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2013 (2) TMI 668 - CGOVT - CustomsPenalty u/s 116 - whether the bilge water pumped out can be taken into account for setting off the shortage of pet coal - Held that - Applicants has not produced the relevant contract/purchase order invoice bill of lading etc. between the supplier and the importer indicating the nature of cargo tolerance limit percentage of moisture content if any in support of his claim that cargo had a moisture content which transferred into bilged water pumped out of ship during voyage. If the cargo has moisture content then the same is required to be mentioned in the import document issued by supplier. When the moisture content and its percentage in the cargo are not explicitly mentioned the plea of the applicant is not supported by valid documentary evidence. In the absence of any such proof the applicant s plea to cover up the short landing taking into account the bilged out water cannot be accepted. Moreover the discharged quantity of Pet Coke of 43266.6 MTs and the quantity of water pumped out of 643.190 MTs taken together works out to 43909.790 MTs as against the Bill of Lading quantity of 43729.300 MTs thus leaving an excess of 180.49 MTs. This factual position is also contrary to the contentions of applicant. Applicant has contended that as per normal practice tolerance limit of 1% is allowed to such cargo. If the tolerance of 1% is allowed the short landed quantity will come down to 25.5 Mts. Government notes that lower authorities have categorically held that there is no tolerance limit of 1% for bulk solid cargo of pet coke. The C.B.E. & C. Circular 96/2002-Cus. dated 27-12-2002 refers to import of bulk liquid cargo only. In the absence of any such guidelines the said contention of applicant is not acceptable. Chapter VI of the Customs Act 1962 stipulates the statutory provisions relating to conveyances carrying imported (or exported) goods. Section 30 stipulates delivery of import manifest or import report with true declaration therein. Further Import Manifest (Vessel) Regulations 1971 provides that nature condition and position (including status) to be truly declared as per respective declaration form. It is therefore quite clear that Manifest is to be considered a basic legal document and the declarations made therein are to be taken as legal submissions for the purpose of any action under the relevant provisions of Customs Act 1962. Similarly Chapter V of the Act provides for levy and assessment of Customs duties and Section 13 thereof when read with provisions of Bill of Entry (Form) Regulations 1976 the legality of the duty levied in this case can be clearly understood. Further for levy/calculation of impugned penalty the provisions of Section 116 of the Customs Act 1962 unambiguously stipulates the levy of penalty not exceeding twice the amount of duty. Provision of Section 148 makes it clear that such agent shall be liable for fulfilment in respect of matter in question of all obligations imposed on such person-in-charge by or under this Act or any law for the time being in force and to penalties and confiscation which may be incurred in respect of that matter. As such steamer agent is liable to penal action under Section 116 ibid in this case matter. - for interpreting the provisions of law Hon ble Supreme Court in the case of M/s. ITC Ltd. v. CCE Delhi - 2004 (9) TMI 103 - SUPREME COURT OF INDIA and M/s. Paper Products Ltd. v. CCE Vadodara - 1999 (8) TMI 70 - SUPREME COURT OF INDIA has held that ordinary and natural meaning of words of statutes has to be strictly construed without any intendments or any liberal interpretation. Hon ble Supreme Court in the case of British Airways PLC v. UOI - 2001 (11) TMI 81 - SUPREME COURT OF INDIA has categorically held that penalty under Section 116 is leviable for not accounting for goods on the person-in-charge of conveyance his agent or person representing the person-in-charge. In view of the position Government is of view that penalty has been rightly imposed under Section 116 on the applicant. - Decided against assessee.
Issues Involved:
1. Short landing of cargo (Pet Coke). 2. Penalty under Section 116 of the Customs Act, 1962. 3. Consideration of bilge water in accounting for cargo shortage. 4. Applicability of tolerance limits for bulk solid cargo. 5. Admissibility of survey reports and other evidence. Issue-wise Detailed Analysis: 1. Short Landing of Cargo (Pet Coke): The applicants were supposed to unload 43,729.30 MT of Pet Coke but only discharged 43,266.6 MT, leaving a shortfall of 462.7 MT. The original adjudicating authority imposed a penalty of Rs. 7,55,900 under Section 116 for this shortfall. The applicants contended that the shortfall was due to the inherent moisture content in the Pet Coke, which was pumped out as bilge water during the voyage. 2. Penalty under Section 116 of the Customs Act, 1962: Section 116 stipulates that a penalty not exceeding twice the amount of duty is imposed for any shortfall in the unloaded quantity of imported goods. The applicants argued that the penalty should not be imposed as the shortfall was due to the moisture content in the Pet Coke. However, the Government upheld the penalty, stating that the shortfall was not properly accounted for and the applicants failed to provide sufficient documentary evidence to support their claim. 3. Consideration of Bilge Water in Accounting for Cargo Shortage: The applicants claimed that the bilge water pumped out during the voyage accounted for the shortfall in the Pet Coke. They provided records from the Deck Log Book and a Joint Draught Survey Report indicating that 643.190 CBM of water was pumped out. However, the Government observed that there was no correlation between the bilge water and the shortfall of Pet Coke. The applicants did not provide relevant contracts, purchase orders, invoices, or bills of lading indicating the moisture content in the cargo. 4. Applicability of Tolerance Limits for Bulk Solid Cargo: The applicants argued for a 1% tolerance limit, which would reduce the shortfall to 25.5 MT. They cited a previous case where such a tolerance limit was allowed. However, the Government noted that the C.B.E. & C. Circular 96/2002-Cus., dated 27-12-2002, only refers to bulk liquid cargo and does not apply to bulk solid cargo like Pet Coke. Therefore, the plea for a tolerance limit was not accepted. 5. Admissibility of Survey Reports and Other Evidence: The applicants relied on a Joint Draught Survey Report and the Statement of Facts, which indicated the quantity of water pumped out. They also cited judicial precedents to support their case. However, the Government noted that these documents were not countersigned by Customs authorities and did not provide categorical evidence that only the "dry quantity of cargo" was discharged. The Government emphasized that the declarations made in the import manifest and other legal documents are to be taken as legal submissions. Conclusion: The Government concluded that the shortfall of Pet Coke was not properly accounted for, and the penalty under Section 116 of the Customs Act, 1962, was justified. The arguments regarding bilge water and tolerance limits were not supported by sufficient evidence. The revision application was rejected, and the order of the Commissioner (Appeals) was upheld. Final Order: The revision application is rejected, and the penalty imposed under Section 116 of the Customs Act, 1962, is upheld.
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