner or person holding himself out as importer. Used to establish that beneficial owner is liable to Port Trust

   Read the full order on eCourts India

8. Chairman, Cochin Port Trust vs Greenways Shipng. Ags. Pvt. Ltd.

   Supreme Court of India 05 Aug 2020 Binding (Supreme Court) Reportable (2020) 8 SCC 1

   Court's Decision & Legal Precedent

   After The Point Of Time That The Port Trust Takes Charge Of The Goods And Issues A Receipt Therefor, And Thereafter Stores The Goods In A Place Belonging To It, Storage And Demurrage Charges Cannot Be To The Account Of The Vessel Or An Agent Of The Vessel. Until The Stage Of Landing And Removal To A Place Of Storage, The Steamer's Agent Or The Vessel Itself May Be Made Liable For Rates Payable By The Vessel For Services Performed To The Vessel. Post Landing And Removal To A Place Of Storage, Detention Charges For Goods That Are Stored, And Demurrage Payable Thereon, It Is Only The Owner Of The Goods Or Other Persons Entitled To The Goods (Who May Be Beneficially Entitled As Well) That The Port Trust Has To Look To For Payment Of Storage Or Demurrage Charges. A Steamer Agent Can Only Be Made Liable For Storage Charges Until Such Time That The Bill Of Lading Has Not Been Endorsed Or Delivery Order Has Not Been Issued By The Steamer Agent.

   On this section: Definitions And Procedures For Imported Goods, Importer Liability, Storage In Customs; Read Together With MPT Act To Determine When Import Is Complete

   Read the full order on eCourts India

9. Board of Trustees Cochin Port Trust vs P and O Nedlloyd (india) Pvt. LTD

   Supreme Court of India 05 Aug 2020 Binding (Supreme Court Three Judge Bench) Reportable (2020) 8 SCC 1

   Court's Decision & Legal Precedent

   Post-Landing Of Goods And After Port Trust Takes Charge And Issues Receipt Therefore, Storage Charges, Demurrage, And Ground Rent Are Payable By The Importer, Owner, Consignee, Or Their Agent, And Not By The Steamer Agent Or Vessel Owner. The Steamer Agent's Liability For Port Dues Extends Only Up To The Point When Port Trust Takes Custody Of The Goods. Title To Goods Is Irrelevant In Determining Liability For Storage Charges. Containers Are Receptacles For Goods, Not Goods Themselves, And Cannot Be Classified As Goods For Purpose Of Demurrage Charging. Port Trust Must Exercise Its Discretion To Sell Uncleared Goods Within A Reasonable Period, Ordinarily Not Exceeding Four Months From Date Of Custody, As Required Under Article 14 Of The Constitution.

   On this section: Import Means Bringing Goods Into India; Import Completed When Goods Become Part Of Mass Within Country And Bill Of Entry Filed

   Read the full order on eCourts India

10. Chairman, Cochin Port Trust vs Maersk India Pvt. LTD

    Supreme Court of India 05 Aug 2020 Binding (Supreme Court) Reportable (2020) 8 SCC 1

    Court's Decision & Legal Precedent

    The statutory scheme of the Major Port Trusts Act 1963 establishes a two-stage liability framework: (1) STAGE ONE (PRE-LANDING TO RECEIPT): Until the Port Trust takes charge of goods and issues a receipt therefor, services rendered are for the vessel and steamer agents may be liable for landing and ancillary charges under the statutory bailment that comes into existence between vessel (bailor) and Port (bailee). (2) STAGE TWO (POST-RECEIPT/POST-LANDING): Once the Port Trust takes charge and receipt is issued, the vessel and steamer agents are absolved of all liability for the goods per section 42(7) of the Act. From this point forward, demurrage and storage charges are the liability of the importer, owner, consignee or their agents (i.e., persons beneficially entitled to the goods), not the steamer agent or vessel. (3) TITLE IRRELEVANCE: The point of time at which title to goods passes to the consignee is immaterial to determining liability for post-landing storage charges. Liability follows statutory entitlement and beneficial ownership per the MPT Act scheme, not technical title transfer. (4) CONTAINERS: A container which is a receptacle for transport and must be returned is not goods for purposes of storage charge liability. The Port Trust must destuff containers entrusted to it and return empty containers within a feasible period. (5) PORT DISCRETION: The Port Trust's power under sections 61-62 to sell goods is discretionary (may, not shall) but must be exercised reasonably with outer limit ordinarily of four months from landing date per Article 14 constraints, after which Port must justify continued detention.

    On this section: Importer includes any owner, beneficial owner or person holding himself out as importer; broader definition than legal owner

    Read the full order on eCourts India

11. Rasiklal Kantilal & CO vs Board of Trustee of Port of Bombay

    Supreme Court of India 28 Feb 2017 Binding (Supreme Court - Division Bench) Reportable

    Court's Decision & Legal Precedent

    Liability to pay demurrage charges to a port authority is not dependent on or determined by the ownership or title to goods. The liability flows from the statutory bailment relationship between the port authority and goods placed in its custody, through the steamer agent (representing the shipowner/consignor). Any person claiming delivery of goods, whether the original consignee or a third party who acquired goods subsequently, can be held liable by the port authority for demurrage and other charges under section 59 of the Major Port Trusts Act, 1963. The inquiry into title to goods and the point of time at which title passes is wholly irrelevant for determining the authority of a port authority to recover its statutory dues. However, the port authority's discretion to grant or deny remission of demurrage charges under section 53 of the Act must be exercised based on rational consideration, sound policy, and with recorded reasons, and cannot be exercised arbitrarily or without justification.

    On this section: Defines customs port and regulates import of goods; restricts vessel entry to customs ports

    Read the full order on eCourts India

12. Siddachalam Exports Private LTD vs Commissioner of Central Excise Delhi-iii

    Supreme Court of India 01 Apr 2011 Binding (SC) Reportable (2011) 4 SCC 572 (Inferred from Supreme Court judgment reporting practice)

    Court's Decision & Legal Precedent

    The procedure prescribed under Section 14(1) of the Customs Act, 1962 and Rule 4 of the Customs Valuation (Determination of Price of Imported Goods) Rules, 1988 must be strictly adhered to for determining the value of goods entered for exportation, irrespective of whether any duty is leviable. Once the transaction value is challenged, the Revenue must bear the burden of proving mis-valuation by sequentially proceeding through Rules 5 to 8, with market enquiry permissible only as a last resort after exhausting alternative methods. Deviation from this mandatory statutory procedure vitiates the proceedings and warrants remand for fresh adjudication in accordance with law.

    On this section: Court held that goods exported in violation of conditions prescribed under the Act or any law for the time being in force would be considered 'prohibited goods', thereby bringing mis-valued exports within the scope of Section 113 and Section 114

    Read the full order on eCourts India

13. Chairman Cochin Port Trust vs Cma Cgm Agencies India Pvt. LTD

    Supreme Court of India 05 Aug 2020 Binding (Supreme Court of India) - Landmark Decision Reportable (2018) 4 SCC 592 [Reference Order dated 07-03-2018]; (2020) 10 SCC 1 [Main Judgment dated 05-08-2020]

    Court's Decision & Legal Precedent

    After a Port Trust takes charge of imported goods from a vessel and issues a receipt therefor, the Port Trust becomes the bailee of those goods. Demurrage and storage charges accruing thereafter for goods stored in the Port's premises are payable by the importer, owner, consignee or other person beneficially entitled to the goods, and NOT by the steamer agent or ship-owner. However, charges for services rendered at the time of landing of goods or their removal from the vessel to the Port's storage premises (such as unloading charges and labour dues) may be charged against the steamer agent as services rendered to the vessel. The time at which title in goods passes to the consignee is irrelevant in determining such liability. The Port Trust must act reasonably in exercising its discretion to sell goods under Sections 61-62 of the MPT Act and must attempt to sell goods within reasonable time from when it assumes custody, with four months from landing being the outer limit, failing which it must provide written explanation justifiable by the courts. Containers are receptacles for goods, not imported goods themselves, and must be destuffed and returned to the steamer agent or container owner within a short feasible period.

    On this section: Import means bringing into India from place outside India; complete when goods cross territorial waters and become part of mass of goods within India; containers as receptacles not imported goods

    Read the full order on eCourts India

14. Chairman, Cochin Port Trust vs Hanjin Shipping India Pvt. LTD

    Supreme Court of India 05 Aug 2020 Binding (SC) - Landmark Supreme Court Judgment Reportable (2018) 4 SCC 592 (Reference Order); (2020) 8 SCC 1 (Final Judgment Citation)

    Court's Decision & Legal Precedent

    After the Port Trust takes charge of imported goods and issues a receipt therefor, liability for payment of storage charges and demurrage vests in the owner of the goods or other persons beneficially entitled to the goods, including the importer and consignee, and not in the steamer agent or vessel. The point at which title passes to the consignee is irrelevant to determining this liability. Steamer agents may be liable for Port Trust dues only for services rendered at the unloading stage (pre-landing), but not for storage and demurrage charges incurred after goods are placed in Port Trust custody. The Port Trust has a constitutional duty to exercise its discretion to sell stored goods reasonably, ordinarily within four months from the date of assuming custody, as Port Trust is State under Article 12 of the Constitution bound by Article 14 equality principles. Containers are not goods imported and must be destuffed and returned by Port Trust to the shipping agent within a reasonable feasible period when the owner does not collect goods.

    On this section: Includes beneficial owner; relevant to who bears liability for customs charges and storage thereafter

    Read the full order on eCourts India

15. Chairman, Cochin Port Trust vs Marine Container Service (south) Pvt. LTD

    Supreme Court of India 05 Aug 2020 Binding (Supreme Court Judgment on Questions of Law) Reportable (2020) 8 SCC 1

    Court's Decision & Legal Precedent

    After the Port Trust takes charge of goods and issues a receipt under Section 42(2) of the Major Port Trusts Act, 1963, the steamer agent/shipowner ceases to have any liability for storage, demurrage, or other charges in respect of those goods. The liability for such charges post-landing attaches exclusively to the importer, owner, consignee, or other person beneficially entitled to the goods. The point of time at which title to goods passes is not relevant to this determination. The endorsement of the bill of lading by a steamer agent (which provides delivery mechanism) is distinct from endorsement by the consignor (which transfers title) and does not create liability on the steamer agent for storage charges. Further, as 'State' under Article 12 of the Constitution, a Port Trust must act constitutionally reasonably under Article 14, ordinarily selling uncleared goods within four months from the date of landing, and must destuff containers and return them promptly to enable resolution of the goods/container deadlock, rather than indefinitely detaining containers while charging storage to steamer agents.

    On this section: Includes owner, beneficial owner, or person holding himself out as importer. Court noted this definition supports liability of beneficial owners for port charges.

    Read the full order on eCourts India

16. Chairman, Cochin Port Trust vs Hanjin Shipping India Pvt. LTD

    Supreme Court of India 05 Aug 2020 Binding - Supreme Court Three-Judge Bench Reportable (2018) 4 SCC 592 (for the Division Bench Reference Order)

    Court's Decision & Legal Precedent

    Upon the Major Port Trusts Act, 1963: (1) The point of time at which title to goods passes to the consignee is not relevant to determine the liability of the consignee or steamer agent in respect of charges to be paid to the Port Trust. (2) Once the Port Trust takes charge of goods and issues receipt therefor, the steamer agent may be held liable for Port Trust dues in connection with services rendered qua unloading of goods, but thereafter, the importer, owner, consignee or their agent is liable to pay demurrage charges for storage of goods. (3) The Port Trust, as 'State' under Article 12 of the Constitution, is bound by Article 14 constraints and must ordinarily sell goods within four months from the date of landing, unless reasonably justified otherwise. (4) Containers are receptacles for imported goods, not imported goods themselves; containers must be returned to steamer agents, and carrying goods in containers makes no difference to the principle that only the owner of goods or person entitled to goods is liable to pay demurrage. (5) The Port Trust is under a duty to destuff every container entrusted to it and return destuffed containers to appropriate persons within as short a period as is feasible where the owner/person entitled to goods does not come forward to take delivery. (6) The statutory scheme of the MPT Act allocates liability for storage charges post-custody exclusively to the owner/beneficial owner of goods, whether consignor, consignee, importer, or their agents, and never to the steamer agent post-custody.

    On this section: Definition of 'importer' includes owner, beneficial owner, or person holding himself out to be importer; broader than strict legal ownership

    Read the full order on eCourts India

The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.