TaxTMI 
TaxTMI 
2009 (2) TMI 635
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.... 1962 (in short 'the Act'). M/s. Fargo Marine Co. Ltd. were the owners of the Vessel at the relevant point of time and Capt. Georgios Perivolaris was the Master of the Vessel. M/s. James Mackintosh and Company Pvt. Ltd. were the Indian agents of the owners. On 13-6-2001 at about 4.00 p.m., the police personnel In-charge of B-1 North Police Station, Chennai, intercepted a Mahindra Jeep with Registration No. TN-02-C-4979 opposite to the R.B.I. Subway and recovered 900 numbers of contraband gold bearing foreign markings and weighing 104.85 kgs. valued at Rs. 4,35,84,048 (i.v.) and Rs. 4,66,89,705 (m.v.) from nine cloth belts kept concealed in the jeep. Thereafter, one Sadasivan, occupant of the jeep was arrested along with one Ganesan, driver of the said jeep. Enquiry disclosed three more accomplices, namely, Rajan Paul @ K. Rajan, Abdul Nabi and Saleem and they were also arrested. The contraband gold was seized on the reasonable belief that they were smuggled into the country without proper permit or licence. Further enquiry disclosed the involvement of one Kishore, second officer of the vessel. The Vessel was berthed at the Chennai harbour and therefore, the second officer was also ....
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.... learned Senior Central Government Standing Counsel, submitted that the facts clearly show that the captain was involved. The statement of the captain that only these three persons could have engaged in the smuggling activity would clearly show that he had knowledge of the smuggling activity. The learned Senior Counsel submitted that the facts would show that there was a telex message received by the captain on 22-3-2001. It is stated that one of the crew members of the Vessel was recently approached by a stranger at Singapore offering large sums of money for carrying gold to India. In spite of this telex message, the captain of the Vessel had not taken steps to prevent the smuggling activity and when this clear telex message had been sent, it is not possible for the captain to deny that he had knowledge of the smuggling. The learned Senior Counsel referred to the decision of the Supreme Court in Kripal Singh v. Collector of Customs (Prev.), 1998 (104) E.L.T. 305, where the Supreme Court dismissed the appeal filed by the owner of the truck because he had failed to prove that at the time when the contraband goods were found in the truck, it has been used without his knowledge and co....
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....ans of transport in the smuggling of any goods or in the carriage of any smuggled goods shall be liable to confiscation, unless the owner of the conveyance or animal proves that it was so used without the knowledge or connivance of the owner himself, his agent, if any, and the person in charge of the conveyance or animal and that each of them had taken all such precautions against such use as are for the time being specified in the rules : Provided that where any such conveyance is used for the carriage of goods or passengers for hire, the owner of any conveyance shall be given an option to pay in lieu of the confiscation of the conveyance a fine not exceeding the market price of the goods which are sought to be smuggled or the smuggled goods, as the case may be. The confiscation is in 2001, long after the amendment. The issue must be decided on the basis of the Section as it reads now. The question then is whether the captain had proved that he had knowledge. In the show cause notice, which is an elaborate one, the only reference to the ship is at paragraph 39, which reads as follows :- "39. The vessel M.V. Tiger Bridge valued at Rs. 8,48,11,500/- which was used as a....
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....the crew of M.V. Tiger Bridge and as they had come into picture only at the time of executing a bond for the vessels and in the absence of any implication by the persons who admitted to have committed the smuggling it can be concluded that he had no role in this smuggling operation. As regards the vessel M.V. Tiger Bridge, the ratio envisaged in Mogul Line Ltd. v. Addl. Collector of Customs Bombay - 1982 (10) E.L.T. 397 (BOM.) does not apply as it is seen from the statements of the persons involved in this smuggling operation that they had smuggled gold on earlier occasions also. Thus it is evident that the owners of the vessel have not taken sufficient precautions to desist the crew from involving in smuggling activities. It is also seen that the smuggled goods find no place in crew's effect declaration nor in any manifest declaration. Thus I hold the vessel M.V. Tiger Bridge liable for confiscation under Section 115(2) of Customs Act, 1962 for being involved in this smuggling operation and also the owners liable for the action of their employees." Therefore, even here, the Commissioner has not recorded any finding regarding knowledge or connivance, except to state thus, "it is....
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....k custom officers to first crane near the fore peak at the top most movable portion were under the long electrical cables, there were hollow space. Mr. Patel confirmed that he transported 9 gold belts from Singapore to Chennai-hiding in those hollow spaces. The rooms of all the three employees of my Ship and hollow space were photographed by customs team. In this regard I would like to state that Mr. Patel was incharge of operating the crane and no other crane officers were generally visiting that area. My Ship was searched by customs team with "Nil" recovery. In this regard, I wish to state that entire incident is very unfortunate and shocking to me as myself and my company have always warned my crew and officers against indulging in any smuggling activities. My company has an unblemished record offering from Singapore to Chennai for many years without any such incident. This entire operation could have been executed only by those three individuals and no other person of my Ship are involved. I promise to inform customs if anything I come to know further in this matter I request that whatever legal actions possible be taken only against three involved persons and rest of my ....
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....as follows :- "6. It appears that the adjudicating authority purported to confiscate the vessel on the ground that appropriate precautionary steps had not been taken to prevent the smuggling of the goods on board the vessel. It is pertinent to note that prior to the amendment of Section 115 of the Customs Act with effect from 13th May, 1988, a vessel was liable to be confiscated even if it was proved that there was a lapse on the part of the owner to take appropriate precautionary steps. However, that provision has been deleted with effect from 13th May, 1988. The present case pertains to the period after the amendment of Section 115 of the Customs Act. Therefore, the confiscation of the vessel on the ground that the owner or the captain of the vessel have not taken sufficient precautionary measures, cannot be a ground for confiscation of the vessel. 7. It was contended by the Counsel for the Revenue, that the negligence on the part of the Company/captain in not replacing the lock of the cabin even after being noticed that the duplicate key has been misplaced, was sufficient to confiscate the vessel under Section 115(2) of the Customs Act. We are unable to agree wit....