TMI Blog2012 (5) TMI 301X X X X Extracts X X X X X X X X Extracts X X X X ..... k Offshore LLC 2010 (260) ELT 397 (Bom.)]. 2. In adjudication of a show-cause notice, the Commissioner of Customs (Import) had confiscated a quantity of 3.6 MTs of diesel (found to have been smuggled) valued at Rs.1,16,187.82, under Section 111 of the Customs Act. As the said quantity of diesel had already been provisionally released against a bond and bank guarantee furnished by the appellant, a fine of Rs.50,000/- was imposed under Section 125 of the Act in lieu of confiscation thereof. The adjudicating authority also directed that duty of Rs.43,860.30 be paid on the said quantity of diesel by the appellant. Accordingly, the appellant was liable to pay the said amount of fine and the said amount of duty on 3.6 MTs of smuggled diesel. 3. The learned Commissioner also confiscated 147 MTs of diesel valued at Rs.47,44,336.35, but this confiscation was ordered under Section 120(2) of the Act. As the said goods had also been released provisionally against bond and bank guarantee, a fine of Rs.20 lakhs was imposed under Section 125 in lieu of confiscation thereof, with a direction for appropriation of the fine from the bank guarantee. No duty was required to be paid on the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esent appellant, this Tribunal upheld the confiscation of the vessel but set aside that of 147 MTs of diesel. The redemption fine in respect of the vessel was reduced to Rs.5 lakhs. Aggrieved by the adverse decision of this Tribunal, M/s. Seal Bulk Offshore LLC (present appellant) filed Customs Appeal No.30 of 2009 with the Hon'ble High Court which admitted that appeal on the following question of law:- "(i) Whether the order of the CESTAT in reducing fine of Rs. 1,00,00,000/- to Rs. 5,00,000/- while confirming the confiscation of the supply vessel M.V. Sea Bulk Toota is based on no evidence or partly relevant or partly irrelevant evidence and is otherwise perverse and arbitrary. (ii) Whether the order of the CESTAT in setting aside - 1. Fine of Rs. 50,000/- in respect of 3.6 MTs of smuggled diesel. 2. Duty of Rs. 43,860.30 and 3. Interest under section 28AB on the duty amount, after having earlier confirmed confiscation of the supply vessel M.V. Sea Bulk Toota, is based on no evidence or partly relevant or partly irrelevant evidence and is otherwise perverse and arbitrary. (iii) Whether the order of the CESTAT in setting aside fine of Rs. 20,00,000/- in respect of 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el, therefore, prays for setting aside the confiscation of 147 MTs of diesel and the fine of Rs.20 lakhs imposed in lieu of such confiscation. 10. The learned JCDR submits that, as per the provisions of Section 147 of the Customs Act, the Chief Engineer of the vessel should enter into the shoes of the owner of the goods and discharge the burden of proof laid down under the proviso to sub-section (2) of Section 120. The submission is that the Chief Engineer was, for all practical purposes, acting as agent of the appellant (owner of the goods). It is submitted that this Tribunal, in fact, held the Chief Engineer to be the agent of the appellant and that this finding has not been interfered with by the Hon'ble High Court. 11. In his rejoinder, the learned counsel submits that the earlier finding of the Tribunal on the relationship between the appellant and the Chief Engineer of the vessel was rendered in the context of applying the provisions of Section 115 of the Customs Act to the case in hand. The learned counsel particularly refers to sub-section (2) of Section 115 and points out that this provision of law separately refers to 'agent' of the owner of conveyance. As per this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, the appellant has heavily relied on certain instructions in the nature of do's and don'ts, which had been given to the crew of the vessel. We have seen the full text of these instructions available in the judgment passed by this Tribunal on 5.8.2008 in the earlier round. The relevant portions of the same instructions can be had from the Hon'ble High Court's judgment as well. These include instructions as to how to handle or otherwise deal with the stock of fuel in the bunkers of the vessel. With reference to these instructions, the learned counsel has argued that the appellant, as the owner of the vessel and the goods, cannot be held liable for the presence of smuggled diesel in the vessel. According to the counsel, the entire responsibility to ensure that such contraband is ruled out was on the Master of the vessel as well as the Chief Engineer. Per contra, the learned JCDR would submit that the Chief Engineer was also sharing the above responsibility with the owner and, therefore, the knowledge and belief of the Chief Engineer about the presence of smuggled diesel in the vessel would amount to similar knowledge and belief of the owner of the goods, which, in turn, will re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he owner (appellant) to take care of the full stock in the vessel, among other things. The above provision indicates that, when any person is authorised by the owner, whether expressly or impliedly, to be his agent in respect of the goods for any of the purposes of the Act, such person shall, without prejudice to the liability of the owner, be deemed to be the owner of the goods. It is true that the appellant was held by the Commissioner to be not liable for the alleged smuggling of diesel and that such finding of the Commissioner has not been set aside by this Tribunal or by the Hon'ble High Court. However, as it appears from Section 147(3) of the Act, the liability or otherwise of the owner of the goods will not affect the liability of the person expressly or impliedly authorised by him in respect of the goods for any of the purposes of the Act. In other words, the authorised person becomes the deemed owner of the goods by virtue of Section 147(3) of the Act. As rightly pointed out by the learned JCDR, the requirement of the owner of the goods to discharge his burden of proof under the proviso to Section 120(2) of the Act is one of the purposes of the Act in relation to the good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s.20 lakhs in respect of 147 MTs of diesel valued at over Rs.47.4 lakhs. He imposed a fine of Rs.50,000/- in respect of 3.6 MTs of smuggled diesel, which fine stands paid by the appellant. 17. We are concerned with the entire quantity of diesel (147 + 3.6 MTs). For the reasons we have already recorded, the confiscation of this quantity of diesel is liable to be upheld. A reasonable amount of redemption fine has now to be determined under Section 125 of the Act in lieu of this confiscation. Considering the fact that a major part of the above stock was legally acquired by the appellant and no duty thereon was demanded by the Revenue, and considering the attendant circumstances of the case, we are of the view that a fine of Rs.1,00,000/- will be fair and justifiable. After deducting the aforesaid fine of Rs.50,000/- already paid by the appellant, we direct them to pay the balance amount of Rs.50,000/- towards redemption fine under Section 125 of the Customs Act in lieu of confiscation of the entire quantity of diesel. 18. The impugned order will stand modified to the aforesaid extent in relation to the goods confiscated by the adjudicating authority. The appeal is disposed of with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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