DIAL cannot levy demurrage charges at IGI Airport: HC

Delhi International Airport Ltd (DIAL) cannot levy demurrage charges at the IGI airport here, Delhi High Court has said while rejecting its plea challenging a 2009 regulation which restrains the operators from charging any rent on confiscated goods.

A bench of justices S Ravindra Bhat and Deepa Sharma dismissed DIAL’s petition challenging the regulation 6(1)(1) of the Handling of Cargo in Customs Areas Regulations, 2009, in this regard.

However, the bench said if DIAL, which operates the IGI airport, was of the view that direction by custom authorities not to charge demurrage was “unwarranted”, it could seek guidance from the central government.

“In these circumstances, the grievance that regulation 6 can potentially render DIAL’s functioning unviable and result in losses to it, has to fail. In light of the foregoing discussion, the challenge to impugned regulation fails.

Consequently, the writ petition (of DIAL) is dismissed,” the bench said.

DIAL had challenged the regulations, which was notified on March 17, 2009 by Central Board of Excise and Customs (CBEC), claiming it as ultra vires to the provisions of the Customs Act, 1962 and also on the ground of arbitrariness.

It had contended that demurrage was charged under the provisions of the Airports Authority of India (AAI) Act and that the regulation framed under the Customs Act cannot be extended to waive the demurrage charged under the AAI Act.

DIAL had executed a concession agreement in August 2009 with Celebi Delhi Cargo Terminal Management India Pvt Ltd for operation of cargo terminal at IGI airport and Commissioner of Customs had directed them to waive the demurrage charges in accordance with the regulation. 

DIAL had argued that the regulation “places a blanket ban on the charge of demurrage by the custodian of goods in case of detention, confiscation or seizure of goods by customs”. Opposing DIAL’s contentions, Commissioner of Customs had said the regulation was incorporated to ensure compliance of provisions of the Customs Act and allied legislations.

The court, however, observed that “Investigation being an integral part of working of the Customs Department, the consignments detained by the customs authorities or other investigating agencies cannot be cleared during investigation, particularly if such cases involve trade policy, human safety and security, security of state etc”.

“It is with these considerations that the impugned regulation was included in the Cargo Regulations and it should be viewed in the light of the object with which it has been framed,” the bench said, adding, “Therefore, the allegation that the impugned regulation violates Article 19(1)(g) does not survive”.

The court also said that the regulation “is well within the scope and ambit of its parent Act i.e the Customs Act, and is also consistent with the same, and does not, in any way, violates constitutional provisions”.