By TIOL News Service

MUMBAI, JUNE 19, 2017: PETITIONERS are challenging two public notices dated 9th February, 2017 and 6th March, 2017 being Public Notice Nos. 16 and 27 of 2017. They also seek to quash and set aside a prior public notice dated 16th January, 2017 being Public Notice No. 8 of 2017.

By a writ of mandamus, the petitioners are seeking a direction to the respondents, who are contesting the writ petition, not to enforce or apply the impugned public notices and to go ahead with the tender notice.

The background facts giving rise to the present petition are that in 1989, the Government of India introduced a policy for development of CFS. The need for CFS was in response to the growing volume of international trade, the need for expeditious clearance of goods at the port within minimum possible time.

Accordingly, several CFSs, including the petitioners' have been set up and the registration and functioning of all CFSs is governed by the Handling of Cargo in Customs Area Regulations, 2009 (HCCA Regulations, 2009).

By a Circular No. 42 of 2005-Cus., respondents introduced the Accredited Clients Programme (ACP) and a system called Risk Management System (RMS).

On 1st September 2008, respondent issued Facility Notice No. 63 of 2008which, inter alia , provided for DPD facility (i.e. for importers to take delivery directly from the port terminal) to ACP importers and to 100% Export Oriented Units (EOUs) for FCL containers covered by the RMS or where no examination is required. The petitioners state that under the DPD facility, delivery of the containers would be done at the port itself and, therefore, such containers would not travel to a CFS for completion of the Customs formalities.

The petitioners submit that in the year 2008, the numbers of ACPs were limited to about 15 in number and the volume of DPD container traffic, therefore, was minimal; that until June 2016 only 26 importers were permitted to avail of the DPD facility, however, later, the number of importers eligible for DPD facility has suddenly been extended to more than 700 importers.

The petitioners state that on account of Public Notice No. 161 of 2016, there has been a rise in the volume of DPD container traffic. As a result of this, the business of CFSs, including the petitioners, was significantly impacted since a significant number of containers, which would otherwise hitherto have passed through CFSs such as the petitioners, would no longer come to the petitioners on account of being earmarked as DPD i.e. delivery at the port itself.

That on account of Public Notice No. 161 of 2016, requiring clearance of the containers from the port within 48 hours, there was an increase in the number of DPD containers that were sent to the designated CFSs i.e. Speedy/respondent no. 9 on account of not being collected within the period of 48 hours prescribed.

Be that as it may, the petitioners filed the present petition on 16th March, 2017. Immediately, on receipt of the copy of the petition, respondent nos. 1 to 6 issued a limited tender notice dated 17th March, 2017 through respondent no. 10 inviting bids from all CFSs registered as Customs Cargo Service Provider (CCSP) under the HCCA Regulations, 2009 for being appointed as the designated CFS for delivery of DPD containers from port terminals of JNCH, NhavaSheva to CFSs, if the importers fail to clear their respective DPD containers from the port terminals within a period of 48 hours of the containers landing at the port terminal.

An affidavit in reply was filed by the Commissioner of Customs, NhavaSheva (General). Inter alia, it is contended that the petitioners have misrepresented the facts and projected incorrect perception; that how the petitioners can be aggrieved against extension of DPD to importers by Customs or by terminals has not been clarified; that there being no right vesting in the petitioners, the petition is motivated and filed for purely commercial considerations;that the writ petition is misconceived and should be rejected outright; that the private interest of the petitioners cannot override overall public interest.

The High Court considered the detailed submissions and after extracting the relevant provisions of the Customs Act, 1962 and Regulations inter alia observed -

+ By Regulation 2(b), the expression "customs cargo service provider" is defined to mean any person responsible for receipt, storage, delivery, dispatch or otherwise handling of imported goods and includes a custodian and persons as referred to in section 141(2) of the Customs Act, 1962.

+ Once the handling of the cargo in customs area is in accordance with the regulations and the regulations are specifically made for that purpose, then, it is futile to contend that the officials in-charge of implementing the Act and the Regulations cannot issue the public notices. The public notices and the notifications referred above in extenso have been issued in accordance with the provisions of the Customs Act, 1962.

+ Regulation 7(2) enables the Commissioner of Customs to regulate the entry of goods in the customs area for efficient handling of such goods. There is a discretionary power conferred in the Commissioner by this regulation. Further, the handling of goods in the customs area is a matter specifically dealt with by sub-section (2) of section 141. Thus, regulations can be made so as to prescribe the manner in which the imported or export goods may be received, stored, delivered, despatched or otherwise handled in the customs area. The regulations can also set out the responsibilities of persons engaged in the aforesaid activities.

+ Once the regulations deal with such matters, then, it is not necessary that separate provisions have to be made for each matter covered by sub-section (2) of section 141. Section 141(2) itself enables the Commissioner to exercise control. The provisions of the Customs Act, 1962 have to be enforced so as to carry out its object and purpose and the goods in the customs area are subject to the control of officers of Customs. They can, with the aid of these regulations and framed by the Board, control the receipt, storage, delivery, despatch or otherwise handling of the imported or export goods in customs area.

+ The impugned notices are referable to the regulations which are made under the provisions of the Act. Therefore, issuance of public notices is implicit and inherent in the exercise of the enabling power of ensuring proper handling of the goods in the customs area and the larger power of control vesting in the officers of the Customs.

+ Beyond alleging that the appointment of respondent no. 9 is arbitrary and that is made without any opportunity to the petitioners or other CFSs, we do not find any challenge raised to these arrangements. The only pleading is that the DPD facility was optional and though respondent no. 9 was notified as a designated CFS in a arbitrary manner, that did not cause serious threat to the business and existence of the CFSs like the petitioners at that point of time.

+ We are of the view that this silence of the petitioners and parties like them for more than 8 years is eloquent enough. This only indicates that so long as there is no threat to their business opportunity or their commercial interest, the petitioners or their representative association do not complain. The complaint now is motivated by pure commercial considerations. In these circumstances, the contesting respondents are right in their submission that we cannot take into account the petitioners' commercial consideration or business prospects in dealing with the challenge raised in the writ petition.

+ In the interest of general public, the law may impose restrictions on the freedom of the citizen to start or carry out his business. Such a law cannot be, therefore, struck down as violative of the mandate of Article 19(1)(g) of the Constitution of India. A business loss to a particular person or diminution in profits cannot be, therefore, the ground on which any action, which is in public interest, can be interfered with. Therefore, at the instance of the petitioners, the present public notices cannot be quashed and set aside.

+ The public notices only lay down a policy and when the policy decision is aimed at reducing the port congestion, facilitating the expeditious movement of imported cargo and by which, there is an ease of doing business, then, all the more we do not see any reason to interfere with the same.

+ Those officers who are empowered by the Customs Act, 1962 and those who are administering the port and managing affairs at the same are acting in coordination so that there is ease of doing business. None of the importers have any complaint. If they obtain the facilities to which they are entitled, they are going to be benefited. They are also going to be benefited by expeditious clearance of the imported goods. In the circumstances, when the officials competent to exercise powers under the Customs Act, 1962 have taken policy decisions as set out in the public notices, then, all the more, we are disinclined to interfere with the same in our extraordinary, equitable and discretionary jurisdiction under Article 226 of the Constitution of India . We do not find anything arbitrary, unreasonable or unfair in the actions of these respondents. All the more when they have ensured transparency in the process of designation.

+ Now, other CFSs have an opportunity to participate in the appointment or designation process. Even then, they are complaining because they do not want a designation at all. They do not want a designation for they are not interested in early or expeditious clearance of the consignments at the port and reduce the congestion at the port. If there is a confusion, chaos and delay then, that may be advantageous to the petitioners, but it would be certainly detrimental to the public interest. The larger public interest has to be sub-served and once that is ensured, then, the same prevails over the commercial or business interests of the petitioners. For their commercial or business motives, a decision taken in public interest cannot be interfered with. The mandate of Articles 14 and 19(1)(g) of the Constitution of India are not violated.

The writ petitions were dismissed.

(See 2017-TIOL-1129-HC-MUM-CUS)