SCMTR 2018, Regulation 10(1)(l): The Authorized Carrier’s Obligation to Waive Container Detention Charges

Introduction

When imported goods arrive at an Indian port and the shipping line detains or holds containers for customs verification, importers often face container detention charges — charges levied by the carrier for containers kept beyond the free period. The Sea Cargo Manifest and Transshipment Regulations, 2018 (SCMTR 2018) contain a specific provision — Regulation 10(1)(l) — that obligates the ‘Authorized Sea Carrier’ to waive these container detention charges in certain circumstances.

This article explains what SCMTR 2018 is, who it applies to, the full scope of Regulation 10(1)(l), the specific triggering conditions, the critical 60-day cap, how this regime differs from HCCAR 2009 Regulation 6(1)(l) (Article 4), and the consequences of non-compliance by carriers.

What is SCMTR 2018?

The Sea Cargo Manifest and Transshipment Regulations, 2018 were enacted vide Notification No. 36/2018-Customs (N.T.), dated 11.05.2018, under the powers conferred by Sections 30, 41, 53, 54, 56, 98(3), 157(2), and 158(2) of the Customs Act, 1962. SCMTR 2018 replaced the earlier Import Manifest (Vessels) Regulations, 1971 and Export Manifest (Vessels) Regulations, 1976, modernising the regulatory framework for sea cargo manifests and transshipment.

SCMTR 2018 applies to all entities that are engaged as authorized sea carriers — i.e., shipping lines or their agents that are registered with ICEGATE for the purpose of filing sea cargo manifests (Import General Manifests / Export General Manifests) with Indian customs. Every authorized sea carrier must comply with the obligations prescribed under SCMTR 2018, including Regulation 10.

The Full Text and Scope of Regulation 10(1)(l)

Regulation 10(1) of SCMTR 2018 prescribes the obligations of every Authorized Sea Carrier. Regulation 10(1)(l) provides:

“not to demand any charges from the importer on account of detention of containers laden with goods, if such goods have been detained by the proper officer of Customs for the purpose of verifying the entries made under Section 46 or Section 50 of the Act, in cases where such entries are found to be correct: Provided that the authorized sea carrier shall be entitled to make a demand for detention charges after sixty days from the date of detention of goods by the Customs.”

This provision mandates that where goods in a container are detained by customs for the purpose of verifying the import manifest (Section 46) or export manifest (Section 50) entries, and those entries are ultimately found to be correct, the carrier cannot charge the importer container detention charges for the period of detention — subject to the 60-day cap.

The Triggering Conditions for Regulation 10(1)(l)

For Regulation 10(1)(l) to apply, ALL of the following conditions must be satisfied:

1. Detention by a proper officer of Customs: A proper officer must have formally detained the container/goods. This is a formal act of detention — not merely a processing delay.
2. Purpose of detention: The detention must be specifically ‘for the purpose of verifying the entries made under Section 46 or Section 50 of the Act’ — i.e., the import manifest or export manifest entries. Detention for other purposes (e.g., investigation for misdeclaration, suspected smuggling) is a different event and does not automatically trigger Regulation 10(1)(l).
3. Entries found to be correct: Regulation 10(1)(l) applies only if the entries in the manifest are ‘found to be correct’ — i.e., the importer’s declarations are vindicated. If the entries are found to be wrong (misdeclaration, under-valuation, mis-classification), the waiver does not apply.
4. The obligation is on the Authorized Sea Carrier: The waiver obligation under Regulation 10(1)(l) is specifically against the carrier — not the CCSP. This is the critical distinction from HCCAR 2009 Reg. 6(1)(l), which applies to the CCSP/custodian.

Key Distinction from HCCAR Reg. 6(1)(l): HCCAR Reg. 6(1)(l) applies when goods are seized/detained for ANY customs reason, and binds the CCSP. SCMTR Reg. 10(1)(l) applies only when detention is for Section 46/50 manifest verification, entries are correct, and binds the Authorized Sea Carrier.

The 60-Day Cap: The Proviso to Regulation 10(1)(l)

The proviso to Regulation 10(1)(l) provides that the Authorized Sea Carrier shall be entitled to demand detention charges after 60 days from the date of detention of goods by Customs. This is a critical and often overlooked limitation:

• For the first 60 days from the date of detention, the carrier is absolutely prohibited from demanding container detention charges (where the triggering conditions are met).
• After 60 days, the carrier may again levy detention charges. The waiver obligation is not permanent — it is time-limited.

CESTAT Ahmedabad confirmed this 60-day maximum cap in its 2022 ruling (reported as ‘No demurrage & detention charge Waiver Beyond 60 Days’), holding that the proviso to Regulation 10(1)(l) allows the authorized carrier to demand detention charges after expiry of 60 days. This has significant tactical implications: if a DRI/SIIB investigation stretches beyond 60 days (which is common), container detention charges will resume after the first 60-day period under Regulation 10(1)(l), even if the importer is innocent.

Tactical Note: If an investigation extends beyond 60 days, the importer should simultaneously pursue: (a) the HCCAR Reg. 6(1)(l) detention certificate from the CCSP (which has no 60-day cap); and (b) monitor the position under SCMTR Reg. 10(1)(l) carefully, given the cap.

The 2024/2025 Enforcement: Gujarat Customs and the Chennai Customs Public Notice

The Gujarat Customs Zone (Ahmedabad) issued a Show Cause Notice in 2024/2025 to a shipping line (authorized sea agent) for failing to honour a detention certificate waiver issued under Regulation 10(1)(l) of SCMTR 2018 — demonstrating that the CBIC and field formations are now actively enforcing the waiver obligation against non-complying carriers. The SCN proposed action under Regulation 13 of SCMTR 2018, which empowers the customs authorities to suspend or revoke the authorization of an Authorized Sea Carrier for non-compliance.

Chennai Customs also issued Public Notice No. 03/2025 (dated 10.01.2025) to Authorized Sea Carriers emphasizing the mandatory nature of the waiver obligation under SCMTR 2018 Regulation 10(1)(l) and directing carriers to comply with detention certificates issued by the customs department.

Judicial Enforcement

The Gujarat High Court (2025) dealt with a case — 2025 (4) TMI 1417 — where an Authorized Sea Agent/delivery agent refused to honour a waiver letter issued under Regulation 10(1)(l) by the Deputy Commissioner of Customs. The Court held the waiver letter is binding and directed the sea agent to release the goods to the importer without demanding container detention charges. The Court confirmed that a detention certificate/waiver letter issued by a Deputy Commissioner under SCMTR 2018 Regulation 10(1)(l) is a statutory direction and cannot be resisted by the carrier on commercial grounds.

Comparison: HCCAR 2009 Reg. 6(1)(l) vs. SCMTR 2018 Reg. 10(1)(l)

These are two parallel but distinct waiver regimes. Understanding the differences is essential for practitioners:

Consequences of Non-Compliance by Carrier

An Authorized Sea Carrier that refuses to honour a valid detention waiver certificate faces:

• Action under Regulation 13 of SCMTR 2018: suspension or revocation of authorization to act as an Authorized Sea Carrier in India.
• Writ court direction: High Courts have issued mandamus directing compliance.
• Court-ordered refund: Where charges have already been collected in violation of the certificate, courts have ordered refunds to the importer.
• Contempt proceedings: Continued non-compliance after a court order may attract contempt.

Conclusion

SCMTR 2018 Regulation 10(1)(l) provides a specific, targeted protection for importers against container detention charges when goods are detained by customs for verification of manifest entries under Sections 46 or 50, and those entries are found correct. Unlike HCCAR Reg. 6(1)(l) — which applies to any seizure/detention for any reason — this provision is narrowly targeted at the manifest verification scenario. The 60-day cap is a critical limitation that practitioners must keep in mind, particularly in protracted DRI/SIIB investigations. Both provisions operate in parallel, and in complex cases, an importer may invoke both simultaneously against the CCSP and the carrier respectively. The interaction between Section 69 re-exports and these two waiver regimes is examined in Articles 6 and 7.

FAQs 

1. What is SCMTR 2018 Regulation 10(1)(l)?
It is a legal provision that requires an Authorized Sea Carrier to waive container detention charges when goods are detained by Customs for verification under Section 46 or 50 and the entries are found correct.

2. When does the waiver of container detention charges apply?
The waiver applies only if goods are formally detained by Customs for verifying import/export manifest entries and those entries are ultimately found to be correct.

3. Who is responsible for waiving container detention charges under SCMTR 2018?
The obligation is on the Authorized Sea Carrier (shipping line or its agent), not on the customs cargo service provider.

4. Is there a time limit for the detention charge waiver?
Yes, the waiver is limited to 60 days from the date of detention. After that, the carrier can legally charge detention fees.

5. Does the waiver apply if there is misdeclaration by the importer?
No, the waiver applies only when the entries under Section 46 or 50 are found to be correct.

6. What is the difference between SCMTR 2018 and HCCAR 2009 in detention waivers?
SCMTR applies to container detention charges by carriers, while HCCAR applies to demurrage/storage charges by custodians, with different conditions and scope.

7. Can Customs issue a detention waiver certificate under Regulation 10(1)(l)?
Yes, Customs authorities can issue a waiver or detention certificate, which is binding on the carrier.

8. What happens if the carrier refuses to waive detention charges?
The carrier may face action under SCMTR 2018, including suspension or revocation of authorization, and court orders for compliance or refund.

9. Can an importer claim both SCMTR and HCCAR waivers together?
Yes, in appropriate cases, importers can simultaneously seek relief under both regimes for different types of charges.

10. Does Regulation 10(1)(l) apply to all types of customs detention?
No, it applies only to detention for verification of entries under Section 46 or 50, not for investigations like smuggling or misdeclaration.

References

1. Sea Cargo Manifest and Transshipment Regulations, 2018 (SCMTR 2018) — ICEGATE — https://www.old.icegate.gov.in/Download/SCMTR_250719.pdf
2. SCMTR 2018 — Thane Customs — https://thc.nic.in/Central%20Governmental%20Regulations/Sea%20Cargo%20Manifest%20and%20Transhipment%20Regulations,%202018..pdf
3. Sea Cargo Manifest and Transshipment Regulations 2018 — Full Text (Abcaus) — https://abcaus.in/wp-content/uploads/2020/06/Sea-Cargo-Manifest-and-Transhipment-Regulations-2018.pdf
4. SCMTR Webinar Slides — ICEGATE (March 2021) — https://www.old.icegate.gov.in/Download/SCMTR_Webinar_05.03.2021.pdf
5. Implementation of SCMTR 2018 — TaxGuru (2024) — https://taxguru.in/custom-duty/implementation-sea-cargo-manifest-transshipment-regulations-scmtr-2018.html
6. Maximum Time Limit 60 Days for Demurrage & Detention Charges Waiver — TaxGuru (2022) — https://taxguru.in/custom-duty/maximum-time-limit-60-days-demurrage-detention-charges-waivers.html
7. 2025 (4) TMI 1417 — Gujarat High Court (Authorized Sea Agent Must Release Goods and Waive Detention) — https://www.taxtmi.com/tmi_blog_details?id=817582
8. Gujarat Customs SCN — Authorized Sea Carrier Non-Compliance with Regulation 10(1)(l) — https://gujaratcustoms.gov.in/juridictional_commissionerate/public/storage/pdfs/JPVCTp53tPVerxzg6Nt0qrzQj4TOcv7acJhgD9s0.pdf
9. Chennai Customs Public Notice 03/2025 — SCMTR 2018 Implementation — https://chennaicustoms.gov.in/wp-content/uploads/2025/01/Public-Notice-03-of-2025-dated-10.01.2025-reg-implementation-of-SCMTR-2…
10. Bangalore Customs — SCMTR Public Notice 18/2024 (August 2024) — https://bangalorecustoms.gov.in/wp-content/uploads/2024/09/mcc_pn_18_2024-1.pdf
11. A Critique on SCMTR 2018 — TaxTMI (2020) — https://www.taxtmi.com/article/detailed?id=9418
12. Isha Exim v. Commissioner of Customs (Madras HC, 2023) — combined Reg. 6(1)(l) and Reg. 10(1)(l) — CaseMine — https://www.casemine.com/judgement/in/63dbca90831db01604ba20ba