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TMI Blog1991 (5) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... carrying one Panasonic tape recorder, some cassette tapes and Rs. 1,370/- in Indian currency and those were seized by the Customs Officers. 3.The Customs Officers commenced rummaging of the vessel at 07.00 hrs. on 6-4-76 and it continued till 02.00 hrs. on 7-4-76. The Rummaging Officers on 7th April 1976 went inside the hatch No. 6 and requested the Chief Officer of the vessel to open the Tween deck which was found closed. The Officers further alleged that Chief Officer of the ship refused to cooperate and this aroused suspicion and three Customs Officers crawled through the manhole into the Tween-deck of starboard side. While searching through darkness of the Tween-deck they came across the hallow space of Samson post just below the blower where they found some bags hanging from a bock at a height and easily accessible. These bags with goods were recovered. The Officers also recovered four packages with goods hanging inside the hollow space of the Samson post. All these packages were dragged to the manhole of the Tween-decks and then lowered to the hatch by means of rope and brought outside the cabin allotted to Customs Boarding Officers. The packages were opened and found to co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 110 of the Act on 15-4-1976 for contravention of the provisions of Section 115(2) of the Act, in as much as it was used as a means of transport of smuggled goods recovered from its different parts in course of rummaging on 6th, 7th, 8th and 10th April 1976 respectively. The vessel was released provisionally on execution of a guarantee bond by the Great Eastern Shipping Company Ltd., petitioners herein as owners of the vessel, with a cash security of Rs. Ten lakhs. We may also mention that inspection of the Log Book maintained in the vessel revealed that this vessel was rummaged between 19-9-1975 and 27-9-1975 by the Customs Officers, Visakhapatnam and a lot of contraband goods including foreign liquor, cigarettes, N.P. Radio cassette recorders, N.P. cassette tape recorders, cassette tapes etc. were recovered and seized. This fact is not denied by the petitioners. They only state in reply to show case notice as follows : "The statement contained in paragraph 5 of the said notice are admitted. It is to be noted, however, that the Master, Shri H.K. Roy was not the Master of or no board the vessel on the voyage which took her to Visakhapatnam". 6.The Statement of Captain of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... details of the incident. 9.The master of the vessel Sh. H.K. Roy, the owner of the vessel M/s. Great Eastern Shipping Co. Ltd. and the agents M/s. International Clearing and Shipping Agency were called upon to explain in writing and to show cause within ten days from the date of the receipt of the notice why the vessel M.V. Jagadarshsn should not be confiscated u/s 115(2) of the Customs Act, 1962 and why a penalty should not be imposed on them u/s 117; Sh. H.K. Roy was also called upon to explain in writing and to show cause to the Collector of Customs and Central Excise why the goods should not be confiscated u/s 111(d), (e) and (f) of the Act and why penalty should not be imposed on him u/s 112. 10.The owners of the vessel, the Great Eastern Shipping Co. Ltd. replied to the show cause notice on September 10, 1976 wherein it was stated that the seized goods had been secreted in intricate and not easily accessible places so that their presence could not be detected in the course of the search that might be conducted and was in fact conducted by the Ship Officers on the directions of the Master. There was no basis whatsoever for the allegation that the Master had knowledge of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, Customs and Central Excise, Bhubneshwar, proceeded to decide the matter in the presence of the parties and the counsel. The Collector held that it was rather difficult to believe that the various kinds of goods in such huge quantity making a considerable bulk could have been taken on board and kept concealed in different parts of the vessel without the knowledge of the Master, as submitted by the petitioners in the reply to the show cause notice as well as at the time of personal hearing. The contention that since contraband goods were found in the cabin of two crew members who have both admitted about their possession, the goods now seized in this case must have also belonged to these two crew members was not accepted because the goods so recovered from the cabin of the two crew members were perfumes only. The Collector further concluded that it was surprising that when the Chief Officer who was supposed to have searched the vessel to find out contraband goods, if any, on board the vessel on 28th March 1976, which happens to be just one day, before the vessel was berthed at a Paradip Port, he did not even care to look into these places. These two crew members did not appear to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order-in-appeal dated 28-2-78/20-3-78 passed by the Central Board of Excise and Customs. The said application was rejected vide order dated 7/20-11-1979 and the same has been challenged before this court by the present proceedings. 15.The learned counsel for the petitioners has submitted that the onus cast on the petitioners and the Master of the vessel has been fully discharged in accordance with the provisions of Section 115(2) of the Act, in as much as notices had been displayed warning the members of the crew and the officers on board of the said vessel against smuggling. Furthermore, the Master of the vessel has been held by a Court of law not to have had any knowledge of nor being concerned about the smuggled goods and, therefore, no liability can be fastened on the petitioners. The impugned order is also sought to be attacked on the ground that the Master was expected to take only such precautions as a reasonable and prudent man should take and in the absence of rules to be framed u/s 115(2) of the Act, the said onus has been duly discharged. The owners as well as the Master of the vessel Shri. H.K. Roy had no knowledge of the concealment of the contraband. On the oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the conveyance and the Master in charge of the conveyance are required to take all precautions against the use of the conveyance for smuggling of goods and the precautions required are those specified in the rules. It is not in dispute that the Customs authorities had not framed any rules providing for precautions which are necessary to be taken by the owner and the Master of the conveyance for prevention of the smuggling of the goods. In absence of any rules, it is impossible for the Additional Collector to include that the owner or the Master had failed to take requisite pre-cautions in accordance with the Rules. The Additional Collector observed in his order that the Master failed to take all such precautions before the vessel entered the Indian territorial waters. In my judgment, in absence of any rules providing for certain set of precautions, it is impossible to direct confiscation of the vessel under sub-section (2) of Section 115 of the Customs Act, 1962 and the order of confiscation, therefore, required to be set aside." The Patna High Court in Commissioner of Income Tax, Bihar v. Gopal Vastralaya (supra) referred to the observations of Untwalia C.J. in CIT v. Patna Tim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uggled goods, as the case may be". The above said provision was amended and the words "and that each of them had taken all such precautions against such use as are for the time being specified in the rules" were deleted by a subsequent amendment in 1988. 19.The record of the case would indicate the following glaring facts : (a) The vessel in question was a cargo ship and there was no one on board except the Master of the vessel and the crew; (b) the search of cabins of two crew members S/Shri S.S. Fernandes and S.P.D. Costa, 220 pieces of perfumes which were not declared in the property list were recovered and seized by the Customs Officers; (c) there were intelligence reports collected by the rummagers that large quantity of contraband goods were released through fishing boat when the ship remained at roads on 9th and 10th April, 1976; (d) further inspection of the Log Book maintained in the vessel revealed that the vessel was rummaged between 10-9-75 and 29-9-75 by the Customs Officers, Visakhapatnam and a lot of contraband goods including foreign liquor, Cigarettes, N.P. Radio cassette recorders, N.P. Cassette tape recorders, cassette tape ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21.The judgments of the Bombay High Court are based on the facts and circumstances of those cases. We are unable to accept the contentions of the learned counsel for the petitioners that in the absence of rules any search conducted by the Master of the Vessel or other crew members should be acceptable by the Customs Authorities as correct. The test of a search conducted by a reasonable and prudent person varies on the facts of each case. The mere non-framing of rules under Section 115(2) cannot make any search as proper and reasonable. The Authorities are at liberty to determine the same on the facts of each case. Of course, as observed by the Patna High Court with which we agree, the standard of proof applicable to prove a positive fact and the one which is required to prove a negative fact cannot be the same. A high standard is always applied for the proof of a positive fact while the standard of preponderance of probability is sufficient to prove a negative fact. However, on the facts of this case we find it difficult to accept that the search conducted by the Master of the vessel met the requirement. The search as alleged to be conducted by the Master and the Chief Officer of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nowledge or connivance on the person concerned whose vessel is liable to confiscation. The same has not been discharged in the present case and the petitioners have failed to prove any such evidence on record. The ingredients of sub-section (2) of Section 115 are, therefore, fully satisfied. The burden of proving the requisite knowledge and the reason to believe u/s 112(b) is on the department or the prosecution while in respect of u/s 115(2) the burden is cast on the petitioners themselves. The acquittal of the Master of the vessel by the Magistrate of the charges u/s 135 of the Act does not follow that the vessel is not liable to confiscation u/s 115 of the Act. There is no infirmity in the order of the Revisional Authority and we see no ground to interfere in the same. 24.We also notice that the Board as well as the Revisional Authority have already moderated and reduced the fine to Rs. 1,40, 340/- which has been imposed in lieu of confiscation of vessel. The authorities have exercised their discretion and the same is just, fair and proper in the circumstances of the present case. There is no scope for further interference in the matter and no relief can be granted to the peti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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