(Published in Part – III Section 4 of the Gazette of India, Extraordinary)
| No. 159 | New Delhi, the 19 August, 2001 |
Tariff
Authority for Major Ports
Notification
In exercise of the powers conferred by Section 49 of the Major Port
Trusts Act, 1963 (38 of 1963), the Tariff Authority for
Major Ports hereby disposes of the representation of M/s. J. M. Baxi &
Co. about levy of 50% port dues and Roadstead charges in respect of vessel
M.V. ‘Perelik’ which was denied entry to the port by the Visakhapatnam
Port Trust as in the Order appended hereto.
(
S. Sathyam )
Chairman
M/s.
J. M. Baxi & Co.
- - - -
Applicant
V/s.
The
Visakhapatnam Port Trust
- - - -
Respondent
O
R D E R
(Passed
on this 12th day of August 2002)
This case relates to a representation received from M/s. J.
M. Baxi & Co. (JMBC) about levy of 50% Port Dues and
Roadstead charges in respect of vessel M.V. ‘Perelik’
which was denied entry to the port by the Visakhapatnam Port Trust (VPT).
2.1.
The details mentioned in the representation of the JMBC and those
revealed by the documents submitted alongwith the representation are
summarised below:
(i).
The vessel ‘M.V. Perelik’ arrived at the
Visakhapatnam anchorage on 27 October 2001 laden with 12087 MT of Ammonium
Nitrate in bulk consigned to M/s. Indian Detonators Ltd.,
Hyderabad (IDL).
(ii).
The VPT granted permission on 28 October 2001 to the vessel to
enter and handle the cargo in reference subject to the conditions
prescribed regarding maximum time of transit through the port area, taking
direct delivery of the cargo from the jetty, and following of the fire
precautions and the Govt. guidelines.
In the meanwhile,
documents were filed with the Customs authorities and duty as assessed was
paid.
(iii).
Despite submission of all the requisite permissions from various
concerned authorities/copies of all the relevant documents alongwith an
undertaking to comply with all the safety requirements/directives issued
by the VPT, the vessel was not granted permission to berth and discharge
the said cargo.
(iv).
The VPT informed the JMBC on 29 October 2001 that the vessel was
denied permission to berth as there was no clearance from the State
Pollution Control Board for the said cargo.
(v).
The IDL (consignees) made an application to the Andhra Pradesh
Pollution Control Board (APPCB) on 31 October 2001 informing about
the import of the said Cargo; observance of all the safety norms and
stipulated GOI guidelines; and, submitted a copy of the application duly
acknowledged by the APPCB to the VPT which was again not considered by the
VPT.
(vi). The vessel finally sailed out on
7 November 2001 from the Visakhapatnam Port to the nearby private port at
Kakinada for discharge.
The
non-acceptance of the vessel for berthing at the VPT resulted in payment
of a huge amount of demurrages.
(vii).
The VPT has handled two vessels M.V. ”VAST
BANGALORE” and M.V. ‘IRENE” on 21 October 2001 and 24
January 2001 to discharge 12690/10846 MT of Ammonium Nitrate in bulk
respectively without any difficulty.
The VPT has been handling much more inflammable and hazardous
liquid cargoes at the port berths duly following the safety precautions
and regulations. The
VPT has also not issued any circular to the trade regarding
handling/non-handling of Ammonium Nitrate cargo.
(viii).
The Ministry of Commerce & Industry (Department of
Explosives) has vide letter dated 30 October 2001 intimated to the IDL
that since Ammonium Nitrate is not an explosive and does not come under
the purview of Explosive Rules 1983, no approval or licence is
required to be obtained from this department for manufacture, transport,
handling, storage, import-export of such cargo.
(ix).
As per Rule 18 of the Manufacture, Storage and Import of Hazardous
Chemical Rules 1989, and the notification issued by the Ministry of
Environment & Forests, there is no need to obtain
permission/clearance from the Pollution Control Board; the party has only
to inform them as per the statutory requirement.
This formality has already been complied with.
(x).
The VSAA has also requested the VPT to not to charge the dues as
the vessel was not allowed to enter the port and discharge the cargo by
the VPT for their own reasons.
(xi).
The VPT has charged 50% port dues leviable on a vessel entering the
port but not handling cargo or passengers, and Roadstead charges as per
the Scale of Rates in force. This is not correct, as the vessel was
not accepted for entry. The VPT has unilaterally denied the
requests made for not charging these amounts.
2.2.
In this backdrop, the JMBC has requested this Authority to
intervene in the matter and issue necessary Orders to the VPT not to levy
any charges since the vessel was not granted permission to handle the said
cargo for their own reasons.
3.1.
In accordance with the procedure prescribed, a
copy of the representation was sent to the Vizagapatnam Chamber of
Commerce and Industry (VCCI), the Visakhapatnam Steamship Agents’
Association (VSAA), the Visakhapatnam Port Users Association (VPUA),
the Shipping Corporation of India (SCI), the Indian National
Shipowners Association (INSA) and the VPT for comments.
3.2.
Comments have not been received from any of the user organisations.
The VPT has also not responded with its comments on the representation.
4.
A joint hearing in this case was held on 5 February 2002 at the VPT
premises. At the joint
hearing,
the following submissions were made:
M/s.
J. M. Baxi & Co. (JMBC)
(i).
We had entered the port limits based on a specific authorisation;
we had actually been cleared also for berthing.
Subsequently, the port changed its mind and refused to handle our
cargo. In the circumstance,
it will be unfair to require us to pay any charges at all.
Visakhapatnam
Port Trust (VPT)
(i).
It is a fact that we had handled this cargo in the past.
It is also a fact that we had given clearance for berthing of this
vessel. But, we had to cancel
the permission because the case had come to attract a lot of local
controversy. Unexpectedly,
the APPCB intervened in the matter to create hurdles and stopped the
operations. Although the port is required in such cases only to give
intimation to them about handling of such cargo, in this case, the APPCB
went beyond that requirement to ask for many more details. Because of the aggressive attitude adopted by the APPCB, the
VPT decided to err on the cautious side by refusing permission to handle
the cargo in this case.
(ii).
It is relevant here to note that, in a PIL case, the Supreme Court
had directed the APPCB to keep a special watch on the VPT in respect of
pollution control measures.
5.
After the joint hearing, the JMBC has informed that the VPT has
debited its deposit account by an amount of Rs.2,38,526/- towards port
dues and roadstead charges. The
JMBC has requested this Authority to require the VPT to refund the amount
with interest thereon.
6.
With reference to the totality of information collected during the
processing of this case, the following position emerges:
(i).
The representation relates to refund of port dues and Anchorage
charges levied by the VPT on the vessel brought in by the Applicant.
The vessel occupied an anchorage of the VPT; and, anchorage fees as
per notified SOR have been claimed by the Port.
Since the vessel entered the Port, but did not carry out any
cargo/passenger operation, 50% of the port dues, again, as per the
notified SOR, has been demanded. Prima
facie, it appears that there is no wrong application of the Scale of
Rates. But, it is necessary
to apply the rules to complete facts of the case.
In the face of the allegation made by the Applicant about the Port
denying permission to berth the vessel, it is necessary to analyse whether
the charges have accrued due to any fault of the Port.
(ii).
It is admitted that a Port Trust can decide on the services to be
provided by it or the cargo to be allowed to be handled within in its
geographical limits. But, it
is inevitable for this Authority to intervene in such matters, if the
action of denying services by the Port Trust gives rise to tariff
implications.
(iii).
The documents produced by the Applicant show that the VPT has
initially on 28 October 2001 granted permission to the vessel to enter
subject to fulfillment of some conditions.
The conditions stipulated generally relate to method of evacuation
of cargo and observance of fire precautions.
There was no mention about obtaining any clearance from the
Pollution Control Board. The
VPT has, however, subsequently denied berthing on the ground that the
Pollution Control Board has not given clearance to the cargo.
By the time this decision was taken, the Applicant’s vessel had
entered the Port and was waiting at the anchorage.
(iv).
The Applicant has argued that the relevant law does not require any
clearance from the Pollution Control Board for handling the cargo carried
by his vessel. That being so,
he has only informed the concerned Authorities about the nature of the
cargo to be handled. These
statutory and procedural aspects are not relevant for the issues at
consideration. There is
nothing on record to show that the PCB has restrained the VPT from
allowing Ammonium Nitrate to be handled within its premises.
The action of the VPT was based only on a presumption of facing
action from the PCB based on a questionnaire received by it. If the port has decided to err on the cautious side, then,
the cost of such decision cannot reasonably be sought to be recovered from
the user concerned.
(v).
The Applicant has pointed out that the VPT has allowed berthing in
the past to vessels carrying Ammonium Nitrate.
The VPT has also admitted this
position. As has been contended by the Applicant, the VPT has not
intimated the Trade that it will not allow Ammonium Nitrate vessels
without obtaining clearance from the PCB. That being so, the past
precedence coupled with the absence of any decision conveyed to disregard
the past precedence, gives rise to a reasonable expectation on the part of
the Applicant towards admission (into the port) for cargo operations.
It is noteworthy that even in this case, the vessel entered into
the Port only after the VPT accorded permission initially; and,
significantly, it was even assigned a berth.
(vi).
The charges demanded by the VPT arise in the context of the
vessel’s entry into and stay at the Port.
Since the VPT has denied berthing after the entry of the vessel in
response to the port’s clearance for berthing, the desired objective of
the vessel’s call at the VPT has not been achieved (i.e.) unloading of
cargo could not happen. This
is a result of the decisions taken by the Port.
It is not reasonable to make the Applicant pay for the
vascillations of the Port. That being so, the VPT is liable to refund the
port dues and Anchorage charges levied by it on the vessel in reference.
(vii).
The Applicant has also prayed for allowing interest on the refunds
to be made by the VPT. It is
recognised that there was no interlocutory order restraining the VPT from
claiming payment of the disputed charges. In fact, there was no prayer made for such an interim order
also. In the absence of any
restraint imposed, the VPT has debited the deposit account of the
Applicant by an amount equivalent to its claim.
Even though this charge can be seen in retrospect as irregular, the
VPT had levied it with a bonafide belief about its legitimacy.
In such cases, therefore, this Authority does not order refunds
with interest unless there is an open and flagrant violation of the SOR.
That being so, it is not considered necessary to order payment of
any interest on the refund to be made by the VPT in this case.
Provisions of penal interest will, however, apply if the VPT does
not effect the refund within the time limit prescribed in its Scale of
Rates. The time limit for
this purpose will count from the date of communication of this Order to
the VPT after its notification in the Gazette of India.
7.
In the result, and for the reasons given above, and based on a
collective application of mind, this Authority allows the representation
of M/s J.M. Baxi to the extent of directing the VPT to refund the port
dues and Anchorage fees levied on the vessel M.V. Perelik which was denied
berthing at the Port.
(
S. Sathyam )
Chairman
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