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TMI Blog1986 (7) TMI 106X X X X Extracts X X X X X X X X Extracts X X X X ..... petitions at great length and, therefore, it would be convenient to deliver main judgment in these two petitions. 2. It would be appropriate to set out briefly the facts leading to filing of these two petitions. The petitioners - M/s Shaw Wallace Company Limited are a Company incorporated under the Companies Act, 1956 and carry on business as ship-owners' Agents in respect of their vessels arriving at Port of Bombay. The petitioners were agents in respect of a vessel M.T. "Al Khafji" and as such Agents were responsible for the discharge of the cargo from the said vessel and for complying with other formalities under the Customs Act. The said vessel had brought Aviation Gasolene for M/s Indian Oil Corporation Limited and the vessel arrived in Bombay in second week of April 1980. Aviation Gasolene was loaded on board the said vessel from the port of Mellini in Italy and the ullage report evidenced that the quantity was 2988.14 metric tonnes. Upon arrival of the vessel at Port of Bombay, the quantity on board was again measured and was certified to be 2973.5 metric tonnes. The quantity mentioned in the Bill of lading and load port quantity was 2988.878 metric tonnes and 2988.14 me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elt that the bills of lading and the out turn report are conclusive evidence and that evidence over-rides the ullage report and the port outturn. The order of the Deputy Collector is under challenge in Writ Petition No. 1236 of 1981. 4. M/s Shaw Wallace Company Limited were Agents in respect of Indian Flag vessel named m.v. "RATNA KIRTI" and the said vessel called at the Port of Bombay in third week of August 1981. The petitioners filed the requisite import general manifest dated August 21, 1981 with the Customs authorities setting out therein the cargo on board the vessel meant for discharge at Bombay. The vessel commenced discharge on August 22, 1981 and completed the discharge operations on August 30, 1981. The cargo, inter-alia, consisted of rolls of news-prints which were manifested under Items Nos. 8, 9, 11 and 31. The cargo is discharged and given into the custody and control of the Port Trust authorities as statutory bailees. The Port Trust Authorities at the time of discharge maintains a landing tally of the cargo and issues tally sheets mentioning therein the quantity of the cargo discharged. The cargo remained in the custody and control of the Port Trust authorities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded in dismissal by order dated April 18, 1984 passed by the Collector of Customs. The appellate authority took the view that short landing stand established by out turn report and out turn reports are treated as authentic and it is not permissible to investigate about the accuracy or otherwise of such report. The Collector also held that the Steamer Agents are a party to the out turn reports which are based on tally taken when the goods are discharged and if the goods were in possession of the Port Trust authorities in the capacity as the bailess, the out turn reports should be accepted as conclusive. The order of the authorities below is under challenge in Writ Petition No. 1354 of 1984. 5. Before adverting to the submission advanced to challenge the impugned orders in these two petitions, it is necessary to set out the relevant provisions of the Customs Act to appreciate the hardships which are faced by the ship agents, by the vessels and their owners, and the consignees in respect of import of goods in Bombay Port. The Bombay Port Trust is statutory authority constituted under the provisions of the Major Port Trust Act, 1963 and Section 28 of the Act enables the Board to mak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 45, inter-alia, provides that all imported goods unloaded in a customs area shall remain in the custody of such person as may be approved by the Collector of Customs until they are cleared for home consumption or are warehoused in accordance with the provisions of Chapter VIII. The custody of the goods unloaded is with the Bombay Port Trust authority which is constituted under the provisions of the Major Port Trusts Act. Sub-section (2) of Section 45 of the Act demands that the Port Trust authorities shall keep a record of such goods and send a copy thereof to the proper Officer. It also provides that the Port Trust authorities shall not permit such goods to be removed from the customs area except under and in accordance with the permission given by the Customs Officer. These Sections of the Act clearly indicate that a vessel carrying imported goods requires permission for landing at the Bombay Port and imported goods are required to be unloaded and given in the custody of the Bombay Port Trust authorities before clearance is granted to the consignees. The report which the Port Trust authorities forward to the Customs authorities under Section 45(2)(a) is known as Port out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thorities by holding auction. The learned counsel urged that it is not correct for the Customs authorities to claim that the fact of short landing would be ascertained only by reference to the out turn report and the Customs authorities would not bother to find out whether the goods were in fact unloaded from the vessel. There is considerable merit in the submission of the learned counsel. 7. The cargo which is imported in Bombay Port can conveniently be divided into five categories: (A) Liquid cargo in bulk, (B) Cargo brought in containers, (C) Dry bulk cargo, (D) General cargo, and (E) Hazardous cargo discharged in Barges and Lighters. Shri Makhija, learned counsel appearing on behalf of Bombay Port Trust authorities submitted that at the time of unloading of the cargo, the Port Trust authorities prepare tally sheets, also known as landing tallies, and in these sheets columns are provided for recording marks under which the goods are landed, the number of packages, the description of the goods, the weight and the remarks, if any. The goods which are unloaded : in torn or damaged conditions are set out in the remarks column. These , tallies are recorded at the wharf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t landed, the fact that certain goods are auctioned or stolen is not taken into account because that fact is not reflected in the out turn report, the said report merely setting out the cargo which was cleared by the consignees. Shri Bulchandani, learned counsel appearing on behalf of the Customs authorities, accepted that the Customs authorities proceed to levy penalty purely on the basis of the out turn report. Shri Bulchandani submitted that the provisions of sub-section (2) of Section 45 of the Act require the Port Trust authorities to forward report and the Customs Officer relies upon that report and declines to take into consideration any other material. Indeed, even in an enquiry for levy of penalty under Section 116, the person-in-charge of the cortveyance is not permitted to produce any evidence or to cross-examine the Officers of the Port Trust for challenging the accuracy of the out turn report. In these circumstances, Shri Venkiteswaran is right in his submissiosn that the ascertainment of short landing of goods is done without proper application of mind and the penalty is levied under Section 116 of the Act in an arbitrary fashion. 8. After detailed arguments and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s unloaded and seal is found broken. The Customs Officer and the Port Trust authorities should ensure that the container is re-sealed after completion of the surey reports of the contents. Any shortage noticed in such survey report will have to be accounted for by the carrier and the liability for such shortage will be solely of the carrier. (B) (b) L.C.L. Container (Less Container Load) (1) At the time of unloading of the L.C.L. container, if the seals are intact and again at the time of de-stuffing of the container, the seals are found intact, then the carrier should be responsible to account for the difference between the manifested quantity and the de-stuffing tally. (2) In case, the seals of the L.C.L. containers at the time of unloading are found to be intact, but are broken or tampered with at the time of de-stuffying, then the responsibility for difference between the manifested quantity and de-stuffying quantity would be that of the Port Trust authorities and not of the carrier. (C) Dry Bulk Cargo (1) In respect of dry bulk cargo, an independent survey report should be prepared by the carrier and the consignee and such report should be counter-signed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Customs Officer. (3) The boat note along with the tally sheet shall be the basis for ascertaining whether the cargo has been short landed and the guantum thereof. In case these guidelines are carried out by all the concerned parties both in its letter and spirit, then it is expected that much of the problems facing the Customs Officers, the Bombay Port Trust authorities, the shipowners and their Agents would be reduced, if not to tally eliminated. The Customs authorities and the Port Trust authorities are directed to carry out these guide-lines while ascertaining whether any cargo was short landed and whether the ship owners are liable for penalty for such short landing under Section 116 of the Act. 9. It is also necessary to give direction as to how the Customs authorities should deal with the proceedings commenced under Section 116 of the Act by service of show cause notice on the ship owners or their Agents. Shri Venkiteswaran complains that the Customs Officer who is exercising quasi judicial authority does not permit the persons served with show cause notice to lead evidence and the request for summoning witnesses is also turned down. It is obvious that the proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceeded to levy penalty on the ground that out turn report given by the Port Trust authorities is conclusive evidence and that conclusion is clearly erroneous. The Deputy Collector also accepted that the ship-owner had no control over the goods once it left its permanent hose connections, but inspite of it levied the penalty. In my judgment, the order of the Deputy Collector, Customs, cannot be sustained and the petition must succeed. 11. Accordingly, rule is made absolute in terms of prayer (a). In the circumstances of the case, there will be no order as to costs. The amount of penalty deposited by the petitioners with the Prothonotary and Senior Master in pursuance of the interim order passed by this Court to be refunded. The Prothonotary and Senior Master to act on minutes. 12. Turning to Writ Petition No.1354 of 1984, it is obvious that the impugned orders cannot be sustained. The Deputy Collector as well as the appellate authority had proceeded to levy the penalty only on the basis of out turn report submitted by the Port Trust authorities. The appellate authority felt that these out turn reports ae authentic and it is not possible to investigate into the accuracy of the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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