Supreme Court upholds Customs Act confiscation, reinstates penalties for vessel MANSCO-3, dismisses challenges.

UNION OF INDIA Versus MUSTAFA & NAJIBAI TRADING CO.

UNION OF INDIA Versus MUSTAFA & NAJIBAI TRADING CO. - 1998 (101) E.L.T. 529 (SC) , 1998 AIR 2526, 1998 (3) SCR 708, 1998 (6) SCC 79, 1998 (5) JT 16, 1998 ... Issues Involved:
1. Confiscation of goods found on the vessel MANSCO-3.
2. Confiscation of the vessel MANSCO-3.
3. Imposition of personal penalties on the Managing Director and the Master of the vessel.

Issue-Wise Detailed Analysis:

1. Confiscation of Goods:
The goods on the vessel MANSCO-3 were confiscated under clauses (d) and (f) of Section 111 of the Customs Act, 1962. Clause (d) pertains to goods imported or attempted to be imported contrary to any prohibition imposed by law, while clause (f) pertains to dutiable or prohibited goods not mentioned in the import manifest or import report.

The Collector found that the goods were imported without an import license, violating the Imports and Exports (Control) Act, 1947, and the Imports (Control) Order, 1955. The Master of the vessel failed to file the Import General Manifest within 24 hours of the vessel's arrival at the Bombay port, leading to the confiscation of the goods under Section 111(f).

The Tribunal upheld the Collector's decision, rejecting the explanation that the goods were 'same bottom cargo' and thus exempt from requiring an import license. The Tribunal also found that the voyage of the vessel to Bombay was not bona fide, as the explanations provided for the vessel's journey were inconsistent and unconvincing.

The High Court, however, reversed these findings, accepting the explanation that the vessel came to Bombay to pick up additional cargo and repair its radar and V.H.F. equipment. The Supreme Court found that the High Court had exceeded its jurisdiction under Articles 226 and 227 by re-appreciating the evidence and substituting its findings for those of the Collector and the Tribunal. The Supreme Court held that the findings of the Collector and the Tribunal were neither unreasonable nor perverse and reinstated the confiscation of the goods.

2. Confiscation of the Vessel MANSCO-3:
The vessel was confiscated under Section 115(2) of the Customs Act, which provides for the confiscation of any conveyance used in the smuggling of goods unless the owner proves that it was used without their knowledge or connivance and that all precautions were taken to prevent such use.

The High Court set aside the confiscation of the vessel, finding no fraudulent intention on the part of the owners or the Master of the vessel. The Supreme Court, however, reinstated the confiscation, holding that the High Court had erred in re-evaluating the evidence and that the findings of the Collector and the Tribunal regarding the fraudulent intention were justified.

3. Imposition of Personal Penalties:
Personal penalties were imposed under Section 112 of the Customs Act on the Managing Director of the owning company and the Master of the vessel. The High Court set aside these penalties, but the Supreme Court reinstated them, finding that the Collector and the Tribunal were justified in imposing the penalties based on the evidence.

The Supreme Court found no merit in the contention that the Managing Director should not be penalized because he was not the owner of the vessel and was not in Dubai at the relevant time. The Tribunal had found sufficient evidence to establish his involvement and upheld the penalty.

Conclusion:
The Supreme Court allowed the appeal, setting aside the High Court's judgment and reinstating the orders of the Collector and the Tribunal regarding the confiscation of goods and the vessel, as well as the imposition of personal penalties. The Writ Petition filed by the respondents was dismissed.