High Court Partially Allows Writ Petitions on Vessel Confiscation

HONG KONG ISLAND SHIPPING CO. LTD. Versus ADDITIONAL COLLECTOR OF CUSTOMS (PREVENTIVE) BOMBAY AND OTHERS

HONG KONG ISLAND SHIPPING CO. LTD. Versus ADDITIONAL COLLECTOR OF CUSTOMS (PREVENTIVE) BOMBAY AND OTHERS - 1986 (26) E.L.T. 35 (Bom.) Issues:
1. Confiscation of vessel and calculators under the Customs Act.
2. Imposition of personal penalties on crew members.
3. Challenge to the order of adjudication.
4. Legality of securing a bond from ship owners.
5. Enforcement of liability on ship owners for penalties imposed on crew members.

Confiscation of Vessel and Calculators:
The case involved the confiscation of a vessel and calculators under the Customs Act after smuggled goods were found hidden in a crew member's cabin. The Additional Collector of Customs ordered the confiscation of the calculators and the vessel, with an option for redemption on payment of a fine. The adjudicating authority concluded that the Master of the ship was aware of the smuggling, but the High Court found that there was insufficient evidence to support this finding. The Court held that the vessel's confiscation could not be sustained as the Master had taken reasonable precautions to prevent smuggling.

Imposition of Personal Penalties on Crew Members:
Personal penalties were imposed on the crew member and the Captain of the ship for their involvement in the smuggling incident. The High Court noted that the burden of proof was on the owner, agent, or Master of the vessel to establish that necessary precautions were taken to prevent smuggling. The Court found that there was no evidence to suggest that the Captain had knowledge of the contraband articles, and thus, the personal penalties imposed on the crew members were not justified.

Challenge to the Order of Adjudication:
The petitioners challenged the order of adjudication through a Writ Petition under Article 226 of the Constitution of India. The High Court reviewed the adjudicating authority's decision and set aside the part of the order confiscating the vessel, citing lack of evidence to prove the Master's involvement in the smuggling.

Legality of Securing a Bond from Ship Owners:
The Customs authorities required the ship owners to execute a bond undertaking liability to pay fines or penalties imposed on crew members in adjudication proceedings before allowing the vessel to leave the port. The Court held that it was justified for Customs authorities to secure such a bond to ensure payment of fines in case of smuggling incidents involving the vessel.

Enforcement of Liability on Ship Owners for Penalties Imposed on Crew Members:
The Court acknowledged the necessity of securing a bond from ship owners but directed Customs authorities to include a clause in the bond stating that the liability would not be enforced if contraband articles were brought on board without the knowledge or connivance of the Master or owner of the ship, despite reasonable precautions taken by them. This was to prevent unjust enforcement of penalties on ship owners in cases where they were not involved in smuggling activities.

In conclusion, the High Court partially allowed the Writ Petitions, setting aside the vessel's confiscation but upholding other aspects of the adjudicating authority's order. The Court emphasized the importance of balancing the enforcement of penalties with ensuring fairness and proper evidence in cases involving smuggling activities on vessels.