2002 (9) TMI 159 - AT - Customs

Tribunal upholds penalty on steamer agents under Customs Act, 1962

P & O NEDLLOYD (INDIA) LTD. Versus COMMISSIONER OF CUSTOMS, CHENNAI

P & O NEDLLOYD (INDIA) LTD. Versus COMMISSIONER OF CUSTOMS, CHENNAI - 2002 (148) E.L.T. 1206 (Tri. - Chennai) Issues Involved:1. Imposition of penalty under Section 116(a) of the Customs Act, 1962 on the Steamer Agents.2. Responsibility for pilferage of goods during transit from Chennai Port to CFS Virugambakkam.3. Interpretation of 'person in charge of the conveyance' under the Customs Act, 1962.4. Applicability of judgments by the Hon'ble Apex Court.Detailed Analysis:1. Imposition of Penalty under Section 116(a) of the Customs Act, 1962 on the Steamer Agents:The Commissioner of Customs imposed a penalty of Rs. 70,78,408/- on the appellants, M/s. P & O Nedlloyd (India) Ltd., under Section 116(a) of the Customs Act, 1962. The appellants contended that they were unaware of the actual quantity of goods in the container and that the container's seal was intact when unloaded from the vessel. They argued that the adjudicating authority incorrectly held them responsible for the pilferage, asserting that the responsibility should lie with the transporter.2. Responsibility for Pilferage of Goods during Transit from Chennai Port to CFS Virugambakkam:The appellants argued that the pilferage occurred en route to the CFS and that the transporter and the driver should be held accountable. Statements from various individuals, including the driver and employees of the transport company, were recorded, revealing that the goods were removed illegally during transit. The driver admitted to colluding with others in the removal of goods.3. Interpretation of 'Person in Charge of the Conveyance' under the Customs Act, 1962:The Tribunal examined whether the liability of the steamer agents ended once the container was unloaded with the seal intact inside the Harbour premises. The Tribunal referred to the judgment in British Airways PLC v. Union of India, where the Hon'ble Apex Court held that the liability could be fastened upon the agent of the person in charge of the conveyance. The Tribunal concluded that the steamer agents' responsibility extended to the CFS/CWC to which the containers were allowed to be removed based on the applications filed by the steamer agents.4. Applicability of Judgments by the Hon'ble Apex Court:The Tribunal considered the judgments cited by the Revenue, including IAAI v. Grand Slam International and British Airways PLC v. Union of India. These judgments supported the argument that the responsibility for the goods lies with the person in charge of the conveyance or their agent until the goods are handed over to the custodian. The Tribunal observed that the steamer agents were responsible for the shortages noticed at the time of examination of the container and were liable to pay the penalty under Section 116(a) of the Customs Act, 1962.Conclusion:The Tribunal upheld the penalty imposed on the appellants under Section 116(a) of the Customs Act, 1962, finding no infirmity in the impugned order. The Tribunal rejected the appellants' plea that the liability should be fixed on the transporter, emphasizing that the steamer agents were responsible for the transport of the goods from Chennai Port to CFS Virugambakkam. The Tribunal noted that the original authority had the power to impose a penalty twice the amount of duty but had reasonably restricted the quantum of penalty to the amount of duty only.