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TMI Blog1998 (4) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... e impugned judgment of the High Court. The appeal is accordingly allowed, the impugned judgment of the Division Bench of the High Court is set aside and the judgment of the learned Single Judge is restored. - 2971A of 1986 - - - Dated:- 21-4-1998 - S.C. Agrawal, S. Rajendra Babu and A.P. Misra, JJ. [Judgment per : S.C. Agrawal, J.]. - This appeal raises a question relating to interpretation of clause (e) of sub-section (1) of Section 115 of the Customs Act, 1962 [hereinafter referred to as `the Customs Act'] which provides for confiscation of "any conveyance carrying imported goods which has entered India and is afterwards found with the whole or substantial portion of such goods missing unless the master of the vessel or aircraft is able to account for the loss of, or deficiency, in the goods". 2. M/s. India Steamship Company Limited, the appellant herein, [hereinafter referred to as `the appellant-company'] was the owner of the sea-going vessel known as `M.V. Indian Resolve'. On its voyage from United Kingdom Continental ports to Calcutta Port it touched the ports at Bombay, Colombo, Madras and Visakhapatnam. The ship was carrying cargo imported for delivery at differ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confiscated under Section 115(1)(e) and why penal action should not be taken under Section 112 of the Customs Act. The appellant- company submitted a reply to the said notice wherein the shortage of 45,000 cigarettes was not disputed but it was contended that the shortage was inconsequential compared to the value of the entire imported cargo carried by the vessel and, therefore, Section 115(1)(e) was not attracted. It was pointed out that the imported goods scheduled to be unloaded at the Port of Calcutta consisted of 847 tonnes iron and steel, 200 tonnes of carbon blocks and plates, 6 tonnes of milk powder, 976 tonnes of machinery, spare parts, equipments and other general cargo and as compared to the cargo to be unloaded the missing goods, namely, 45,000 cigarettes, were inconsequential and insignificant. The Additional Collector of Customs, by order dated August 23, 1975, held that the terms "substantial portion" in Section 115(1)(e) referred to the value of the missing goods in themselves and that 45,000 cigarettes was substantial portion of the imported goods carried by the vessel and the amount of duty leviable on the missing quantity is more than Rs. 31,000/- and he, therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orted goods, cannot be punished by confiscation of the vessel itself even though smuggling of 3 gold bars has taken place. We do not think that this was or could have been the intention of the legislature. In our opinion if a vessel has imported different items or varieties of goods and if either the whole or substantial portion of one of the items or varieties be found missing, the Customs authorities would be entitled to invoke Section 115(1)(e). If we do not adopt this interpretation, we shall not be giving effect to the object the legislatures had in view, namely, the prevention of smuggling." Feeling aggrieved by the said judgment the appellant-company has filed this appeal. 3. Shri Dipanker Gupta, the learned Senior Counsel appearing for the appellant-company, has urged that the expression "substantial portion" in Section 115(1)(e) of the Customs Act must be construed to mean substantial portion of the goods which have been imported in the vessel. The submission is that the learned single Judge was right in proceeding on that basis and that the Division Bench of the High Court was in error in reversing the said view of the learned Single Judge. It has been contended that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l portion of such goods" refer to the goods which have been imported in the vessel and, therefore, the said expression must be construed as referring to the whole or substantial portion of the goods which have been imported in the vessel. This means that what should be found missing is the whole or substantial portion of the goods that have been imported in the vessel. The learned Judges on the Division Bench of the High Court have pointed out that a difficulty may arise in ascertaining whether the substantial portion of goods is missing by giving an illustration where 100 tonnes of wheat and 4 gold bars were imported in a vessel and out of the 4 gold bars 3 gold bars were found missing and have observed that in such a case if we go by the quantity of the imported goods the owner of the vessel cannot be punished by confiscation of the vessel itself even though smuggling of 3 gold bars has taken place and that this could not have been the intention of the legislature. In our opinion, the said illustration does not pose any difficulty because the expression "substantial portion of such goods" in Section 115(1)(e) has been used to mean substantial portion of the goods that have been i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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