Calcutta High Court
Everett (I) Pvt. Ltd. vs Assistant Collector Of Customs on 1 April, 1986
Equivalent citations: 1986(9)ECC131, 1986(24)ELT469(CAL)
JUDGMENT Sudhir Ranjan Roy, J.
1. These three writ applications are taken up for analogous hearing since they involve a common question of law.
2. All the three applications arose out of penalty proceedings under Section 116 of the Customs Act, 1982 in respect of different consignments imported into India from foreign countries for ultimate exportation to Nepal.
3. Due to alleged short landing of the cargo at the Calcutta port, separate penalty proceedings were started against the petitioners under Section 116 of the Customs Act, 1962 and penalties were imposed upon the petitioners overruling their objections including the common legal objection that Section 116 of the Customs Act has no application to Nepal cargo which is exempt from payment of Customs duty under a notification issued by the Government under Section 25 of the Customs Act, 1962.
4. It is against these orders imposing penalty that the petitioners invoked the writ jurisdiction of this court and obtained the instant rules with interim orders of stay.
5. Now, since there is a common legal question involved in all the three cases which are being disposed of by this common judgment and since much would depend on how the said question is answered ; it may be convenient to try to find an answer to the said question first. Incidentally, if the said question is answered in favour of the petitioners there will be no difficulty in disposing of the writ applications in their favour and probing into the other question which the petitioners have raised, may not be necessary.
6. Coming now to the point at issue, the consignments brought to India in all the three cases were meant for exportation to Nepal. According to the petitioners, since the goods were in transit to Nepal and since under the terms of the Treaty of Transit between His Magesty's Government of Nepal and the Government of India which came into force on March 25, 1978 the cargo in transit to Nepal was free of Customs duty, Section 116 of the Customs Act, 1962 could have no application to the said consignments.
7. In this connection it may be useful to refer to the relevant exemption Notification No. 68-Customs, dated March 25, 1978 issued by the Government of India whereby it was provided inter alia as follows :-
"the Central Government hereby exempts-
(a) all goods when imported into India (emphasis supplied) from a foreign country for the purpose of exports to Nepal (emphasis supplied) from the whole of the duty of Customs leviable thereon under the First Schedule to the Customs Tariff Act, 1975 and from the whole of the additional duty leviable thereon under Section 3 of the said Act.
(b)...
(c)...".
The contention of the petitioner is that since the provisions of Section 116 apply only to short landing of dutiable cargo, it can obviously have no application where the goods loaded on board a vessel for importation into India are imported free of duty.
8. In this connection it may be convenient to refer to the relevant provisions of Section 116 of the Customs Act, 1962. It is as hereunder :-
"if any goods loaded in a conveyance for importation into India...are not unloaded at their place of destination in India, or if the quantity unloaded is short of the quantity to be unloaded at that destination and if the failure to unload or deficiency is not accounted for to the satisfaction of the Assistant Collector of Customs, the person in charge of the conveyance shall be liable, (a) in the case of goods loaded in a conveyance for importation into India...to a penalty not exceeding twice the amount of duty that would have been chargeable on the goods not unloaded or the deficient goods, as the case may be, had such goods been imported ;
(b)...".
9. Incidentally, it may be recalled here that Section 116 of the Customs Act does not provide for payment of duty but only for payment of penalty in case of short landed or deficient goods. The reference to duty in Sub-clause (a) of Section 116, in my view, has been made simply for assessment of the amount of penalty to be imposed, as was also rightly contended by Mr. Roy Chowdhury, the learned counsel appearing on behalf of the respondents.
10. In this connection, reference may be made to the decision of the Andhra Pradesh High Court in South India Corporation v. Assistant Collector of Customs, 1983 E.C.R. 477D, where it has been held that what is imposed under Section 116 is not duty but penalty for not accounting to the satisfaction of the Assistant Collector of Customs the quantity of the goods short landed.
11. I am not prepared to accept the contention of Mr. Roy Mukherji, the learned senior counsel for the petitioners that Section 116 of the Customs Act, 1962 applies only to short landing of dutiable cargo. As a matter of fact the first and the operative part of the section makes it more than clear that penalty is leviable where cargo imported into India is short landed. There is no indication therein that the section applies only to dutiable cargo and not to cargo which is duty free. It is only in Sub-clauses (a) and (b) to the section that there is reference to duty, but the said reference is only for the purpose of assessment of the amount of penalty and sub-clauses (a) which is the relevant clause so far the instant cases are concerned, provides that the amount of penalty should not exceed twice the amount of duty that would have been chargeable on the goods not unloaded or the deficient goods, as the case may be, had such goods been imported. In my judgment, it cannot be interpreted on the basis of Clause (a), which is not the controlling or the operative part of the section, that the section applies only to cargo which is leviable to duty and that no penalty can be imposed where the goods have been imported free of Customs duty. The only acceptable and reasonable interpretation to Clause (a) of the section, in my view, would be that had the short landed goods been actually imported the duty ordinarily leviable thereon, whether any duty is actually chargeable or not, shall be the measure for assessment of the penalty, as Mr. Roy Chowdhury, the learned counsel appearing for the respondents also contended.
12. In this connection, it was contended by Mr. Roy Mukherji appearing for the petitioners, that the sole object of imposition of penalty under Section 116 being to compensate the Government against loss of revenue due to short landing of imported cargo, there can be no question of imposition of any penalty under the said section where in view of the exemption notification no duty is leviable on such cargo. And in support of this contention he referred me to the decision of the Bombay High Court in B.K.D. Aktie Selskab v. Secretary of State, A.Z.R. 1940 Bombay 294 (303) which holds that where the deficient goods are dutiable, the penalty according to the section shall not exceed twice the amount of duty chargeable on the deficient goods. The object of the penalty seems to be primarily to compensate the Government of the loss of revenue. The amount of the penalty is paid to the Customs and goes to the revenue. The object of the penalty is not merely to compensate the Government, but also to deter other persons from committing the same offence and thereby preventing or hindering the collection of revenue.
13. But this decision, in my view, does not really help the petitioners, to substantiate their contention that Section 116 of the Customs Act applies only to goods leviable to Customs duty. It simply provides that the object of the penalty is primarily to compensate the Government of the loss of revenue and it is undoubtedly so. The decision, in my judgment is not an authority for the proposition that where duty cannot be charged no penalty can also be imposed.
14. Reference may be made in this connection to the decision of the Kerala High Court in Shorabji & Co. v. Collector of Customs, 1980 E.L.T. 57 (Kerala) where it has been held that in considering the question of penalty under Section 116, the satisfaction of the consignee is of little relevance. The object of the provision is to prevent loss of revenue to the nation. The fact that the consignee or the consignor has no case that the goods were short landed, does not impede the authorities from looking behind the satisfaction of the persons involved in the contract of carriage to determine for themselves as to whether any fraud has been played on the public revenue by the carrier either by himself or in cooperation with others.
15. It is thus clear that if Nepal cargo which is exempt from payment of Customs duty, is also held to be exempt from payment of penalty under Section 116 of the Customs Act on the basis of the argument advanced on behalf of the petitioners, fraud on public revenue by the carrier either by himself or in cooperation with others including the consignor and the consignee, may go on unrestricted. This, however, is only an incidental aspect of the matter and as already stated, to read in Section 116 an unmentioned clause that it applies only to dutiable cargo would, in my view, amount to straining the language of the section which it is not permissible in a fiscal statute. It need not be emphasised that a fiscal statute should be interpreted very strictly and nothing should be introduced therein so as to convey a different meaning beyond its plain language. To repeat, the language of the section is very clear and is capable of the only interpretation that penalty is leviable on short landed charge and the amount of the said penalty should not exceed twice the amount of duty ordinarily leviable, whether any duty is actually chargeable or not. The penalty leviable under Section 116 is thus independent of any duty that may or may not be levied on the cargo in question. The person in charge of the conveyance carrying the cargo makes himself liable for payment of penalty on fulfilment of the conditions as laid down in the operative part of the section. Any other consideration is irrelevant for the purpose. Clauses (a) and (b) to the section simply provide the maximum amount of penalty. that may be imposed in each case and the method of assessment thereof. The said clause's, as it is more than clear, do not in any way control the operative part of the section, which is absolutely self-contained.
16. The next point urged on behalf of the petitioners in this regard was that Section 116 in its terms being applicable only to goods imported into India or to export goods it can, on the face of it, have no application to Nepal cargo which is meant for exportation to Nepal.
17. In this connection reference may be made once again to the relevant exemption notification which exempts from payment of Customs duty or Additional duty "all goods when imported into India for the purpose of exports to Nepal".
18. So, the goods in any case have to be imported initially into India and in my view, goods so imported into India are subjected to all their legal incidents as provided by the Customs Act, 1962. But since Nepal cargo is meant ultimately for exportation to Nepal it is exempt from payment of Customs duty and Additional duty in terms of the relevant notification. Had there been no such notification, Customs and Additional duties would have been leviable thereon on account of their being initially imported into India. In that view of the matter, Section 116 would be attracted in proper cases as soon as the goods are imported into India irrespective of the fact whether they are meant ultimately for exportation to Nepal.
19. "The question wheter Nepal cargo discharged from a ship at the Calcutta port for exportation to Nepal by other conveyances amounts to their importation into India, does not, in my view, really arise here since according to the relevant exemption notification such discharge of the cargo at the Calcutta port would amount to their importation into India for the limited purposes. As a matter of fact Nepal cargo has initially to be imported into India for the relevant exemption notification to become operative. If there is no importation of the goods into India at the outset the exemption notification in its terms will not apply.
20. At any event, so far Nepal cargo is concerned which is meant ultimately for exportation to Nepal and not to be used in India, import can be said to take place as soon as the goods are brought into the territorial waters of India.
21. Incidentally, there is a difference of opinion on the point between the different High Courts in India. The matter came up for consideration in a different way before the Supreme Court in State of Punjab v. Gian Chand, 1985 E.C.R. 2222 (decided on April 2, 1968). It was held by the Supreme Court that the process of importation would be complete as soon as the goods reaches an Indian port and passes through the Customs barrier. Any one taking the goods thereafter cannot be said to have imported it. Similar view on the point was taken earlier by this Court in Additional Collector v. Sitaram Agarwalla, . In Gramophone Company of India v. Birendra Bahadur, , the Supreme Court while reversing the Bench decision of the Calcutta High Court observed that "the Calcutta High Court thought that goods may be said to be imported into the country only if there is an incorporation or mixing up of the goods imported with the mass of the property in the local area. In other words, the High Court relied on the "Original Package Doctrine" as enunciated by the American Court. Reliance was placed by the High Court upon the decision of this Court in the Central India Spinning and Weaving and Manufacturing Co. Ltd. v. Municipal Committee, Wardha-. That was a case which arose under the C.P. and Berar Municipal Act and the question was whether the power to impose a terminal tax on goods or animals imported into or exported from the limits of a Municipality, included the right to levy tax on the goods which were neither loaded nor unloaded at Wardha but were merely carried across through the Municipal area...We must, however, say that the "Original Package Doctrine" as enunciated by Chief Justice Marehal on which reliance was placed, was expressly disapproved by the Federal Court in the Province of Madras v. Boddu Padanna, 1942 F.C.R. 90 and again by the Supreme Court in Empress Mills, Nagpur v. Municipal Committee, Wardha. So, we derive no benefit from this case". In view of this decision of the Supreme Court, the view expressed by different High Courts to the effect that goods could not be said to be imported into a country unless there was an incorporation or mixing up of the goods imported with the mass of the property in the local area, cannot be said to be correct.
22. In this connection a Full Bench of the Bombay High Court in Apar Pvt. Ltd. v. Union of India-, held that since 'India' includes its territorial waters the taxable event occurs no sooner than the goods enter into the territorial waters of India and does not postpone till they are actually off-loaded on the land mass.
23. Thus, in any view of the matter Nepal cargo discharged at the Calcutta Port should be deemed to have been imported into India for exportation to Nepal within the meaning of the relevant exemption notification. And importation will carry with it all its legal incidents in the absence of anything to the contrary.
24. I hold, accordingly, that Section 116 of the Customs Act, 1962 applies equally to dutiable as well as to non-dutiable goods and, accordingly, the contention raised by the petitioners that the section can have no application to Nepal Cargo since the said Cargo is totally exempt from Customs duty, is absolutely without merits.
25. The common question of law having thus been decided against the petitioners the other contentions raised in each of the three cases may separately be considered.
26. In Matter No. 753 of 1982, the ship S.S. Mandalay arrived at the Calcutta Port from Sweden in the month of February, 1977 carrying inter alia one case of cigarettes weighing 19 kgs., the consignee being Dr. John S. Tooms of Nepal. The ship having arrived at the port of Calcutta one of the subject cases containing cigarettes, spirits/wine and preservers, was found to be short-landed.
27. On July 19, 1977 the Customs authorities issued a K.L.C. (show cause notice) calling upon the petitioner, the United Liner Agency of India (P) Ltd., to show cause why penalty for short-landing will not be imposed under Section 116 of the Customs Act.
28. On receipt of the said notice the petitioner without in any way challenging the alleged short-landing of a case, being a part of the subject consignment, sent a reply to the effect that since the vessel had arrived at Calcutta via Singapore, the petitioner would required time to trace the whereabouts of the alleged short-landed goods. Thereafter, the petitioner remained quiet and no steps were taken in response to the show cause notice.
29. On July 12, 1978 the Assistant Collector of Customs passed an order imposing a penalty of Rs. 42,525 upon the petitioner under Section 116 of the Customs Act and the said order was communicated to the petitioner on November 17, 1980. Thereafter, communications followed between the petitioner and the Customs authorities and the relevant penalty bill was forwarded to the petitioner.
30. Ultimately, on July 9, 1982 the present writ petition was filed and the rule was obtained.
31. According to the petitioner Section 116 being penal in nature, opportunity should have been given to the petitioner to explain the position before the impugned penalty was imposed.
32. It is, however, not disputed that a show cause notice in the form of K.L.C. was issued to the petitioner on July 19, 1977, when the petitioner took time to trace out the missing package but ultimately remained silent.
33. Significantly, at no point of time the petitioner challenged the factual aspect of the matter, that is, the short-landing of one of the subject packages and the petitioner's subsequent silence after having assured the Customs authorities in response to the show cause notice that attempts were being made to trace out the missing package, shows that the short-landing could not be accounted for by the petitioner within the meaning of Section 116 and that being so, the impugned order imposing penalty cannot be said to be bad in law. I do not agree that service of any further notice was necessary before the order imposing the penalty was made. It is also inconsequential that in the impugned order the nature of the contents of the short-landed cargo could not be specifically stated, since it was not possible for the Customs authorities to know about its exact contents.
34. As regards to the assessment of penalty it is not for this Court to embark into any enquiry. If dissatisfied, it was open to the petitioner to move up before the relevant departmental authorities, which the petitioner did not do.
35. The impugned order not being prima facie perverse and rules of natural justice having been followed, this court exercising writ jurisdiction cannot be of any assistance to the petitioner.
36. So far as Matter No. 715 of 1982 is concerned, the petitioner, the Everett (India) Pvt. Ltd., are the Steamer Agents for the sea-going vessel M.V. Makeverett" owned by Everett Orient Line Inc. of Liberia. The said ship arrived at the port of Calcutta on or about December 13, 1977 carrying among other things the subject consignment of 25 wooden cases containing 15,000 yards of 100% polyester yarn dyed suitings from port of Busan, Korea to port of Calcutta in transit to Nepal.
37. After the discharge of the cargo was completed on December 26, 1977, the Port Trust Outturn Report dated January 14, 1978 showed short-landing of one of the cases.
38. On March 18, 1978 the Customs authorities issued a show cause notice to the petitioner about short-landing of one case out of the said consignment of 25 cases and directing the petitioner to show cause why penalty under Section 116 of the Customs Act will not be imposed.
39. The petitioner sent a reply to the said notice on September 22, 1980 to the effect that since the cargo in question was in transit to Nepal Section 116 of the Customs Act was not applicable. Significantly, the alleged short-landing of one case out of the subject consignment, was not questioned by the petitioner.
40. On March 7, 1981, the Assistant Collector of Customs furnished particulars of the duty to the petitioner and wanted to know if the petitioner desired to have a personal hearing (Annexure E). By Annexure F dated March 17, 1981 the petitioner replied to the Assistant Collector that since the subject packages were in transit to Nepal under the Treaty of Transit, they were free from customs duty and consequently Section 116 of the Customs Act had no application. Incidentally, here also the petitioner did not challenge the factual aspect of the matter, viz., short-landing of one of the packages.
41. It may be recalled here that in the show cause notice dated March 18 1978 (Annexure D) the Assistant Collector of Customs also called upon the petitioner to state whether they wanted to be heard in person. In reply to the: said notice the petitioner did not express any desire to be heard in person. It was simply stated that since the cargo in question was in transit to Nepal, Section 116 was not applicable. Subsequently in their letter to the Assistant Collector dated September 22, 1980 (Annexure D/l) the petitioner informed :' "please grant us personal hearing if you require any further information." This does not, however, show that the petitioners were interested in personal hearing. In other words the petitioners did not avail themselves of the opportunity of personal hearing and this was because they took shelter under the legal objection that Section 116 of the Customs Act could have no application to the case.
42. Even in their letter dated March 17, 1981 (Annexure F) the petitioner did not ask for any personal hearing and remained satisfied by raising the same legal objection regarding non-applicability of Section 116 of the Customs Act. This was followed by the impugned order of the Deputy Collector of Customs imposing penalty of Rs. 21,035 upon the petitioner under Section 116 of the Customs Act.
43. In their affidavit-in-reply several objections have been raised by the petitioners, viz., that no personal hearing was given to them ; that since after the discharge of the cargo, it was lying at the shed exposed to all sorts of risks and hazards including the possibility of pilferage, the petitioner could not be made liable for the alleged short-landing. That in the absence of any steamer survey immediately after the discharge of the cargo, there was no material before the Customs authorities to establish that the shortage as alleged had in fact taken place on board the vessel.
44. In my view, neither of these objections is tenable since, as already seen, the petitioner neither challenged the alleged short-landing nor did they avail themselves of the opportunity given to them of personal hearing. As such these points cannot not be agitated before the Court.
45. In the impugned order dated March 31, 1981 (Annexure G) all the relevant facts were taken into consideration including the applicability or otherwise of Section 116 of the Customs Act, 1962 to Nepal cargo and I do not think that the said order surfers from any perversity. That being so, and the rules of natural justice having been duly complied with, it is beyond the scope of jurisdiction of this court to interfere with the said order.
46. Coming next to the Matter No. 1704 of 1981, the petitioner, the Everett (India) Pvt. Ltd., were at the material time the steamer agents for the sea-going vessel "M.S. Manloeverett".
The said ship arrives at the port of Calcutta on or about August 19, 1977 carrying among other cargo, a consignment of 374 cartons of rubber shoes. This consignment was originally shipped on Board another vessel and was transhipped at Hongkong on to the vessel 'Manoloeverett'. The gross weight of the consignment was 13, 658 kilograms and the party to be notified was National Trading Ltd., of Kathmandu, Nepal. The relevant bill of lading also covered the shipment of six cases of cotton knitted vests weighing 498 kgs., the party to be notified being National Trading Ltd., Kathmandu, Nepal.
47. The goods were to be discharged at the port of Calcutta in the course of transit to Nepal.
48. On arrival at the port of Calcutta the ship discharged the cargo on August 19 and 20, 1977. But though all the 374 cartons of the subject consignment were unloaded, some of the said cartons were recorded by the Calcutta Port Trust as having been landed in broken condition in the landing receipt. No short-landing was, however, noted.
49. On or about December 16, 1977 the Assistant Collector of Customs issued' a notice to the petitioner alleging that on agent/insurance survey held on 9, Calcutta Jetty on December 7, 1977, some contents of the said 374 cartons of rubber shoes valued at Rs. 17,648.33 were found short. It was further alleged that the cases were landed in broken condition and as such, it was obvious that the shortage had occurred on board the vessel. The petitioner was accordingly called open to show cause why a penalty of Rs. 17,648.33 being the amount of duty leviable on the goods found short on survey, should not be imposed on the petitioner under Section 116 of the Customs Act, 1962.
50. By a letter dated February 10, 1978 the petitioner replied to the said notice stating inter-alia that the alleged shortages were not acceptable to the carrier who had neither been present nor had been invited to attend the per-ported survey held on December 7, 1977. It was also pointed out that under the Customs Public Notification No. 132 the Importers and/or clearing agents were required to approach the steamer agents for a survery immediately after landing from vessel in order to establish that the shortages took place before the landing and to ascertain the shortages, if any, the petitioners as such, denied their liability out right for the alleged shortages.
51. By a notice dated February 13, 1979 the customs authorities informed the petitioner that the petitioner would be given a personal hearing by the Deputy Collector of Customs on February 20, 1979. In compliance thereof the petitioner attended the said hearing and submitted inter alia that the consignment in question being meant for Nepal, Section 116 of the Customs Act had no application to case ; that the alleged short landing was not duly established and that the value of the alleged short landed goods was not correctly assessed.
52. However, by an order dated March 17, 1979 the Deputy Collector of Customs imposed a penalty of Rs. 17,650 upon the petitioner under Section 116 of the Customs Act, 1962 overruling all the objections (vide annexure F).
53. Being aggrieved the petitioner preferred an appeal on July 7,1980 but the appellate collector of Customs dismissed the said appeal by an order dated November 8, 1981 (vide Annexure G).
54. The petitioner, accordingly obtained the instant rule by invoking the writ jurisdiction of this court.
55. Now, the common question of law involved in all the 3 cases, viz. the applicability of Section 116 of the Customs Act to the Nepal Cargo, having already been decided against the petitioners, the question that now remains for consideration in the instant case is whether the petitioner was rightly penalised for alleged short landing of the subject consignment.
56. Coming to the question of short landing, the bill of lading (Annexure A) shows that the goods were received in apparent good order and condition. The Tally report (Annexure B) shows that some of the packages were unloaded in broken condition, though there is no reference to any shortage in the Outturn Report (Annexure B). However, in the agents/Insurance survey held on 7-12-77 at 9, Calcutta Jetty lockfast wagon (Annexure C) 52 cartons were found in the following conditions ''Cartons torn, boled, fibre bands missing, in a repacked conditions and resecured with 3/4 local iron bands". The survey report, on the face of it, shows that a number of pairs of rubber shoes which the cartons contained were found missing therefrom. In the show cause notice (Annexure C) the shortage has been calculated at 851 pairs.
57. In this regard the following objections were taken before the Assistant Collector of Customs on behalf of the petitioner in response to the show cause notice (Annexure D) (a) the survey was not done in the presence of the ship's duty officer or even the agents who attend the vessel daily ; (b) that there should have been a steamer survey instead of insurance/Apprisement survey ; and (c) that under public Notification No. 132 the consignee or the cargo owners were required to approach the steamer agents for a survey to ascertain shortage if any, and not having done so, the carrier could not be held liable for the alleged shortage.
Rightly or wrongly these objections were overruled by the Deputy Collector of Customs by his order dated march 17, 1979 (Annexure 'E').
58. Against this order the petitioner moved up in appeal before the Appellate Collector of Customs. Strangely, however, in the memo of appeal (Annexure F) the petitioner did not even raise a whisper about the correctness or otherwise of the Deputy Collector's findings regarding short landing including the Survey report.
59. The grounds on which the findings of the Deputy Collector were Challanged are as follows : (a) that Section 116 of the Customs Act has no application to Nepal cargo and that (b) the value of the alleged short-landed goods has not been correctly computed and as such, the duty amount has been wrongly calculated.
60. This clearly indicates, as was rightly contended by Mr. Roy Chowdhury appearing on behalf of the respondents that at the appellate stage the petitioner gave up their objection regarding short landing and accepted the findings of the Deputy Collector on the point.
61. It is true that in spite of any such objection not having been taken before the Appellate Collector in the memo of appeal, such objections were raised before the Appellate Collector in course of the argument (Annexure G), but significantly, such objections were not taken into consideration by the Appellate Collector. The impugned order of the Appellate Collector shows that "two major points" were raised before him by the appellant and both the said points related to the applicability or otherwise of Section 116 of the Customs Act to Nepal cargo.
62. The only other point raised regarding the quantum of penalty imposed, was overruled.
63. It is, therefore, clear that though the Appellate Collector noted faithfully all the objections taken before him on behalf of the appellant, the points not taken in the memo of appeal were carefully ignored and, in my view, rightly.
64. The petitioner thus having accepted the alleged short-landing as found by the Deputy Collector of Customs, are, in my view, debarred from raising the said factual objections aspect once again before this court which has also no jurisdiction to enter into questions of fact.
65. It may, however, be of interest to discuss incidentally one of the points very seriously agitated by Mr. Roy Mukherjee, the learned counsel appearing on behalf of the petitioner. The contention was that the vessel having discharged the cargo in or about August 19, 1977 the survey should have been held immediately thereafter in terms of the public Notification No. 132 dated December 14, 1973 and since the survey was held only on December 1, 1977 that is after four months after the discharge of the cargo, no reliance should have been placed on the survey report and the penalty proceedings should have been struck down on this ground alone.
66. In support of his contention Mr. Roy Mukherjee referred to me to few decisions of this Court, reported as well as reported In Heilgers Ltd. v. Deputy Collector of Customs-, a learned single Judge of this Court held that since the ex-parte insurance was conducted almost about a month after the landing of the cargo, it was in violation of the instructions issued by the Customs authorities in the Public Notification No. 132 dated December 14, 1973 and simply on that ground the impugned order imposing penalty under Section 116 of the Customs Act was struck down.
67. Similar view was taken by the same learned Single Judge in Everette (India) Private Ltd. v. Assistant Collector of Customs in the matter No. 1561 of 1981 and another learned Single Judge in Everette India (Pvt.) Ltd. v. The Deputy Collector of Customs in matter No. 1062 of 1981 adopted the same view.
68. Since all the aforesaid decisions are based mainly on the public Notification No. 132 dated December 14, 1973, it may be of interest to quote the whole of it and it is as hereunder :-
subject: Claim for refund of duty on goods found missing in packages landed under qualified receipt, i.e., unsound condition-regarding-It is hereby notified for information of the Importers, Clearing Agents and all other concerned that for the purpose of claiming refund of duty on the ground of short landing in respect of goods missing from packages landed under a qualified receipt, i.e., in unsound condition, it will be necessary for the Importers/clearing Agents to have the goods surveyed by the steamer Agents immediately after their landing from vessel in order to establish that shortages took place before landing. The importers and/or the clearing agents can ascertain by enquiry from the steamer agents if not from the port Commissioners (who grants landing) arrange with the Steamer Agents for survey to be conducted to ascertain the short landing. Importers (or their agents) can also apply to the steamer Agents for refund of customs duty who may consider the claim and pay the duty direct to the importers concerned and in such cases there could be no question of the Custom House refunding duty to the importer or initiating action separately for imposing penalty on the steamer Agents under Section 116 of the Customs Act, 1962.
Where no steamer Agents survey is held for the packages landed in unsound condition and the contents are found missing, the refund claim will not be treated as a short-landing claim unless of course, the claim is still found to be one of short landing in character, i.e., the short landing of the goods is established with clear evidence. In absence of such evidence the refund claims in respect of the missing contents of the packages landed under qualified receipt will be dealt with purely on technical evidence by the Appraising Refund Section of this Customs House. The claim which arise purely on the basis of short landing will only be dealt with by the M.C.D. The above procedure is in modification of this Customs House public Notice No. 81 of 1971 on the above subject.
A.K. Bandyopadhyay COLLECTOR OF CUSTOMS, Customs House Calcutta, Dated the 14th December, 1973, File No. 54E-34I (Misc.)/72 PRO (Part-1) 600 Copies/21 xii 73.
69. It is clear on a plain reading of the Notification that it relates to claim for refund of duty on goods found missing in packages landed under qualified receipt, i.e., unsound condition and it provides that for the purpose of claiming refund of duty on the ground of short landing it will be necessary for the importers/clearing Agents to have the goods surveyed by the Steamer Agents immediately after landing to establish that the shortages took place before landing.
70. Significantly, the parties who are required to take such steps are the Importers/Clearing Agents. It does not cast any liability upon the Customs authorities and obviously there could be no such liability since the notification relates to refund of duty and not to imposition of penalty under Section 116 of the Customs Act.
71. To apply the notification in case of such imposition of penalty by the Customs authorities under Section 116 of the Customs Act, will be highly prejudicial to them and will affect seriously the collection of revenue, since no duty has been cast upon the Customs authorities to arrange for a survey immediately after the landing of the goods. The liability for taking such steps under the notification being upon the Importers/Clearing Agents, they can always frustrate the claims for penalty of the Customs authorities by delaying collusively or otherwise the holding of the survey or by not applying for steamer survey.
72. A reading of the judgments of the learned Single Judges as referred to earlier, makes it clear that due attention of the learned Judges was not drawn to this aspect of the matter.
73. Accordingly, I do not think that penalty claims of the Customs authorities under Section 116 of the Customs Act can, in any way, be defeated due to delayed survey in violation of the public Notification no. 132 since the said notification does not create any liability upon the Customs authorities to arrange for a survey of the goods. In case of any delay, it is only the claims for refund of duty that are liable to be defeated and not any other claim. However, as already stated, this is practically besides the point since the factum of short landing in the instant case was not challenged by the petitioners before the Appellate Collector of Customs.
74. In the above view of the matter, the petitioner will not be entitled to the relief prayed for particularly because the impugned order of the respondents imposing penalty upon the petitioner for short landing of the subject cargo cannot, in any way, be said to be perverse. This is more so, in view of my positive finding to the effect that Section 116 of the Customs Act, 1962 is also attracted to the Nepal cargo, which is not assessable to duty under the relevant exemption notification in pursuance of the Treaty between the Governments of Nepal and India.
75. All the three writ applications, hereby heard analogously, accordingly fails and are dismissed on contest.
76. The Rules issued be discharged and interim orders, if any, do stand vacated. No order is made for costs.
77. This order will equally bind all the three matters hereby tried analogously.
78. On the prayer of the petitioners the operation of this order shall remain stayed for a period of four weeks from this date.