1987 (7) TMI 336 - AT - Customs

Summary

Issues Involved:

1. Determination of the quantity of Aviation Gasoline discharged.
2. Basis for calculating short discharge and penalty under Section 116 of the Customs Act.
3. Validity of the outturn report versus the ullage report.
4. Allowance for ocean loss.
5. Liability of the steamer agent and the Master of the vessel.

Detailed Analysis:

1. Determination of the Quantity of Aviation Gasoline Discharged:

The appellants, steamer agents of the vessel s.s. SCHELPWIJK, contested the short discharge claim based on the shore tank measurement. The shore tank was 14 km away from Kandla Port, where the vessel discharged the cargo. The ullage survey conducted on arrival indicated 2149.008 M/T of Aviation Gasoline on board, which was discharged fully as per the survey report. The Department, however, relied on the outturn report based on shore tank measurement, showing 2110.359 M/T received, leading to a claimed shortfall of 71.641 M/T after allowing a 1% tolerance.

2. Basis for Calculating Short Discharge and Penalty under Section 116 of the Customs Act:

Section 116 of the Customs Act mandates that the person in charge of the conveyance must account for the entire quantity loaded as per the Bill of Lading. The Bill of Lading indicated 2182 M/T of Aviation Gasoline. The Department contended that the shortfall should be calculated based on the shore tank measurement, while the appellants argued that the ullage survey conducted at the port should be the basis.

3. Validity of the Outturn Report versus the Ullage Report:

The Department relied on the outturn report based on shore tank measurements, asserting that the shore tank measurement should be accepted as the accurate quantity. The appellants, however, relied on the ullage survey report, which was conducted in the presence of the consignee and indicated that the entire quantity on board was discharged. The Tribunal had previously dealt with similar cases, where it was held that the quantity discharged should be based on shore tank measurements due to their higher accuracy.

4. Allowance for Ocean Loss:

Both parties agreed that a 1% ocean loss allowance should be granted on the Bill of Lading quantity. The Bill of Lading quantity being 2182 M/T, the allowable loss was 21.82 M/T. The Tribunal considered this allowance in determining the shortfall.

5. Liability of the Steamer Agent and the Master of the Vessel:

The Additional Collector imposed a penalty of Rs. 1,46,769/- on the steamer agent and the Master, holding that the shortfall was not satisfactorily explained. The Tribunal's Member (Judicial) opined that the penalty should be based on the quantity discharged as per the ullage report, after allowing for the 1% ocean loss, resulting in a shortfall of 11.172 M/T. However, the Member (Technical) upheld the penalty based on the shore tank measurement, asserting the strict liability under Section 116.

Separate Judgments:

- Member (Judicial): Argued that the quantity discharged should be based on the ullage survey, leading to a shortfall of 11.172 M/T after accounting for the 1% ocean loss. Consequently, the penalty should be recalculated based on this shortfall.

- Member (Technical): Contended that the shore tank measurement should be the basis for determining the shortfall, upholding the penalty imposed by the Additional Collector for a shortfall of 50.291 M/T.

Final Order:

The President referred the matter to a third Member due to the difference of opinion. The third Member, agreeing with the Member (Technical), confirmed the Additional Collector's order, rejecting the appeal in toto. The final order, based on the majority view, upheld the penalty imposed by the Additional Collector.