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2016 (9) TMI 619 - MADRAS HIGH COURT

2016 (9) TMI 619 - MADRAS HIGH COURT - 2016 (340) E.L.T. 318 (Mad.) - Short-landing of goods - Acid Grade Flurospar - is tolerance limit of 6.47% justified? - Imposition of penalty - Held that: - The experts say the Acide Grade, which shipped routinely in the form of damp filtercake, contains 7% to 10% moisture. Adoption of the tolerance limit at 6.47% is correct. - If 6.47% is adopted as tolerance limit on the entire manifested cargo, then there will be no shortlanding. The respondents are .....

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Srinivas, SPC ORDER Heard Mr.Dominic S.David, learned counsel for the petitioner and Mr.A.P.Srinivas, learned Senior Central Government standing counsel for the respondents and with their consent, the writ petition itself is taken up for disposal. 2. In this writ petition, correctness of the order passed by the Adjudicating Authority as confirmed by the Appellate Authority as slightly modified by the Revisional Authority involving shortlanding of goods is questioned. Though the facts of the case .....

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anded was ascertained to be 237.684 M.T. The import duty which would have been chargeable on the deficient goods was calculated at ₹ 5,15,366/-. Therefore, a show cause came to be issued to the petitioner on 11.03.1996 under Section 124 of the Customs Act, stating that the petitioner has not accounted for the shortlanded quantity of 237.684 W.M.T. of Acid Grade Flourspar as per Section 116 (a) read with Section 148(2) of the Customs Act, 1962. Therefore, they were called upon to show cause .....

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shortlanded 237.684 WMT 4. Less Moisture @ 6.47% 15.212 5. Quantity shortlanded in DMT 222.472 DMT 6. CIF Value of 222.472 DTM @ U.S. $ 81.00 Per DMT U.S.$ 18020.23 7. Exchange Rate @ U.S.$31.55 for U.S. $ 18020.23 Rs.5,68,538.25 8. Landing charges @ 1% of CIF Value Rs.Rs.5,685.38 9. Total Assessable value Rs.5,74,223.63 10. Basic customs duty @ 65% on assessable value Rs.3,73,245.35 11. C.V.D. @ 15% on Assessable value Rs.1,42,120.34 12. Total Customs duty Rs.5,15,365.69 OR Rs.5,15,366/- (Rupe .....

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en calculated on the total manifested cargo. Though such was his view, while adopting the tolerance limit, the Adjudicating Authority applied the percentage of 0.5% of the manifested quantified as quantity lost. This, according to the Adjudicating Authority, is universal accepted principle in Maritime Law, for which, the Authority has also referred to the order passed by the Government of India. The petitioner preferred an appeal before the Commissioner of Customs and Central Excise (Appeals), T .....

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e revised demand was issued and a sum of ₹ 1,26,761/- was collected as penalty by issuing detention notices. The correctness of the impugned orders are assailed in the present writ petition. 5. I have heard the submissions made by the learned counsel appearing on either side carefully and perused the materials available on record. 6. Learned counsel placed reliance on an article published by Mr.M.Michael Miller, who said to be an internationally renowned expert on chemicals. This article h .....

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while issuing show cause notice at 6.47% was perfectly within the parameters as mentioned by Mr.Michael Miller. However, while adjudicating the show cause notice after receiving the reply, the Adjudicating Authority adopted a percentage of 0.5% and stated that it is an universal accepted principle in Maritime law. 7. Learned Senior standing counsel for the respondent department relied on the order passed by the Revisional Authority in the case of In Re:Spanoceanic Services Pvt.Ltd. [2014 (313) .....

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he has straight away adopted the tolerance limit at 0.5% which is incorrect. 9. The Revisional Authority found that the petitioner was not intentionally involved in the short landing, therefore, exercised his discretion and reduced the penalty. While doing so, the Revisional Authority ought to have seen that the mistake committed by the Adjudicating Authority in calculating the tolerance limit only for the shortlanded quantity in the show cause notice. This error ought to have been rectified. Th .....

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cargo left on board. Therefore, the vessel is no way responsible for shore out-turn. Two things are clear, that is there was no cargo left in the vessel. Secondly, the vessel did not berth in the port and the cargo was discharged into the barges and from the barges, it has come to the port area, where the quantity of the cargo has been measured. Therefore, even going by the order in Spanoceanic Services (supra), there are several types of loses, that is loss of Board, Loss of Pier and other hand .....

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Hon'ble Division Bench held as follows: 4....................... It is thereafter on 31.08.1999 that the show cause notice has been issued. The original authority refers to the deduction of moisture content and the tolerance limit of 0.5% of manifested quantity as the quantity lost and revised the shortlanded quantity as 265.681 metric tonnes. The submission of the learned counsel is that if the deduction of moisture content is made for the manifested quantity then there won't be any sho .....

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ctors were not taken note by the Revisional Authority. If this Court comes to such a conclusion, then the only option available for the Court is to send back the matter to the authority for reconsideration. However, this Court does not propose to do the same, since the show cause notice itself was issued after a lapse of two years from the date on which the cargo landed at the Cuddalore port and it has taken over 10 years for the conclusion of the proceedings at different levels culminating in t .....

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