TMI Blog2009 (2) TMI 635X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent. [Judgment per : Prabha Sridevan, J.]. - The Department has filed this appeal raising a question of law, which is wordy and long, but not clear. Therefore, the learned Senior Central Government Standing Counsel, Mr. Gurulingam submitted that he may be permitted to raise the following question of law for consideration and accordingly, he framed this question of law : Whether the mere fact that the Master of the Vessel or the owner of the Vessel was not shown to have been privy to the smuggling of contraband goods would be sufficient to exclude the operation of Section 115(2) of the Customs Act ? 2. The facts are as follows :- M.V. Tiger Bridge (hereinafter referred to as the Vessel ) was ordered to be confiscated under Section 115(2) of the Customs Act, 1962 (in short the Act ). M/s. Fargo Marine Co. Ltd. were the owners of the Vessel at the relevant point of time and Capt. Georgios Perivolaris was the Master of the Vessel. M/s. James Mackintosh and Company Pvt. Ltd. were the Indian agents of the owners. On 13-6-2001 at about 4.00 p.m., the police personnel In-charge of B-1 North Police Station, Chennai, intercepted a Mahindra Jeep with Registration No. TN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imposed personal penalties under Section 112(a) (b) of the Act. No penalty was imposed on the captain of the Vessel. It is against the order of confiscation that the owners of the Vessel went before the CESTAT. 3. The two members of the Tribunal differed with each other regarding the findings with regard to Section 115(2) of the Act and thereafter, the matter went before the third Member. The third Member came to the conclusion that there is no evidence that the smuggling of gold in question had taken place with the knowledge of the owners of the Vessel, the agents or the Master of the Vessel and therefore, the confiscation under Section 115(2) of the Act was ordered to be set aside. Against this, the Department has filed the present appeal. 4. Mr. Gurulingam, learned Senior Central Government Standing Counsel, submitted that the facts clearly show that the captain was involved. The statement of the captain that only these three persons could have engaged in the smuggling activity would clearly show that he had knowledge of the smuggling activity. The learned Senior Counsel submitted that the facts would show that there was a telex message received by the captain on 22-3-2001 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the knowledge or connivance of the owner himself, his agent, if any, and the person in charge of the conveyance or animal : Provided that where any such conveyance is used for the carriage of goods or passengers for hire, the owner of any conveyance shall be given an option to pay in lieu of the confiscation of the conveyance a fine not exceeding the market price of the goods which are sought to be smuggled or the smuggled goods, as the case may be. Explanation. - In this section, market price means market price at the date when the goods are seized. Certain words were omitted by Act 26 of 1988 with effect from 13-5-1988 and the said section, prior to that, read thus :- (2) Any conveyance or animal used as a means of transport in the smuggling of any goods or in the carriage of any smuggled goods shall be liable to confiscation, unless the owner of the conveyance or animal proves that it was so used without the knowledge or connivance of the owner himself, his agent, if any, and the person in charge of the conveyance or animal and that each of them had taken all such precautions against such use as are for the time being specified in the rules : Provided that where any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... captain had specifically reminded the crew of the telex message regarding smuggling and all gangway watch-keepers and deck duty officers were strictly instructed to control gangway access and to prevent unauthorised boarding. The captain also informed that if any persons approached any of the crew members, then the captain should be immediately informed. The true copy of the minutes of the Safety Meeting is also enclosed in the typed set of papers. 9. In the order-in-original, at paragraph 71, it is observed as follows :- 71. As regards M/s. James Mackintosh Co. Pvt. Ltd., it is clearly seen that they do not figure anywhere in the statements given by the staff of M/s. Moonlight Chandling and the crew of M.V. Tiger Bridge and as they had come into picture only at the time of executing a bond for the vessels and in the absence of any implication by the persons who admitted to have committed the smuggling it can be concluded that he had no role in this smuggling operation. As regards the vessel M.V. Tiger Bridge, the ratio envisaged in Mogul Line Ltd. v. Addl. Collector of Customs Bombay - 1982 (10) E.L.T. 397 (BOM.) does not apply as it is seen from the statements of the pers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atel and Mr. Khalasi admitted having transported the gold from Singapore and handing over to Mr. Rajan, Mr. Salim and Mr. Nabi. Thereafter customs officers asked Mr. Patel to identify the place of storage of 9 belts of gold carrying 900 bars. Mr. Patel stated that he stored the gold under his bed lower most drawers holes by removing the movable part of the drawer. He identified the place. He also stated that the gold belts were kept on the bed under the blanket just before delivery to Mr. Salim, Mr. Nabi and Mr. Rajan. Customs Officers further enquired and insisted Mr. Patel to show the place of storage of 9 belts of gold enroute to Singapore to Chennai. After initial hesitation Mr. Patel took custom officers to first crane near the fore peak at the top most movable portion were under the long electrical cables, there were hollow space. Mr. Patel confirmed that he transported 9 gold belts from Singapore to Chennai-hiding in those hollow spaces. The rooms of all the three employees of my Ship and hollow space were photographed by customs team. In this regard I would like to state that Mr. Patel was incharge of operating the crane and no other crane officers were generally visiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment since it is evident that there the owner could not prove that the contraband goods were used without his knowledge, whereas A.P. Moller Singapore Pvt. Ltd. v. Assistant Director, D.R.I., Bombay, 2004 (174) E.L.T. 156 (BOM.), cited supra, is directly on the point. There, the captain of the Vessel had stated that he had conducted inspection of the entire Vessel and thereafter, the vessel had been confiscated under Section 115(2) of the Act. The Bench of the Bombay High Court observed that the adjudicating authority purported to confiscate the Vessel on the ground that appropriate precautionary steps had not been taken. The Bench observed further in paragraphs 6, 7 and 8 as follows :- 6. It appears that the adjudicating authority purported to confiscate the vessel on the ground that appropriate precautionary steps had not been taken to prevent the smuggling of the goods on board the vessel. It is pertinent to note that prior to the amendment of Section 115 of the Customs Act with effect from 13th May, 1988, a vessel was liable to be confiscated even if it was proved that there was a lapse on the part of the owner to take appropriate precautionary steps. However, that provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... squarely applies to the present case. Here, after receiving the telex message, instructions had been given to all the gangway operators to be vigilant and the statement recorded from the captain does not indicate, as submitted by the learned Senior Central Government Standing Counsel, that he knew that these three persons were involved. He had clearly stated that he had no knowledge and that he was shocked when these three persons had indicated where they had concealed the goods and that he had stated that only they could have done it and no one else. This only means that the Captain had clearly stated that it was not with the complicity of any other crew member. This cannot and this does not mean that he knew that these three were involved. He has indicated his shock and surprise regarding the smuggling activity. He has also given a statement as to the steps he had taken to warn the crew and also told them if anyone approaches them, the crew has to inform the captain and the gangway operators have to be vigilant. 14. We are in entire agreement with the reasoning of the Bombay High Court in that case and we conclude that in the absence of a finding regarding the captain s or the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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