9911796707
TMI Blog1998 (7) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... f Section 111 of the Customs Act, 1962 (hereinafter referred to as `the Act'). The gunny bags, white cloth wrappings, wooden cases and the cartons which were used for keeping the seized goods were also confiscated under Section 118(1) of the Act. The vessel, MANSCO-3, containing the said goods was confiscated under Section 115(2) of the Act but the owner of the vessel was given an option to redeem it on payment of fine of Rs. 7,50,000/- within one month of the date of receipt of the said order and personal penalties were also imposed under Section 112 of the Act on respondent No. 2, the Managing Director of respondent No. 1 company (the owner of the vessel) as well as on the Master of the vessel and other persons. 2.In September 1982 408 packets were consigned from Dubai to Afghanistan via Karachi and were shipped to Karachi on the vessel `AMETHYST'. When the said vessel arrived at Karachi port the Government of Pakistan refused clearance of the consignment and the goods remained in transit shed at Karachi port. On April 25, 1983 the Central Board of Revenue of Pakistan allowed re-shipment of the goods back to Dubai. Thereafter the vessel, MANSCO-3, was sent from Dubai to Karachi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to come to the inner anchorage of Bombay harbour even before Bombay Port Trust charges were paid and without being escorted by the Port Trust Pilot and that there was a direction by the harbour pilot to go back to the outer anchorage. The 408 gunny packages bearing the markings `In Transit to Afghanistan via Karachi and Chamman' were found to contain VCRs, Video Cassettes, Car Cassette Players, textiles, TV sets. All these packages originated from Dubai and were valued at Rs. 56,21,320/- c.i.f. and Rs. 1,68,63,960/- (market value). The other packets found in the vessel contained ready-made garments, PVC pipes, footwears, aluminium utensils packed in 971 packings and were valued at Rs. 3,32,240/- c.i.f. and Rs. 9,96,720/- (market value) and the said goods originated from Pakistan. The Customs Officers recorded the statements of the Captain of the vessel as well as the representative of the local agents at Bombay. Since the Captain and the local agents did not take any steps to file the Import General Manifest and other documents for the purpose of voyage to Bombay, the Customs Officers seized all the 1379 packets found on board of the vessel. After completing the investigation Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom Dubai to Karachi and which were seized from MANSCO-3 by the customs authorities at Bombay port and were ordered to be confiscated. The said Writ Petition has been allowed by the High Court by the impugned judgment. Hence this appeal. 3.We have heard Shri M.S. Usgaonkar for the Union of India and Ms. A. J. Rana, the learned Counsel for the respondents. 4. As mentioned earlier, the orders passed by the Collector and the Tribunal, which have been quashed by the High Court, involve : (i) confiscation of the goods which were found in MANSCO-3 during the course of inspection of the vessel by the customs authorities on August 24, 1983 and had been seized; (ii) confiscation of the vessel, MANSCO-3; and (iii) Imposition of personal penalties on respondent No. 2, the Managing Director of respondent No. 1 company and on the Master of the vessel. 5. We will first take up the matter of confiscation of the goods. As indicated earlier, the goods were ordered to be confiscated in exercise of power conferred under clauses (d) and (f) of Section 111 of the Act which are reproduced as follows : "111. Confiscation of improperly imported goods, etc. - The foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort manifest or import report is in any way incorrect or incomplete, and that there was no fraudulent intention, he may permit it to be amended or supplemented." 8. Regulation 3 in the Import Manifest (Vessels) Regulations, 1971 (hereinafter referred to as `the Import Manifest Regulations') framed under Section 157 of the Act, as in force at the relevant time, required that the import manifest must be delivered in duplicate and should cover all the goods carried in a vessel and shall consist of :- (i) a general declaration in form I, (ii) a Cargo declaration in form II, (iii) a Vessel's Stores List in form III, (iv) a list of the private property in the possession of the Master, Officers and crew in form IV. 9.In Regulation 5(1) of the Import Manifest Regulations it was provided that the cargo declaration shall be delivered in separate sheets in respect of each of the following categories of cargo, namely, (a) cargo to be landed, (b) Unaccompanied baggage, (c) goods to be transshipped, and (d) same bottom or retention cargo. 10.The Collector held that the seized goods had been imported into India without an import licence and hence in co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is satisfied that the Import Manifest is in any way incorrect or incomplete and that there was no fraudulent intention. The Collector, however, rejected the said contention on the view that there is nothing on record to show that the Master of the vessel MANSCO-3 or its agents in Bombay at any time filed the manifest or they had at any time made a request for being permitted to file the manifest and that in the absence of the manifest the question of request being entertained for amending or supplementing the manifest under Section 30(3) of the act does not arise. 12.While dealing with the contention based on the provisions of Section 30(3) of the Act, the Collector considered the question whether the voyage of the vessel MANSCO-3 to Bombay was bonafide and found that the said voyage was not bonafide having regard to inconsistencies in the statements of the Master of the vessel and the other crew members and the agents of the owner regarding the purpose of the visit of the vessel to Bombay. It was pointed out that Aabdul Khatri in his statement had said that he received a telex from the owners of the vessel from Dubai asking him to proceed to Bombay to take 125 tons cargo for Du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on board the vessel, this equipment went out of order only when the vessel was about 100 to 150 nautical miles from Bombay. The Collector held that the voyage of the vessel MANSCO-3 from Karachi to Bombay was neither to have the radar and V.H.F. equipments repaired, nor was it for lifting 100 to 150 tons of cargo from Bombay as stated by the Captain and that the real purpose of the visit of the vessel MANSCO-3 to Bombay was known only to the owners of the vessel at Dubai, the agents at Karachi and Mohamed Yousuf Abdulla who were in constant touch with each other over telephone and through telex and that it could not be said that the voyage was bonafide and there was no fraudulent intention. In this context, the Collector pointed out that in order to make the voyage look bonafide a large number of cartons containing very cheap quality of goods of Pakistani origin which could not have any market in Dubai were also placed on board the vessel and the packages containing electronic goods and textiles which bear markings to show that they were in transit to Afghanistan were kept hidden below the packages containing cheap quality Pakistani goods. The Collector also referred to the fact t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eting Customs, Health and Immigration formalities, on a fishing craft in a manner which is highly irregular from the customs angle since instances of lakhs worth of precious metal being smuggled by people by carrying it on their person are not uncommon and that these two crew members after contacting Mohammed Yousuf Abdulla disappeared and remained away from the vessel for quite some time. Having regard to the aforesaid facts and circumstances, the Collector recorded the finding that the intentions of the owners of the vessel MANSCO-3, the Captain and the agents, including Mohammed Yousuf Abdulla, were fraudulent and, therefore, the question of exercising the discretion for extending the period for filing the import manifest as provided under Section 30(1) of the Act or for considering amendment or supplementation of the manifest would not arise even if a request would have been made for such extension of the time limit for filing of the manifest or for its amendment. 15.The Tribunal, while confirming the order of the Collector regarding confiscation of goods under clauses (d) and (f) of Section 111 of the Act, has considered the evidence that was produced before the Collector. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has pointed out that the explanation offered by the Captain was that he was under the belief that customs formalities would be attended to by the local agents, while Ramesh Shah, one of the Directors of the local agents, had stated that since no cargo was to be unloaded he thought it was not necessary to file the Import General Manifest and has held that the Captain was an experienced Captain who knew his responsibilities and on earlier voyage he did file a `NIL' manifest at another port and in his statement recorded on September 2, 1983 the Captain had stated that he was aware that the manifest has to be delivered to the customs immediately when the vessel enters the customs area even if the vessel comes in Ballast and that, therefore, there was no good reason for the Captain to be under the impression that the agents would attend to the customs formalities and that the explanation of Ramesh Shah that no Import General Manifest was required to be filed because no cargo was to be unloaded at Bombay was also not based on any reasonable ground. The Tribunal rejected the contention based on clause (b) of the proviso to sub-section (1) of Section 30 of the Act on the view that not only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso observed that admittedly the goods were prohibited goods which required import licence to import into India and admittedly no such import licence was obtained and that there had been violation of the Import and Export (Control) Act, Import (Control) Order and the provisions of the Act. 18.The High Court, while exercising its jurisdiction under Articles 226 and 227 of the Constitution, has reversed the concurrent findings of fact recorded by the Collector and the Tribunal regarding the avowed purpose of the voyage of the vessel MANSCO-3 from Karachi to Bombay, viz., picking up additional cargo and repair of Radar. Disagreeing with the findings recorded by the Collector as well as the Tribunal, the High Court has accepted the explanation offered by the owners and the master of the vessel MANSCO-3 for its coming to Bombay from Karachi. The High Court has held that there was nothing to show that there was any fraudulent intention on the part of the owners of the vessel, the Captain and the agents at Karachi in the vessel MANSCO-3 coming to Bombay from Karachi. 19.Shri Usgaonkar has assailed the said view of the High Court and has urged that in interfering with the findings of f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arrived at by the fact finding bodies, the Tribunal or the statutory authorities, on the facts, found that cumulative effect or preponderance of evidence cannot be interfered with where the fact finding body or authority has acted reasonably upon the view which can be taken by any reasonable man, courts will be reluctant to interfere in such a situation. Where, however, the conclusions of the fact-finding authority are based on no evidence then the question of law arises and that may be looked into by the courts but in the instant case the facts are entirely different. [pp. 9, 10] 21.In the present case, the Collector as well as the Tribunal, after carefully considering the evidence produced during course of the proceedings, arrived at the conclusion that the explanation offered by the owners and master of the vessel MANSCO-3 for voyage of vessel from Karachi to Bombay, namely, to pick up additional cargo at Bombay and to get the Radar and V.H.F. equipment repaired at Bombay was unacceptable. Reversing the said view the High Court has accepted the said explanation. The explanation that the vessel MANSCO-3 came to Bombay to pick additional cargo was rejected by the Collector as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mohammed Yousef having promised to arrange for the cargo at Bombay does not find support from the telex received at the office of the agents at Bombay on August 16, 1983 from Dubai and it is belied by the fact that no cargo was available at the Bombay port for loading on the vessel when it arrived at Bombay. Similarly, as regards repair of Radar and V.H.F. equipment the Collector and the Tribunal have found that the Radar was not functioning when the vessel left Dubai and that it had been repaired at Karachi and that the V.H.F. equipment was working till the vessel reached about 100 to 150 nautical miles from Bombay port which shows that repair of Radar and V.H.F. equipment could not be the reason for the vessel MANSCO-3 proceeding to Bombay from Karachi. The High Court, while accepting the explanation that one of the reasons for the vessel to proceed to Bombay was to have the Radar and V.H.F. equipment repaired at Bombay, has laid stress on the fact that at the time when the vessel reached Bombay V.H.F. equipment was not working and that two mechanics were taken to the vessel for repairing of Radar and V.H.F. equipment. The fact that the Radar and V.H.F. equipment had to be repa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hin the Indian customs water for the purpose of being imported contrary to any prohibition imposed by or under the Act or any other law for the time being in force. If it is found that any goods have been imported or attempted to be imported or brought within the Indian customs water for the purpose of being imported contrary to any prohibition imposed by or under the Act or any other law for the time being in force the said goods would be liable to confiscation under Section 111(d) and the question whether the person importing or bringing the said goods intended to commit violation of the provisions of the Act or any other law for the time being in force would be of no consequence. Similarly, clause (f) of Section 111 provides for confiscation of any dutiable or prohibited goods which are required to be mentioned under the regulations in any import manifest or import report and which are not so mentioned therein. In the matter of confiscation of goods under Section 111(f) what is required to be seen is whether the goods are dutiable or prohibited goods and are required to be mentioned in the import manifest or import report under the regulations made under the Act and whether they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essel MANSCO-3 had arrived at the outer anchorage of the Bombay Port on August 20, 1983. The outer anchorage is a part of the Bombay Port. This would show that the vessel MANSCO-3 had arrived at the customs port of Bombay on August 20, 1983. In view of Section 30(1) of the Act the Import General Manifest should have been delivered within twenty four hours of the arrival of the vessel at the outer anchorage on August 20, 1983. The High Court was in error in holding that the vessel would be treated to have arrived at the customs port of Bombay on August 23, 1983 after the Bombay Port Trust charges had been paid and the signal had been given for the vessel to be brought into the inner anchorage on or after August 23, 1983. Proviso (b) to sub-section (1) of Section 30, which empowers the proper officer to accept the import manifest or import report at any time after the expiry of the period of twenty four hours if he is satisfied that there was sufficient cause for not delivering the import manifest or import report or any part thereof within twenty four hours after the arrival of the conveyance, has no application in the present case because the Collector as well as the Tribunal have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to the owners of the cargo since the local agents have no concern whatsoever with the owners of the cargo. Section 124 of the Act reads as follows :- "124. Issue of show cause notice before confiscation of goods, etc. - No order confiscating any goods or imposing any penalty on any person shall be made under this Chapter unless the owner of the goods or such person :- (a) is given a notice in writing informing him of the grounds on which it is proposed to confiscate the goods or to impose a penalty; (b) is given an opportunity of making a representation in writing within such reasonable time as may be specified in the notice against the ground of confiscation or imposition of penalty mentioned therein; and (c) is given a reasonable opportunity of being heard in the matter : Provided that the notice referred to in clause (a) and the representation referred to in clause (b) may at the request of the person concerned be oral." 29.Shri Usgaonkar has urged that confiscation of goods under Section 111 of the Act is in the nature of a penalty in rem which attaches to the goods and is distinct from personal penalty that can be imposed under Section 112 of the Act which is a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ] By way of illustration the Court has referred to a case "where the offender (the smuggler, for example) is not known, but the goods in respect of which the contravention has taken place are known and have been seized". 31.Similarly, in the case of D. Bhoormall (supra) this Court, while considering the provisions of Section 167(8) of the Sea Customs Act, 1878, has pointed out that proceedings for confiscation of contraband goods are proceedings in rem and the penalty of confiscation is enforced against the goods irrespective of whether offender is known or unknown and it is not necessary for the customs authorities to prove that any particular person is concerned with their illicit importation or exportation and it is enough if the department furnishes prima facie proof of the goods being smuggled stocks. It was observed that the second kind of penalty which is enforced against the person concerned in the smuggling of the goods is one in personam and in the case of the said penalty the Department have to prove further that the person proceeded against was concerned in the smuggling. It was held that ``goods found to be smuggled goods can, therefore, be confiscated without proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of goods ordered to be confiscated cannot be said to have suffered any prejudice in a case where notice has been given to the person responsible for the alleged contravention on which the order for confiscation of goods is founded and who alone is in a position to offer an explanation for such contravention. The requirement regarding issuing of notice to the owner of the goods under Section 124 cannot, therefore, be construed as a mandatory requirement so as to have the effect of invalidating an order. An order of confiscation would not be rendered invalid if there is substantial compliance with the requirements of Section 124 in the sense that before passing an order of confiscation a notice has been given either to the owner of the goods or a person who is responsible for the contravention on which the order for confiscation of goods is founded and who alone is in a position to offer an explanation for such contravention. 34.In the present case, Show Cause Notices dated December 31, 1983 were issued by the Assistant Collector of Customs, R. I., Bombay, to M/s. Mustafa Najibai Trading Co., Dubai, respondent No. 1, the owners of the vessel, MANSCO-3, Nuruddin Mustafa, respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctions 111(d) and 111(f) of the Act. Since the owners of the goods were not present on the scene and had no personal knowledge, they could not offer an explanation other than that offered by the owners of the vessel, the Master of the vessel and the local agents of the owners of the vessel at Bombay. In the circumstances, it cannot be said that the failure to issue a notice under Section 124 to the owners of the goods has resulted in any prejudice to the owners of the goods that have been ordered to be confiscated and such failure cannot, therefore, be a ground for setting aside the order of confiscation of goods passed under Sections 111(d) and 111(f) of the Act. We are, therefore, unable to uphold the impugned judgment of the High Court setting aside the order for confiscation of the goods passed under Sections 111(d) and 111(f) of the Act. 35.The order of confiscation of the vessel MANSCO-3 was passed under Section 115(2) of the Act. At the relevant time, Section 115 provided as under:- "115. Confiscation of conveyances. - (1) The following conveyances shall be liable to confiscation :- (a) any vessel which is or has been within the Indian customs water, any aircraft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ected to proceed to Bombay was to lift the said additional cargo and also to have the Radar and V.H.F. equipment repaired. We have already considered the said aspect of the case while dealing with the matter of confiscation of the goods and have held that the said finding of the High Court cannot be upheld. The High Court has set aside the confiscation of the vessel also on the ground that no notice was issued to the owners of the vessel under Section 124 of the Act. In this regard, it may be stated that the Show Cause Notice dated December 31, 1983, indicates that the said notice was issued to Mustafa Najibai, respondent No. 2, on behalf of respondent No. 1, the owners of the vessel, as well as to Abdul Rahim Khatri, the master of the vessel and the promoter and the two directors of M/s. Regent Shipping and Trade Pvt. Ltd., the agents of the owners of the vessel at Bombay. Respondent No. 1, the owners of the vessel, had full knowledge of the said Show Cause Notice because a reply to the said notice was filed on their behalf as well as on behalf of respondent No. 2 and they had contested the proceedings before the Collector. In these circumstances, we are of the view that the order ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
