Can Shipping Lines Without Physical Cargo Custody Be Regulated Under Customs Rules? Bombay HC To Examine
The Bombay High Court will examine whether shipping lines, shipping agents, and carriers that neither hold physical custody of cargo nor operate cargo within customs premises can be classified as 'Customs Cargo Service Providers' under the Handling of Cargo in Customs Areas Regulations, 2009.
A Division Bench of Justice B.P. Colabawalla and Justice Farhan P. Dubash framed this question while admitting an appeal filed by Aegon Shipping India Pvt. Ltd. against an order passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai.
The court framed the following substantial question of law:
“Whether, in view of the settled law laid down in Supreme Industries Ltd. (No.2) v. CBIC, (2021) 16 GSTR-OL 566; Polytech Trade Foundation v. Union of India, 2021 SCC OnLine Del 3964; and Shipping Corpn. of India Ltd. v. C.L. Jain Woolen Mills, (2001) 5 SCC 345, the provisions of the Handling of Cargo in Customs Areas Regulations, 2009 (HCCAR) apply at all to an NVOCC/Shipping Agent/Shipping Line/Carrier who neither holds physical custody of cargo nor operates cargo in customs premises, and whether the Learned Tribunal erred in holding the Appellant to be a 'Customs Cargo Service Provider' under Regulation 2(b) of HCCAR 2009?”
The court also framed three other substantial questions of law.
The first concerns whether the tribunal went beyond the original suspension order by introducing violations and supplying new grounds to sustain it.
The court will examine this question in light of the Supreme Court's judgment in Mohinder Singh Gill v. Chief Election Commissioner, which the company relied on in challenging the tribunal's approach.
The second question concerns whether the Sea Cargo Manifest and Transhipment Regulations, 2018, rendered Jawaharlal Nehru Custom House Public Notice No. 169/2016 inapplicable.
The third question concerns whether shipping companies can charge container detention fees after 60 days under the 2018 regulations, and whether the rules protect their contractual rights against administrative interference.
The court stayed the suspension order dated August 10, 2026, and the public notice issued pursuant to it. It observed, prima facie, that the company's operations should not have been suspended while an inquiry was pending. It also noted that the timelines under Regulation 11(3) of the 2009 regulations appeared not to have been followed.
The court clarified that any ongoing inquiry must be decided independently, on its own merits and in accordance with law, without being influenced by the tribunal's observations.
For the Appellant (Aegon Shipping India Pvt. Ltd.): Advocates Mohammad Rafiq, Biju Joseph, Bhoomika Markam and Rebecca Joe, instructed by Lloyd and Johnson.
For the Respondent (Commissioner of Customs): Advocates Jitendra Mishra, Sangeeta Yadav and Umesh Gupta.