Customs, Excise and Gold Tribunal - Mumbai
H.K. Shipping Services Pvt. Ltd. vs Commr. Of C. Ex. And Cus. on 10 March, 2000
Equivalent citations: 2000(120)ELT676(TRI-MUMBAI)
ORDER Gowri Shankar, Member (T)
1. M/s. Goyal Traders, appellant in appeal C/212/93 imported into Bhavnagar port a ship for the purpose of being broken into scrap. On inspection of the ship, the officers at Alang, where such breaking up takes place found in one of the folded tanks of the ship which was designed and used as carrier of live stock, 284 tonnes of cattle feed. The department was of the view that cattle feed was "consumer goods" as defined in the Import Policy for the relevant period, issued notice to the importer proposing confiscation of the cattle feed under Clause (d) of section 111, and the ship under Clause 115 of the Act. Penalty was also proposed by invoking section 148 of the Act on M/s. H.K. Shipping Services, whom the department found to be the agent of the seller of the vessel. These proceedings culminated in the issue of the order of the Collector impugned before us ordering confiscation of the cattle feed and the ship with an option to redeem them on payment of line of Rs. 1 lakh and Rs. 3 lakh respectively, imposing penalty of Rs. 1 lakh upon the importer and Rs. 10,000/- on H.K. Shipping Services.
2. The contention raised on behalf of the importer of the ship is that the cattle feed is not "consumer goods". It does not satisfy the requirement of being "consumption goods which can directly satisfy human needs without further processing", that is how consumer goods are defined in the relevant import policy. Cattle feed, it is contended, is used, as is evident, to feed cattle and therefore cannot satisfy any human need. Therefore confiscation of the cattle feed and consequential confiscation of the ship are not sustainable.
3. The departmental representative contends that feeding animals or cattle or live stock satisfy deep emotional needs in human beings. Therefore it satisfies a human need. It is therefore consumer goods.
4. It is not possible for us to accept the ingenious proposition that the departmental representative makes. It may be possible, and could indeed be true that the act of watching an animal feed or feeding gives satisfaction to its owner. It may even satisfy a deep need to nurture, which many have found to be inherent in human nature. But we do not think this is a need, which the definition in the policy contemplates satisfaction of. The emphasis in the definition in the policy is upon the direct satisfaction of a human needs. We are unable to accept that the needs referred to in the definition are limited to satisfaction of the physical needs such as food, drink, and cloth, etc. There are many articles, which are obviously consumer goods which satisfy needs other than these, such as a piece of music or a book, or objects of aesthetic value. But we do not find it possible to say that feeding of an animal would directly satisfy a human need. The connection is too remote. Further, this claim could well be made regarding machinery, ship, aircraft, etc. Engineers and architect could obtain emotional satisfaction by looking a piece of well designed and constructed machinery, or a building. The distinction, if we accept that in such cases a human need is satisfied between capital goods and other goods would be erased. The fact that the goods were being sold by the appellant although for a nominal sum would not by itself be sufficient to justify confiscation under Clause (d) of section 111. Confiscation of the cattle feed and therefore the ship cannot be sustained and are set aside.
5. The contention by the advocate on behalf of the other appellant is that it was not acting as an agent of the master of the vessel which carried the cattle feed. Penalty has been imposed on the other appellant for the reason that it was the agent of the master of the vessel which carried the goods and invoked section 148 (2) and consequences of such liability to penalty would fall upon the agent. There are two objections to this. The first is that the action has been taken with regard to the ship and the goods, not for failure to declare the cattle feed in the manifest but because the import was unauthorised. Confiscation has been proposed, and was ordered, of the cattle feed under Clause (d) and not under Clause (j) of section 111 which would apply in case where goods which are required to be declared in the manifest had not been declared. The other objection which is raised by the advocate for the applicant is that it was not the agent of the master of the vessel at all, but only of the seller and its activity was limited to Customs and port formalities and with the repatriation of the crew members after sale.
6. Sub-section (2) of section 148 of the Act, which has been resorted to by the Collector reads as follows:
"(2) An agent appointed by the person in charge of a conveyance and any person who represents himself to any officer of customs as an agent of any such person in charge, and is accepted as such by that officer, shall be liable for the fulfilment in respect of the matter in question of all obligations imposed on such person in charge by or under this Act or any law for the time being in force, and to penalties and confiscation which may be incurred in respect of that matter."
7. It will be clear from this that the liability to penalty or confiscation of the goods would fall upon the agent if the agent acted on behalf of the person in charge of the vessel and so represented himself. The expression "fulfilment in respect of the matter in question of the obligation imposed on such person in charge" occurring in Sub-section (2) is of significant. If the appellant had not acted as agent of the master in respect of filing the manifest, it would not be possible, in our view to visit upon that agent the consequence which would otherwise have fallen upon the person in charge of the conveyance. The manifest was signed by the master of the vessel. This appellant has not signed any documents relating to the Customs department. The contention of the departmental representative that it held itself out to be an agent and was accepted by the Customs does not answer this point. An arrangement for the general facilities, which is what this appellant was apparently doing would not amount, on the facts of this case, to this appellant being an agent in respect of the ship or cattle feed in terms of section 148. Penalty was not imposable on this appellant.
8. Both appeals are allowed and impugned order set aside. Consequential relief.