TaxTMI 
TaxTMI 
2012 (5) TMI 301
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.... diesel by the appellant. Accordingly, the appellant was liable to pay the said amount of fine and the said amount of duty on 3.6 MTs of smuggled diesel. 3. The learned Commissioner also confiscated 147 MTs of diesel valued at Rs.47,44,336.35, but this confiscation was ordered under Section 120(2) of the Act. As the said goods had also been released provisionally against bond and bank guarantee, a fine of Rs.20 lakhs was imposed under Section 125 in lieu of confiscation thereof, with a direction for appropriation of the fine from the bank guarantee. No duty was required to be paid on the said quantity of diesel. 4. The aforesaid 147 + 3.6 MTs of diesel had been seized from "M.V. Sea Bulk Toota". 147 MTs of diesel were found to have been legally acquired and 3.6 MTs of diesel were found to have been smuggled and both were found mixed in such a manner that the smuggled diesel could not be separated. This is the reason why Section 120(2) of the Customs Act was invoked by the adjudicating authority to confiscate 147 MTs of diesel. The adjudicating authority also confiscated the above vessel valued at over Rs.8.3 crores under Section 115 of the Act. As th....
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....Sea Bulk Toota is based on no evidence or partly relevant or partly irrelevant evidence and is otherwise 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 vessel M.V. Sea Bulk 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" The Hon'ble High Court, in its judgment reported in 2010 (260) ELT 397 (Bom.) answered the first question in the negative and remanded the third question to this Tribunal for fresh decision. The High Court....
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....his Tribunal, in fact, held the Chief Engineer to be the agent of the appellant and that this finding has not been interfered with by the Hon'ble High Court. 11. In his rejoinder, the learned counsel submits that the earlier finding of the Tribunal on the relationship between the appellant and the Chief Engineer of the vessel was rendered in the context of applying the provisions of Section 115 of the Customs Act to the case in hand. The learned counsel particularly refers to sub-section (2) of Section 115 and points out that this provision of law separately refers to 'agent' of the owner of conveyance. As per this provision, any conveyance used for smuggling of any goods or for the carriage of any smuggled goods shall be liable to confiscation unless the owner of the conveyance 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. The learned counsel submits that, in the proviso to Section 120(2) of the Act, there is no mention of 'agent' of the owner of the goods and, therefore, it is not permissible to substitute anybody for owner of the goods for the purpose of confiscatio....
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....s argued that the appellant, as the owner of the vessel and the goods, cannot be held liable for the presence of smuggled diesel in the vessel. According to the counsel, the entire responsibility to ensure that such contraband is ruled out was on the Master of the vessel as well as the Chief Engineer. Per contra, the learned JCDR would submit that the Chief Engineer was also sharing the above responsibility with the owner and, therefore, the knowledge and belief of the Chief Engineer about the presence of smuggled diesel in the vessel would amount to similar knowledge and belief of the owner of the goods, which, in turn, will render the entire quantity of goods liable to confiscation under sub-section (2) of Section 120. 14. Section 120(2) envisages confiscation of the entire stock of diesel containing the smuggled quantity and the legally acquired quantity subject, of course, to the proviso thereto. In the present case, the learned Commissioner segregated the smuggled quantity from the legally acquired quantity for the purpose of confiscation and determination of redemption fine. This course of action was not permissible in law inasmuch as it was not envisaged under ....
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....ioner has not been set aside by this Tribunal or by the Hon'ble High Court. However, as it appears from Section 147(3) of the Act, the liability or otherwise of the owner of the goods will not affect the liability of the person expressly or impliedly authorised by him in respect of the goods for any of the purposes of the Act. In other words, the authorised person becomes the deemed owner of the goods by virtue of Section 147(3) of the Act. As rightly pointed out by the learned JCDR, the requirement of the owner of the goods to discharge his burden of proof under the proviso to Section 120(2) of the Act is one of the purposes of the Act in relation to the goods. If that be so, as rightly pointed out by the learned JCDR, the burden of proof which is normally to be discharged by the owner of the goods has to be discharged, in the present case, by the deemed owner. The Chief Engineer who shared full responsibility with the owner of the goods will thus step into the shoes of the owner of the goods for purposes of the proviso to Section 120(2). The question now arises as to whether the Chief Engineer had no knowledge or reason to belief that the seized stock of diesel contained sm....