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TMI Blog2002 (9) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to the scrap yard of Mukand Ltd. at Kalwa, Thane. There the scrap was removed from the containers, in order to be inspected for acceptance by Mukand Ltd. Before this inspection to be carried out, smoke was seen pouring out of one of the heaps of this scrap, followed by an explosion. Officials of Mukand Ltd. informed the local police and the supplier. The police called explosive expert. Under his supervision, bombs and shells which formed part of the consignment was separated. Col. Choudhary, explosive expert reported that some of these were merely empty cases and were harmless. Some others were defective because of malfunctioning or an absent fuse. The remaining contained both explosive substance as well as the fuse. The Customs department having been by this time involved, it came to the factory and detained both the shells and bombs segregated by the expert and remaining scrap and carried out investigation. This was followed by the notice issued to all parties, proposing confiscation of the entire scrap under Clauses (d), (f), (i), (l) and (m) of Section 111 of the Customs Act and penalties on the importer, and its employees, ITC and its employees, the Custom House Agent and o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will not apply. It is not easy to say whether the provision of Section 118 will apply. The scrap was brought in containers and its explosive material was only found after the scrap had been stuffed and piled into three heaps. There is therefore not enough material to say that each of the containers, assuming it to be "package" within the meaning of Section 118 of the Act contained any part of the explosive material and that therefore the other scrap contained in those containers was liable to confiscation. Of course, it will follow that some of the containers at least would have contained the explosive material. The quantum of explosive substance totally weighed 1.2 tons against total weight of scrap of 1298 tons. This amounts to a small percentage of the total. We have already noted the absence of intention to bring the explosive material that the Commissioner himself finds. Therefore, the scrap would not be liable to confiscation under Section 118. 5.The Commissioner in point of fact, does allege and find any intention on part of any one and accepts in various places in the order that there was no such intention. Thus he says, "It is true that the primary charge against the im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m another person. The Commissioner does not say what precaution the importer ought to have been taken in order to ensure that the scrap did not contain any explosive material. When once the importer has taken sufficient precautions by, way of insisting on inspection of the goods, we do not think that it can be blamed for the presence of these explosives. As we have noted the Commissioner repeatedly knowledges any absence of motive. He has also not said what precaution could have been taken by the importer. (If the suggestion that the importer should have been done. It is falsify to think of that suggestion. It is not practicable to think for any importer to examine the scrap and other material that it imports.) The importer had asked for inspection of the consignment by Lloyds, which the Commissioner accepts to be internationally reputed. The fact that the consignment was inspected not by Lloyds has passed on the task, is not by itself sufficient to conclude that Mukand Ltd. is guilty of acts or omissions which render it liable to penalty under Section 112 of the Act. We will deal later with the question as to whether its departure from the contract itself is sufficient to invoke t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to Dubai and evidence does not disclose that there was any tempering of goods enroute. In the impugned order the Commissioner finds as follows : The department has also not alleged any collusion between the parties to import any ammunition/explosives alongwith the heavy melting scrap. 10.The main argument of I.T.C. Global Holdings that, it relied with the contract of Lloyd's, the Commissioner seems to think that representative of I.T.C. Global must be present in the survey. This argument of the Commissioner may not be correct because inspection clause referred to above does not specifically state that the representative of I.T.C. Global should be present at the time of survey. The Clause XIII of the contract only provides for inspection should be conducted by the international surveyors Lloyd's Agent. The Commissioner's reference to existence of only one reputed International Agency, Yemen Insurance and Reinsurance Co., Aden and they have nominated Captain Ibrahim, fact that the goods have come from Aden to Dubai and Dubai to Bombay and there was no explosion of the material at Dubai could only show that what is possible was only done with the available material. Contract DO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n know that fact of the scrap was from the source of Iran Iraq war, when that is the question it could not be expected that the goods would be of a soft variety. The show cause notice does not provide for the procedure prescribed nor does it mention specifically that the procedure prescribed in Hand Book of survey maintained by Tata Tea Ltd. should be followed. Show cause notice does not mention violation of Section 46 of the Act inasmuch as how and in what manner the said provision has been violated. The appellants were not heard on that point. In the absence of the any allegation to that effect in the show cause notice the adjudicating authority could not have found the appellants have violated Section 46 of the Act. 13.The observation of the Commissioner that for knowledge awareness in Page 47 of the order were not reflected in the show cause notice. In the absence of the same in the notice it is difficult to sustain the findings mentioned in the impugned order as it violated principles of natural justice. We therefore hold in favour of I.T.C. Global Holdings and its employees. 14.The question is whether such negligence is enough to conclude that these were liable to penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Collector of Customs by Regulation 25(1) of the Custom House Agents Licensing Regulation, 1984, based on which it was to be charged on actual basis. Noticee No. 8 gave the said amount of Rs. 1,70,000/- @ Rs. 2,000/- per container for 85 containers to Noticee No. 9 for Customs clearance in cash and accordingly Noticee No. 9 submitted 18 handwritten vouchers between 4-2-94 to 25-2-94 showing cash expenses incurred at Up Departure Yard at Wadala for examination which was sanctioned by Noticee No. 8 whereas, in fact the last examination by Customs was completed on 14-2-94 and all the eighty five containers were cleared from Up Departure Yard between 4-2-94 to 16-2-94. The Commissioner has imposed a penalty on them for the reason that they facilitated the clearance of containers of scrap without subjecting the goods to proper examination by the custom officers involved. The Commissioner has made much of the fact that the this firm charged more to its customers for the clearance than was prescribed by the custom house. He has also noted that the time that was taken for destuffing the cargo and clearing it was entirely insufficient considering the quantity of the scrap that was invo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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