Bombay High Court
J.M. Baxi And Co. vs Deputy Collector Of Customs And Ors. on 6 August, 2002
Equivalent citations: 2003(1)BOMCR776, 2003(90)ECC742, 2003(156)ELT961(BOM), 2002(4)MHLJ823
Author: J.P. Devadhar
Bench: V.C. Daga, J.P. Devadhar
JUDGMENT J.P. Devadhar, J.
1. In this petition, petitioners have challenged the orders passed by the Customs Department seeking to levy penalty upon the petitioners under Section 116 of the Customs Act, 1962 for the alleged short landing of cargo.
2. The facts relevant for the present petition are as follows :--At the relevant time, the petitioners were agents of foreign flag vessel "Globe Oceanic". The said vessel arrived at the port of Kandla in the last week of June, 1984 carrying 949.584 metric tons of Acrylonitrile Monomer in bulk for discharge at Kandla. After filing the Import General Manifest, the vessel discharged the cargo and the said vessel sailed from Kandla soon thereafter. As per the ullage report dated 30th June, 1984 taken before of discharge of the cargo, it was noticed that the total quantity discharged was 948.334 M.T. as against the quantity of 949.584 M.T. manifested in the I.G.M. Thus shortage of 1.250 M.T. noticed in the ullage report was well within the permissible limit as ocean loss. By a show cause notice dated 22nd March, 1985, the Assistant Collector of Customs, Kandla called upon the petitioners to show cause as to why action under Section 116 of the Customs Act should not be taken against the petitioners in view of loss of 9.090 M.T. of cargo which was reported to be short landed by the Port Trust on the basis of the shore tank measurement. The petitioners by the letter dated 10-5-1985 replied to the show cause notice denying their liability under Section 116 of the Customs Act on the ground that the shortage noticed under the ullage report was within the permissible limit. By an order dated 29-8-1986, the Deputy Collector of Customs, Kandla imposed penalty of Rs. 1,02,458/- upon the petitioners by taking into account the shortage noticed in the shore tank measurement. On appeal, the Collector of Customs (Appeals) by an dated 26-8-1987 confirmed the order of penalty. Challenging these two orders, the present petition has been filed.
3. Mr. Gomes, learned Counsel appearing on behalf of the petitioners submitted that the entire action on the part of the respondents in resorting to penal action under Section 116 of the Customs Act on the basis of shore tank measurement was wholly unwarranted because the quantity discharged has to be determined on the basis of ullage report taken at the time of actual discharge of the cargo and not on the basis of shore tank measurement taken at the site of the Consignee which in several kilometres away from the Port of discharge. It was submitted that the shortage recorded as per the ullage report was within the prescribed limits. It was submitted that the measurements of the imported cargo on the basis of ullage report was well recognized method and this Court in the case of Shaw Wallace and Co. Ltd. v. Assistant Collector of Customs and Ors. reported in 1986 (25) E.L.T. 948 (Bombay) has held that the quantity mentioned in ullage report should be accepted as correct quantity brought by the vessel for unloading. Division Bench of this Court in the case of Forbes Forbes Campbell and Co. Ltd. v. The Deputy Collector of Customs and others in Writ Petition No. 3299 of 1987 decided on 10th July, 2002 (since reported in 2002(4) Mh.L.J. 242), has reiterated that the Customs authorities cannot penalize the ship owners under Section 116 of the Customs Act by taking the quantity mentioned in the shore tank measurement instead of the quantity in the ullage report. It was submitted that in view of the binding decision of this Hon'ble Court, the orders impugned in the petition based on the shore tank measurements are liable to be quashed and set aside.
4. Mr. Chaudhari, learned Counsel appearing on behalf of the respondents submitted two fold arguments. As a preliminary objection, it was firstly contended that in view of the fact that the cargo was discharged at Kandla and the action under Section 116 of the Customs Act was initiated at Kandla, it is the Gujarat High Court which has jurisdiction to decide the legality and the orders passed under Section 116 of the Customs Act and this Court has no jurisdiction. Secondly, it was submitted that against the order passed by the Commissioner of Customs (Appeals) further remedy of appeal before the CEGAT was available to the petitioners and hence the petitioners are not entitled to any reliefs in the present petition.
5. After hearing both the parties and after perusing the record placed before us, we are of the opinion that there is no merit in the contentions raised by the respondents. As regards the jurisdiction of this court in entertaining the petition is concerned, this Court in the case of Kishore Rungta v. Punjab National Bank reported in 2001(4) Mh.L.J. 195 = 103(3) BLR 803 (Bom) has held that even if a part of the cause of action has arisen, then this Court will have jurisdiction to entertain the petition. Moreover, the Apex Court in the case of Navinchandra v. State of Maharashtra has held that the High Court will have jurisdiction if part of the cause of action has arisen within its jurisdiction, hi the instant case, admittedly the order of the Collector of Customs (Appeals) which is impugned in the petition has been passed at Mumbai and hence this Court has jurisdiction to entertain the present petition. Accordingly there is no merit in the first contention raised by the revenue.
6. As regards the second contention raised by the respondents, we are of the opinion that in view of the pendency of the petition for more than 10 years in this Court and in view of the fact that the issues raised in the petition are covered by the decisions of this Court, the impugned orders are liable to be quashed and set aside. There is no dispute that as per the ullage report, the shortage noticed at the time of the discharge of the cargo was within the permissible limit. Under Section 34 of the Customs Act, imported goods cannot be discharged except under the supervision of the Customs Authorities. In the instant case, it is not in dispute that the goods were discharged under the supervision of the Customs Authorities and merely because ullage report was not signed by the Customs Authorities, it cannot be said that the ullage report cannot be relied upon. No error in the ullage report has been pointed out by the respondents. Thus, the case of the petitioners is covered by the decision of this Court in the case of Forbes Forbes Campbell and Co. Ltd. (supra) and the shortage alleged on the basis of shore tank measurement cannot be entertained.
7. Under the circumstances, the impugned orders dated 29-8-1986 and 26-8-1987 are quashed and set aside and the Rule is made absolute in terms of prayer Clause (a) of the petition. However, in the facts and circumstances of the case, there will be no order as to costs.