Bombay High Court
Sai Shipping Co. Pvt. Ltd. vs J. Datta, Member, C.B.E. & C. And Others on 24 July, 1986
Equivalent citations: 1987(11)ECC110, 1988(19)ECR245(BOMBAY), 1986(25)ELT623(BOM)
JUDGMENT
1. By this petition filed under Article 226 of the Constitution of India, the petitioners are challenging the legality of the part of the order dated June 6, 1981 passed by the Additional Collector of Customs (Preventive), Bombay, confiscating a ship m.v. "SEYRIAN WAVE" under the provisions of Section 115 of the Customs Act, 1962, but permitting the petitioners to redeem the ship on payment of fine of Rs. 3,70,000/-. It is not necessary to set out the facts in great detail as the controversy lies in a very narrow compass.
2. On October 19, 1980 at about 3 P.M. party of Customs Officers board the ship which had arrived on the previous day and anchored at Bombay Harbour. On taking search of the ship and the Captain's cabin, the Indian currency of Rs. 30,800/- and United States $ 11,050/- were found. The statement of the Captain of the ship was recorded. Further search of the ship indicated other contraband articles like cigarettes, calculators etc. After the investigation was completed, the vessel was seized under Section 110 of the Customs Act on the reasonable belief that the same is liable to confiscation as used for the purpose of bringing contraband goods. The Customs Authorities thereafter served show-cause notice dated March 25, 1981 and after considering the objections raised by the Captain and the owner of the vessel, came to the conclusion that the ship is required to be confiscated under the provisions of Section 115 of the Act.
3. Shri Venkiteswaran, learned counsel appearing on behalf of the petitioners, did not dispute that the ship was used for the purpose of bringing contraband articles. The only submission advanced by the learned counsel was in respect of the amount of fine imposed by the Collector of Customs in lieu of confiscation. Reliance was placed on the Proviso to Sub-section (2) of Section 115 of the Customs Act in support of the contention that the fine imposed in lieu of confiscation was excessive. The proviso reads as under :
"Provided that where any such conveyance is used for the carriage of goods or passengers for hire, the owner of any conveyance shall be given an option to pay in lieu of the confiscation of the conveyance a fine not exceeding the market price of the goods which are sought to be smuggled or the smuggled goods, as the case may be."
The plain reading of the proviso makes it clear that the owner of the conveyance has to be given option to pay in lieu of confiscation of the vessel a fine which shall not exceed the market price of the goods which are smuggled or the smuggled goods. Shri Venkiteswaran submitted that as per the show cause notice the charge was that the vessel was used for transportation of the following contraband goods :
(1) 100 cases of whisky sold by the Master for Rs. 30,800/- plus United States Dollars 6,000/-, totalling Rs. 78,800/-
(2) Unclaimed goods which were seized and of the market value of Rs. 17,665/-, and (3) Goods of the market value of Rs. 2,25,600/- which were found missing from the private property of the crew.
The total of these three items is Rs. 3,22,065/- and Shri Venkiteswaran submits that the fine in lieu of confiscation cannot exceed this amount. The submission of the learned counsel is correct and deserves acceptance. Shri Sethna, learned counsel appearing on behalf of the Department, urged that the expression "goods" has been defined under Section 2(22) of the Customs Act and include currency also. The submission of Shri Sethna is that what was recovered from the Captain was not only American Dollars 6,00/- but 11,050 American Dollars and as the balance amount of 5,050 dollars were not accounted for, the Customs Authorities were justified in presuming that the said amount was also contraband goods liable for confiscation. Shri Sethna submits that taking into account the value of 5,050 American Dollars, the fine of Rs. 3,70,000/- imposed in lieu of confiscation is just and proper. It is not possible to accept the submission of Shri Sethna, because the show cause notice does not reveal any charge against the Captain of the ship for possessing 5,050 American Dollars which were not accounted for. On the other hand the show cause notice recites that $ 4,200/- found with the Captain were accounted. In the face of the contents of the show cause notice, it is impossible to accede to the submission of Shri Sethna that the Collector of Customs was right in taking into account the value of these American Dollars 5,050/- while imposing fine in lieu of confiscation. The proceedings commenced by the Customs Authorities are quasi-criminal in nature and unless and until a specific charge against the delinquent is framed, it is not possible to impose fine on assumptions and inferences. In my judgment, the fine imposed by the Collector of Rs. 3,70,000/- in lieu of confiscation is not correct and it could not be more than Rs. 3,22,065/-.
4. Accordingly, petition party succeeds and the impugned order passed by the Additional Collector of Customs (Preventive), Bombay is modified and the owners of the vessel m.v. 'Skyrian Wave' are permitted to redeem the ship on payment of fine of Rs. 3,22,065/- only.
5. I am informed at the bar that the ship has already left the shore on bank guarantee furnished by the petitioner. The Department is entitled to enforce the bank guarantee to the extent of Rs. 3,22,065/- and the bank guarantee for the balance amount stands discharged.
6. There will be no order as the costs.