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TMI Blog2020 (3) TMI 1306X X X X Extracts X X X X X X X X Extracts X X X X ..... of goods by sea in ships carrying goods from any port in India to any other port whether in or outside India. Thus, the said Act is not relevant for considering whether the person-in-charge of the conveyance can state that the bill of lading quantities are not binding of vessels/conveyance or its master. Therefore, the arguments of the Learned Counsel for the petitioner on this ground cannot be entertained. Vessel is permitted to discharge liquid cargo only after a ullage survey is carried out under supervision of the Customs Officer and such survey report is signed not only by the Customs officer, but also by the ship-owner or/and the consignee and its agent - After the discharge of the liquid cargo from the vessel, a fresh survey is to be carried out in presence of the Customs Officer. The discharge completion survey report is to be signed by the Customs officer, ship-owner and the consignee or its agent - The difference in the Bill of Lading Quantity or the ullage Survey Report at the Port of loading with the ullage Survey Report at discharge port is to be treated as short landed quantity for the purpose of Section 116 of the Customs Act, 1962. From the reading of the j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntion on the part of the applicants. On this contention Govt. would observe that as per above finding short landing in the goods is established and the applicants failed to account satisfactorily for the said short landing in the impugned goods in terms of provisions of Section 116 r/w 148 of the Customs Act, 1962. Hence the applicants are liable for penalty under Section 116 of the Customs Act. At the same Govt. would observe that there is nothing on record that the applicants are intentionally or actively responsible to the said short landing in goods. Hence in interest of justice Govt. would reduce the penalty equivalent the amount of duty that would have been chargeable on the goods short landed or the deficient goods had such goods been imported. Govt. accordingly orders the original authority to re-calculate the amount of penalty in all the above eleven cases mentioned in the Annexure. 5.4. Regarding other pleadings Govt. would observe that other pleadings have already been examined by the Commissioner (Appeals) in the impugned order-in-appeal Govt. agrees with the findings and order of the Commissioner (Appeals), in this regard and accordingly upholds the same. 4. Purs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C24/29/99 6-6-05 ₹ 12,724 35 3. M.T. Coral Star 13-6-95 Propene 14-3-96 3-3-99 7,20,000 C24/30/99 6-6-05 ₹ 3,61,537 9 4. M.T. Coral Star 30-4-95 Propene 15-3-96 3-3-99 3,35,000 C24/31/99 3-6-05 ₹ 1,68,707 8 5. M.R. Coral Star 30-1-95 Propene 14-5-96 3-3-99 10,75,000 C24/32/99 6-6-05 ₹ 5,39,668 15 6. M.T.LPG/C Lady Elena 8-9-98 Propene 13-5-99 22-6-99 6,00,000 C24/58/99 6-6-05 ₹ 3,13,320 17 7. M.T. Virgo Gas 2-3-96 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to justify the imposition of penalty under Section 116 read with Section 148 of the Customs Act, 1962. 12. The 1st respondent has held that no survey report was prepared which was countersigned by the officer of the customs as per the guidelines of the Bombay High Court in Shaw Wallace and Co. v. The Assistant Collector of Customs, 1986 (25) E.L.T. 948 and therefore penalty under Section 116 of Customs Act, 1962 was justified. However, the 1st respondent ordered reduction of penalty. 13. It is submitted that the orders of the 3rd respondent gives no reason while re-quantifying penalty except for the calculations. 14. It is the contention of the Learned Counsel for the petitioner that adjudication orders were passed beyond five years from the date of discharge of the cargo in Sl. Nos. 2 and 11 of the Chart/Table to impose penalty under Section 116 of the Customs Act, 1962 and therefore they are liable to be quashed in the light of the decision/order dated 12-6-1995 of the Bombay High Court in Parekh Shipping Corporation v. The Asstt. Collector of Customs, 1995 (80) E.L.T. 781. 15. The Court further held that the bond should not be kept alive for all time to come and mus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17. The Learned Counsel also placed reliance on a recent decision of this Court rendered in the case of M/s. Transworld Shipping Services Private Limited v. Government of India, Represented by the Joint Secretary in W.P. No. 33139 of 2004, dated 10-1-2018 [2018 (361) E.L.T. 176 (Mad.)], wherein after considering the decisions cited above and few other decisions where show cause notices were issued beyond six years, orders were set aside by this Court. The Court observed as under :- 31. Thus, the Revenue cannot seek to distinguish the decisions referred to by the Learned Counsel for the petitioner, by contending that the show cause notice was issued well within the period of five years from the date of discharge. In my considered view, the time taken for adjudication is what important to be noted, and if the said time is reckoned, it has taken six years for the Authorities to complete the adjudication from the date of discharge, which is found to be unreasonable in all the decisions referred to above. The penalty, which was imposed by the Adjudicating Authority and confirmed by the Appellate Authority was twice the shortage. On revision, the first respondent/Government of India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs of the 3rd respondent were well reasoned and require no interference. He submits that short landing stands concluded as per the yardsticks/procedure prescribed by the Hon ble Bombay High Court in Shaw Wallace and Co. v. Asst. Collector of Customs, 1986 (25) E.L.T. 948 and the circular of the Central Board of Excise and Customs dated 27-12-2002, wherein, the view taken in the above case has been accepted by the Board and was followed. 22. I have considered the submissions of the Learned Counsel for the petitioner and the respondents. I have also perused the documents produced by the petitioner, affidavit filed in support of the writ petition and the counter affidavit filed by the respondents and the provisions of the Customs Act, 1962 and the case laws filed by the Learned Counsel for the petitioner. 23. In J.M. Baxi v. Govt. of India and Others in W.P. No. 24059 of 2009 vide order dated 4-12-2019, this Court has observed as under : 31. It may be useful to 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were discharged from the vessel and were transferred to the Port Trust. 52. 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 remission of customs duty was allowed to the importers under Section 23 of the Act. 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. 24. Before dealing with the penalty imposed under the above provision, I shall deal with the provisions of Indian Carriage of Goods by Sea Act, 1925. The Indian Carriage of Goods by Sea Act, 1925 was enacted in the background of International conference on Maritime law held at Brussels. The Statement of object to the said Act states that it recognise a long standing demand. Section 6 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt the goods actually received, or which he has no reasonable means of checking. 4. Such a bill of lading shall be prima facie evidence of the receipt by the carrier of the goods as therein described in accordance with paragraph 3 (a), (b) and (c). However, proof to the contrary shall not be admissible when the bill of lading has been transferred to a third party acting in good faith. 5. The Shipper shall be deemed to have guaranteed to the carrier the accuracy at the time of shipment of the marks, number, quantity, and weight, as furnished by him, and the shipper shall indemnify the carrier against all loss, damages and expenses arising or resulting from inaccuracies in such particulars. The right of the carrier to such indemnity shall in no way limit his responsibility and liability under the contract of carriage to any person other than the shipper. 6. Unless notice of loss or damage and the general nature of such loss or damage be given in writing to the carrier or his agent at the port of discharge before or at the time of the removal of the goods into the custody of the person entitled to delivery thereof under the contract of carriage, or, if the loss or damage be n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the caution uttered by Lord Atkin in Stag Line Ltd. v. Foscold [1932 Appeal Cases 328] about the importance of giving words in these rules their plain meaning, and not to colour one s interpretation by considering whether a meaning otherwise plain should be avoided if it alters the previous law. After stating that this caution would be well founded if the Act merely purported to codify the law, he went on to observe : But if this is the canon of construction in regard to a codifying Act, still more does it apply to an Act like the present which is not intended to codify the English law, but is the result (as expressed in the Act) of an international conference intended to unify certain rules relating to bills of lading. It will be remembered that the Act only applies to contracts of carriage of goods outwards from ports of the United Kingdom : and the rules will often have to be interpreted in the courts of the foreign consignees. For the purpose of uniformity it is therefore important that the courts should apply themselves to the consideration only of the words used without any predilection for the former law.... 13. The House of Lords was in that case interpreting certai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of destination in India, or if the quantity unloaded is short of the quantity to be unloaded at that destination, and if the failure to unload or the deficiency is not accounted for to the satisfaction of the [Assistant 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 transshipped 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. 31. The Bombay High Court in Shaw Wallace and Co. s case (supra) had devised a procedure to be adopted in the case of unloading of liquid cargo. As per the decision, the methods to be followed are as follows :- (A) Liquid Cargo in bulk : (1) The quantity shown in the Bill of Lading reflected i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agent. 35. The difference in the Bill of Lading Quantity or the ullage Survey Report at the Port of loading with the ullage Survey Report at discharge port is to be treated as short landed quantity for the purpose of Section 116 of the Customs Act, 1962. 36. The person-in-charge of the conveyance or its agent is responsible for short landing under Section 116 of the Customs Act, 1962. From the facts and circumstances of the present case, it is noticed that there is no survey report prepared as per the guidelines given in the above judgment of the Bombay High Court. It therefore appears that while allowing the unloading of the import cargo, the Customs officer had failed to follow the above procedure. 37. The method prescribed therein has also been later incorporated by the Central Board of Indirect Taxes in their Circular No. 96/2002, dated 27-12-2002. It has been clarified that in the case of all bulk liquid cargo imports, whether for home consumption or for warehousing, the show tank receipt quantity should be taken as the basis for levy of Customs duty pending provisional assessments [which] may be finalised accordingly. 38. In this case, the import had taken place b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e issuance of Show Cause Notice Date of Adjudication Penalty imposed as per 6 and upheld by Commissioner of Customs and Central Excise (Appeals) (Rs.) Appeal No. before the Appellate Authority Date and Amount of Penalty imposed as per consequential demand Period within which the Show Cause Notice from the date of arrival of ship (in Months) (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) 1 M.T. Lady Pauline 31-12-95 Propene 8-2-96 22-2-99 2,00,000 C24/28/99 6-6-05 ₹ 1,02,581 2 3 M.T. Coral Star 13-6-95 Propene 14-3-96 3-3-99 7,20,000 C24/30/99 6-6-05 ₹ 3,61,537 9 4 M.T. Coral ..... X X X X Extracts X X X X X X X X Extracts X X X X
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