Customs, Excise and Gold Tribunal - Tamil Nadu
P And O Nedlloyd (India) Ltd. vs Cc on 13 September, 2002
Equivalent citations: 2002(105)ECR856(TRI.-CHENNAI), 2002(148)ELT1206(TRI-CHENNAI)
ORDER Jeet Ram Kait, Member (T)
1. This appeal filed by M/s. P & O Nedlloyd (India) Ltd. is directed against the order in original No. S8/C(A)/A4-28/99 dated 11.8.1999 passed by the Commissioner of Customs, Madras by which the Commissioner has imposed a penalty of Rs. 70,78,408/- on appellant viz. M/s. P & O Nedloyd (India) Ltd. who are the Steamer Agents, under Section 116(a) of the Customs Act, 1962. He has also imposed penalty of Rs. 1,00,000/- each on various other persons involved in the case. He has also ordered confiscation of vehicle TMV 2510 under Section 115(1) of the Act with option to redeem the same on payment of fine of Rs. 1,00,000/- and also ordered release of the seized goods. In the present appeal, we are concerned with the appeal filed by M/s. P & O Nedlloyd (India) Pvt. Ltd., the Steamer Agents.
2. The brief facts of the case are that on gathering information that goods contained in container No. ICSU 5060556 was removed illegally while in transit from Chennai Port Trust to CFS, Virugambakkm without payment of duty, the officers of the DRI, detained the said container at CFS Virugambakkam on 12.9.1988. On enquiry, it was noticed that the goods stuffed in the said container was imported by the Chennai Branch of ITDC, DFT division, Jeevan Vihar, Sansad Marg, New Delhi, vide Bill of Entry (BE) No. 51211 dated 9.9.1988. As per the BE and the invoice, the consignment consisted of 999 cartons of assorted brands of liquor of foreign origin. The container was found locked with one time lock No. 011213 and the container was transported from Chennai Harbour to CFS Virugambakkam by Trailer No. TMV 2510 belonging to the Transport Company viz. M/s. AKTP. On examination of the container in presence of the independent witnesses and Shri Gopalakrishnan, driver of the Trailer, Shri E. Vijayakumar, Senior Manager of ITDC who are the importers, Shri Rupam Jaikumar, Clearance Supervisor of M/s. ITDC and Shri P. Raghuraman, Clerk of the CHA viz. Alankar Shipping & Trading Co. Pvt. Ltd. it was found to contain only 652 cartons of foreign liquor and the same were listed. Since the goods listed did not correspond to the declaration found in the BE, the same were seized under a mahazar dated 12.9.1998. Statement was obtained from the driver of the Trailer wherein he inter alia stated that the container was opened en-route to CFS, Virugambakkam without tampering with the Customs bottle seal by two persons by name viz. Murugesan, a friend of his, working with M/s. GVS Transports, and another person viz. Raju and they took away sizable quantity of goods from the container and he was also offered some commission. As the involvement of the Driver Gopalakrishnan was beyond doubt in the illicit removal of dutiable goods from the import container, he was arrested on 12.9.1998 and remanded to the judicial custody. Statement was also recorded from Murugesan, Clearing Clerk of M/s. AKPT on 12.9.1998 wherein he has stated inter alia that his job was to supervise the transport of the containers from Chennai Harbour to the place to the destination and for that purposes he obtained the necessary document from the Steamer Agent viz. the appellants herein for the transport of the container and he made arrangements for the five trailers and around 11.30 PM he loaded the container in trailer No. TMV 2510 and went to supervise the loading of containers in other trailers and he requested Gopalakrishnan, the driver of Trailer No. 2510 to be available till he came back since there was no cleaner available in the vehicle, but when he came back after supervising the loading of other trailers, he found Trailer No. 2510 was not there at the site and he came to know on the following day that the said trailer had reached the CFS Virugambakkam. Statements were also recorded from the owner and employees of the Transport Company, such as G. Nagarajan, Shri Satyanarayanan and Shri S.K. Ganapathi, Eiankovan of the Transporter and all of them denied any knowledge about the pilferage. Statement was also obtained from L. Gopikrishnan, Officer (Operations) of the appellants Company on 14.9.1998 wherein he stated inter alia that normally the containers are allotted by him on equal ratio basis and that the Company on routine transport all the containers only to Concor CFS but in this particular case there was a letter from the importer M/s. ITDC Chennai vide their letter dated 24.8.1998 requesting them to transport the container to CWC Virugambakkam and a container was allotted on a routine equal basis and on 14.9.1998 one Shri Satyanarayana of the Transport Company informed him that the container was detained by the DRI officers. He had denied any knowledge about the discrepancy in the quantity of the goods. Statement was also recorded from Shri S. Edwin, Executive, Customer Service of the appellants Company, wherein he stated inter alia that transporters normally hand over container to the CFS authorities with seal intact and produce all the documents for verification and endorsement which would be recorded by them and as and when the consignee come for delivery order, they hand over the copy of the-same to the consignee for inspection and clearance from the CFS. He has also stated that in this case they have received instructions from M/s. ITDC who are the importers stating that the importers have got permission from the Customs for bonding the cargo and the documents were prepared accordingly and contacted the Transport Company for conveyance of the goods. Statement was also recorded from Maran Nallaiah, Director of CHA M/s. Alankar Shipping & Trading Co. Pvt. Ltd. Chennai on 14.9.1998 wherein he stated inter alia that the transportation of the consignment was done by the appellant herein. Statement was also recorded from E. Vijayakumar, Senior Manager of the importer on 15.9.1998 wherein he stated about the placement of orders for import of 900 cartons of foreign liquor from M/s. United Distilleries & Vinters UK and they had engaged M/s. Alankar Shipping & Trading Company. He has also stated that in this particular case, the DRI officers asked him to be present at CFS Virugambakkam for examination of the container and on examination it was found that the goods were not tallying with the quantity mentioned in the BE. He also stated that they had written to the Steamer Agents about the discrepancy and they also asked the CHA why the container arrival was not informed to them. In the circumstances proceedings were initiated by issue of show cause notice dated 5.3.1999 and the proceedings culminated in the order impugned which is challenged by the appellants, who are the Steamer Agents, who have been visited with a penalty of Rs. 70,78,408/- under Section 116(a) of the Customs Act, 1962. Aggrieved by the said order, the appellants have come in appeal on the following grounds:
(a) Penalty under Section 116(a) of the Customs Act, 1962 cannot be imposed on the appellants as the appellants were unaware of the actual quantity of the goods stuffed in the container.
(b) At the time of landing of the container from the vessel, the seal of the container was found intact and the container was also in good order and condition and on the said premise the Commissioner should have dropped the proceedings against the appellants.
(c) The adjudicating authority was not correct in holding that the movement of the container from the Chennai Port to the CFS was an extension of the contract of carriage and that the point of discharge of the cargo has accordingly been shifted to the CFS. Further, the person in charge of the conveyance means the owner of the carrier and not their agent i.e. the appellants.
(d) The goods were being carried by the trailer belonging to Shri G. Nagarajan owner of the Transport Company and hence it is only the said Nagarajan, the driver of the trailer who can be held responsible for the pilferage.
(e) In this case the driver of the trailer has admitted that he has colluded with other two persons in removal of part of the goods from the trailer and hence it is the transporter or their driver who should be held responsible for the pilferage and not the appellants who are the Steamer agents.
3. Shri Ranganathan, learned Advocate accompanied by Miss Shya mala, learned Advocate appeared for the appellants and argued the case for a considerable length of time and submitted that in this case the Steamer Agents (Appellants) cannot be held responsible for the pilferage of the goods en route from the Chennai Port to CFS Virugambakkam. Shri Ranganathan, learned Counsel submitted that when the container was unloaded from the Vessel, the seal of the container was intact and this fact is not disputed. He submitted that the responsibility for the pilferage is on the transporter and not on the Steamer agents who are the appellants in this case.
4. Shri Veeraraghavan, learned ACGSC appearing on behalf of the Revenue defended the impugned order and submitted that in this case the Transporter was engaged by the appellants herein as their agents and hence the responsibility rightly was on the appellants to ensure that the goods landed at the destination intact and they have failed in their responsibility and it cannot be shifted to the transporter. He relied upon the following judgements of the Hon'ble Apex Court in support of his plea:
(1) IAAI v. Grand Slam International wherein by a majority judgement, it was held that Demurrage/keeping charges payable by importer to custodian (Porl Trust/IAAI/CWC) even if good detained for non fault of his and the Collector of Customs was not empowered to debar the custodian from collection of keeping charges at the rates laid down in custodian's statutory Regulations.
(2) British Airways PLC v. Union of India delivered by the Hon'ble Apex Court on 6.11.2001 wherein it was held that Process of unloading is completed only when the Cargo is handed over to the custodian and each packet accounted in confirmity with cargo manifest and till such time cargo being in possession and control of carrier airlines, only "person in-charge" of aircraft and not custodian responsible for keeping safety of the goods and to account for any loss in terms of Section 116 of the Customs Act, 1962.
5. We have considered the submissions made by both the sides. This case was argued by the learned Counsels for a considerable length of time. The plea canvassed was that the appellant who are the Steamer agents cannot be fastened with penal liability and it is only the transporter who should be held responsible for pilferage. The Bench had asked the learned Counsels to peruse the Judgment of the Hon'ble Apex Court in the case of British Airways v. UOI and make their submissions in the matter, after perusing the said judgement, the learned Counsels in fairness conceded that in view of this judgement, they have no further submissions to make and pleaded for leniency.
6. We observe that the sort and the only question that arises for consideration in this case is whether the liability of the steamer agents was over once they have unloaded the container with one time seal intact in side the Harbour premises. In this case M/s. Arulmigu Kaliga Parameswari Transport (M/s. AKTP) was appointed by the appellants who are the Steamer Agents for transportation of the container from the Chennai Port to CFS Virugambakkam. The liability of the Steamer agent does not end by unloading the container in the Harbour premises but extends to the CFS/CWC to which the containers are allowed to be removed on the applications filed by the Steamer Agents in terms of Public Notice No. 90/95. As rightly held by the Commissioner in para 29 of the impugned order, the Steamer Agents not being the importer cannot be called upon to pay duty and therefore, duty is demandable as penalty under Section 116(a) of the Customs Act, 1962 inasmuch as the Steamer Agents were responsible for the shortages noticed at the time of examination of the container and since they have failed to unload the entire quantity carried by them they are liable to pay penalty. The Hon'ble Supreme Court had occasion to interpret Section 148(1), (2) and Sub-Clause (2) thereto in the case of British Airways PLC v. UOI reported in 2002 (139) wherein the Hon'ble Court held as under in paras 9 and 13:
9. The scheme of the Act provides that the cargo must be unloaded at the place of intended destination and it should not be short of the quantity. Where it is found that the cargo has not been unloaded at the requisite destination or the deficiencies are not accounted for to the satisfaction of the authorities under the Act, the person incharge of the conveyance shall be liable in terms of Section 116 of the Act. Besides the person incharge of the conveyance, the liability could be fastened upon his agent appointed under the Act or a person representing the officer incharge who has accepted as such by the officer concerned for the purposes of dealing with the cargo on his (officer-in-charge) behalf. Assuming that the appellants are neither the officer incharge within the meaning of Section 2(31) of the Act nor his agent, it cannot be denied that they shall be deemed to be a person representing the officer in-charge to the officers of the customs as his agent for the purposes of dealing with the cargo off-loaded from the aircraft of the appellant carrier.
13. It may be noticed that Sub-section (2) of Section 148 was enacted to give relief to the aircraft carrier and the officer incharge of a conveyance and permit him to leave with the conveyance by making his agent and person representing him responsible for all the penalties and confiscations. Accepting the submissions of the appellants in this context would defeat the purpose of incorporation of Sub-section (2) of Section 148 of the Act and make the working of the Act impractical. Such an interpretation would be detrimental both to the carrier, the officer incharge on the one hand and the revenue and customs authorities under the Act, on the other. Insistence of ascertaining the liability under Section 116 of the Act before passing an order in terms of Section 42 would mean not permitting the conveyance to depart from the customs station unless its officers have minutely examined the whole case and determined the consequences for not accounting of goods. Such could not be the intention of the Legislature.
7. It would therefore be seen that the Hon'ble Apex Court has given quietus to the doubt as to who is the person in charge of the conveyance and whether liability can be fastened upon the officer in-charge of the conveyance, by holding that the liability can be fastened upon the agent of the person in-charge appointed under the Act or a person representing the officer in-charge who has accepted as such by the officer concerned for the purpose of dealing with the cargo on his behalf. In this case admittedly the appellants are the agents of the conveyance.
7.1. In this case duty liability cannot be fastened on the custodian of the goods because the custody of the goods have not been taken by the custodian i.e. Chennai Port Trust authority from the Shipping Agent. The Port Trust had only tallied the containers with the tally sheet prepared by them and they found the seal also intact. In this case this container containing the imported liquor was not to be emptied in the warehouse of the Chennai Port Trust and since it was meant to be carried to the CFS Virugambakkam on the request made by the importer to the Shipping Agent and since the Shipping Agent had engaged the transporter to carry the container to CFS, Virugambakkam, the Chennai Port Trust authorities are not responsible for any loss which has occurred from the Port Trust on way to the CFS. Similarly, duty cannot be fastened on the CFS who are also custodian of the imported goods because the imported goods have not reached CFS. Had the goods been pilfered from the custody of the Custodian, then under Section 45(3) of the Customs Act, 1962 the custodian could have been made responsible for payment of duty on such pilfered goods whereas this is not the case here. Duty cannot be demanded from the importer either, because the importer has not filed any Bill of Entry and the imported liquor was pilfered before the same was cleared by the importer viz. M/s. ITDC. The transporter also cannot be fastened with duty liability because the Customs do not deal with the Transporter who is the agent of the Shipper and the Customs deal only with the Shipper and the Importer. Therefore, no duty liability can be fastened with the transporter in respect of payment of Customs duty. However, Shipping Agents are at liberty to take any civil action against the transporter for causing loss to them. The only person from whom duty in the shape of penalty can be demanded is the Shippping Agent because the journey of the container continued from the Chennai Port to the CFS, Virugambakkam under their arrangements based on a letter of request dated 24.8.1998 from the importer i.e. M/s. ITDC Chennai requesting them to transport the goods from Chennai Port Trust to CFS, Virgugambakkam and the transporter was appointed by the Shipping Agent and therefore, the shipping agents (the appellants) were responsible for transport of the goods from Chennai Port Trust to CFS Virugambakkam and hence they (appellants Shipping Agents) have been rightly penalised under Section 116(a) of the Customs Act, 1962 for the deficiency, not being accounted for to the satisfaction of the Assistant Commissioner of the Deputy Commissioner. Therefore, the plea of the appellants that the liability should be fixed on the transporter cannot also be accepted.
7.2. The original authority had power to impose penalty twice the amount of duty under Section 116(a) of the Customs Act, 1962, but he has restricted the quantum of penalty equal to the amount of duty only, which is very reasonable.
8. In view of the above, we find no infirmity in the impugned order imposing penalty on the appellants under Section 116(a) of the Customs Act, 1962. We, therefore, do not find any reason to interfere with the impugned order and uphold the same by rejecting the appeal.
(Pronounced in open Court on 13.9.2002)