1986 (10) TMI 230 - AT - Customs

Summary

Issues Involved:

1. Imposition of penalty on the Master of the Vessel.
2. Imposition of penalty on the shipping agent.
3. Imposition of penalty on crew members.
4. Imposition of penalty on Gajraj.
5. Non-mention of specific sub-section of Section 112 in the show cause notice.
6. Alleged violation of principles of natural justice.

Detailed Analysis:

1. Imposition of Penalty on the Master of the Vessel:

The Master of the vessel was penalized under Section 112 of the Customs Act, 1962. The learned Counsel for the Master argued that the Master had issued a general circular prohibiting contravention of any law by the crew and took reasonable precautions. It was contended that the Master could not have prior knowledge of the contraband goods hidden in obscure places. The Tribunal, however, held that given the magnitude and volume of the contraband goods recovered, the Master should have been aware of their presence. The Tribunal rejected the argument that the Master had taken reasonable precautions and found that the Master's knowledge of the contraband goods was implicit.

2. Imposition of Penalty on the Shipping Agent:

The shipping agent, K.P.V. Shaik Mohd. Rowther & Co., was also penalized. The learned Counsel argued that there was no evidence to warrant the imposition of a penalty as the shipping agent merely filed statutory documents and had no control over the contraband goods. The Tribunal found considerable force in this argument and noted that the learned S.D.R. conceded the lack of evidence against the shipping agent. Consequently, the penalty imposed on the shipping agent was set aside.

3. Imposition of Penalty on Crew Members:

The crew members, including Khalasi, Dravidamani, John Mathew, and Fernando, were penalized. The learned Counsel argued that these crew members could not have knowledge of the contraband goods as the places were accessible to passengers and others. The Tribunal, however, held that the crew members, being in charge of maintenance and having access to the areas where the goods were found, should have known about the contraband goods. The Tribunal dismissed the argument that the show cause notice was not served on the crew members, confirming that the notices were dispatched and displayed as required by law.

4. Imposition of Penalty on Gajraj:

Gajraj, the Welfare Officer, was penalized for the contraband goods found in areas under his control. The learned Counsel argued that Gajraj had given the keys to other crew members and could not be held responsible. The Tribunal found that Gajraj, being in possession of the keys and aware of the contraband practices, could not disown knowledge of the goods. The Tribunal dismissed the argument regarding the violation of natural justice due to non-furnishing of the mahazar copy, noting that it did not cause prejudice to Gajraj. However, the Tribunal reduced the penalty on Gajraj from Rs. 25,000/- to Rs. 10,000/-.

5. Non-Mention of Specific Sub-Section of Section 112 in the Show Cause Notice:

The appellants argued that the show cause notice did not specify whether the penalty was under sub-section (a) or (b) of Section 112, causing prejudice. The Tribunal held that all necessary ingredients were clearly set out in the show cause notice, and the appellants did not demonstrate any prejudice in their defense due to this omission. The Tribunal found no merit in this argument.

6. Alleged Violation of Principles of Natural Justice:

The appellants argued that the principles of natural justice were violated as the show cause notice was not served, and the mahazar copy was not furnished. The Tribunal confirmed that the notices were dispatched and displayed as required by law. The Tribunal also held that non-furnishing of the mahazar copy did not cause any prejudice, as the recovery of contraband goods was not disputed. Therefore, the Tribunal found no violation of natural justice.

Conclusion:

The appeals by the shipping agent (C/58/86) and Sripad Thite (C/64/86) were allowed, and the penalties imposed on them were set aside. The other appeals were dismissed, with the penalty on Gajraj reduced from Rs. 25,000/- to Rs. 10,000/-.