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TMI Blog2010 (8) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... RESENTED BY : Shri Pradeep S. Jetly, for the Appellant. S/Shri S.N. Kantawalla a/w. Kunal Shah, i/b. M/s. Bhat Saldana, for the Respondent. [Judgment per : S.J. Kathawalla, J.]. The Appellant-Revenue has filed the present Appeal under section 130 of the Customs Act, 1962 (the said Act), challenging the order dated5th August 2008, passed in Appeal No. C/700/07-Mum., by the Customs, Excise and Service Tax Appellate Tribunal (the Tribunal), West Zonal Bench at Mumbai. 2. The above Appeal was admitted by this Court on15th April 2009on the following substantial questions of law :- (i) Whether the order of the CESTAT in reducing fine of Rs. 1,00,00,000/- to Rs. 5,00,000/- while confirming the confiscation of the supply vessel M.V. Sea Bulk Toota is based on no evidence or partly relevant or partly irrelevant evidence and is otherwise perverse and arbitrary. (ii) Whether the order of the CESTAT in setting aside - 1. Fine of Rs. 50,000/- in respect of 3.6 MTs of smuggled diesel. 2. Duty of Rs. 43,860.30 and 3. Interest under section 28AB on the duty amount, after having earlier confirmed confiscation of the supply vesselM.V.SeaBulk Toota, is base ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icers went near it, they noticed a barge anchored alongside the supply vessel. On seeing the Customs party, the barge quickly started to leave the supply vessel after removing the pipe from the supply vessel through which they had been receiving diesel. The Customs team chased the barge and after repeated warnings, apprehended the barge. A closer inspection showed the name of the barge to be ML Anchor . The Customs staff then boarded the barge and caught hold of the Tandel who gave his name as Viplav Kumar Rai @ Sunil Rai and after questioning, he accepted that he had illegally purchased 40 MTs of high speed diesel from the supply vessel Sea Bulk Toota . 6. Some of the Customs staff were asked to remain on the barge and guard the staff members of the barge alongwith Tandel Mr. Viplav Kumar Rai @ Sunil Rai. The remaining staff boarded the supply vessel Sea Bulk Toota with two Panchas. After boarding the supply vessel the Custom officers got hold of the Chief Engineer, who was standing on the Deck and went to the Master of the vessel, where both of them were subjected to interrogation. After some time, the Chief Engineer of the vessel, Mr. Errol Tennyson, accepted that he had s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as seized by Special Investigation and Intelligence Branch (Import) under a seizure notice bearing No. F .CO. SG/INF-02/AKS/2006 SIIB(I) dated 21st May 2006 and was subsequently released upon the personal Bond of Rs. 8,85,67,061/- being furnished by the owner and a bank guarantee dated 8th June 2006 for Rs. 2,20,33,440/-. 10. The Commissioner of Customs (Import) issued a Show Cause Notice dated 15th November 2006 under Section 124 of the said Act, inter alia calling upon the Respondent (Owners of the supply vessel M.Y Sea Bulk Toota ) to inter alia show cause as to why - (i) ........................ (ii) The 3.6 MTs of diesel stored in the supply vessel M.V. Sea Bulk Toota over and above 45 MTs declared on arrival on 23rd May 2006 at Mumbai and 102.197 MTs purchased on 23rd May 2006 be held liable to confiscation under section 111(d), 111(f) and 111(h) of the said Act read with the provisions of Foreign Trade Policy (2002-07) and since no duty was paid on the illegally imported diesel oil of 3.6 MTs, why the duty amounting to Rs. 43,860.30 as detailed in Annexure-G should not be recovered from M/s. Sea Bulk Offshore Dubai LLC, Post Box No. 32387, Dubai, UAE, the owners of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ropriate the same from the bank guarantee. No duty is required to be paid on this quantity if it has been consumed in the normal course of legitimate use. 92. The supply vessel M.V.SeaBulk Toota valued at Rs. 8,31,67,061/- is confiscated under section 115 of the Customs Act, 1962. Since it has already been released against bond of Rs. 8.86 crores and a BG of Rs. 2.20 crores, I impose a fine of Rs. 1,00,00,000/- and appropriate the same from the BG. 12. The Respondent impugned the Order-in-Original dated15th May 2007by filing an Appeal before the Tribunal. The Tribunal vide its Order No. A/441 to 445/08/CSTB/C-II dated5th August 2008allowed the Appeal. The Tribunal upheld the confiscation of the vessel but reduced the redemption fine to Rs. 5,00,000/- from Rs. 1,00,00,000/-. The Tribunal has also set aside the confiscation of 147 MTs of diesel. 13. Being aggrieved by the order of the Tribunal dated5th August 2008, the Appellant filed the above Appeal which as stated above, was admitted on15th April 2009on the questions of law set out in paragraph 2 of this judgment. Submissions : 14. It is submitted on behalf of the Appellant-Revenue that the order dated5th August 2008p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the goods will not be liable to confiscation. In support of this contention, the Respondent relied on several decisions of this Court as well as of the Tribunal. Conclusion :- 17. We have gone through the detailed order of the Adjudicating Authority, which inter alia contains the entire evidence recorded in the matter pertaining to the illegal sale of HSD from the M.VSeaBulk Toota to the barge M.L. Anchor . We have also perused the impugned order passed by the Tribunal dated5th August 2008. We have also considered the submissions advanced by the learned Advocates appearing for the Revenue as well as the Respondent. 18. The Tribunal has recorded in its order that the Respondent herein who is the Owner of the vessel, vide letter dated20th May 2005had given clear-cut instructions to the Master and Chief Engineer of the vessel, qua their responsibilities pertaining to the fuel oil consumption, fuel oil bunkering and unauthorised fuel transfers. The instructions pertaining to the unauthorised fuel oil transfers are reproduced hereunder :- 1. Seabulk Offshore and its customers take a very serious view about unauthorized fuel oil transfers and deliberate short loading of fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity, took the view that the fine of Rs. 1,00,00,000/- imposed by the Adjudicating Authority, is excessive and reduced the same to Rs. 5,00,000/-. The view taken by the Tribunal cannot be termed as arbitrary or perverse and thus, needs no interference. We, therefore, answer question no. (i) as set out in paragraph 2 above, in the negative, that is, against the Appellant and in favour of the Respondent. 20. The third substantial question of law as set out in paragraph 2 above, pertains to the order of the Tribunal setting aside the fine of Rs. 20,00,000/- in respect of 147 MTs stored in the supply vessel M.V Sea Bulk Toota , in which the smuggled HSD was mixed in such a manner that the said smuggled HSD could not be separated. 21. Section 120 of the said Act is reproduced hereunder :- 120. Confiscation of smuggled goods notwithstanding any change in form, etc. - (1) Smuggled goods may be confiscated notwithstanding any change in their form. (2) Where smuggled goods are mixed with other goods in such manner that the smuggled goods cannot be separated from such other goods, the whole of the goods shall be liable to confiscation : Provided that where the owner of such goo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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