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TMI Blog2019 (12) TMI 1448X X X X Extracts X X X X X X X X Extracts X X X X ..... f short landing. Remission of customs duty was allowed by the Appellate Commissioner to the importer on account of short delivery of the goods and not on account of the short landing of the goods. Therefore, there is no nexus between the alleged short landing and short receipt - In this case, the importers had produced a certificate dated 29-2-1996 of Lloyd s Agents after filing a refund claim on 26-12-1996. In this case, no short landing was noticed by the Customs Department when the goods were discharged at the Tuticorin Port Trust. There is no evidence on record to conclude there short landing. On the other hand, the goods were discharged at the Tuticorin Port. However, after they were discharged, the aforesaid goods were delivered to the importer filed a refund claim on 27-4-1996. The short landing was to be ascertained then and there as and when the imported goods were discharged from the vessel and were transferred to the Port Trust - Therefore, unless there was a report of the surveyors or any other report of the custodian of the goods namely the Tuticorin Port Trust certifying that there were short landing, a steamer or its agent cannot be held liable merely because r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Port under the supervision of an independent surveyor namely M/s. Ericsson and Richards (Tuticorin) who certified that the entire manifested quantity had been discharged at the Tuticorin Port. 5. Importer s agent namely Vallavarayar and Sons also did not notice any shortage in the discharge of the manifested quantity at time of discharge of the import consignment at the Tuticorin Port. 6. Before the consignment was discharged, the importer filed Bill of Entry dated 14-12-1995 and later cleared the consignment. 7. Later, the importer filed an application for remission of customs duty under Section 23 of the Customs Act, 1962 stating that there was short receipt of quantity by it. Remission of duty was disallowed. 8. Under these circumstances, the importer filed an appeal before the Commissioner of Customs (Appeals). The Commissioner of Customs (Appeals) allowed importers appeal vide order dated 16-12-1997 bearing reference C. CUS. No. 1493/1997. The relevant portion of the aforesaid order reads as under :- In this case, the refund claim for ₹ 1,77,547/- for 886 bags short-delivered against the manifested quantity was rejected on the ground that Tuticorin Port T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use notice on 18-8-2000. Without adjudicating the said show cause notice, a 2nd show cause notice was later issued to the petitioner on 31-1-2004. 15. The petitioner also replied to the said show cause notice. The 2nd show cause notice ultimately culminated in an order dated 18-5-2005 of the Deputy Commissioner of Customs. The Deputy Commissioner of Customs dropped the proceedings based on the available evidence on record. 16. However, the said order was appealed against before the Commissioner of Customs (Appeals) on 13-4-2006. This was pursuant to a review of the said order of the Deputy Commissioner of Customs under Section 129D(2) of the Customs Act, 1962 by the Commissioner. 17. The said Appeal was numbered as Appeal No. C24/1/2006-TTN-(Cus) (Deptt.). The Commissioner of Customs (Appeals) by an order dated 11-8-2006 reversed the order passed by the Deputy Commissioner of Customs in Order in Original No. 94/05-06 with the following observations : .. There is no dispute that penalty can be imposed on steamer agent who is acting on behalf of vessel. This was held in the case of M/s. Transworld Shipping v. CC, 2003 (154) E.L.T. 137 (CEGAT). If the goods are short le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eport containing actual weighment receipt details is finalized and Govt. feels that the legal responsibility of steamer Agent i.e. the applicant s does not ceases on mere initial outer surveys of said full discharge of cargo loaded in the ship. The Steamer Agent do remains liable for actual and proper weighment/measurement. Since short receipt has actually happened in this case, which may be due to any of the reasons, the legal liability remains that of steamer which may be due to any of the reasons, the legal liability remains that of steamer agent i.e. the applicant. Therefore, Govt. is of the opinion that the applicant has rightly been held as liable for action under Section 116 of Customs Act, 1962 in this case. 7. Now Govt. takes up the point of Limitation . The applicant s sole reliance on this issue is upon O bitter dicta judgments specifically that of Hon ble High Court in Writ Petition No. 528/1995. On this Govt. is of the view that the fact of the case proceedings as were continuing before other appellate forums in the matter distinguishes this case from that of (any) normal delayed case. The penal proceedings under Section 116 of Customs Act, 1962 were initiated in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. 23. It is submitted that it cannot be independently issued after a lapse of limitation under Sections 26, 27 and 28 of the Customs Act, 1962. In any event, he submits that show cause notice after lapse of 15 years of the subject import was time-barred. The Learned Counsel for the petitioner refers to the decision of the Bombay High Court dated 12-6-1995 in W.P. No. 528 of 1995 rendered in 1995 (80) E.L.T. 781 (Bom.), wherein it was held as under :- The exercise of powers under Section 116 of the Customs Act, if necessary, must be undertaken within a reasonable time. Shri Venkateswaran submitted that the Customs Excise and Gold Control Tribunal has held that show cause notice issued beyond the period of five years from the date of vessel leaving the Port is arbitrary and unreasonable. In our judgment, the period of five years is more than reasonable. Indeed, the bond executed by the Agents should also be for a duration of five years and in case the respondents desire to proceed against the Agents, action must be taken before the expiry of the period. The bond should not be kept alive for all time to come and must be limited for a duration of five years from the date of exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refer to Chapter VI of the Customs Act, 1962 which deals with provisions relating to conveyances carrying imported goods. 32. As per Section 29 of the Customs Act, the person-in-charge of any vessel or any aircraft entering India shall not permit the vessel or aircraft to call or land at any place other than the customs port or customs Airport. 33. Under Section 30(1) of the Act, the person-in-charge of a conveyance carrying imported goods shall within twenty-four hours after arrival at the Customs Station, deliver to the customs officer an import manifest making and subscribing a declaration as to the truth of its contents. 34. The imported goods are not permitted to be unloaded until an order has been passed by the proper officer granting entry inwards to such vessel under Section 31 of the Act. Section 32 of the Act provide that no imported goods required to be mentioned under the regulation of an import manifest shall be unloaded at any Customs Station except the permission of the Officer. 35. Under Section 34 of the Act, the imported goods shall not be unloaded from any conveyance except under the supervision of the proper officer. As per the proviso, the Board may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istant Commissioner of Customs or Deputy Commissioner of Customs], the person-in-charge of the conveyance shall be liable, - (a) in the case of goods loaded in a conveyance for importation into India or goods transhipped under the provisions of this Act, to a penalty not exceeding twice the amount of duty that would have been chargeable on the goods not unloaded or the deficient goods, as the case may be, had such goods been imported; (b) in the case of coastal goods, to a penalty not exceeding twice the amount of export duty that would have been chargeable on the goods not unloaded or the deficient goods, as the case may be, had such goods been exported. 41. The importer had claimed remission of duty under Section 23 of the Customs Act, 1962. It appears that the application for remission of duty was rejected by the concerned officer vide Order-in-Original RLC. No. 4/96-97-Refunds dated 16-4-1997. On further appeal, the importer was held eligible for remission of customs by Commissioner of Custom Appeals vide Order dated 16-12-1997. 42. Further, appeal to CEGAT was dismissed as without Jurisdiction. After refunding the amount to the importer, the present proceedings we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... However the survey report in question suffers from various deficiencies as discussed above and therefore, I find that it cannot permit the basis for settlement of this refund. 20. Even at the time of personal hearing, the importer has only reiterated that their refund claim is based on the Port Trust Certificate and the survey report. 21. They have further claimed that their overseas insurance company has settled their claim on the basis of the survey report. 22. However as discussed supra, the survey report itself is defective and therefore the insurance settlement based on the defective survey report is not of any help in conclusively establishing the storage of goods. 44. In the present case, the custody of the imported goods was with the Tuticorin Port Trust which is constituted under the provisions of the Major Port Trust Act, 1963. Tuticorin Port Trust was required to keep a record of such goods and send a copy thereof to the proper Officer of the customs. 45. There is a categorical finding in O.I.O. No. 4/97, dated 16-4-1997 of the Assistant Commissioner while rejecting the claim for remission of duty of the importer that a proper tally could not be made duri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance for home consumption. 54. Whereas, Section 116 of the Act applies only if any goods loaded in a conveyance for importation into India are not unloaded at the place of destination in India or where there is a failure to unload and the goods are not accounted for to the satisfaction of the Assistant Collector of Customs. Only under those circumstances, the person in charge of the conveyance shall be liable to a penalty. 55. Further, invocation of Section 116 of the Customs Act is not dependent on the outcome of the application for remission of customs duty of an importer. 56. If there was indeed short landing, the authorities ought to have initiated proceedings independent irrespective of the application for remission of Customs duty under the provisions of the Customs Act, 1962. 57. Therefore, invocation of Section 116 of the Customs Act, 1962 long after 9 to 10 years of the actual import and clearance of the goods by the importer cannot be countenanced. 58. Under these circumstances, the impugned order of the 1st respondent seeking to justify levy of penalty on the petitioner under Section 116 of the Customs Act, 1962 cannot be sustained and is therefore liable ..... X X X X Extracts X X X X X X X X Extracts X X X X
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