Customs, Excise and Gold Tribunal - Mumbai
Metraco (India) Ltd. vs Collector Of Customs on 9 November, 1989
Equivalent citations: 1990ECR261(TRI.-MUMBAI), 1990(49)ELT207(TRI-MUMBAI)
ORDER R. Jayaraman, Member (T)
1. This is an appeal directed against the order of the Addl. Collector of Customs, Bombay bearing No. SG-Misc 122/CR/88/S/10-76/CR/89 SUB dated 23-3-1989 ordering confiscation of 4 consignments of Cassia totally valued at Rs. 17,85,780/- but allowing the goods to be redeemed on payment of fine of Rs. 9 lakhs. The Addl. Collr. has also imposed a penalty of Rs. 2 lakhs on the appellants.
2. The main facts of the case for the purpose of disposal of the appeal can be summed up as below:
The appellants imported 4 consignments of cassia and claimed clearance under OGL as per Sr.No. 62 of Appx. 6 part II. They presented the Bill of Lading dated 28-11-1988, showing the date of issue as well as the date of loading on board as 28-11-1988. Import of cassia under OGL was disallowed by issue of Public Notice No. 82 dated 29-11-1988. However, under para 3 of the aforesaid Public Notice, it has been stipulated that import of Cloves and Cinnamon/Cassia by eligible importers shall not be permitted under OGL except to the extent of irrevocable letters of credit already opened and established before the date of this Public Notice, for which shipments are made within a period of 90 days from the date of this Public Notice. In the case of the appellants, no L/C has been opened and established before the shipment of the goods. The Customs house is reported to have received certain information about the correctness of the dates of shipment mentioned in the Bs/L and made enquiries from the Steamer Agents, Bombay, who after making inquiries from the Shipping Lines at Hong Kong informed the Customs authorities that the goods were actually loaded on board the vessel only on 19-12-1988 and not on 28-11-1988 as shown as the loading date on the B/L. On the basis of this confirmation, from the Steamer Agents, adjudication proceedings were initiated, which ultimately resulted in the order of confiscation and imposition of penalty. The present appeal is against the aforesaid order.
3. Shri Nankani, the learned advocate, on behalf of the appellants, submitted that in this case, shipment has taken place prior to the date of Public Notice. The date of B/L is 28-11-1988, while the Public Notice has been issued on 29-11-1988. Hence, the Public Notice is not applicable to the imports made by the appellants, where the B/L date is 28-11-1988. Elaborating on this point, he pointed out that when they made the enquiries with the Steamer Agents at Bombay regarding the date of B/L, they have referred to the Correction Advice issued by Mitsui OSK Lines Ltd. Hong Kong, which is dated 17-2-1989. He took us through the Correction Advice and argued that according to the Correction Advice, the cargo covered under various B/Ls stuffed in containers was delivered to them right from 24th to 27th Nov. 1988 for shipment to Bombay per 'City of Edinburgh' (1st call) due at Hong Kong on 27-11-1988. Due to space problem only few containers could be loaded on the vessel and others shut out were to be sent by the next vessel, which also could not materialise due to space problem. The containers still left out were then loaded on their next vessel Tokyo Bay' which arrived at Hong Kong on 18-12-1988. The above facts slipped from the mind of the clerk in charge of issuing Bs/L and he stamped "loaded on Board" as 28-11-1988 instead of the date as 19-12-1988. According to the Correction Advice, it is confirmed that the B/L date remains the same. He also contended that through the Correction Advice, the Steamer Agents at Bombay are requested to send the intimation of the correction of the dates in the Bs/L. They are yet to receive this correction. Hence, according to him, the Bs/L date remains the same as 28-11-1988, which as per the provisions of para 82 of Handbook, is the relevant date in the case of shipment made by sea. Since the B/L date remains the same even as per the Correction Advice, which is the relevant date for the shipment made by sea as per para 82 of the handbook, he argued that the provisions of the Public Notice No. 82 dated 29-11-1988 are not applicable and the goods can be allowed under OGL.
4. Shri Nankani, while conceding that in this case no L/C was opened and established, contended that there cannot be any mala fide attributed to them, firstly, they were not even aware of the Correction Advice communicated by Mitsui OSK Lines Ltd. to the Steamer Agents at Bombay till the date of adjudication. Only after the adjudication, when they approached the Steamer Agents, they got the copy of the Correction Advice. Hence, they cannot be expected to be aware of the fact that the goods were loaded on board only on 12-12-1988, in the absence of any communication to that effect. They have been under the bona fide impression that the goods had been loaded on 28-11-1988, as per the date on the B/L. Moreover, they have submitted the B/E for warehousing. If there had been any mala fides on their part, they would have rushed to take the clearance of the goods. The very fact that they have submitted a B/E for warehousing, indicates that they were not ware of any manipulation on the date of B/L. He also took us through the provisions of Rule 3 of the Schedule of Rules relating to the Bs/L in the (The Indian). Carriage of Goods by Sea Act, 1925 and submitted that after receiving the goods into his charge, the carrier or the master or agent of the carrier, shall, on demand of the shipper, issue to the shipper, a bill of lading showing the marks and number of packages, the order and condition of the goods. In this case they also produced a certificate from M/s. Onward Cargo Service, Hongkong to the effect that the impugned goods were delivered to the warehouse of Mitsui O.S.K. Lines Ltd. Hongkong on 27-11-1988. Hence the goods have been received by the Shipping Lines on 27-11-1988 and they have issued the B/L on 28-11-1988. As per the provisions contained in para 82 of the Handbook in the case of shipment made by sea, the date of shipment will be the date on the B/L. This is in contradistinction to the goods shipped by Airway. Under para 83 of the Handbook, it is laid down that the ( ate of the relevant Airway Bill will normally be taken as the date of despatch, provided this represents the date on which the goods left the last airport in the country from which the import is effected. He also contended that the Correction Advice only seeks to alter the date of loading on board the vessel. All the same it confirms the date of the B/L. Hence, by virtue of provisions of para 82 of the Handbook, the date of B/L being 28-11-1988, it should be construed as the date of shipment and the goods allowed under OGL. Referring to para 86 of the Handbook, he pointed out that validity of the import licence is decided with reference to the date of actual shipment/despatch of the goods from the supplier's country and in the case of shipment made by sea, this has to be reckoned as the date of the B/L as per the provisions of para 82.
5. Shri Nankani also contended that there is absolutely no evidence with regard to any mala fides in the alteration of the date of loading of the goods on board the vessel. Even the Correction Advice as well as the letter from the Steamer Agents addressed to the Customs authorities, clearly indicate that the date on which the goods were loaded on board the vesse was wrongly endorsed because the clerk incharge in regard to the issue of Bs/L, by mistake has stamped the date of issue of B/L as the same as the date of loading the goods on board the vessel. The department have also not produced any evidence that the date of loading the goods on board the vessel has been shown as different from the actual date, at the instance of the appellants. He also contended that the Director of the firm had gone to Hongkong as early in Sept. 1988 and placed an order for 91 metric tonnes in 7 containers; 4 containers are the subject matter of the present appeal. The other 3 containers arrived in 2 consignments by the same vessel and were cleared by the very same Customs house accepting the B/L without questioning the date of B/L. The reason given by the Addl. Collector with regard to the previous releases of 2 consignments, which have arrived by the same vessel, is that they were covered by the L/C and hence B/L was accepted. If the case of the department is that the date on the B/L has been fabricated at the instance of the appellants, similar objection is also called for in regard to the other 2 consignments, which is not the case here. He also pointed out that they had applied to the Ministry of Agriculture for the requisite permission as early as on 28-8-1988 in respect of the impugned imports, for which they have placed order, and the permission was also issued by the Ministry of Agriculture as early as on 26-10-1988. This clearly indicates their bona fide in getting the cassia under OGL and they were expected to know about the change in the Policy as early as on 29-9-1988. He pleaded that since no mala fides are established, even if it is held that the goods are liable for confiscation, the imposition of penalty is totally unjust and the redemption fine to the extent of 50% of the value of the goods is uncalled for. In this context he also mentioned that in similar cases, consignments have been allowed on a lower fine and in some cases on warning.
6. Heard Shri Arya. He referred to the provisions of Rule 7 of the Schedule of Rules relating to Bs/L in the (The Indian) Carriage of Goods by Sea Act, 1925. He pointed out that there is a provision for issue of shipped B/L on surrendering the documents of title to such goods issued previously. He took us through the provisions of Rule 7 and argued that in view of the clear provisions made under Rule 7, for purpose of construing the date of shipment, the date of shipped B/L is the relevant date for purpose of para 82 of the Handbook. He also pointed out that the B/L is the receipt of the goods placed on board the ship and also the document for transferring the title of the goods in the consignments. He also referred to the judgment of the Madras High Court reported in AIR 1968 Madras 42 (46) and stated that B/L is generally prima facie evidence against the ship owner of shipment on board of the goods acknowledged in the Bill. He also contended that it is not the case of the appellants that the goods were loaded on board the vessel on 28-11 -1988. They are admittedly loaded on board the vessel only on 19-12-1988. Even the B/L, which originally shows the date of loading on board the vessel as 28-11-1988 is sought to be corrected by the Correction Advice so as to read the date as 19-12-1988. In this case, L/C is admittedly not opened or established. Hence, only if it can he established that the goods have been loaded on board the vessel prior to the date of issue of Public Notice, they can claim the benefit of the OGL. Since in view of the admitted fact that the goods have been loaded on board the vessel on 19-12-1988 and no L/C has been opened, they cannot claim the benefit of OGL. The appellants, knowing fully about the issue of the Public Notice did not take any step to stop the consignment or to approach the licensing authority for issue of licence. Hence, there is justification for imposition of penalty and the order of confiscation is also justified.
7. After hearing both sides, we observe that the following facts arc undisputed:
(i) No L/C has been established in this case;
(ii) The goods have been loaded on board the vessel Tokyo Bay' on 19-12-1988. in respect of which the B/L have been issued on 28-11-1988.
In the context of the aforesaid admitted facts, the questions that are required to ho decided can be identified as follows :
(i) Whether 28-11-1988 being the date of issue of B/L can be taken as the date of shipment, or 19-12-1988 being the date of loading of the goods on hoard the vessel is to be taken as the date of shipment;
(ii) Whether the original wrong stamping of loading the goods on board the vessel showing the date as 28-11-1988 was at the instance of the appellants, and whether the appellants deliberately produced the anti-dated B/L for the purpose of availing clearance under OGL.
8. With regard to the question at sr. No. (i) above, the point can be further narrowed down to the interpretation of para 82 read with para 86 of the Handbook of Procedures. As per para 86, the validity of import licence is decided with reference to the date of actual shipment/despatch of the goods from the supplying country and not the date of arrival of the goods at an Indian Port. Para 82 thereof indicates as below :
"In the case of shipments made by sea, this will be the date on the Bill of Lading."
From a reading of para 86, it is evident that the validity of the licence is to be determined with reference to the date of actual shipment. However, in respect of shipment made by sea, as per para 82, this date will be the date on the B/L. Shri Nankani took us through the provisions of Rule 3 of the Bs/L Rules and contended that the B/L can be issued on demand after the goods are received into the charge of the carrier, or the master or agent of the carrier. In this case, there are evidences to show that the goods have been delivered to the warehouse of the Shipping Lines on 27-11-1988 itself. Hence, the B/L showing the date of issue, which is not corrected even as per the Correction Advice, should be construed as the date of shipment. Shri Arya on the other hand referred to Rule 7 of the aforesaid Rules to point out that after the goods are loaded, a shipped B/L is to be issued on demand by the shipper and this shipped B/L date is the date of B/L as referred to in para 82.
9. We have carefully considered the pros and cons of both sides' arguments. Rules 3 & 4 of the said Rules read as below:
"Rule 3 : After receiving the goods into his charge, the carrier or the master or agent of the carrier, shall, on demand of the shipper, issue to the shipper a bill of lading showing among other things :-
(a) The leading marks necessary for identification of the goods as the same are furnished in writing by the shipper before the loading of such goods starts, provided such marks are stamped or otherwise shown clearly upon the goods if uncovered, or on the cases or coverings in which such goods are contained, in such a manner as should ordinarily remain legible until the end of the voyage;
(b) Either the number of packages or pieces, or the quantity, or weight, as the case may be, as furnished in writing by the shipper;
(c) The apparent order and condition of the goods provided that no carrier, master or agent of the carrier, shall be bound to state or show in the bill of lading any marks, number, quantity or weight which he has reasonable ground for suspecting not accurately to represent the goods actually received, or which he has had no reasonable means of checking.
Rule 4: Such a bill of lading shall be printer facie evidence of the receipt by the carrier of the goods as therein described in accordance with paragraphs 3(a), (b) and (c).
10. On a careful reading of the aforesaid rules, it is evident that after receiving the goods into his charge, the carrier or the master or agent of the carrier shall issue a B/L to the shipper on being demanded and such a B/L shall be prima facie evidence of the receipt by the carrier of the goods.
11. Rule 7 reads as below:
"After the goods are loaded, the bill of lading to be issued by the carrier, master or agent of the carrier, to the shipper shall, if the shipper so demands, be a "shipped" bill of lading, provided, that if the shipper shall have previously taken up any document of title to such goods, he shall surrender the same as against the issue of the "shipped" bill of lading, but at the option of carrier, such document of title may be noted at the port of shipment by the carrier, master or agent with the name or names of the ship or ships upon which the goods have been shipped and the date or dates of shipment, and when so noted the same shall for the purpose of this Article be deemed to constitute a "shipped" bill of lading".
12. On a plain reading of the Rule 7, it is evident that at the option of the carrier, document of title obtained by the shipper previously in terms of Rule 3 of the said Rules, can be endorsed at the Port of shipment by the carrier, master or agent with the name or names of the ships, on which the goods have been loaded and the date or dates of the shipment. In this case, it is contended that the goods have been delivered at the warehouse of the Shipping Lines at Hongkong on 27-11-1988. The date of issue of the B/L is shown as 28-11-1988. This B/L can be said to have been issued as a receipt as contemplated in Rule 3. When the same document has been used for noting the name of the ship and the date of shipment as 28-11-1988 originally (but subsequently corrected as 19-12-1988) it is clear that 19-12-1988 is the date of shipment as envisaged in Rule 7 aforesaid, because at the option of the carrier, the same document can be utilised for noting the name of the vessel and also the date of shipment. Obviously, it is not the case of the appellants that the B/L obtained soon after depositing the cargo in the warehouse on 27-11-1988 was surrendered, and another shipped B/L was obtained as contemplated under Rule 7. In this view of the matter, we are unable to agree with Shri Nankani that only the date of issue of the B/L viz. 28-11-1988 is to be taken as the date of shipment. Moreover, on a close and careful reading of para 82, it is evident that in the case of shipment made by sea, this will be the date on the B/L. Para 82 does not simpliciter say that the date of shipment is the date of B/L. It says that in the case of shipment made by sea, this will be the date on the B/L. When the Rules as pointed out by both sides, provide for two dates, one for the date of issue of the B/L when the goods were entrusted with the carrier and another date of actual shipment by placing the goods on board the vessel as contemplated under Rule 7, it is the date of actual shipment, that is required to be taken especially when the provisions of para 86 are to be read, where the validity is to be determined with reference to the date of actual shipment.
13. If the argument of Shri Nankani is to be accepted, it can lead to situations, where goods having been delivered at the warehouse of the Shipping Lines months prior to the Actual shipment could be construed to have been actually shipped on the date when they were entrusted to the shipping agents. Such a construction would nullify the object of the Policy itself, where, it is laid down that the validity is to be determined with regard to the actual shipment and can not be with reference to the date of issue of B/L, when the goods were left in the custody of the warehouse of the carrier, even without vessels waiting for loading anywhere nearby.
14. In view of the position, we reject the argument of Shri Nankani to the effect that the date of issue of B/L viz. 28-11-1988, should be taken as the date of shipment. The admitted position is that the goods have been loaded on 19-12-1988 much after the issue of the Public Notice and therefore the goods cannot be allowed under OGL but only under a valid licence. Since it is not the case of the appellants that they had opened the L/C the question of considering the shipment having taken place within a period of 90 days does not arise. We, therefore, hold that the goods are liable for confiscation.
15. Now coming to the second question viz. whether there was a deliberate attempt on the part of the appellants to present an anti-dated B/L, we find that there is no worthwhile evidence presented by the department to show that there had been a deliberate attempt on the part of the appellants to present an anti-dated B/L. Even the " document, on the basis of which adjudication proceedings have been initiated viz. the letter from the Steamer Agents, clearly indicates that the cargo has been received by the Shipping Lines at Hongkong as early as in the month of November. The appellants have also produced evidence to show the date of receipt from the Shipping Lines at Hongkong is 27-11-1988, which is not rebutted. In the circumstances, the date of issue of the B/L as 28-11-1988 is quite possible but the date of loading has been admitted to have been wrongly shown because of the mistake On the part of the clerk endorsing the loading date on the B/L. In view of the aforesaid factual position, the benefit of doubt is definitely required to be given to the appellants. We, therefore, hold that the allegation of deliberate presentation of the anti-dated B/L is not established. We also take note of the plea made by Shri Nankani that two consignments of cassia imported by the same vessel have been allowed on accepting the Bs/L bearing the same date without any question. Though in those cases, Ls/C have been opened and established, the fact that date of loading on those Bs/L has not been questioned in those cases, indicates that suspicion has arisen only because of absence of L/C in this case and the documents are not otherwise suspect. 15A. In view of the aforesaid findings, while confirming the order of confiscation, we would deem it proper to set aside the penalty. We would also reduce the redemption fine from Rs. Nine lakhs to Rs. Four lakhs fifty thousand. The appellants be granted consequential relief.
16. The appeal is disposed of in the above terms.