2009 (6) TMI 108 - HC - Customs

Whether the vessel m.v. MEGA JAYA , which carried acid grade flourspar to the port of Cuddalore on 6-9-1998 with a manifested quantity of 9612.650 MTs., packed in 8505 bags, was discharged in full ? What are the consequences for such short landing? Held that - If it is the contention of the petitioner that there is no justification in condoning the delay on the part of the first respondent in filing the revision by the Department, it is to be stated that it is the discretionary right of the competent revisional authority to assign reasons while condoning the delay. In the case on hand, the revisional authority/first respondent has exercised its discretion in condoning the delay, by justifying the reasons explained by the Department. Therefore, there is no perversity in condoning the delay Even in Shaw Wallace case, 1986 (7) TMI 106 - HIGH COURT OF JUDICATURE AT BOMBAY relied upon by the learned counsel for the petitioner, in respect of bulk cargo, an independent survey report should be prepared by the carrier and the consignee and such report should be countersigned by the Customs Officer before discharge of the cargo and such report should be accepted for the purpose of ascertaining the actual cargo unloaded. Concedingly, in this case, the independent survey report, prepared by the carrier and the consignee, is not countersigned by the Customs Officer before discharge of the cargo. Hence, the decisions cited by the learned counsel for the petitioner are of no avail to his case. W.P. dismissed.

Summary

Issues Involved:
1. Whether the vessel m.v. "MEGA JAYA" discharged the full manifested quantity of acid grade flourspar at the port of Cuddalore.
2. Consequences of any short landing of cargo.

Issue-wise Detailed Analysis:

1. Whether the vessel m.v. "MEGA JAYA" discharged the full manifested quantity of acid grade flourspar at the port of Cuddalore:

The petitioner, acting as the steamer agent for the vessel m.v. "MEGA JAYA," claimed that the entire manifested quantity of 9612.650 MTs of acid grade flourspar was discharged at the port of Cuddalore. This was supported by a draft survey conducted by the Port Officer, Captain S. Sainath, and a completion discharge certificate dated 18-9-1998. Despite these documents, the Customs Department alleged a short landing of 342.964 MTs and issued a show cause notice to the petitioner. The petitioner argued that any shortage was notional and due to handling losses, moisture content, and other factors. The Customs Department, however, insisted that the draft survey report was not countersigned by a customs official, making it invalid. The court found that the Port Officer was not a "Proper Officer" as defined under Section 2(34) of the Customs Act, 1962, and thus his report could not be accepted without countersignature from a customs official.

2. Consequences of any short landing of cargo:

The Customs Department determined that there was a short landing of 265.681 MTs after accounting for allowable tolerances and moisture content. Consequently, a penalty of Rs. 9,90,000/- was imposed under Section 116 read with Section 148 of the Customs Act, 1962. The petitioner's appeal to the second respondent resulted in the penalty being set aside, but the Customs Department filed a revision application with the first respondent. Despite the delay in filing, the first respondent condoned the delay and reinstated the penalty, albeit modified to be equivalent to the duty amount. The court upheld this decision, emphasizing that the independent surveyor's report was not valid without the proper countersignature and that the discretion to condone the delay was rightly exercised by the revisional authority.

Conclusion:

The court concluded that the vessel did not discharge the full manifested quantity as claimed by the petitioner, due to the lack of a countersigned draft survey report by a proper customs officer. The imposed penalty for short landing was justified under the Customs Act, and the delay in filing the revision application by the Customs Department was appropriately condoned. The writ petition was dismissed, affirming the penalty imposed by the first respondent.