TMI Blog1986 (4) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... that the petitioners invoked the writ jurisdiction of this court and obtained the instant rules with interim orders of stay. 5. Now, since there is a common legal question involved in all the three cases which are being disposed of by this common judgment and since much would depend on how the said question is answered ; it may be convenient to try to find an answer to the said question first. Incidentally, if the said question is answered in favour of the petitioners there will be no difficulty in disposing of the writ applications in their favour and probing into the other question which the petitioners have raised, may not be necessary. 6. Coming now to the point at issue, the consignments brought to India in all the three cases were meant for exportation to Nepal. According to the petitioners, since the goods were in transit to Nepal and since under the terms of the Treaty of Transit between His Magesty's Government of Nepal and the Government of India which came into force on March 25, 1978 the cargo in transit to Nepal was free of Customs duty. Section 116 of the Customs Act, 1962 could have no application to the said consignments. 7. In this connection it may be usefu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enalty for not accounting to the satisfaction of the Assistant Collector of Customs the quantity of the goods short landed. 11. I am not prepared to accept the contention of Mr. Roy Mukherji, the learned senior counsel for the petitioners that Section 116 of the Customs Act, 1962 applies only to short landing of dutiable cargo. As a matter of fact the first and the operative part of the section makes it more than clear that penalty is leviable where cargo imported into India is short landed. There is no indication therein that the section applies only to dutiable cargo and not to cargo which is duty free. It is only in sub-clauses (a) and (b) to the section that there is reference to duty, but the said reference is only for the purpose of assessment of the amount of penalty and sub-clauses (a) which is the relevant clause so far the instant cases are concerned, provides that the amount of penalty should not exceed twice the amount of duty that would have been chargeable on the goods not unloaded or the deficient goods, as the case may be, had such goods been imported. In my judgment, it cannot be interpreted on the basis of Clause (a), which is not the controlling or the operativ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atisfaction of the consignee is of little relevance. The object of the provision is to prevent loss of revenue to the nation. The fact that the consignee or the consignor has no case that the goods were short landed, does not impede the authorities from looking behind the satisfaction of the persons involved in the contract of carriage to determine for themselves as to whether any fraud has been played on the public revenue by the carrier either by himself or in cooperation with others. 15. It is thus clear that if Nepal cargo which is exempt from payment of Customs duty, is also held to be exempt from payment of penalty under Section 116 of the Customs Act on the basis of the argument advanced on behalf of the petitioners, fraud on public revenue by the carrier either by himself or in cooperation with others including the consignor and the consignee, may go on unrestricted. This, however, is only an incidental aspect of the matter and as already stated, to read in Section 116 an unmentioned clause that it applies only to dutiable cargo would, in my view, amount to straining the language of the section which it is not permissible in a fiscal statute. It need not be emphasised tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m a ship at the Calcutta port for exportation to Nepal by other conveyances amounts to their importation into India, does not, in my view, really arise here since according to the relevant exemption notification such discharge of the cargo at the Calcutta port would amount to their importation into India for the limited purposes. As a matter of fact Nepal cargo has initially to be imported into India for the relevant exemption notification to become operative. If there is no importation of the goods into India at the outset the exemption notification in its terms will not apply. 20. At any event, so far Nepal cargo is concerned which is meant ultimately for exportation to Nepal and not to be used in India, import can be said to take place as soon as the goods are brought into the territorial waters of India. 21. Incidentally, there is a difference of opinion on the point between the different High Courts in India. The matter came up for consideration in a different way before the Supreme Court in State of Punjab v. Gian Chand, 1985 E.C.R. 2222 (decided on April 2, 1968). It was held by the Supreme Court that the process of importation would be complete as soon as the goods reac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t should be deemed to have been imported into India for exportation to Nepal within the meaning of the relevant exemption notification. And importation will carry with it all its legal incidents in the absence of anything to the contrary. 24. I hold, accordingly, that Section 116 of the Customs Act, 1962 applies equally to dutiable as well as to non-dutiable goods and, accordingly, the contention raised by the petitioners that the section can have no application to Nepal Cargo since the said Cargo is totally exempt from Customs duty, is absolutely without merits. 25. The common question of law having thus been decided against the petitioners the other contentions raised in each of the three cases may separately be considered. 26. In Matter No. 753 of 1982, the ship S.S. Mandalay arrived at the Calcutta Port from Sweden in the month of February, 1977 carrying inter alia one case of cigarettes weighing 19 kgs., the consignee being Dr. John S. Tooms of Nepal. The ship having arrived at the port of Calcutta one of the subject cases containing cigarettes, spirits/wine and preservers, was found to be short-landed. 27. On July 19, 1977 the Customs authorities issued a K.L.C. (sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s exact contents. 34. As regards to the assessment of penalty it is not for this Court to embark into any enquiry. If dissatisfied, it was open to the petitioner to move up before the relevant departmental authorities, which the petitioner did not do. 35. The impugned order not being prima facie perverse and rules of natural justice having been followed, this court exercising writ jurisdiction cannot be of any assistance to the petitioner. 36. So far as Matter No. 715 of 1982 is concerned, the petitioner, the Everett (India) Pvt. Ltd., are the Steamer Agents for the sea-going vessel' M.V. Makeverett" owned by Everett Orient Line Inc. of Liberia. The said ship arrived at the port of Calcutta on or about December 13, 1977 carrying among other things the subject consignment of 25 wooden cases containing 15,000 yards of 100% polyester yarn dyed suitings from port of Busan, Korea to port of Calcutta in transit to Nepal. 37. After the discharge of the cargo was completed on December 26, 1977, the Port Trust Outturn Report dated January 14, 1978 showed short-landing of one of the cases. 38. On March 18, 1978 the Customs authorities issued a show cause notice to the petitioner ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner under Section 116 of the Customs Act. 43. In their affidavit-in-reply several objections have been raised by the petitioners, viz., that no personal hearing was given to them ; that since after the discharge of the cargo, it was lying at the shed exposed to all sorts of risks and hazards including the possibility of pilferage, the petitioner could not be made liable for the alleged short-landing. That in the absence of any steamer survey immediately after the discharge of the cargo, there was no material before the Customs authorities to establish that the shortage as alleged had in fact taken place on board the vessel. 44. In my view, neither of these objections is tenable since, as already seen, the petitioner neither challenged the alleged short-landing nor did they avail themselves of the opportunity given to them of personal hearing. As such these points cannot not be agitated before the Court. 45. In the impugned order dated March 31, 1981 (Annexure G) all the relevant facts were taken into consideration including the applicability or otherwise of Section 116 of the Customs Act, 1962 to Nepal cargo and I do not think that the said order suffers from any perversity. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Notification No. 132 the Importers and/or clearing agents were required to approach the steamer agents for a survery immediately after landing from vessel in order to establish that the shortages took place before the landing and to ascertain the shortages, if any, the petitioners as such, denied their liability out right for the alleged shortages. 51. By a notice dated February 13, 1979 the customs authorities informed the petitioner that the petitioner would be given a personal hearing by the Deputy Collector of Customs on February 20, 1979. In compliance thereof the petitioner attended the said hearing and submitted inter alia that the consignment in question being meant for Nepal, Section 116 of the Customs Act had no application to case ; that the alleged short landing was not duly established and that the value of the alleged short landed goods was not correctly assessed. 52. However, by an order dated March 17, 1979 the Deputy Collector of Customs imposed a penalty of Rs. 17,650 upon the petitioner under Section 116 of the Customs Act, 1962 overruling all the objections (vide annexure F). 53. Being aggrieved the petitioner preferred an appeal on July 7, 1980 but the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut the correctness or otherwise of the Deputy Collector's findings regarding short landing including the Survey report. 59. The grounds on which the findings of the Deputy Collector were Challanged are as follows : (a) that Section 116 of the Customs Act has no application to Nepal cargo and that (b) the value of the alleged short-landed goods has not been correctly computed and as such, the duty amount has been wrongly calculated. 60. This clearly indicates, as was rightly contended by Mr. Roy Chowdhury appearing on behalf of the respondents that at the appellate stage the petitioner gave up their objection regarding short landing and accepted the findings of the Deputy Collector on the point. 61. It is true that in spite of any such objection not having been taken before the Appellate Collector in the memo of appeal, such objections were raised before the Appellate Collector in course of the argument (Annexure G), but significantly, such objections were not taken into consideration by the Appellate Collector. The impugned order of the Appellate Collector shows that "two major points" were raised before him by the appellant and both the said points related to the applicabili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of interest to quote the whole of it and it is as hereunder :- Subject : Claim for refund of duty on goods found missing in packages landed under qualified receipt, i.e., unsound condition - regarding - It is hereby notified for information of the Importers, Clearing Agents and all other concerned that for the purpose of claiming refund of duty on the ground of short landing in respect of goods missing from packages landed under a qualified receipt, i.e., in unsound condition, it will be necessary for the Importers/Clearing Agents to have the goods surveyed by the steamer Agents immediately after their landing from vessel in order to establish that shortages took place before landing. The importers and/or the clearing agents can ascertain by enquiry from the steamer agents if not from the port Commissioners (who grants landing) arrange with the Steamer Agents for survey to be conducted to ascertain the short landing. Importers (or their agents) can also apply to the steamer Agents for refund of customs duty who may consider the claim and pay the duty direct to the importers concerned and in such cases there could be no question of the Custom House refunding duty to the importer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of the Customs authorities by delaying collusively or otherwise the holding of the survey or by not applying for steamer survey. 72. A reading of the judgments of the learned Single Judges as referred to earlier, makes it clear that due attention of the learned Judges was not drawn to this aspect of the matter. 73. Accordingly, I do not think that penalty claims of the Customs authorities under Section 116 of the Customs Act can, in any way, be defeated due to delayed survey in violation of the public Notification No. 132 since the said notification does not create any liability upon the Customs authorities to arrange for a survey of the goods. In case of any delay, it is only the claims for refund of duty that are liable to be defeated and not any other claim. However, as already stated, this is practically besides the point since the factum of short landing in the instant case was not challenged by the petitioners before the Appellate Collector of Customs. 74. In the above view of the matter, the petitioner will not be entitled to the relief prayed for particularly because the impugned order of the respondents imposing penalty upon the petitioner for short landing of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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