Customs, Excise and Gold Tribunal - Mumbai
Air India vs Addl. Collector Of Customs (P) on 31 December, 1991
Equivalent citations: 1993(67)ELT400(TRI-MUMBAI)
ORDER R. Jayararaman, Member (T)
1. This is an appeal directed against the order in original No. S/14-1-77/86P dated 30-8-1988 passed by the Addl. Collector of Customs (P), Bombay, imposing a penalty of Rs. 5 lakhs on the appellants under Section 114(i) of the Customs Act, 1962.
2. The facts of the case can be briefly stated as below :-
On 27-11-1986, the officers of Customs received an information that a consignment of 5 packages said to contain handicrafts items made of soap stone and passed for shipment to Montreal under S/B No. 207940 dated 25-11-1986 and covered by Airway Bill No. 09849692845 would be containing narcotics substances instead of declared cargo. The officers made enquiries about the cargo with a view to locating the same in the warehouse of the appellants, but the consignment was not found. As per the information, the said consignment was to go by Air India Flight No. A.I. 107; but on scrutiny of the export manifest filed by the appellants for the said flight, the particulars of the suspected consignment were not found. However, subsequently it was learnt that five packages covered by the said Airway Bill No. 09849692845 had been received at New York by A.I. 107 dated 27-11-1986 as unmanifested cargo. The said consignment was brought back to Bombay by A.I. 102 dated 3-12-1986. Each of the five packages was found to be labelled with Air India Airway Bill No. 0984969284 and the name of the consignee and markings shown as per S/B No. 207940 dated 25-11-1986. On examination of the five packages so brought back from New York by A.I. flight No. 102 dated 3-12-1986, hashish weighing 125 kgs was recovered. Thereafter, investigations were carried out by interrogating the staff of Air India, partner and employee of the Customs House Agents who filed the said S/B, the Agents of Air India, who issued the Airway Bill and also the persons, who are shown as exporters in the said shipping Bill. Thereafter, show cause notices were issued to a number of employees of Air India as also to Air India, Customs House Agents, the partner and employee thereof, the Agents of Air India who issued the Airway Bill and also to the firm figuring as exporters in the shipping Bill. In the adjudication proceedings held by the Addl. Collector, charges against all the employees of Air India were dropped and they were exonerated. Penalties were imposed only on the appellants - Air India, Bombay and on the Customs House Agents, its partner and employee. The rest were discharged from the show cause notice. The Customs House Agents M/s. Chown Shipping Agency, Shri Iqbal Qureshi, partner of the above firm and Shri Anant P. Pai, employee of the Custom House Agents have also appealed against the penalties imposed on them. Though, all the three appeals were listed for hearing together, since the appellants S/Shri Iqbal Qureshi & Anant Pai and the firm of Customs House agents pleaded for disposal of their appeals by way of remand on short ground of violation of principles of natural justice, without going into merits of the case, their cases have been delinked and are being disposed of by a separate order. In this appeal, only the penalty of Rs. 5 lakhs imposed on M/s. Air India is to be considered.
3. Shri Siodia, the Ld. Advocate on behalf of the appellants pleaded as below :-
(i) It is not established that the 5 packages, which reached New York as unmanifested cargo were the ones sent from Bombay. It could be that these packages might have been taken on board in any other stations in transit like Dubai, London;
(ii) It is also likely that 5 packages might have gone without manifestation as a loose cargo loaded without knowledge of the Air India at the last minute;
(iii) Though an instruction in the form of a telex in respect of the cargo covered by Airway Bill No. 09849692845 directing for immediate shipment 'must go' was received, that telex was issued at Sales Section of Air India and must have been issued on the request of the shippers. Normally, if such an order cannot be implemented the person in charge of loading informs his higher authority in Air India, and the message is sent to the sale section, which issued the 'must go order'. In this case, it appears that no such intimation has been given;
(iv) Even assuming that the packages returned from New York had been only loaded at Bombay, it is not disputed that Air India took all possible efforts to get back the 5 packages and only after they were returned back, the Customs Department can recover the hashish;
(v) Manifesting could not be done mainly because of the fact that papers kept in the pigeon hole were lost. If these papers were available, manifesting would have been done.
(vi) The entire loading and unloading operation had been done under the supervision of the Customs officer;
(vii) It is also pertinent to point out that many of the officials of the Air India connected with the loading operations have been issued with show cause notice, but the Addl. Collector has exonerated all of them and chosen to impose the penalty only on Air India. In any case Air India, as a corporate entity, cannot be attributed with any mens rea. It acts only through its employees and when the allegations against the employees have been dropped, there is no warrant for imposition of penalty on Air India. Though the Addl. Collector says that he is not imposing the penalty on the basis of vicarious responsibility of Air India, his action amounts to the same. It is not a case of duty liability where vicarious responsibility can be attracted. Even for construing the prosecution offence against the companies, the person in charge or is responsible to the company for the conduct of business is only required to be proceeded against. While it is a penal liability, which relates to proceedings, in personam, penalty cannot be imposed on the Organization, especially when the persons incharge of the operation have been totally exonerated by the Addl. Collector. According to his understanding, notice of show cause to the Air India was only with regard to the proposed confiscation of hashish contained in packages, which were brought by Air India flight from New York and handed over to the Customs. It cannot be construed that it is applicable for imposing penalty on them.
(viii) M/s. Trident Travel & Tours Pvt. Ltd., the agents for Air India, no doubt, gave instruction for holding back the consignment, but the said paper was not available in the pigeon hole.
(ix) Finally he pleaded that in any case no mens rea can be attributed to the Air India Organisation as such. The omission and commission alleged to have been committed could be by some of the employees of the Organisation and the Department actually issued show cause notices to them. But when the Addl. Collector has exonerated all of them, penalty cannot be imposed on the Organisation holding them as personally liable for the acts of omission of their employees. In this context, he referred to the following decisions for urging that in the absence of mens rea, penalty is not permissible :
(i) AIR 1970 SC 253 - Hindustan Steel;
(ii) 1984 (44) E.L.T. 79 (Tri.); and
(iii) 1987 (28) E.L.T 484.
4. Smt. Lipika Choudhury, the Id. SDR, countered the arguments of the Id. Advocate as below :-
Sections 39, 40 & 41 of the Customs Act, 1962 and also the Export Manifest (Air Craft Regulations, 1976) were referred to by her. She urged that no cargo could be taken on board the Aircraft, without a proper order permitting the shipment. In this case, 5 packages containing hashish have been despatched by Air India flight and the shipment is not reported in the form of export manifest, which is required to be delivered before the departure of the Aircraft. Since this is narcotic item, even the declaration about the export of narcotics, which is required to be given under the Export Manifest (Aircraft) Regulations has not been given.
The contention that the 5 packages received from New York would have been kept on board the Aircraft at any other transit station, is not at all convincing. She referred to the relevant portion of the order in original to show that these packages specifically referred to the Air consignment number covered by the shipping bill and also the marks and numbers figuring as per the Shipping Bill filed at Bombay. In the circumstances, it cannot be accepted that someone has loaded the packages either at Dubai or at London and put these markings on the consignment and sent to New York. These packages have actually been shipped only at Bombay unauthorisedly. She also pointed out that the Customs officers were acting on definite information about the particular shipping bill and they were making efforts to locate the consignment which was not found lying in the warehouse. In any case, if the documents are not available, the packages, atleast, should be available in the warehouse of the appellants. The fact that these packages were taken out from the warehouse and substituted by different packages and shipped through Air India flight itself indicates that Air India have failed to discharge the statutory obligations, inasmuch as the shipment of 5 packages has been done without proper order from the Customs' officer and even the export of these packages has not figured in the Export Manifest filed prior to the departure of the Aircraft. It is also apparent that someone in the sales office has issued instruction 'must go' in respect of this particular consignment and there is no system as to find out who has issued such instruction and on what basis the instruction had been given. This clearly indicates that the Air India have left the entire operation of the system in a haphazard manner giving room for shipment of even narcotics without their knowledge. If not malafide, there is a positive negligence and lack of due deligence on the part of the appellants. When the Organization, as such, has not taken due care and deligence to guard against the shipment of unauthorised cargo, they cannot escape from the penal liability. She also pointed out that even at this stage, they have not bothered to improve the system and they have not woken up to the reality of the grave situation. It is admitted by them that the written instructions to the effect that the cargo should be stopped, given by Shri Lobo, has not been acted upon and it has been treated in a casual manner. It is also strange that 12 packages which were manifested were not loaded on that flight, but 5 packages which are not manifested have been taken on board the aircraft. This clearly indicates a lack of proper system, on account of which substitution and shipment of unauthorised packages has taken place.
5. For imposing penalty under Section 114 of the Customs Act, there is no ingredient of mens rea enshrined in the said Section. There is no reference to the words like "knowingly" mentioned in the section. In a case like this, where there is a gross negligence on the part of the Organisation to guard against the shipment of unmanifested cargo, penalty could be imposed irrespective of, whether, there is mens rea or otherwise. She also referred to the decision of the CEGAT reported in 1989 (22) ECR 455 and also the decision of the Supreme Court reported in 1989 (42) E.L.T. 350 to urge that unless language of the statute implies establishment of mens rea, it is needless to impart this criteria in the statute.
6. She also submitted that the Customs officer deployed is to cover a number of flights and is posted only for general supervision/by carrying out random checks as prescribed. He cannot be expected to tally loading of all the goods on board the Aircraft, export document-wise. That is why the statute itself prescribes the responsibility, in this regard, on the person incharge of the conveyance.
7. The Id. Advocate, in reply, contended that systems and procedures are established and if the individuals have not followed the procedure, it cannot be said that there is no system existing. The Organization cannot be blamed for the lapses of some individual staff members.
8. After hearing both the sides, we find that it is, first necessary, to consider the contention of the learned Advocate that the 5 packages brought from New York by Air India Flight No. 102 dated 3-12-1986 might have been loaded in some other station in transist and may not relate to Bombay. In this context, the following factual position remains unchallenged :-
The packages received from New York by Air India flight 102 dated 3-12-1986 were examined in the presence of panchas. On examination, it was found that they bore the markings as "Geeta Marble Company, 7580 Pearey Lal Bhavan, Ram Nagar, N. Delhi". They were also bearing an Air India Sticker bearing Airway Bill No. 098-49692845 Montreal lot of 5 packages. Transfer station - New York. It is the case of the Department that the Customs officers received an information that a consignment of 5 packages covered by shipping Bill No. 207940 dated 25-11-1986 would be shipped to Montreal under Air Way Bill No. 098-49692845 and the consignment would be declared to be handicrafts of soap stone. The consignor's name would be shown as Geeta Marble Co., 7580 Pearey Lal Bhavan, New Delhi. It is evident from the markings on 5 packages as recorded in the panchanama that they are clearly relatable to the consignment covered by the Shipping Bill and also the relevant Airway Bill of Bombay. Hence, in the context of the aforesaid factual position, we have, no doubt, in our mind that these 5 packages have been shipped only from Bombay and they have gone as unmanifested cargo to New York and produced for Customs examination on their return. Now the question is, whether, the Air India could be fastened with penal liability for the unauthorised export of the cargo taken on board their aircraft without the cover of proper order passed by the Customs officer and without manifesting the shipment in the export manifest of that particular flight. The main thrust of the argument of the Id. Advocate is that the show cause notices have been issued to a number of employees of Air India connected with the loading operations, but the Addl. Collector has exonerated all of them. Hence, the penalty on Air India, as an Organisation, cannot be imposed, because the Organisation has to function through their employees and when persons in charge of the operation have been exonerated, penal liability cannot be visited on the Organisation as such. Moreover, no mens rea can be attributed to the Organisation as such.
9. We can appreciate the argument of the Id. Advocate that Air India, as an organization, could not be a party to the illicit export of hashish. It cannot also be the case of the Department that the Air India have knowingly allowed the export of hashish and they are party to the smuggling of hashish. Because the contents of the cargo cannot be expected to be known to the carrier and hence knowledge regarding the export of hashish cannot be attributed to them. All the same, it is the responsibility of the carrier to ensure that there is a system of checks, which would prevent unauthorised export of goods, without clearance by Customs or without inclusion in the manifest. It is pleaded by the Id. Advocate that the Customs officers have been deployed for supervision. This argument does not absolve their responsibility as carriers to check the loading of each package with the export document to ensure loading of only such packages, which have been allowed export by the proper officer of the customs and also to give true declaration of the goods carried by the aircraft in the export manifest. We also see considerable force in the argument of the Id. S.D.R. that the Customs officer posted for general supervision is to attend to many flights and he cannot check each piece of package loaded on board the aircraft by tallying it with the connected export documents. He could do only a random check during his visit to see whether the package being loaded during his visit is covered by the export document duly passed by the customs or otherwise. The statutory responsibility in this case is squarely cast on the person in charge of the aircraft and on the carrier who delivers the export manifest.
10. We find that though the investigations have been carried out with regard to the role of some of the Air India employees, the Addl. Collector discharged the show cause notice against them. The relevant findings of the Addl. Collector with regard to the charge against the Air India employees are extracted below :-
"Although there are sufficient reasons to suspect that anyone or more of them have connived in this illegal export without which it would not have been possible to take out the packages by the Air India flight on 27-11-1986, the department has not been able to point out specifically any such person/persons and accordingly I am inclined to extend benefit of doubt to all these employees including loaders and carpenters."
The Department has not come in appeal against the order of dropping the charges against the employees of the Air India and hence we are unable to go in detail in to this question. However, we are to observe that the Addl. Collector has not given a clean chit in the case of the Air India employees. His main difficulty appears to be that no one could be pinpointed for imposing penal liability on the basis of the available evidences. All the same, he has held that without their collusion or connivance it would not have been possible to take out the cargo illegally through the Air India flight. This could be on account of the fact that the system of checks adopted by the Air India is not fool proof, which could have enabled their employees, who are responsible for loading operation to send out cargo without manifesting and without cover of shipping bill. The Id. SDR has pointed out that when many items cleared by the Customs officer have been shut out, these 5 packages which were not covered by S/B duly passed by a proper officer could find place in the aircraft and go out unmanifested. Such a situation does not speak well of the performance of the system. Though, in this case, this is a consignment of hashish, the unauthorised consignment could be even an explosive. If the carrier is not mindful of his obligation to carry only those items of cargo, which are permitted to be loaded by the proper officer of customs or of security, even the safety and security of the passengers travelling in the flight would be in jeopardy. We also requested the Id. Advocate to get the affidavit from the person in charge of Air India to find out whether they have improved upon the system to ensure against such unauthorised loading of cargo, but from the affidavit purported to have been signed by one Shri Jyotirvadan Jugatrai Rindani, Secretary and Deputy Director Administration of Air India, we find that it is only in the nature of an explanation in the present case and does not throw any light on the methods adopted for guarding against the shipment of unauthorised cargo, nor they have indicated as to how they have improved upon the system. We are of the view that in a case of this type, the organisation should have, on their own, conducted a thorough enquiry to locate the loopholes and to prevent repetition of such serious mistakes being committed. To our dismay, we find that nothing of this sort has been done and the appeal from the Air India is only on the ground that as an Organisation, it cannot have mens rea and when their employees have been exonerated, the Air India also should be given the same benefit. We are not at all happy about this approach. We are not suggesting that Air India, as an Organisation, have knowingly committed this illegal export but we cannot restrain ourselves from observing that Air India being, a national carrier and having been entrusted with certain statutory obligations as also the custody of the export cargo till shipment, could ill afford to agitate such arguments. In any case, since these are legal arguments, we are bound to consider the same.
11. For appreciating the legal position, the following factual position is required to be mentioned. The 5 packages have been sent as unmanifested cargo from Bombay to New York. The documents relating to the export are reported to have been placed in pigeon holes. They were found missing at the time of shipment but made their re-appearance, after unauthorised shipment. Someone in the Sales office is reported to have included this cargo as 'must go' item on that day. But they are not able to point out as to who gave this instruction and on what basis. If the documents are not found, the cargo ought not to have been shipped and the goods must be lying in their warehouse. All the same, the five packages have been placed on board the Aircraft without verifying the export documents. The Id. Advocate argues that if the documents were available, it would have been manifested. T'he plea from the Id. Advocate is that there could have been some lapses on the part of the individual employees of Air India but the system is alright. However, neither he nor the affidavit produced could indicate as to how the system is alright and how the same could enable identification of the persons committing such lapses. No enquiry appears to have been conducted by Air India on their own to look into the existing system and to identify the loopholes giving room for such serious lapses.
12. In the context of the aforesaid factual position, we now propose to consider the legal arguments of the Id. Advocate. At the outset, we agree that as carriers, the Air India could not have had the knowledge that the five packages transported by them contained hashish, because the carriers receive the cargo said to contain the contents as declared. But in this case, the main thrust of the allegation is on their lack of deligence and positive negligence to prevent unauthorised shipment of 5 packages. In other words, they are alleged to have omitted to take proper steps to guard against loading of 5 packages without documents showing clearance by Customs officer and shipment thereof without manifesting. There is a statutory obligation on them to ensure loading of only goods cleared by proper officer of Customs and to submit the export manifest prior to the departure of Aircraft containing the details of all the goods taken as cargo on board the Aircraft. We find that even Air India can not dispute that the five packages had gone unmanifested and the explanation given is that documents kept in the pigeon hole were missing. This positively indicates negligence in ensuring proper safety or security of the documents connected with shipment. This can be identified as an area of omission either due to faulty system or due to negligence on the part of the dealing staff. All the same, this results in an act of omission. Another point worth noting is that the goods have been loaded as cargo and they are not the ones kept concealed in some part of the Aircraft. For taking goods as cargo on board the flight, the statutory responsibility cast on the carrier is required to be fulfilled.
13. In this case, there is a failure to comply with the statutory obligation. Moreover, as a national carrier, they have been entrusted with the custody of export cargo till their shipment. If the documents were not found in the pigeon holes, at least the 5 packages should have been in their custody in the warehouse. But they were found to have been shipped. This is a positive act of commission and this act indicates malfunctioning of the system of receipt and taking of goods from the warehouse of the Air-India. Thus the ingredience of acts of commission and the same rendering the goods liable to confiscation under Section 113 of the Customs Act are found to be present in this case. Hence, penalty under Section 114 of the Customs Act is justifiable. But then, the argument is that, in the absence of mens rea, no penalty could be imposed. Case laws have been cited on this position by both the sides. We have carefully considered these case laws.
14. Though Sections 112 & 114 of the Customs Act do not contain the ingredience of mens rea, we cannot ignore the case laws, where, in the case of personal penalty, this aspect has been taken into account by the Tribunal and the courts. All the same, we are to observe that there are certain types of omissions and commissions, which ipso facto could expose the delinquent to the penal liability, irrespective of whether there is mens rea on his part or not. The Supreme Court in the case of Ajit Mills reported in AIR 1977 SC 2279 rejected the contention of "no mens rea - no crime", especially in economic crimes. In the case of Gujarat Travancore Agency reported in 1989 (42) E.L.T. 350 (S.C.), it has been held by the Supreme Court that unless there is something in the language of the statute indicating the need to establish the element of mens rea, it is sufficient to prove that a default is complying with the statute has occurred for imposing penalty. Though, this judgment is given in the context of the provisions of Section 271(l)(a) of the Income-Tax Act, these observations of the Supreme Court are mutatis mutandis applicable to other similarly penal provisions. However, in some of the subsequent judgments, the Supreme Court has taken the view that where there is no mala fide, penalty cannot be justified. In the context of the aforesaid case laws, we observe that in the case of such infractions of compliance with statutory requirements, penalty is attracted irrespective of the mens rea being established or otherwise. This could be explained by drawing an illustration from the very same case before us. If there is an allegation that Air India transported hashish or they have aided or abetted the smuggling of hashish and penalty has been imposed on this ground, in the absence of mens rea being established on their part as having knowledge about smuggling of hashish, they could not be visited with penalty. But the case here is somewhat different. They are entrusted with certain statutory obligations. Mere non-fulfilment of these statutory obligations rendering the goods liable to confiscation would expose the Organisation to penal liability. For this purpose, ingredient of metis rea need not be present since no criminal liability is alleged. What is alleged is failure to carry out statutory obligations.
15. The three citations made by the Id. Advocate were also duly considered. In one case, it relates to penalty imposed on a godown-keeper, who had no knowledge regarding the storage in the godown. In another case, it relates to imposition of penalty on the lorry owner with regard to improper export of silver. The truck was seized in the interior of the country and there was no statutory obligation cast on the owner of the truck for rendering a manifest or for loading only the goods allowed by the Customs Officer. The other case relates to imposition of penalty on an Air cargo agent for the alleged mis-declaration of the goods on the shipping document. In our view, all the aforesaid three case laws do not cover a situation like this, where the Organization, as carrier of goods to outside India, are required to fulfil certain statutory obligations. We also, on our own, came across another judgment of the Bombay High Court reported in 1984 (15) E.L.T. 375 (Bom.) in the case of Garware Shipping Corporation Ltd., where penalty imposed on the master and owner of the ship was set aside by the Bombay High Court. In this case contraband goods were found concealed in the fresh water tank of the vessel. The plea raised by the revenue was that the goods were not manifested. This plea was rejected by the Bombay High Court, on the ground that they have no knowledge about the concealment of the goods and hence they could not have manifested. But in this case before us, the factual position is that the five packages were delivered in their warehouse and the export documents were also missing while in their custody and the 5 packages had gone unmanifested. It is not a case of concealment of these 5 packages in some water tank or other places of Aircraft, but they have gone as unmanifested cargo, as is evident from the telex of the Air India sent from New York. In the circumstances, we are to hold that the statutory obligations cast on the carrier had not been complied with by the acts of omission or commission and hence they are exposed to penalty. However, we are not interested in loading the national carrier with a huge penalty, especially, when we are convinced that they do not have hand in the illegal export of hashish. In this view of the matter, any penalty that could be imposed could only be of a corrective nature, so that they could look into the present system for identifying the areas of loop-holes and taking proper steps to guard against such lapses, in future. With this view, while we sustain the penalty, we would deem it proper to reduce the penalty to a nominal sum of Rs. 1,000/- (Rupees one thousand only).
Appeal is disposed of in the above terms, with consequential relief.
P.K. Desai, Member (J) I hav the previlege of going through the order proposed by my Learned Brother R. Jayaraman, Member (Technical) proposing upholding penal liability of the Appellants, but reducing the personal penalty imposed to Rs. 1000/- (Rupees one thousand only). While concurring with the finding as to existence of the liability for imposition of the penalty of the appellants and also to the quantum of the penalty as proposed to be reduced, in my view the involvement of the appellants could be viewed from another angle, and hence I deem it proper to record my separate reasonings.
2. There is no serious challenge to the factual position that a consignment of 5 packages, subsequently found to contain narcotics, was found loaded in the Aircraft of the appellants without any entry in that regard in the Manifest or without the shipping bill, and the consignment reached the Air Port at New York, where the same was detected as an unmanifested one, and therefore brought back to Bombay; except to the extent that a plea was raised before us that there was no evidence that the same was loaded only at Bombay and it was probable that the same could have been loaded at any other Air Port where the said Aircraft had landed and taken the cargo. That part of the theory has however to be rejected, in view of the evidence in the form of markings available that the consignment was booked at Bombay and packages were brought to the Air Port Cargo Complex at Bombay. Some other incidents and events co-relatable to the main incident also exist, and they have been dealt with in the order proposed by my Learned Brother. I however refrain from touching them, as, in my view, they may not be essential for the purpose of determination of the issue from the angle that I intend to adopt.
3. From the order passed by the Ld. Adjudicating Authority, clear indication is available, and rightly so, that he has not invoked the principles of vicarious liability, and the imposition of the penalty is only on the basis of the contravention of the provisions of the Customs Act, committed by the appellants themselves. A specific reference to the provisions of Section 40 of the Customs Act bear testimony thereto. Averments in the Show Cause Notice also indicate allegation of penal liability of the appellants in their own capacity.
4. Before dealing with the point at issue, it may be pertinent to note that the Ld. Adjudicating Authority has exonerated the employees of the appellant on the ground that it is not possible to pinpoint any single individual or a group of persons involved in the act of loading the unmanifested cargo of 5 packages. Going by the evidence as available on record, one may be inclined not to wholly endorse to the said view, and may feel that more minute scrutiny of the evidence could have enabled him to take a different view. One is also inclined to observe that some more efforts at the investigation stage and further probe into the matter could have enabled the department to conclusively nab the real person or persons. This however being not the issue here, and the departmental authorities having thought it not necessary to prefer appeal against the same, further deliberation on the issue is not called for.
5. What, however, causes grave concern, is the feeling that the appellants do not seem to have viewed the incident with the seriousness that it justifiably deserves. Positively the occurrence is an act of the someone or more from within their own establishment, however, on a query, we were told that no enquiry is initiated either to enquire into the causes for such occurrences and take disciplinary action against the erring officials, nor to take up further preventive actions. Hazards of such occurrences can well be visualised and one cannot resist expressing concerns and a desire the appellants ought to ensure that recurrence is prevented.
6. Reverting back to the point at issue, Chapters VI and VII of the Customs Act, impose certain statutory obligations on the carrier of the goods. The obligations impose could certainly not be viewed as mere procedural formalities, the lapse or non-compliance of which, could be viewed leniently. The allegations imposed thereunder are on the owners and persons in charge of the conveyances and the owners cannot absolve themselves of the liability by pleading that they functioned only through their employees. Statutory obligations imposed on the party, be it an individual or a body corporate, have to be complied with and they have to render themselves liable to penal consequences, if any lapse thereof is established.
7. Undisputedly unmanifested cargo of 5 packages had been loaded in the aircraft. Significantly, the said consignment was found in the cargo hold, where the loading is and even statutorily required to be, under the supervision and manifest has to be drawn. The consignment ought to have been under the shipping Bill, and notwithstanding other alleged lapses in taking timely actions, there has positively been non-compliance of statutory obligation, by an act of omission, if not of commission. It may be pertinent to note here, that the case is not the one of finding contraband concealed in a way, which, even on reasonable inspection, could not have been detected. I am conscious of the views expressed by judicial forums that penal liability could not be attributed where the person/party could not have known the loading of contraband without any entry in cargo manifest. Here however the consignment has gone as a cargo, duly rinding its berth in the cargo hold by the aircraft, further, the consignment was of 5 packages, which obviously was not small enough to remain undetected. The judicial prononuncements in that regard therefore cannot render any assistance.
8. The question that then remains to be examined, is whether the appellants could be held liable to imposition of penalty vide Section 114 of the Customs Act. As per the said section, penal liability accrues where the provisions of Section 113 of the Act stand attracted. The consignment transported was subsequently detected to contain narcotics, though the same was declared as handicraft items of soap stones, and as such, the provisions of Section 113 (h) may also stand attracted. If however, that cannot be taken as a cause for imputing penal liability vide Section 114 of the Act, on the appellants, as they could not have known what they were transporting, there does exist a positive non-compliance of the statutory obligation and resultant contravention of the statutory provisions, which are duly established, which render them liable to imposition of penalty vide Section 117 of the Customs Act.
9. I am fully conscious of the fact that the show cause notice issued has called upon the appellants to explain why penalty vide Section 114 of the Act ought not be imposed, and that, there is no mention therein of the penal liability under Section 117 of the Act. However, as per the basic tanets of law, it is permissible to punish a person for a minor offence though charged to have committed a graver offence, provided of course, both of them fall within the same family group. The allegation against the appellants, even going by the show cause notice, is of transporting unmanifested cargo, containing narcotics, and non-compliance of the statutory requirements, and if penal consequences vide Section 114 cannot be attributed, Section 117 of the Act, even though not specifically mentioned in the show cause notice, can be invoked. There is no legal bar against the same.
10. Penalty that could be imposed under Section 117 of the Act is Rs. 1000/- and the quantum of penalty as proposed by my Learned Brother incidently, happens to be the same.
11. Under the circumstances, I concur with the final order proposed by Brother R. Jayaraman.