1995 (6) TMI 36 - CGOVT - Customs

Summary

Issues Involved:
1. Amendment of Import General Manifest (IGM)
2. Responsibility for unloading cargo
3. Imposition of penalty under Section 116 of the Customs Act, 1962
4. Disappearance of the vessel without proper clearance
5. Applicability of Section 22 of the Customs Act, 1962
6. Role of Port Trust and Customs Authorities

Issue-wise Detailed Analysis:

1. Amendment of Import General Manifest (IGM):
The applicants, acting as local steamer agents, sought amendments to the IGM on two occasions. Initially, they requested to convert a single consignee entry into multiple entries for local consignees, and later sought to amend the IGM to treat the remaining cargo as same bottom cargo for re-export. The authorities had to consider these requests in light of the ongoing disputes and the applicants' attempts to manage the cargo responsibly.

2. Responsibility for Unloading Cargo:
The applicants argued that the responsibility for unloading the cargo lay with the local consignees as per the FIOS (Free In Out Stevedoring) terms. The consignees failed to arrange for stevedores, leading to the cargo remaining on board. The applicants contended that they had taken all possible steps, including informing the Port Trust and Customs authorities and seeking to re-export the cargo, thus fulfilling their obligations.

3. Imposition of Penalty under Section 116 of the Customs Act, 1962:
The original authority imposed a penalty equivalent to the duty involved, citing failure to unload the cargo and the disappearance of the vessel. The appellate authority upheld this decision, emphasizing the applicants' role as agents of the vessel's master. However, the applicants argued that their conduct was not contemptuous and that they had taken adequate precautions, including informing relevant authorities and seeking to re-export the cargo. They relied on precedents like the Supreme Court's decision in Hindustan Steel Ltd. v. State of Orissa, which emphasized that penalties should not be imposed unless there was deliberate defiance of the law or contumacious conduct.

4. Disappearance of the Vessel without Proper Clearance:
The vessel's disappearance without proper clearance was a significant issue. The applicants informed the authorities about the vessel's departure and argued that the Customs and Port Trust authorities failed to prevent it. They highlighted the extraordinary circumstances, including the vessel being held up for five months, crew members falling sick, and the shipping line incurring substantial expenses. The applicants contended that these factors should mitigate the penalty imposed.

5. Applicability of Section 22 of the Customs Act, 1962:
The applicants argued that the cargo had deteriorated and was unfit for human consumption, as evidenced by the subsequent Bill of Entry filed with Dubai Customs. They contended that the Customs authorities should have applied Section 22, which deals with the disposal of deteriorated goods, instead of imposing an arbitrary penalty. The Government acknowledged that if the goods had indeed deteriorated, Section 22 would be relevant in determining the penalty.

6. Role of Port Trust and Customs Authorities:
The applicants claimed that they had informed the Port Trust and Customs authorities not to let the vessel sail without proper clearance. They argued that the authorities' failure to respond to their requests and take preventive measures contributed to the vessel's disappearance. The Government directed the Deputy Collector to verify these claims and consider the role of the Port Trust and Customs authorities in allowing the vessel to disappear.

Conclusion:
The Government remanded the case back to the Deputy Collector for de novo consideration, emphasizing the need to verify the facts and determine the penalty based on the circumstances and provisions of Section 22 of the Customs Act, 1962. The Deputy Collector was instructed to consider the hardships faced by the applicants, the role of the Port Trust and Customs authorities, and the actual revenue loss due to the deterioration of goods. The case highlighted the importance of a thorough and objective assessment of the facts and circumstances before imposing penalties.