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TMI Blog2003 (12) TMI 545X X X X Extracts X X X X X X X X Extracts X X X X ..... the vessel and imposition of redemption fine. 2. The brief facts for the purpose of deciding this appeal are that the appellants are the owners of the vessel M.V. Tiger Bridge (hereinafter referred to as the vessel) at the relevant time and Capt. Georgios Perivolaris, was the master of the vessel. M/s. James Mackintosh and Company Pvt. Ltd., B-1, No. 10 Judge Jambulingam Road, Chennai are the Indian agents of the owners of the vessel. Show cause notice dated 4-12-2001 was issued among others to the agents of the vessel and a copy of the order of adjudication was also issued to the agents among others. 2.1 On 13-6-2001, at about 4 P.M. Police personnel in charge of B-1 North Police Station, Chennai intercepted a Mahindra Jeep with Registration No. TN-02-C-4979 opposite to the Reserve Bank of India Sub-way, near Harbour and recovered 900 numbers of contraband gold bearing foreign markings and weighing 104.85 Kgs valued at Rs. 4,35,84,048 (i.v.) and Rs. 4,66,89,705 (m.v.) from nine cloth belts kept concealed in a specially made cavity in the above said jeep. This was followed by arrest of one Sadasivan, the occupant of the jeep along with one Ganesan the driver of the said jeep. O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Mahindra Commander Jeep bearing Regn No. TN-02-C-4979 jeep, also in his statement clearly stated about the use of the Jeep for smuggling purpose and also about concealing the contraband gold in the three cloth belts after it was removed from the vessel secreted in the specially made cavity of the said Jeep and that it was when Sadasivan while coming from the harbour through the 8th gate that the local police officers intercepted and checked the jeep near the Reserve Bank sub-way. In his further statement dated 15-6-2001 Ganesan inter alia stated about the active involvement of Sadasivan in bringing money from Bombay for smuggling activities. Rajan Patil in his statement dated 14-6-2001 also stated about the involvement of Sadasivan in the smuggling activities. 2.2. D.V. Kishore, Second Officer of the Vessel in his statement dated 14-6-2001 inter alia stated about two people approaching him in Singapore about carrying the contraband to Chennai in the said vessel and that he was offered a consideration of USD 500/-. He has also stated that the two persons had also mentioned the name of the other two crew members viz. R.J. Patel (Ratilal Jasmalbhai Patel) working as Able Sea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appearing for the appellants at the outset invited our attention to Section 115(2) before the amendment in 1988 and also after the amendment. He has submitted that prior to the amendment the Section contained two conditions to be satisfied before the vessel could be exculpated from penal action. The first was that there should be knowledge of or connivance by the Owner/Master/Agents of the ship and the second was that all the above persons should have taken all such precautions against smuggling as may be specified in the rules. The Second condition was removed by the Finance Act, 1988. The effect of the amendment was that failure to take precautions as specified by the department was no longer a reason for ordering confiscation of the ship. He contended that the learned Commissioner has lost sight of the second condition. He submitted that after the amendment in 1988 the only condition to be fulfilled was that of lack of knowledge on the part of the master of the vessel regarding concealment of contraband in the vessel. Therefore, on this score alone, the impugned order is liable to be set aside so far his client is concerned, argued the learned Counsel. He further vehemently arg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd its removal from the cabin and transportation in Mahindra Jeep is admitted by one and all. Though the captain of the vessel was not implicated by any one else involved in this case, the use of the vessel for concealment and conveyance of the contraband is established by evidence on record. Since he was not implicated by others, he was not penalised under Section 111(d) and (e) of the Act and since the vessel was admittedly used for smuggling purpose and the captain having failed to take sufficient precautions to desist the crew members from involving in smuggling, the conveyance was confiscated and hence the impugned order is perfectly in order. He has also invited our attention to Paras 22 and 35 of the impugned order wherein the modus operandi adopted for smuggling the contraband was revealed by the Second Officer of the vessel and also by the two crew members viz. R.J. Patel and H.L. Khalasi. He has also invited our attention to para 16 of the impugned order wherein Saleem Abdul Rahim Khan, employee of M/s. Moonship Chandelling in his statement has categorically stated that the same vessel was also used for smuggling on earlier occasions also. The learned JCDR also pressed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss the owner of the conveyance or animal proves that it was so used without the knowledge or connivance of the owner himself, his agent, if any, and the person in charge of the conveyance or animal . 6.1 On a reading of the above provisions, it is clear that a duty is cast on the owner to prove that the conveyance was used without his knowledge for purpose of smuggling. Owner includes, his agents/incharge of the vessel viz. master/captain. 7. The thrust of the argument of the learned Counsel for the appellants is that after the amendment to Section 115(2), the only condition to be fulfilled by the in-charge of conveyance was that the smuggling has taken place without his knowledge and that the earlier condition requiring the owner/in-charge to take all precautions against the use of the conveyance for smuggling activities, has been deleted. The learned Counsel therefore pleaded that the adjudicating authority has lost sight of the amendment and hence he has proceeded to confiscate the vessel. Examining this plea, we observe that excepting the statement of the Captain of the vessel wherein he has mentioned that he had always warned the officers and crew not to indulge in smugg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers cannot be held to be a search as a reasonably and prudent man would do. Therefore, in the present case the burden of proving absence of knowledge or connivance on the part of the captain of the vessel is therefore, not discharged by him. Exonerating the Captain of the vessel/owner/agent of the owner under Section 112 as they were not shown to have been privy to the smuggling of contraband would not be sufficient to exclude the operation of Section 115(2) of the Act, as held in para 21 by the Hon ble Delhi High Court in the case of Great Eastern Shipping Co. Ltd. (supra). The Hon ble High Court of Delhi in the noted case has also referred to the judgment of the learned Single Judge in the case of Mogul Line Ltd. v. Addl. Collector (supra). Therefore, the view taken by the Division Bench, Hon ble Delhi High Court in the case of Great Eastern Shipping Co. (supra) is required to be preferred to decide the present case. Further the Tribunal in the case of Capt. Jens Warner v. CC reported in 1998 (99) E.L.T. 324 wherein the Tribunal found that contraband gold of a substantial quantity similar to the one in the present case, was recovered from places which are accessible to or capable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g was also involved on earlier occasions as revealed by Saleem Abdul Rahim Khan employee of M/s. Moonship Chandelling and as stated by one of the crew members viz. R.J. Patel in his statement dated 15-6-2001. The retractions given by various persons can only be taken as an afterthought as is usually attempted to in all such smuggling activities and the Commissioner has rightly rejected the same. Needless to say that smugglers are enemies of the society and the illicit wealth emerging from smuggling creates economic imbalances, inequality and insecurity in society apart from social problems, and therefore, no leniency is called for in such cases. In the present case for a value of the vessel of Rs. 8,48,11,500/- the redemption fine of Rs. 85,00,000/- imposed works out to 10% of the value of the vessel, which cannot be considered as excessive or harsh warranting any reduction. 10. In view of our discussion and finding as above, we do not find any reason to interfere with the order passed by the lower authority and we uphold the confiscation of the vessel and imposition of redemption fine. The appeal thus fails and is accordingly dismissed. Sd/- (Jeet Ram Kait) Member (T) Da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . We are not able to agree with either of these conclusions. The master, on being questioned, had said that he had posted two officers, one on the gangway and one on deck, to carry out checks of persons coming on board the ship. When any ship is in port, a number of persons come on board in connection with various purposes for which the ship is deployed. They would include persons concerned with provisioning the ship, representative of the owner, representative of various Government agencies, some persons required to carry out repairs to the ship or equipment on it, employees of companies connected with loading and unloading cargo etc. It would not be practicable to ensure that unless the identity of each visitor and the genuineness of the purpose for which he wants to enter the ship is established, they must not be permitted to board it. That the efforts involved and the time taken would defeat the purpose for which the persons visit the ship. It is not possible to agree that if such precautions had been taken, smuggling would not have taken place. Smugglers all over the world use ingenious methods to smuggle goods, and have frequently overcome difficulties caused by vigilance of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds which he knows or has reason to believe are liable to confiscation under Section 111 of the Customs Act. The Finance Act, 1988 amended Section 115(2) and removed the second condition. In other words, the failure to take precaution as specified by the department was no longer a factor and reason for ordering confiscation of the vessel. The Commissioner s order that no precaution was taken by the captain of the vessel to safeguard that smuggling was not done by use of vessel is not in terms of amended Section 115(2) of the Customs Act. The finding is erroneous and requires to be set aside. In view of the above legal position, I set aside the order of the learned Commissioner against the appellant by allowing the appeal. Sd/- (S.L. Peeran) Member (J) Dated 18-12-2003 POINTS OF DIFFERENCE In view of difference of opinion between the Members, the following question is referred to Third Member for determining the same :- Whether the appeal is required to be dismissed as held by Member (T) for the reasons recorded in his order? OR Whether the appeal is required to be allowed as held by Member (J) for the reasons recorded in his order.? Sd/- ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Finance Act, 1988. The effect of the deletion of the proviso, according to the Counsels, is that an owner of a vessel could save the vessel from confiscation if he is able to show that he himself, or his agent or person in charge of the vessel did not have knowledge of the use of the vessel for smuggling activities or had not connived at the smuggling activity. The ld. Counsel has emphasised that, in the present case, there is no allegation or finding that the owner of the vessel, his agent or the master of the vessel had any knowledge of the smuggling activity or had connived at smuggling activity. He also pointed out that, on the contrary, it was the evidence that the captain of the vessel was not even aware of the smuggling activity. The crew members who had been apprehended for their involvement in the smuggling had also not named the vessel s owner or agent or master of the vessel for involvement or having knowledge of smuggling. In these circumstances, ld. Counsel has submitted that the confiscation of the vessel upon the finding recorded in the order was beyond the provisions of Section 115(2) of the Customs Act as it stood at the relevant time and therefore, ld. Member ..... X X X X Extracts X X X X X X X X Extracts X X X X
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