2001 (11) TMI 81 - SC - Customs

Once the officer incharge of the aircraft is given a certificate under Clause (e) of Subsection (2) of Section 42 of the Act, the authorities cannot re-open the issue? Held that - Sub-section (2) of Section 148 was enacted to give relief to the aircraft carrier and the officer incharge of a conveyance and permit him to leave with the conveyance by making his agent and person representing him responsible for all the penalties and confiscations. Accepting the submissions of the appellants in this context would defeat the purpose of incorporation of sub-section (2) of Section 148 of the Act and make the working of the Act impractical. Such an interpretation would be detrimental both to the carrier, the officer incharge on the one hand and the revenue and customs authorities under the Act, on the other. Insistence of ascertaining the liability under Section 116 of the Act before passing an order in terms of Section 42 would mean not permitting the conveyance to depart from the customs station unless its officers have minutely examined the whole case and determined the consequences for not accounting of goods. Such could not be the intention of the Legislature. Alternatively the learned counsel for the appellants referred to the facts of the case to canvass that even if the appellants are liable under the law to be served with the show cause notice, the respondents authorities have on facts not proved the averments made in the show cause notice. Such a submission is factually incorrect and legally impermissible. All the authorities on facts have found that the shortages had not been accounted for and actually not denied by the appellants. The findings of fact arrived at by all the authorities under the Act could not be disturbed by the High Court in exercise of the writ jurisdiction under Article 226 of the Constitution of India.

Issues Involved:
1. Liability of the appellants under Section 116 of the Customs Act, 1962.
2. Interpretation of the term "person incharge" under Section 2(31) of the Customs Act, 1962.
3. Application of Section 148 of the Customs Act, 1962 regarding the liability of agents.
4. Validity and interplay of Sections 42 and 116 of the Customs Act, 1962.
5. Factual determination of shortages in cargo and the accountability of the appellants.

Detailed Analysis:

1. Liability of the appellants under Section 116 of the Customs Act, 1962:
The appellants argued that they were not the 'persons incharge' of the aircraft and thus could not be held liable for any shortages in the unloaded cargo under Section 116 of the Customs Act, 1962. They contended that any penalty imposed on them was unjustified as they were not responsible for the goods once unloaded.

2. Interpretation of the term "person incharge" under Section 2(31) of the Customs Act, 1962:
Section 2(31) defines "person incharge" as the commander or pilot-in-charge of the aircraft. The appellants claimed that since they were not the persons incharge as per this definition, they should not be held liable for the shortages. However, the court examined the broader interpretation and application of this term in the context of the Act.

3. Application of Section 148 of the Customs Act, 1962 regarding the liability of agents:
Section 148 states that an agent appointed by the person in charge of a conveyance, and any person representing himself as such, shall be liable for the obligations and penalties imposed on the person in charge. The respondents argued that the appellants, though not the 'persons incharge,' were liable under this section as they acted as agents for the person in charge. The court agreed, stating that the appellants represented themselves as agents and were accepted as such by the customs officers.

4. Validity and interplay of Sections 42 and 116 of the Customs Act, 1962:
Section 42 restricts the departure of a conveyance from a customs station until the proper officer is satisfied that no penalty is leviable under Section 116. The appellants argued that once an order under Section 42 was issued, no further proceedings could be initiated under Section 116. The court clarified that Sections 42 and 116 deal with different contingencies and authorities. Section 42 ensures that the conveyance is not unnecessarily detained, while Section 116 addresses penalties for shortages in unloaded goods. The court emphasized that compliance with Section 42 does not preclude action under Section 116 if shortages are later discovered.

5. Factual determination of shortages in cargo and the accountability of the appellants:
The court noted that the mechanism for unloading and accounting for cargo involves the carrier's representatives handing over the goods to the custodian and preparing a segregation report. The appellants' representatives were found to be responsible for this process. The authorities under the Act found that the shortages were not accounted for satisfactorily, and the appellants did not dispute these findings. The court upheld the factual determinations made by the authorities and dismissed the appellants' claims.

Conclusion:
The Supreme Court dismissed the appeals, holding that the appellants were liable under Section 116 of the Customs Act, 1962, as they acted as agents of the person in charge. The court emphasized the harmonious construction of the Act's provisions and upheld the factual findings of the authorities. The appeals were dismissed with costs quantified at Rs. 5,000/- in each appeal.

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