Customs, Excise and Gold Tribunal - Mumbai
Shipping Corporation Of India Ltd. vs Collector Of Customs on 10 April, 1986
Equivalent citations: 1986(25)ELT1019(TRI-MUMBAI)
ORDER K.S. Dilipsinhji, Member (T)
1. M/s. Bootwala & Co. Advocates & Solicitors, Bombay filed an application dated 26-7-1982 to the Government of India under old Section 131 of the Customs Act and this has been transferred to the Tribunal in terms of Section 131B ibid and has to be treated as an appeal before it. The application was originally filed against the Order No. S/49-208 to 213/81 dated 20-1-1982 of the Appellate Collector of Customs under which he disposed of 6 first appeals of the appellants under the aforesaid common order. When, therefore, the Revision Application of the appellants was transferred to the Tribunal, it was pointed out to the appellants that in compliance with the procedures of the Tribunal, five additional appeals were required to be filed against the remaining five orders of the original authorities and the common order of the Appellate Collector. The appellants complied with these directions and hence all these six appeals to the Tribunal were heard together and are being disposed of under this common order.
2. The facts of the case are that the ship "Banglar Preeti" encountered very heavy seas and boisterous weather in the North Atlantic from 11-12-78 to 14-12-78 on its way from U.K. and Continental ports to Bombay and took shelter in the port of Bilbao. After leaving Bilbao, the ship again encountered heavy weather and rough seas on 24-12-1978 and 25-12-1978 on its voyage from Bilbao to Leixoes. As a result of the two encounters with strong weather and heavy seas, the cargo on the deck of the ship was washed away and jettisoned to save the ship from sinking. The vessel arrived at Bombay on 26-1-1979 with the cargo loaded from U.K. and Continental ports for discharge at Bombay. Since the cargo had been washed away or jettisoned in the aforesaid weather, there was shortlanding against several items in the IGM and the Custom House issued six show cause notices calling upon the steamer agents M/s. Shipping Corporation of India to account for the cargo and to show cause for levy of penalty under Section 116 in case of their failure to do so. After holding inquiry, the Dy. Collector in one case and the Assistant Collector MCD in the other five cases passed orders levying penalties under Section 116 of the Customs Act against the respective items mentioned in those orders. The Shipping Corporation of india filed an appeal under old Section 128 of the Customs Act to the Appellate Collector of Customs, Bombay against the aforesaid six orders of the Dy. Collector and the Asstt. Collector and the Appellate Collector gave partial relief to them as per the common order of the Appellate Collector dated 20-1-1982. The basis for the Collector to grant the relief is also mentioned in that order. The main ground was the extension of the Marine Note of Protest dated 29-4-1979 made by the Master of the vessel "Banglar Preeti" Akma Asim before the Notary Public in Chittagong port on 29-4-1979. Copies of the extension of the Marine Note of Protest have been filed by the appellants. The other grounds for the Collector to grant relief were the refund claims by the importers for the lower amounts and the BPT's certificate for amended outturn reports for the items concerned. In their application dated 26-7-1982 to the GOI, now an appeal to the Tribunal, the appellants have made a tall claim of absolving them from any liability on all items which were not accounted for by them on the grounds that the goods mentioned against the items were either washed away or jettisoned. In particular, they have preferred the appeal against Item Nos. 282, 16, 704, 40, 423, 143, 16, 204, 702, 723, and'762 of the IGM of the ship.
3. Shri I.A. Bootwala, advocate for the appellant was heard by us in support of the written memos of appeal. After setting out the facts of the case as mentioned above, Shri Bootwala submitted that a total of Rs. 12,47,346/- was levied by way of penalty amounts under the six original orders of the Dy. Collector and the Assistant Collector. On appeal, the Appellate Collector gave relief to the extent of penalties amounting to Rs. 4,00,000/- approximately and the amount to be paid as penalty was reduced to Rs. 7,43,342.94P. Since over 80 items of the IGM were covered under these six orders, the penalty amount was quite substantial. On the other hand, looking to the facts of the case, not much of documentary evidence was available with the appellants to substantiate their claim. The Appellate Collector in his order dated 20-1-1982 accepted the facts mentioned in the Extended Marine Note of Protest. So far as the present appeals before the Tribunal were concerned, Shri Bootwala submitted that he would not press for those items which were stowed in the hatches of the ship which were not affected by the adverse weather but could confine his submissions only to the cargo which was stacked on the deck of the ship which was either washed away by the stormy seas or had to be jettisoned to save the ship.
4. In addition to the levy-of penalty, the Appellate Collector had also directed payment of interest from the appellants and Shri Bootwala stated that he would urge that the amount of interesf should be ordered to be refunded. Shri Bootwala filed a copy of the stay order No. S/49-208/ 81-M to S/49-213/81-M dated 29-1-1981, a copy of letter No. IGM No. 1971/22-1-79/S/49-208 to 213/81M dated 4-5-1984 of the Assistant Collector of Customs MCD and a copy of the letter No. 235/Custom/Banglar Preeti/ 1971 dated 31-7-1984 from the appellants to the A.C. M.C.D. in support of his contention for refund of interest amounting to Rs. 1,55,429.96P levied by the Asstt. Collector in terms of the aforesaid stay order dated 29-1-1981 of the Appellate Collector on the penalty of Rs. 7,43,342.94 for the period 3-12-1980 to 30-1-1982 at 18% per annum. Thereafter, Shri Bootwala took up his arguments with reference to each line number for which the appellants have pressed their claim in the present appeals.
Item No. 805; Shri Bootwala submitted that this item covered 77 drums originally. The Appellate Collector allowed their appeal in respect of 73 drums, accepting the fact that these drums were washed away or jettisoned as evidenced in the extended Marine Note of Protest dated 29-4-1979 of the Master of the ship. Shri Bootwala submitted that the entire consignment of 77 drums was stowed on the deck and all the drums were washed away or jettisoned. Therefore, he requested that the penalty amount in respect of the 4 drums not accounted for should also be refunded.
Item. No. 227; Shri Bootwala submitted that he would not press the appeal in respect of this item.
Item No. 611; Shri Bootwala submitted that the penalty amount in respect of this item was Rs. 1,537.62. This item had been included twice and therefore the amount of penalty had also been levied twice on this account. Accordingly, he requested that one set of penalty amount be refunded.
Item No. 297; The penalty amount in respect of this item was Rs. 2,998.64. This item had been included once again for the purpose of levy of penalty and hence the penalty had been levied twice against the same item. He therefore requested that one set of penalty be refunded.
Item Nos. 423 & 76: Shri Bootwala stated that he would not press the appeals in respect of these two items.
Item No. 40; Shri Bootwala contended that a penalty was levied twice against this item and therefore requested that one set of penalty be refunded on this item.
Item Nos. 139 and 397: Shri Bootwala did not press the appeal in respect of these items.
Item No. 204: Shri Bootwala stated that the refund against this item was on account of the damage sustained to the goods as there was loss of contents because the container had been damaged. When it was pointed but to Shri Bootwala that Item No. 204 was not covered by the order of the Collector (Appeals) he agreed to this position and accepted the fact that at this stage he 'could not ask for refund against this item number.
Item No. 622; Shri Bootwala submitted that the consignment against this item covered 10 bags of vegetable wax and these were stowed on the deck. A survey was held on the landing of the consignment in Bombay which brought out the fact of shortage. However in reply to our question, Shri Bootwala submitted that he had no evidence to support his contention that this consignment was stowed on the deck or that the survey report was available to establish the shortage.
Item No. 297: Shri Bootwala explained that this item covered cases of whisky. The bottles were broken but shri Bootwala could not produce any evidence when we asked him to do so. He however contended that penalty in respect of this item was also levied twice. He requested that one set of penalty be refunded.
Item No. 656; Shri Bootwala mentioned that this item consisted of 25 pallets having paper bags containing polyethylene. Some bags were torn and their contents had spilt out. The shortage was discovered on survey and the amount of penalty levied thereon was Rs. 1,405.53. Shri Bootwala stated that these bags were torn because of rough weather. However, he did not nave any documentary evidence to establish this shortage on survey.
Item No. 704; Shri Bootwala argued that a penalty of Rs. 777.05 was levied for the shortage detected on survey against this item consisting of 24 cases of Bronze Powder. The wooden cases had been damaged due to rough weather and their planks had broken resulting in the bronze powder spilling out of the cases. However, Shri Bootwala had not documentary evidence to support his claim.
5. In the end, Shri Bootwala requested for relief for the aforesaid items taking into account the special circumstances of the case. He also repeated his request for the refund of interest charged by the Asstt. Collector on the basis of the Appellate Collector's order dated 29-1-1981.
6. Shri Pal, the learned SDR observed on behalf of the Respondent Collector that wherever the appellants could substantiate their claim by way of documentary evidence, the relief had been provided to them by the Appellate Collector. The Appellate Collector had therefore taken cognisance of the Marine Note of Protest and provided substantial relief. All the items which were washed off or jettisoned were treated leniently under the Appellate Collector's order. The Master of the Vessel had lodged a detailed protest note with the Notary Public in Chittagong and the Appellate Collector had allowed each item covered by this protest note. Besides this note of protest, the appellants did not produce any evidence like B.P.T.'s amended outturn report, survey reports or any other evidence of suppliers or importers to justify their claim of relief. Shri Pal submitted that the accountability for the cargo in terms of Section 116 of the Customs Act was a strict liability and the appellants had to be put to a strict test by way of proof before they could claim relief. No such proof was produced by them in a majority of the cases and hence their request for relief did not merit favourable consideration. With these submissions, Shri Pal dealt with the specific arguments of the appellants as under:
Item No. 805; Shri Pal submitted that Item No. 805 consisted of 77 drums of Pyridine. The Marine Note of Protest accounted for 73 drums and therefore the benefit was given to this extent. There was no evidence for the remaining 4 drums and hence the appellant's claim for relief on this account was not tenable.
Item No. 611; Shri Pal submitted that he had no objection for the grant of relief against this item as penalty had been levied twice against the same shortlanding.
Item No. 297; Shri Pal had no objection to the grant of refund of one set of penalty against this item as the penalty had been levied twice against this item.
Item No. 40; Shri Pal submitted that the correct item was 14 and Item Nos. 14 and 74 had been outturned as shortlanded by the B.P.T. The BPT's report stated that the outturn had not been finalised and the cargo against these two items had not been cleared in full. The Collector's action for levy of penalty against these two items was therefore correct.
Item Nos. 139 and 397; No evidence had been produced by the appellants in support of their claim for relief against these items and therefore Shri Pal requested rejection of their appeal in respect of these items.
Item No. 204; Shri Pal submitted that the cargo had not been cleared fully. However, there was no evidence to confirm that there was short-landings against this item. Even if it be held that the shortage against this item was on account of survey, the steamer agents were liable to account for the contents of the pakages under Section 116. This was a strict liability and had to be enforced rigourously. In this behalf Shri Pal relied on the CEGAT's judgment in the case of Shaik Mohamad Rowther Shipping & Agencies Pvt. Ltd., Madras v. Collector of Customs, Madras 1983 ELT 1270.
Item Nos. 611, 622, 297, 656 and 704; Shri Pal submitted that in respect of these five items that the claims of the appellants were without any supporting evidence and hence the same were not tenable. Except for Item No. 297, where penalty hd been levied twice, the claims dsof the appellants for the aforesaid items were not maintainable. In case of their claim on account of shortages noticed on survey he would again reiterate his reliance on the decision of the CEGAT reported in 1983 ELT 1270.
7. Shri Pal therefore submitted that by and large, except for the penalties which had been levied twice, the claims of the appellants in the appeals were not meriting favourable consideration and therefore the appeals should be rejected.
8. We have examined the submissions made on both the sides. It is necessary to observe that in the petition dated 26-7-1982 addressed to the Goverment of India, the appellants had confined their claim in respect of Item Nos. 282, 12, 704,40,423, 143, 16, 204, 702, 723 and 762. But subsequently, they were required to file five additional appeals and these included claim for relief against other items not so contained in the original petition dated 26-7-1982. Since however the delay in filing the appeals has been condoned the claims in respect of those items also become valid and they have to be examined and dealt with merits. In dealing with the merits dof their appeals, it is seen that the appellants have only produced the Extended Marine Note of Portest filed by the Master at Chittagong on 29-4-1979. This note contains the fact that one Marine Note of Protest was lodged by the Master before the Notary Public in Bilbao on 15-12-1978. A copy of this note has not been produced. It is also possible that the Master would have lodged a similar protest note at Leixoes. it is further seen that since the ship encountered heavy weather and lost a lot of cargo through it, it would have declared a general average and the copy of the same would have been also available with the appellants. Similarly, claims have been made that the cargoes landed in Bombay were surveyed. The Insurance Survey Reports would have been also available. Thus, the appellants could have submitted a lot of documentary evidence in support of their claims. But no such. evidence has been produced except one document as mentioned above. Therefore the appellant's contention that in the circumstances sof the case they are, unable to produce any documentary evidence is not tenable, and their claim for relief by the appellants in the aforesaid appeals is not supported by any proof. It is therefore not possible to concede the appellant's request in the absence of any proof. These observations by the learned advocate vide para 4 above. Examining the advocate's submissions and those in the written memos of appeal it is found that the appellant's request for relief in respect of the relevant items is not tenable except in the case of Item Nos. 611 and 297. It is seen from the order of the Collector (Appeals) dated 20.1.82 that the Item Nos. 611 and 297 appear twice in it and the Appellate Collector has rejected the appellant's claim in respect of these items under his aforesaid order. It is thus evident that double penalties hae been levied in respect of the aforesaid items, herefore one set of penalties is levied in excess against these two items and the appellant's claim in respect of one set of penalty is quite valid. Accordingly, the penalty of Rs.1537.62 against Item No. 611 and the penalty amount of Rs.2998.64 against Item No. 297 are ordered to be refunded to the appellants in modification of the orders of the lower authorities. The appeals in respect of the other items are not tenable as no evidence is produced by the appellants in support of their contention. For certain items, the appellants do not press their claim and for one item they admit that the claim is not valid as the same is not covered by the order of the Appellate Collector.
9. In addition the appellants have requested for the refund of interest amounting to Rs.1,55,429.96 p. The advocate for the appellant filed certain documents during the course of the oral hearing for which no prior permission was obtained from the Tribunal. Since, however, the request for refund of the interest has been repeated in five subsequent appeals numbered 676/75 to 680/75 the same is considered and is being disposed of by this order. These appeals have been preferred in terms of Section 129A of the Customs Act. Under Sub-section (1) the type of order or decision against which an appeal can be filed to the Tribunal is mentioned therein. The Appellate Collector's order on stay application of the appellants under old Section 129 of the Customs Act does not come within the ambit of Section 129A(1) of the Customs Act. In fact, the order under which the appellants have felt aggrieved is the one passed by the Appellate collector under his reference No. S/49-208 to 213/81 dated 20.1.82. This order does not mention any directions by the Appellate Collector for the payment of interest. Therefore, the appellant's claim in the five appeals for refund of interest is not tenable and has to be dismissed accordingly. Further, it is seen from the Appellate Collector's Order No. S/49-208 to 213/81 dated 20.1.82 that the appellants on their own volunteered to pay interest on the Bank Guarantee. The Appellate Collector accepted their offer under his aforesaid order No. S/49-208 to 213/81 dated 20.1.82. The computation of the interest amount was made subsequently in the Assistant Collector MCD's letter No. IGM 1271/22.1.79/5/49-208 to 213/81M dated 4.5.84. If the appellants have any grievance against this order they have to take it up with the appropriate authority. This Tribunal has no jurisdiction to deal with the question of refund of interest pressed by the appellants.
10. In view of our foregoing- findings except for the modifications of the orders of the lower authorities in respect of the two items 611 and 297, we confirm these orders and reject the appeals of M/s Shipping Corporation of India Ltd.