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TMI Blog2013 (12) TMI 1464X X X X Extracts X X X X X X X X Extracts X X X X ..... rs Ltd., Tanuku & M/s. Subhodaya Chemicals Ltd., Visakhapatnam. On scrutiny of the IGM, it was found that as per the joint draught survey done by M/s. Pinnacle Marine Services (P) Ltd. & M/s. Ericsson & Richards (Andhra) Visakhapatnam, surveyors the quantity of discharged cargo was 14539 MT resulting in short landing of 210.322 MT of Bright Yellow Crude Sulphur for which a show cause notice dated 26-9-2012 was issued to the steamer agent and the duty worked out thereon Rs. 523147/-. After following the due process of law, the Adjudicating Authority vide impugned order-in-original held that the short landing quantity of 210.322 MT of BYCS is 1.42% which is beyond the 1% permissible limit fixed by the Hon'ble High Court of Bombay in the case of M/s. Shaw Wallace & Co. Ltd. v. Asst. Collector of Customs reported in 1987 (3) Bom CR 151 = 1986 (25) E.L.T. 948 (Bombay), hence imposed a penalty of Rs. 10,00,000/- under Section 116 of Customs Act on the applicant. 3. Being aggrieved by the impugned order-in-original, the applicant filed appeal before Commissioner (Appeals) who upheld the impugned order and rejected the appeal. 4. Being aggrieved by the impugned order-in-appeal, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1986 (25) E.L.T. 948 (Bom.) in its true spirit wherein the Hon'ble Judge taking into account the nature of the cargo, allowed 1% as handling loss. Similarly the Central Board of Excise and Customs by the order dated 3-2-1957 permitted loss of between 1% to 1.3%. It is humbly submitted, that the quasi judicial authority in exercise of its judicial functions needs to apply itself to the various facts of the matter including the nature of cargo, voyage length, absence of mens rea, etc., before imposing penalty. In the instant case, the penalty imposed without application of mind and up to 200% of the duty imposable and as a maximum permitted under the act. 4.7 The respondent failed to appreciate the fact that while carrying the bulk cargo, there occur certain losses arising out of Loss over Board (LoB), Loss at Pier (LoP) and other handling losses at different places. The cargo being Bright Yellow Crude Sulphur, these and some losses due to variance in moisture content; evaporation and/or absorption of moisture due to exposure of the subject shipment to the elements otherwise atmospheric change, attendant all throughout the stages of transit from port of loading/origin to final ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14539 MT of cargo as against the quantity of 14749.322 as evidenced in the bills of lading was discharged at Visakhapatnam. 5.3 Hence from total bill of lading quantity of cargo of 36749.322 MT as per Bills of Lading Nos. 1, 2, 3, 4 & 5, 22000 MT of cargo was discharged at Chennai and 14539 MT cargo was discharged at Visakhapatnam port. The Asstt. Commissioner of Customs on the basis of a joint draught survey found that the total quantity of cargo discharged at Visakhapatnam was only 14539.00 MT against the Bill of Lading quantity of 14739.322 MT and that there was a short landing of 210.322 MT of cargo. 5.4 It is a universally accepted principle in the maritime world to allow 0.5% of tolerance limit of the total cargo at the time of carrying any bulk cargo. While carrying the bulk cargo, there occurs certain losses arising out of Loss of Board (LoB), Loss at Pier (LoP) and other handling losses at different places. The cargo being Ammonium Nitrate these had some losses due to moisture contents. To add up to these losses occurred at the Loss at Pier, Loss on Board, other handling losses and loss due to moisture content, it is a general practice to allow 0.5% tolerance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation on the grounds stated above. 9. Government notes that Chapter VI of the Customs Act, 1962 provides the provisions relating to conveyances carrying imported (or exported) goods. Section 30 stipulates delivery of import manifest or import report with true declaration therein. Further Import Manifest (Vessel) Regulations, 1971 provides the nature, condition and position (including status) to be truly declared as per respective declaration form. It is therefore quite clear that "Manifest" is to be considered a basic legal document and the declarations made therein are to be taken as statutory declarations for the purpose of further action under the relevant provisions of Customs Act, 1962. Similarly, Chapter V of the Act provides for levy and assessment of Customs duties and Section 13 thereof when read with provisions of Bill of Entry (Form) Regulations, 1976 the legality of the duty levied in this case can be clearly understood. Further for levy/calculation of impugned penalty, the provisions of Section 116 of the Customs Act, 1962 unambiguously stipulates the levy of penalty not exceeding twice the amount of duty. 9.1 The person-in-charge of conveyance is responsib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the goods not unloaded or the deficient goods, as the case may be, had such goods been imported; (b) In the case of coastal goods, to a penalty not exceeding twice the amount of export duty that would have been chargeable on the goods not unloaded or the deficient goods, as the case may be, had such goods been exported. The said provision of Section 116 makes it clear that penalty is imposed for not unloading the goods which were loaded in vessel for importation into India. There is no requirement of proving mens rea on the part of person-in-charge of conveyance. In this case, the short landing or non-landing of goods is admissible by the applicant. As such penalty is imposable under Section 116 ibid. 9.3 Government notes that for interpreting the provisions of law, Hon'ble Supreme Court in the case of M/s. ITC Ltd. v. CCE, Delhi - 2004 (171) E.L.T. 433 (S.C.) and M/s. Paper Products Ltd. v. CCE, Vadodara - 1999 (112) E.L.T. 765 (S.C.) has held that ordinary and natural meaning of words of statutes has to be strictly construed without any intendments or any liberal interpretation. In view of these principles laid down by Hon'ble Supreme Court, the penal action is rig ..... X X X X Extracts X X X X X X X X Extracts X X X X
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