TMI Blog1984 (9) TMI 292X X X X Extracts X X X X X X X X Extracts X X X X ..... rd of Excise and Customs, by which it confirmed the Order-in-Original bearing No. S/14-5-5/78 Pint., dated 29-7-1979 passed by the Additional Collector of Customs (Preventive), Bombay, by which he imposed a personal penalty of ₹ 20,000/- on the appellant Shri A.L. Fernandez, Master of the vessel M.V. Akbar under Section 112 of the Customs Act, 1962. 3. The Appeal 260/80 arises out of the Order-in-Appeal bearing Nos. 309A-310A of 1979 passed by the Central Board of Excise and Customs by which the Board confirmed the Order-in-Original bearing No. S/14-4-547/78, dated 3-4-1979 passed by the Additional Collector of Customs (Preventive), Bombay, by which he imposed a personal penalty of ₹ 10,000/- on the second appellant, Shri U.N. Padwal, Master of the vessel and directed confiscation of the vessel M.V. Marjan belonging to the first appellant but gave an option to the first appellant to redeem the same on payment of a fine of ₹ 1,00,000/-. 4. The Appeal 325/80 arises out of Order-in-Appeal Nos. 317A-318A/79 of 1979, dated 30-11-1979 passed by the Central Board of Excise and Customs, by which it confirmed the Order-in-Original bearing No. S/14-4-736/79, Pint, dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but confirmed the order of confiscation of the vessel M.V. Al-Loulouah and fine in lieu of confiscation of ₹ 20,000/-, passed by the Additional Collector of Customs (Preventive), Bombay vide his Order-in-Original bearing No. S/14-4-528/78 Pint., dated 24-1-1979. 8. The Appeal 335/80 arises out of the Order-in-Appeal bearing Nos. 329A-330A of 1979 passed by the Central Board of Excise and Customs dated 30-11-1979 by which it confirmed the order of the Additional Collector of Customs (Preventive), Bombay in Order-in-Original bearing No. S/14-4-168/79 Pint., dated 23-4-1979, by which the Addl. Collector directed confiscation of the vessel M.V. AL-Loulouah but gave an option to the first appellant, M/s. Al Jassim Shipping Agencies, Kuwait to redeem the same on payment of a fine of ₹ 20,000/-, and also imposed a personal penalty of ₹ 3000/-, on the second appellant Shri K.S. Contractor, Master of the vessel. 9. The Appeal 352/80 arises out of the Order-in-Appeal Nos. 325A-326A, dated 30-11-1979 passed by the Central Board of Excise and Customs, by which it confirmed the Order-in-original bearing No. S/14-4-787/78 Pint., dated 18-5-1979 passed by the Additional C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssette recorder, cassette tape recorders, transistors, electronic calculators, sewing machines, microphones, textiles, toys, cameras, perfumes etc. of foreign origin totally valued at ₹ 83,878/-CIF and ₹ 2,51,634/- M.V. The said goods were seized on the reasonable belief that they were unauthorisedly imported into India. After investigation, a show cause notice was issued to the owners as well as the Master of the vessel calling upon them as to why the vessel should not be confiscated under Section 115(2) of the Customs Act and why personal penalty should not be imposed on the Master for non-declaration of the seized goods. After consideration of their reply and after giving personal hearing, the Additional Collector ordered confiscation of the seized goods and imposed a personal penalty for non-declaration under Section 30 of the Customs Act on the Master and also ordered confiscation of the ship but allowed redemption on payment of a fine of ₹ 1,50,000/-. Feeling aggrieved the appellants preferred appeals before the Board unsuccessfully. Thereafter, they filed revision applications which statutorily stood transferred to this Tribunal for being heard as an appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d side of the engine room, airtrunking Kasab stores under the tool racks in kasab stores and in the officers smoke room-cum-dining saloon. Inside the gunny bag the officers of Customs noticed one tin which contained some wrist watches and watch straps. The cloth bundle and the polythene bags contained cigarettes, transistor, radios, textiles, cassette tapes, electronic battery cells of foreign origin. In all the officers found goods of the value of ₹ 46,607 cif and ₹ 99,261/-M.V. The officers continued the search on 22-8-1978 in the presence of the Chief Officer and Second Engineer. During the search they found another gunny bag containing wrist watches and watch straps concealed in the airvent pipe on port side of the engine room. They further found one cloth bundle containing 4 wrist watches ; a pocket transistor and 3 cartons of cigarettes concealed above the air trunking in the air-conditioning plant on the boat deck. On further examination of the gunny bag and cloth bundles they found 112 pcs. of wrist watches, 200 cigarettes each in 3 cartons and one pocket transistor of foreign origin in all valued at ₹ 17,567/- cif and ₹ 35,229/- M.V. On 23-8-1978, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revision application which statutorily stood transferred to this Tribunal for being heard as an appeal. 18. Appeal 332/80 : On 14-10-1978 on an information, the officers of the Rummaging Division boarded the vessel M.V. Vijaya Vasant and conducted a search which resulted in the recovery of watches, cassette tapes, cigarettes, transistors, etc., of foreign origin of the value of ₹ 2,572/-cif and ₹ 5,853/- M.V. concealed in a drum box. The rummaging officers again boarded the ship on 18-10-1978 and searched the Poop Dect and the ventilator of the crew gaily. The officers noticed a number of small cartons concealed therein. They also noticed a number of small cartons and loose cassette tapes concealed beneath the wooden crate containing the coal. They further found one paper packet containing wrist watches concealed in the hallow spare of the capstan at the extreme aft of the ship and in the hallow pipe nearby. Search of the said bags and packets resulted in the recovery of goods of foreign origin totally valued at ₹ 8,746/- cif and ₹ 23,346/- M.V. On 19-10-1978 the rummaging officers again search the said vessel. They found 8 small cartons and cassette tap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssel. Feeling aggrieved the owners M/s. Al-Jassim Shipping Agencies, Kuwait preferred an appeal before the Board unsuccessfully and thereafter filed a revision application before the Government of India which statutorily stood transferred to the Tribunal for being heard as an appeal. 21. Appeal 335/80 : On 21-2-1979, the officers of Customs House, Bombay boarded the vessel M.V. Al-Loulouah and searched the vessel. During the search they found two polythene wrapped bundles concealed underneath mooring rope coil at the stern of the vessel. The bundle contained 90 pcs. of wrist watches of foreign origin valued at ₹ 11,250/- cif and ₹ 22,500/- M.V. After investigation show cause notices were issued to the owners of the vessel. Master and agents of the vessel as well as to the Chief Officer of the vessel. After considering their replies and after personal hearing, the Addl. Collector of Customs ordered confiscation of the vessel but gave an option to redeem the same on payment of a fine of ₹ 20,000/-. He also imposed a personal penalty of ₹ 3,000/- on the Master but refrained from imposing any penalty on the others. Feeling aggrieved the owners as well as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 29,544/- M.V. After completion of the investigation, show cause notices were issued to the owners, Master and also to two others. After consideration of their replies and after giving personal hearing, the Addl. Collector (Preventive), Bombay ordered confiscation of the vessel but gave an option to the first appellant to redeem the same on payment of a fine of ₹ 20,000/-. He also imposed a personal penalty of ₹ 5,000/- on the second appellant. Feeling aggrieved the appellants preferred two appeals before the Board unsuccessfully. Thereafter, they filed one Revision Application before the Central Govt. which statutorily stood transferred to this Tribunal for being heard as an appeal. 25. Shri N.P. Jagasia, learned Advocate who appeared for the appellants in all the above appeals contended that the Additional Collector ordered confiscation of the vessels holding that they were used as a means of transport in the smuggling of goods and that the owners and the Masters of the ship have not adduced positive evidence that the vessels were not so used without the knowledge or connivance of the owners or the Masters and that they had failed to discharge the burden of pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove a negative fact. Shri Jagasia further submitted that neither the Additional Collector nor the Board had recorded a finding that either the owner or the agent had the knowledge that the vessels were used as a means of transport in the smuggling of contraband goods or used in the carriage of the smuggled goods. There was not even a finding by the Additional Collector or by the Board that the master or the owner of any of the vessels had knowledge of the existence of the contraband goods in the vessel. Shri Jagasia further submitted that the master had stated that he had taken all reasonable precautions to prevent smuggling by the crew members and others and he had even conducted search and had made entries in the log book. Thus, established that reasonable precautions were taken by the master. There was no contra evidence that the master did not warn the crew members and others against the act of smuggling or that he did not conduct the search of the vessel. The Customs Authorities had recorded the statements of the crew members. None implicated the master either in the act of smuggling or in the carriage of the smuggled goods. In the said circumstances the master is deemed to ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of various vessels involved in these appeals may be set aside. 26. In support of his contention that in the absence of the rules prescribing the precautions required to be taken by the owner and the master, they are not required to take any precautions, Shri Jagasia relied upon certain decisions of the Bombay High Court to which we shall make reference later. Shri Jagasia also relied upon certain decisions of the Bombay High Court to fortify his contention that the owner and the master are not required to adduce positive proof regarding the absence of knowledge and connivance. Finally, Shri Jagasia submitted that the Additional Collector as well as the Board had committed a grave error in holding that the masters of the vessels were required to declare the smuggled goods in the manifest and failing to declare the smuggled goods carried in their vessels amounts to violation of the provisions of Section 30, and, therefore, the masters are liable for penalty under Section 112. Shri Jagasia contended that the declaration contemplated under Section 30 of the Customs Act is in respect of the goods legitimately carried in the vessel and there is no legal obligation to make any declar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls involved in these appeals are not justified ? (2) Whether the imposition of personal penalty on the masters of the vessels involved in these appeal is not legal ? 30. We will, in the first instance, take up for consideration the second point first. The Additional Collector had imposed a personal penalty on the masters of the various vessels solely on the ground that they had failed to make declaration of the contraband goods seized from their vessels. The Additional Collector as well as the Board held that the masters have contravened the provisions of Section 30 of the Customs Act. 31. Sub-section (1) of Section 30 requires that the person in-charge of a conveyance carrying imported goods shall within twenty-four hours after arrival thereof at a customs station, deliver to the proper officer, an import manifest, and to make and subscribe to a declaration as to the truth of its contents at the foot of the manifest. The finding of the Additional Collector and confirmed by the Board was to the effect that the masters have failed to include the goods which were seized from the vessels in the manifest and therefore, the declaration made are not true declaration, and thus, v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Section 30 to imported goods as defined in Section 2(25) must necessarily means goods which are legitimately brought into India from a place outside India. The words any goods in Section 2(25) must mean, not the classification of goods like smuggled, shop-soiled, damaged, decayed and so forth but must mean goods in their different varieties from a pin to an elephant legitimately carried by the vessel . Shri Krishan Kumar was not able to point out any other decision of the Bombay High Court or the Supreme Court which has taken a view different from the view taken by the Division Bench in Mogul Line Ltd. The judgment of the Bombay High Court is binding on us. Following the above cited decision of the Bombay High Court we hold that the imposition of penalty on the masters for violation of Section 30 of the Customs Act is not legal, and therefore, we set aside the penalties imposed on the masters of the vessels. 32. Now coming to the first of the points, Shri Jagasia contended that the Additional Collector as well as the learned Member of the Board have misunderstood the scope and extent of the burden cast on the owners and the masters of the vessels under Section 115(2) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Collector felt that the master and the Chief Officer have failed to take all reasonable precautions against the use of the vessel during the voyage. It is required to be stated that under sub-section (2) of Section 115 of the Customs Act, the conveyance could be confiscated if it was used with the knowledge or connivance of the owner or its agent for the purpose of transport of smuggled goods. It is not in dispute that the Government of India has not framed no rules in regard to the precautions to be taken by the owner or his agent under this sub-section. The Additional Collector relied upon the fact that the petitioners sent a radio message to the master of the ship to search the vessel on September 7, 1977 and though the search was carried out, it was not a thorough search. According to the Collector if the search was thorough, then the master could have detected the contraband goods. In my judgment the approach of the Additional Collector is not accurate. The contraband material was concealed in a drum cavity of the lift boat and the log book entry clearly shows that the search was carried out throughout the ship but nothing was detected. There is no reason to presume that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 conclude that the owner or the master had failed to take requisite precautions 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, requires to be set aside . 34. The Division Bench of the Bombay High Court in Misc. Petition in Appeal No. 57/79, The Mogul Line Ltd. and others v. A.K. Dutt and another affirmed the view taken by Justice Pendse. In paragraph 6 of the judgment, the Division Bench observed thus, the next question that arises is whether all such precautions against such uses had been taken as required by sub-section (2). Now according to sub-section (2) itself, the precautions to be taken must be as are for the time being specified in the rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... responsible for throwing out the cartons. The Master of the ship had stated in his statement that he had conducted a search. None of the crew members or others have implicated the Master with the knowledge of existence of these goods. The possibility of somebody hiding some of the goods and throwing away to the sea which are found floating after the Master had effected the search cannot be ruled out. The cabin itself was unoccupied and apparently accessible to all, the crew members. Looking to the duties that a Captain has to discharge and considering the fact that he had taken such precautions which a reasonable and a prudent man in the circumstances would have taken and in the absence of any other circumstances to impute the knowledge to the Captain it could be safely said that the Master, i.e. Captain had no knowledge of the existence of the contrabands. The department did not even contend that the Master of the ship connived in the importation of the smuggled goods. We, therefore, hold that the learned Additional Collector and the Board were not justified in directing confiscation of the vessel. We set aside the confiscation. 37. Appeal 260/80 : The search conducted on the v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 38. Appeal 325/80 : The search conducted by the Rummaging officers of the vessel M.V. Bacat-I, which is the subject-matter of this appeal resulted in the recovery of one gunny bag concealed inside the lightening hole in the way of the ships inner structure of the common store room. This gunny bag contained 87 pcs. of wrist watches of foreign origin valued at ₹ 13,572/- cif and ₹ 27,144/- M.V. Looking to the nature of the goods and manner of concealment and value thereof it is highly improbable that the Master would have connived in the act of smuggling or would have known the existence of the smuggled goods. In the circumstances and for the reasons already given earlier, we hold that the Additional Collector was not justified in ordering the confiscation of the vessel. We, therefore, set aside the confiscation. 39. The search carried out by the Rummaging Officers of the vessel M.V. Vijaya Vasant which is the subject-matter of the appeal 332/80 resulted in the recovery of watches, cassette tapes, cigarettes, transistors, etc of foreign origin of the value of ₹ 2,572/- cif and ₹ 5,853/- M.V. concealed in a drum box. The second search conducted by the offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds, size and value thereof and their place of concealment, the Master even if he had taken due care and precaution, could not have detected the goods. We, therefore, hold that the Master had satisfactorily discharged the burden cast on him under Section 115(2). We therefore set aside the order of confiscation of the vessel. 41. The vessel M.V. Al-Loulouah which is the subject-matter of the Appeal 335/80 was searched by the officers on 21-2-1979, they found two polythene wrapped bundles concealed underneath mooring rope coil at the stern of the vessel which contained 90 pcs. of wrist watches of foreign origin valued at ₹ 11,250/- cif and ₹ 22,500/- M.V. Here again, considering the quantity of the wrist watches and value thereof it is highly improbable that the Master would have been a party to the smuggling of the goods in question. Looking to the place of concealment, we are satisfied that the Master who is not an expert could not have detected the goods during the search. We, therefore, hold that the Master has discharged the burden cast on him. Accordingly, we set aside the order of confiscation of the vessel. 42. The search carried out by the officers of the Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Master had either connived in the act of smuggling or had the knowledge of smuggled goods being carried in the ship. In the circumstances the Addl. Collector was not justified in ordering confiscation of the vessel. We, therefore, set aside the confiscation. 44. It may be stated that the finding of the learned Additional Collector in all these cases was that the vessels were used as means of transport in the smuggling and not that they were used for the carriage of smuggled goods. The Board had only confirmed the finding of the Additional Collector. There was hardly any evidence to establish that the vessels were used as means of transport in the smuggling of the goods. Just because certain smuggled goods were found in the vessels, one cannot jump to a conclusion that the vessels were used as means of transport in the smuggling of the goods found inside the vessel. The vessels are either cargo vessel or passenger vessel. In the circumstances, the said finding of the learned Collector, in our opinion, is not based on any evidence. On this ground also the confiscation of the vessels are liable to be set aside. As we had set aside the orders of confiscation of the vessels, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Now it is seen that besides the Master, the Chief Officer, Chief Stewards and second stewards can have access to the locker in question because they too possessed the duplicate keys of the locker. The Additional Collector has not chosen to impose personal penalty on any of these persons. Shri Lawrence Fernandez, a general stewards, according to the statement of Chief Stewards was required to be in possession of the key. But Lawrence denied that he was given the key by Shri Mazarello when he signed off. No investigation was carried out as to whose responsibility it was to see that key of Locker No. 88 was given to Lawrence Fernandez. Whether it was the responsibility of the Master or the Chief Stewards or the second stewards or the Chief Officer. None of the stewards have implicated the Master. Just because Locker No. 88 was opened with the master key found in possession of the Master one cannot come to a conclusion that the gold bars found were either smuggled by the Master or that he connived in the smuggling of the gold bars. As has been stated earlier, any of the above persons, viz.. Chief Officer, Chief Stewards or second steward or the Master could have kept the gold bars ins ..... X X X X Extracts X X X X X X X X Extracts X X X X
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