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TMI Blog1987 (7) TMI 336X X X X Extracts X X X X X X X X Extracts X X X X ..... r giving allowance of 1%. The appellants were called upon to show cause why penalty should not be levied on a quantity of 50.219 M/T of Aviation Gasoline under Section 116 of the Customs Act. In their reply, dated 20-9-1976, the appellants, among other things, stated that as per ullage taken on arrival of the vessel prior to commencement of the discharge by the consignees, M/s. Indian Oil Corporation and the Chief Officer of the vessel, the vessel had on board a manifested quantity of 2182 M/T of Aviation Gasoline, which was discharged in full. The short landing alleged was presumably based on the outturn certificate issued after the cargo was received in full and dry certificate was issued to that effect. They contended that there was no shortage. They pleaded that there shall not be any penalty either on them or on the ship. The Additional Collector of Customs, Ahmedabad, who held the enquiry, held that the explanation offered by the steamer agents cannot be accepted as a satisfactory explanation for the shortage. The outturn clearly showed the shortage and after giving due allowance and condoning the admissible percentage of shortage, the total shortage comes to 50.29 M/T, for w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question whether there has been satisfactory accountal of the goods carried in the ship. 5. Shri Pal appearing for the Collector, however, submitted that the quantity shipped as per the Bill of Lading and the IGM filed by the Master was 2182 M/T. The landing certificate was issued to the Master on his request showing the quantity as 2110.359 M/T. This quantity represented the quantity received on the shore tank. The outturn report was based on the quantity received on the shore tank. Shri Pal further submitted that ullage report cannot be relied upon to establish the quantity discharged, it only shows the quantity on board the vessel. It was also submitted by Shri Pal that Master s liability under Section 116 is strict liability and in that connection Shri Pal relied on a decision of Kerala High Court reported in 1980 E.LT. 57. Shri Pal submitted that shore tank measurement should be accepted and in that connection he placed reliance on the following decisions. (i) 1983 E.C.R. 1460 = 1988 (33) E.L.T. 561 (Tri.) (ii) 1983 E.LT.1270 (iii) 1986 (6) E.C.R. 366 (Calcutta) = 1985 (21) E.L.T. 558 (Tri.). He further placed reliance on the following orders of this Bench: (a) Or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to be unloaded at that destination and failure to unload or the deficiency is not accounted for to the satisfaction of Asstt. Collector of Customs, the person in-charge of the conveyance shall be liable...... The rest of the section is not relevant for our purpose. 9. The liability cast on the person in-charge of conveyance under the above section is to discharge the entire quantity loaded in the conveyance at the place of destination in India. The Section provides for levy of penalty if the quantity unloaded at the destination is short of the quantity to be unloaded and if no satisfactory explanation is forthcoming for the deficiency. 10. Without prejudice to the contention of the appellants, namely, that the quantity loaded was uncertain, the Bill of Lading and the IGM quantity was 2182 M/T. The person incharge of the conveyance is required to account for that quantity at the place of destination and the place of destination of the ship in question was Kandla Port. From the documentary evidence, namely, the survey report, dated 12-1-1974 of M/s. J.B. Boda Marine General Survey Agencies Pvt. Ltd. (workship surveyors) it is seen that the surveyors at the request of M/s. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the difference of 32.992 M/T as compared to Bill of Lading quantity and the quantity on arrival at Kandla, as per the ship s calibration tables is due to the vessel having loaded with this amount short of product Aviation Gasolene 115/145. On completion of discharge on 8th January, 1974 at 03.55 hours, we inspected all the tanks and we hereby certify that all the tanks were found completely empty". 11. From the report of the surveyors it is clear that the quantity found on board the vessel before the discharge was 2149.008 M/T. The discharge operation was carried out in the presence of the consignees. The surveyors further certified that after the completion of the discharge, they inspected all the tanks and they were found completely empty. In other words, according to the surveyors certificate, the entire quantity of 2149.008 M/T which was on board the ship had been discharged at Kandla Port. But then the quantity received in storage tank was only 2110.359 M/T. The quantity received in the storage tank was less by 38.649 M/T when compared to the quantity discharged from the ship. 12. According to the appellants the quantity discharged from the vessel should be taken for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing 2182 M/T, the condonable loss at 1% comes to 21.82 M/T. The difference between Bill of Lading quantity and the quantity on board and discharged, by the vessel was 32.992 M/T. From this 1% ocean loss shall have to be deducted and the net loss comes to 11.172 M/T. Therefore, penalty could be levied only on that quantity which was short of Bill of Lading quantity. 14. The appellants, however, contended that the Bill of Lading quantity is itself uncertain In the sense that the Master of the ship had not accepted the responsibility for the quantity loaded. In that connection, reliance was placed on the decision of the Kerala High Court and Goa Bench of the Bombay High Court in support of their contention. The said decisions have not much relevance for the purpose of levying penalty under Section 116. In those cases the High Courts were considering the liability of the carrier for short delivery in the suits filed by the consignees. So far as the Customs authority is concerned, under Section 116 the person incharge of the vessel is required to unload the quantity loaded on the ship as evidenced by Bill of Lading and Import General Manifest which the Master or the steamer agent fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion available in respect of discharged quantity is the one obtained by tank measurement though the tanks are situated at a distance from the wharf and connected by a long pipe, in the absence of any allegation that there was an actual pilferage or leakage in the pipeline that is the next best information available regarding the quantity of oil actually discharged". 17. There is no conflict whatsoever between the view taken in those decisions and the view we have taken in this appeal. As stated earlier, in the present appeal there is evidence by way of ullage report regarding the quantity on board the ship. There is also evidence as to the discharge of the entire quantity and a certificate by the surveyors thal the ship s tank after discharge were examined and were found empty. As has been observed earlier, if there is evidence regarding the quantity discharged at the port of Kandla which is forthcoming in this case, then for the purposes of levying penalty under Section 16 of the Customs Act the discharged quantity at the port should be taken and not the quantity received at the storage tank. We may, however, point out that Shri Gopalaratnam had contended that certain quantity o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arge of the conveyance and their agents so as to provide for smooth exercise of functions under the provisions of the Customs Act as well as to ensure that injustice not caused to any of the authorities or the person incharge of the conveyance. In respect of liquid cargo in bulk, His Lordship laid down 5 guidelines and for the purpose of this case, suffice, if we refer to 3 of them : (1) The quantity shown in the Bill of Lading reflected in the Import General Manifest should be prima facie accepted as the cargo on board the vessel brought for unloading at the Port of Bombay. (2) After the discharge of the liquid cargo from the vessel, a fresh survey should be carried out in the presence of the Customs Officer and this discharge completion survey report should be signed by the Customs Officer, the snip-owner and the consignee; (3) In case of any differences between the Bill Of Lading quantity or the ullage survey report of the port of loading quantity and the discharge port ullage survey report quantity, then such difference shall be considered as short landed quantity and for which the ship owner should be held responsible. 20. On merits of the case His Lordship observed n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioned in brother Hegde s draft order vide para 12, this appeal is identical to the one filed by M/s. O.P. Dave Sons, GandhidhamNo. CDO")(BOM)383/81. As also mentioned by brother Hegde in his order, there had been difference of opinion between two of us in that appeal and the matter has been referred to the President in terms of Section 129C of the Customs Act and the outcome is still awaited. Therefore, my order in this appeal has to follow my order in that appeal as no new arguments, case law or facts have been brought out in the present appeal. Before proceed to record my findings in the present appeal, it is necessary for me to observe that the facts of the case as well as the arguments in the appeal advanced by both the sides have been faithfully recorded in brother Hegde s order and hence it is not necessary for me to set out tie same once again in my order. I would adopt these for the purposes of the present order 24. The point which calls for determination in this appeal is to arrive at the quantity of Aviation Gasolene discharged by the vessel SCHELPWIJK on its arrival at Kandla on 7-1-1974. The choice is whether to accept the ullage, report of J.B. Boda Marine G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Customs has to give the permission under Section 3 for unloading the goods and such unloading has to be supervised by him in terms of Section 34. The imported goods as unloaded in the Customs area have thereafter to remain in the custody of such person as may be approved by the Collector of Customs in terms of Section 45. The parcel of Aviation Gasoline in question imported by s.s. SCHELPWIJK at Kandla was required to comply inter alia with the aforesaid requirements of law. To complete the examination of legal requirements under the Customs Act it may further be added that that Aviation Gasoline has to be discharged at the Oil Jetty, Kandla which was approved as a landing place in terms of Section 8 and the cargo was discharged at the port of Kandla which was appointed as a Customs Port in terms of Section 7. As per the outturn report, the quantity of the Aviation Gasoline discharged at Kandla by the ship was 2110.359 M.T. Though the actual place of the landing of the Imported oil was at Oil Jetty at Kandla port thaoil was taken through the pipeline to the installations of the oil Company at Khari Rohar, Khari Rohar Is within the limits of Kandla port and it is therefore no one s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the tank dip method of measurement of the oil is more accurate than the ullage method. There is no dispute by the appellants in this behalf. Therefore, it is not correct to accept the quantity as shown on board the ship by the ullage report as the quantity landed by the ship. In fact while landing it is possible that a quantity can leak out just as it is possible and as it actually happens that few cases get lost overboard in the course of discharge 26. Another point which the appellants have vehemently urged before the Tribunal isthe length of the pipeline of about 14 K.M. from the oil pier to the installations. However, this would not affect the outturn report as the consignee and the Port Trust authorities would take all the precautions to ensure that the quantity/discharged by the ship is received in the oil installations. At most of the Ports, the oil installations are situated at a distance from the Oil Jetty. This has also been observed by the South Regional Bench in the appeal of M/s. D.B. Madan Co. Therefore the length of pipeline is not relevant for the purpose of determining the quantity outturned by a vessel. Further, it is seen that the cargo in question was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pendse. But even as per this judgment the Hon ble Judge has recommended that there should be a survey of the quantity of liquid cargo unloaded by the ship in the presence of the Customs Officer. He has further held that in case there is a difference between the manifested quantity and the surveyed quantity, the difference should be considered as the quantity unaccounted for the purpose of levy of penalty. Therefore, my present order does not materially differ from this judgment of Hon ble Justice Pendse. 29. In view of the foregoing circumstances, I hold that the Addl. Collector s order is correct. Accordingly, I confirm the same and reject the appeal of M/s. South India Corporation (Agencies) Ltd., Madras. Bombay (K.S.Dilipsinhji) 12-3-1987 Member (Technical) [POINT OF DIFFERENCE] 30. Since there has been a difference between the two Members In deciding this appeal, the matter is referred to the President in terms of Section 129C(5) to determine the following point :- Whether in the facts and circumstances of the case the shortage in the quantity of Aviation Gasoline unloaded at Kandla by s.s. SCHELPWIJK which arrived there on 7-1-1974, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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