In exercise of the powers conferred by Section 48 of the Major Port Trusts Act, 1963 (38 of 1963) the Tariff Authority for Major Ports hereby disposes of the representation made by Ms. Seahorse Ship Agencies Pvt. Limited for waiver of ground rent levied by the Kolkata Port Trust for the period of detention of its containers by the Customs as in the Order appended hereto

REGD. NO. D. L -33004/99 The Gazette of India

EXTRAORDINARY

PART III—Section 4

PUBLISHED BY AUTHORITY

No. 47] NEW DELHI. FRIDAY. MARCH 15, 2002/PHALGUNA 24, 1923

911 GI/2002

(1)2 THE QAZUri'E OF INDIA: EXTRAORDINARY [PART IH-^SBC. 41 34 THE GAZETTE OF INDIA: EXTRAORDINARY [PART III—SEC. 4] 5 "

qM-^"l/b^~"i-

7 8 THEGA^TlB0FIM3IA;B?CmApRPINARY

(PARTIII—Sgc.4)

TARIFF AUTHORITY FOR MAJOR PORTS

NOTIFICATION

New Delhi, the 15th March, 2002

No. TAMP/94/2001-CPX—In exercise of the powers conferred by Section 48 of the Major Port Trusts Act, 1963 (38 of 1963), the Tariff Authority for Major Ports hereby disposes of the representation made by M/s. Seahorse Ship Agencies Pvt. Limited for waiver of ground rent levied by the Kolkata Port Trust for the period of detention of its containers by the Customs as in the Order appended hereto.

9

SCHEDULE

Case No. TAMP/94/2001-CPT

M/s. Seahorse Ship Agoncfet Pvt Limited Applicant

V"

Th"Kolkata Port Trust (KoPT)

Respondent

(Passed on this 11th day of March 2002)

This case relates to a representation made by M/s. Seahorse Ship Agencies Pvt. Ltd. (SSAPL) for waiver of ground rent levied by the Kolkata Port Trust (KOPT) for the period of detention of their containers by the Customs.

2.1. The SSAPL has made the following points in its representation:

(i). A container belonging to one of Its principals landed at the Kolkata Docks on 10 July 2001 and was destuffed on 9 August 2001. During the course of destufflng 12 packages were found to be unmanlfested. The customs authorities seized the container and the unmanifested cargo.

(II). Subsequently, on a detailed scrutiny of all the documents and submissions made by the SSAPL, It was found that the 12 cartons were actually manifested goods and part of a consignment imported by some other company in the same vessel. The detention notice was, therefore, withdrawn by the Customs on 30 August 2001.

(Mi). The KOPT was requested to waive the container ground rent charges for the period from 9 August 2001 to 4 September 2001 in view of the Customs' official detention; but, the KOPT has refused to consider Its request in the absence of any provision in the Scale of Rates (SOR).

(Iv). The previous SOR of the KOPT contained a clause that no detention/rent shall be charged for the period the container/cargo are officially detained by the Customs.

2.2. In this backdrop, the SSAPL has requested this Authority to direct the KOPT not to charge the container ground rent for the period from 9 August 2001 to 4 September 2001.

3.1. In accordance with the procedure prescribed, a copy of the proposal was sent to concerned representative bodies of port users and the KOPT for comments. The comments received are summarised below:

The Association of Sapping Interest In Calcutta (ASIC)

(i). The container was detained by the Customs for no fault of the SSAPL. As per the long established practice followed by the KOPT, rent on cargo/container is not charged If the cargo/container Is detained by the Customs for a specified period. Therefore, no ground rent on the container shall be realised from the SSAPL for the period of Custom detention.

(ii). This being a matter of 'refund' and not of "waiver¹ of ground rent, the KOPT could have granted refund under section 55 of the MPT Act 1963. The10 THE GAZETTE OF INDIA; EXTRAORDINARY [PART III—SEC. 4]

absence of relevant provisions in the SOR is not a valid reason. The SOR is

subordinate to the MPT Act; and, cannot over-rule the Act

The MilnpinQ Corporation of India Uniltwd (SCh

(i). Although no reference about the clause relating to waiver of rent if the

cargo/container is officially detained was found in the earlier port tariff, there is

a definite merit in the representation made.

(IQ- The detention of the container was made on the specific instructions of the

Customs authorities; and, ultimately no case was found against the SSAPL

The agents shall not therefore, be made to pay the detention charges for no

fault of theirs.

The Kolkata Port Trust (KOPT)

(I). As per Section 48 of the MPT Act 1063, the TAMP Is empowered to frame a

Scale of Rates and Statement of Conditions under which any of the service

specified In that section shall be performed by the port or any other person

authorised under Section 42. The Port Trusts Board is empowered to waive

the demurrage charges under Section 53 of the MPT Act 1963,

(II). Since the KOPT is not responsible for the detention, there is no merit in the

appeal of the SSAPL.

The Eastern India Shippers Association JEI8A1

(i). No ground rent shall be levied for the period of detention as the shipping

agents are In no way responsible for detention of the containers by Customs.

Similarly, demurrage on the cargo shall also be waived.

Ttw Bengal Chamber of Commerce and industry JBCCi)

(I). The TAMP may notify waiver of ground rent by the KOPT for the period of

detention of container by the Customs, which is another department of the

Government for Investigation.

(li). The SSAPL did not cause any illegal import; and, the goods were properly

accounted for and accepted by the Custom authorities. Hence, In the absence

of a relevant notified provision in the SOR of the KOPT, waiver may be

considered by the TAMP.

3.2. A copy each of the above comments was sent to the SSAPL and the KOPT as

feedback information.

4.1- A Joint hearing in this case was held on 7 January 2002 in Kolkata. At the Joint

hearing, the following submissions were made:

M/s. Sea horse Ship Apancles Private Limited (SSAPL)

(I). The Port Trust has refused to waive; therefore, we have come to the TAMP.

(II). If the Port Trust had a CFS we could have off-loaded the cargo and released

the container.

(III). The Customs had detained; why should we pay?

(Iv). The container was kept In the custody of the KOPT. There was some pilferage

in an adjacent container. Some cargo of that was put Into our container. All

this was not our doing.

u (v). An enquiry was made by the Customs, and they had cleared us. They found pilferage; breaking open of our container; and, dumping of unmanlfested excess cargo into our container.

(vQ. The Port oouW hove dectuffed the cargo on day one and released the oaigo; •

lot of money would have been saved for us.

(vii). We started destuffing; the excess was detected; we informed the KOPT, they

notified customs; and, the customs Intervened. We want the period from then

to be covered by waiver/exemption.

(VHI). We knew about the enquiry conducted by the Customs. We even participated;

but, no official letter was given about the detention, so we could not convince

our principals.

The Assootation of Shipping Interests In KoiKata (ASIC)

0). The port should have brought to the notice of the ship agent, the problem on

day one. when it was noticed.

(ii). The surveyor only reports on condition of lock and seal. The earner must have

carefully looked Into It before clearing the box for landing.

Kolkata Port Trust tKOPT)

(I). This was an FCL and not an LCL oontainer.

(ii). It was at a non-CPY b&rth. The SSAPL wrongly refers to CPY berth. The

destuffing at the non-CPY berth Is done by the agents, and not by the port

(Hi). The Supreme court judgment In the Airports Authority of India case has also

upheld the levy of demurrage on cargo by the port trust even during the period

of detention by the Customs.

(v). Lines should hav* moved the container to the Custom bonded area,

(vi). There was no request from the agent for destuffing.

(vil). They waited for the FCL party. That was the delay.

(viii). The yard superintendent wae Wormed about destuffing. The carrier was also

Informed.

4.2. At the Joint hearing, the KOPT filed a written submission containing its

comments on the ittpresentation of the SSAPL. In addition to detailing the history of the case,

the following points have been made by the KOPT against refund of the ground renfc-

(I). The container agent Is responsible for making arrangements tor destufflng;

and, at no point of time the KOPT has refused/denied the agent to destuttthe

container.

(10. The container physically occupied the storage space Inside the port premises;

and hence, the storage charges are recoverable.

(ill). If the contairwwssvvrongfulry-detalned, the agents can recover the same from

the erring government agenoy. The KOPT oannot be denied of the legitimate

charges for its services.

(Iv). The TAMP has issued a clarification in this regard vide letter No. TAMP/8O99-

Mlsc. dated 30 October 2001 on Its Order prescribing the time limit of two

month* for levy of storage charges on FCL container

"Since the Port ha* no control over auoh container and omnnot makm

arrangement for deatufHng as the cargo ahng with the container la

seized / confiscated by the Customs authorities. In such cases,

however, the storage charges wU oease to apply Horn the data the

Customs Authorities ordered release of the cargo. So, seized /

confiscated container can be required (by the Port Trial) to be

removed (by the line/Consignee) from Ha premises to the Cuatoma

Bonded Ana so that Its space Is not unnecessarily occupied."

(v). The following note' in the revised SOR has been approved for insertion with

effect from 4 April 2001:

"Where the container Is setzed&onflscatwd by the Customs Authorities

and the same cannot be destuffed within the prescribedtimeUmHof 75

days, the Storage Charges will cease to appty from the data the

Customs order release of the cargo subjecttothe Unea obaervlng the

nocoaaary hrmaHtiea and bearing tho ooat of transportation and

destutflng. Otherwise, selzed/bonllscatad> container should be

removed by the Line / Consignee from the port premises to the

Customs Bonded Area and in that case the Storage Charges shall

cease to apply from the detect such removal.''

(vl). The Hon'ble Supreme Court has passed the following orders In the case of the

International Airport Authority Vs. M/s. Grand Slam International [1995 (I).

Scale 850:1995 AIR SCE1802; p-1028]:

"An Authority created under a atotuto even if It la the cuatodian of the

imported goods because of the provision of Customs Act 1001, would

be entitled to charge demurrages for the imported goods in its custody

and make the importer or consignee liabletorthe same even for period

during which he/ft was unable to clear the goods from the Customs

Area due to fault on the part of the Cuatoma Authorities or of other

authorities who might have Issued Detention Certificate owning such

fauH"

It is, therefore, lawful and reasonable for a port trust to oharga demurrage on

any goods, which has arisen due to the fauK of Customs or other authorities

who might have Issued the detention certificate.

5. With reference to the totality of information collected during the processing of

this case, and bearing in mind the arguments advanced at the joint hearing, the following

position emerges:-

(f). Before proceeding with the issue agitated by the SSAPL, It becomes

necessary to deal with the statement made by the KOPT about the statutory

power available to this Authority and the power vested with the Port Trust

Board under Section 63 of the MPT Act Implied in the statement made by the

KOPT Is a suggestion that this Authority cannot Intervene In cases Kke the one

in reference and such matters should be left to be decided by the Board of

Trustees of the KOPT under the powers conferred on It by Section 53 of the

MPT Act. It has to be recognised that setting tariffs at the major ports, which

falls under the competence of this Authority, can take the toHowing three

routes:

(a). A proposal from the major ports trusts / private terminal

operators for modification of the Scale of Rates

13

(b). A representation from users / representative bodies of port

users; and

(c). Suo motu action by this Authority.

The Government has already advised that this Authority can prescribe Scale of

Rates of the major ports trusts / private terminals with retrospective effect, if

such an approval becomes essential. That being so, this Authority can alter

the Scale of Rates of the KOPT with retrospective effect, If some exceptional

circumstances to do so emerge. It may also be relevant here to mention that

grievances relating to port tariff which may relate to application of the existing

tariffs as well as hardship caused due to absence of a specific condltlonallty in

the Scale of Rates, cannot be left to be decided by the port trusts at their will

when a neutral, third party and statutory regulator is in position.

(ii). The ASIC has argued that the instant case needs to be dealt with under the

provisions of Section 55 of the MPT Act Section 55 of the MPT Act deals with

refund of over-charges levied by a port trust As pointed out by the KOPT, the

charges realised In the instant case were based on the provisions available In

its Scale of Rates. Levy of charges based on rates and conditionalltles

prescribed In the Scale of Rates for the corresponding services rendered

cannot be termed as an over-charge.

(III). One of the guidelines adopted at the Chennai Workshop (February 1998) is

about users not being made responsible for delays caused by the ports. This

principle has been followed in prescribing / amending many of the

conditionallties in the Scale of Rates of different ports. In this case, admittedly,

the delay was caused by the Customs. Since a relief has been sought from

the KOPT, it becomes necessary to examine whether the delay was due to any

fault of the KOPT. It may perhaps not serve any useful purpose to harp only

on the pleadings that the user is not responsible for the delay caused.

In this regard, the following points deserve consideration:

(a). The container was detained by the Customs and not by the port.

(b). Since the SSAPL has alleged tampering with the contents of the

container, it may be relevant to see if the KOPT was the custodian of

the container at the critical time. There is no proof available on record

to say that the tampering happened when the container was in the

custody of the KOPT. All that has been mentioned is that the

tampering was noticed at the time of destufflng.

(c). The container in question was an FCL container. As pointed out by the

KOPT, this container could have been moved to the Customs bonded

area. There Is nothing to show that the Pott had compelled the

container to remain within its premises.

(d). The SSAPL has argued that the port should have destuffed the

container fmmediately on landing. The KOPT has responded that it

had neve)- denied permission for destuffing of the container. It is

unreasonable to expect a port trust to presume the various services

required by a user. It is for the user to requisition different services

required by him from the port trusts. In the instant case, this requisition

assumes more significance for destufflng since the container in

reference was an FCL container which might not necessarily be

destuffed in the port premises; and, ft had landed at a non-CPY berth

which meant that destuffing, in any case, was to be done by an agent

and not by the port.

From the above, It cannot be reasonably concluded that the delay was

caused by the port not only In respect of the detention of the container,

but also on the associated services Involved with destufffng it

(Iv). The BCCI has argued for waiver of ground rent levied by the KOPT for the

period of detention of the container by the Customs on the ground that another

department of the Government caused the delay. Even if the KOPT and the

Customs are seen to be instrumentalities of the same Government, there is no

Justification for ignoring the fact that they are separate legal and financial

entities. It Is noteworthy that a port trust is a self-financing organisation and it

cannot stand responsible for acts of commission / omission of other arms of

the Government. As has been argued by the KOPT, the container in reference

continued to occupy revenue earning space Inside the port premises during the

period of its detention. That being so, the KOPT Is justified in demanding

storage charges for that period.

(v). The KOPT has cited an order passed by the Supreme Court in a case relating

to the International Airports Authority of India to justify its action to levy storage

charges even during the period of detention of container / cargo by other

statutory agencies. Irrespective of the Supreme Court decision, as has already

been pointed out, the principle followed by this Authority is that users are not to

be responsible for delays caused by the port In this case, it has only been

argued that the delay was caused not due to the fault of the user; but, it is not

established that it was due to the fault of the port That being so, there is no

merit In the request of the SSAPL for refund of storage charges levied by the

KOPT for the period of detention of its container by the customs.

(vl). In view of the position clearly emerging in this case, It is not necessary to

modify the Scale of Rates of the KOPT to include a conditionally about

allowing relief In payment of storage charges for the period during which

containers are detained by other agencies.

6. In the result, and for the reasons given above, and based on a collective

application of mind, this Authority rejects the representation of M/s. Seahorse Ship Agencies

Pvt. Ltd. for refund of the ground rent levied by the KOPT for the period of detention of their

containers by the Customs.

S. SATHYAM, Chairman

[ADVT./143/IILTV-2002] Printed by the Manager, Oovt. of India PreBi. Ring Road, Mayapuri, Now Delhi-110064 and Publiahed by the Controller of Publications, Delhi-110054.