TaxTMI 
TaxTMI 
2010 (8) TMI 256
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....se perverse and arbitrary. (ii) Whether the order of the CESTAT in setting aside - 1. Fine of Rs. 50,000/- in respect of 3.6 MTs of smuggled diesel. 2. Duty of Rs. 43,860.30 and 3. Interest under section 28AB on the duty amount, after having earlier confirmed confiscation of the supply vesselM.V.SeaBulk Toota, is based on no evidence or partly relevant or partly irrelevant evidence and is otherwise perverse and arbitrary ? (iii) Whether the order of the CESTAT in setting aside fine of Rs. 20,00,000/- in respect of 147 MTs of diesel stored in the supply vessel M.V. Sea Bulk Toota in which the smuggled HSD was mixed in such a manner that the smuggled HSD could not be separated after having earlier confirmed confiscation of the supply vessel M.V. Sea Bulk Toota, is based on no evidence or partly relevant or partly irrelevant evidence and is otherwise perverse and arbitrary ?" 3. The learned Counsel appearing for the Appellant as well as the Respondent has agreed that the question no. (ii) set out hereinabove, need not be answered since the Respondent has complied with the same and therefore, this Court should only answ....
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....Kumar Rai @ Sunil Rai. The remaining staff boarded the supply vessel 'Sea Bulk Toota' with two Panchas. After boarding the supply vessel the Custom officers got hold of the Chief Engineer, who was standing on the Deck and went to the Master of the vessel, where both of them were subjected to interrogation. After some time, the Chief Engineer of the vessel, Mr. Errol Tennyson, accepted that he had sold 40 MTs of HSD to the barge 'ML Anchor' and further admitted that earlier also he used to purchase HSD for his vessel during his Mumbai High voyage and by selling the same illegally to barges he used to make money. 7. After this, it was decided to search the barge thoroughly. During the search of the barge, it was found that the barge had purchased around 40,000 litres of diesel which was found to be stored in the hatch of the barge; which as admitted by the Chief Engineer of the supply vessel, was sold to barge 'ML Anchor' from the supply vessel 'Sea Bulk Toota'. During the search of the barge US $ 18600.00 were recovered from a gunny bag of rice in which it had been concealed and was to be given to the Chief Engineer of the vessel 'Sea Bulk Toota' for the diesel received by t....
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....d 102.197 MTs purchased on 23rd May 2006 be held liable to confiscation under section 111(d), 111(f) and 111(h) of the said Act read with the provisions of Foreign Trade Policy (2002-07) and since no duty was paid on the illegally imported diesel oil of 3.6 MTs, why the duty amounting to Rs. 43,860.30 as detailed in Annexure-G should not be recovered from M/s. Sea Bulk Offshore Dubai LLC, Post Box No. 32387, Dubai, UAE, the owners of Vessel Sea Bulk Toota, being the de-facto importers of the HSD, under section 28 of the Customs Act, 1962. Why interest on the duty amount not paid, should not be recovered under section 28AB of the Customs Act, 1962; (iii) The 147 MTs of diesel stored in supply vessel Sea Bulk Toota in which the smuggled HSD were mixed in such manner that the smuggled HSD cannot be separated, should not be confiscated under the provisions of Section 102(2) of the said Act and the Customs Duty Rs. 17,90,966.47 as detailed in Annexure-H, leviable should not be recovered; (iv)....................................... (v)......................................... (vi) The supply vessel 'M.V. Sea Bulk Toota' valued at Rs. 8,31,67,061/- and the barge 'M.L....
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....eal. The Tribunal upheld the confiscation of the vessel but reduced the redemption fine to Rs. 5,00,000/- from Rs. 1,00,00,000/-. The Tribunal has also set aside the confiscation of 147 MTs of diesel. 13. Being aggrieved by the order of the Tribunal dated5th August 2008, the Appellant filed the above Appeal which as stated above, was admitted on15th April 2009on the questions of law set out in paragraph 2 of this judgment. Submissions : 14. It is submitted on behalf of the Appellant-Revenue that the order dated5th August 2008passed by the Tribunal is arbitrary, perverse and lacks any vestige of fairness and is therefore, liable to be set aside. The Tribunal despite having held the Chief Engineer as the agent of the Respondent, without any reason, proceeded to observe that the redemption fine imposed of Rs. 1 crore was very excessive and reduced the same to Rs. 5,00,000/-. 15. It is further submitted that 147.179 MTs of High Speed Diesel (HSD) which was legally acquired by 'M.V Sea Bulk Toota' and still lying in its hold on the date of seizure of the vessel would be liable for confiscation under Section 120(2) of the said Act, since it was mixed with the s....
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....ent. 18. The Tribunal has recorded in its order that the Respondent herein who is the Owner of the vessel, vide letter dated20th May 2005had given clear-cut instructions to the Master and Chief Engineer of the vessel, qua their responsibilities pertaining to the fuel oil consumption, fuel oil bunkering and unauthorised fuel transfers. The instructions pertaining to the unauthorised fuel oil transfers are reproduced hereunder :- 1. Seabulk Offshore and its customers take a very serious view about unauthorized fuel oil transfers and deliberate short loading of fuel oil. 2. Customers will usually off-hire the vessel and in most cases terminate the charter if a serious discrepancy is noted or if an unauthorised transfer is discovered. 3. Seabulk Offshore reserve the right to prosecute any individual believed to be involved in unauthorized fuel oil transfers or short loadings. 4. Seabulk Offshore may also report an individual to his home state Maritime Administration if he is found to be negligent in the performance of his duties with respect to the receipt, transfer, storage or use of a vessel's bunkers. 5. InSingaporeor on Singapore Regi....