1991 (5) TMI 74 - HC - Customs

Summary

Issues Involved:
1. Confiscation of the vessel u/s 115(2) of the Customs Act, 1962.
2. Imposition of penalty u/s 112(a)(i) of the Customs Act, 1962.
3. Adequacy of precautions taken by the Master and owners of the vessel against smuggling.
4. The impact of the acquittal of the Master of the vessel on the charges u/s 135 of the Customs Act, 1962.
5. Validity of the fine imposed in lieu of confiscation of the vessel.

Summary:

1. Confiscation of the Vessel u/s 115(2) of the Customs Act, 1962:
The vessel 'M.V. Jag Darshan' was found carrying a large amount of contraband goods during a search by Customs Officers at Paradip Port. The Collector of Customs ordered the confiscation of the vessel u/s 115(2) of the Customs Act, 1962, stating that the owners and the Master of the vessel had knowledge of the smuggled goods and failed to take adequate precautions to prevent smuggling. The Central Board of Excise & Customs upheld the confiscation but reduced the fine in lieu of confiscation to Rs. 1,40,340/-.

2. Imposition of Penalty u/s 112(a)(i) of the Customs Act, 1962:
The Collector imposed penalties of Rs. 5 lakhs on the owners, Rs. 1 lakh on the Master, and Rs. 1 lakh on the agents of the vessel u/s 112(a)(i) of the Customs Act. However, the Central Board of Excise & Customs remitted these personal penalties.

3. Adequacy of Precautions Taken by the Master and Owners of the Vessel Against Smuggling:
The petitioners argued that they had taken all reasonable precautions, including displaying notices warning against smuggling and conducting searches. The Court, however, found that these measures were insufficient, as the large quantity of contraband goods could not have been concealed without the knowledge of the Master and crew. The Court held that the search conducted by the Master did not meet the standard of a reasonable and prudent person.

4. The Impact of the Acquittal of the Master of the Vessel on the Charges u/s 135 of the Customs Act, 1962:
The Master of the vessel was acquitted of charges u/s 135 of the Customs Act by the Chief Judicial Magistrate, Cuttack. The Court noted that the acquittal did not affect the liability of the vessel to confiscation u/s 115(2) of the Act, as the burden of proving absence of knowledge or connivance was on the petitioners, which they failed to discharge.

5. Validity of the Fine Imposed in Lieu of Confiscation of the Vessel:
The Court upheld the fine of Rs. 1,40,340/- imposed in lieu of confiscation, stating that the authorities had exercised their discretion justly, fairly, and properly. The petition challenging the fine and the confiscation was dismissed, with no order as to costs.