TaxTMI 
TaxTMI 
2013 (8) TMI 583
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..../company is a steamer agent of the Vessel MAERSK UTAH, which arrived on 3-9-2009. One Komal Enterprises, Hyderabad, holder of Import and Export Code imported 110 containers of M.S. Scrap/Plates from U.A.E. Out of 110 containers, 40 containers of M.S. Scrap/Plates of quantity 797.370 MTs. valued at Rs. 1,07,85,965/- involving a duty of Rs. 13,83,482/- and M.S. Plates of quantity 302.290 MTs. valued at Rs. 51,11,318/- involving duty of Rs. 12,48,253/- landed in the Port of Chennai and an Import General Manifest (IGM) was filed in terms of Section 30 of the Customs Act, 1962 (for brevity, "the Act"). 3.2 On investigation by the Dock Intelligence Unit (Container Tracking Cell), on weighment, it was found that the 40 containers, referred to above, were empty. The statements were recorded from the importer-Rajesh Suresh Jagnani. He, inter alia, stated that he came to know about the empty containers only after the Customs House Clearing Agent informed him. The petitioner/Steamer Agent was asked to explain about the empty containers and K.M. Ravi Varma, Line Manager of the Steamer Agent gave a statement on behalf of the petitioner on 29-9-2009. It is the case of the Department that the Li....
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....ounting for the above said 1099.660 MTs of MS Plates Ex stock and MS Steel Scrap, which has been not landed/short landed, under Section 116 of the Customs Act' 62." 3.4 A reply to the show cause notice dated 24-3-2010 was submitted and an Order-in-Original came to be passed by the Joint Commissioner of Customs (MCD) on 29-10-2010. The third respondent, while referring to the statement of K.M. Ravi Varma, Line Manager of the Steamer Agent under Section 108 of the Act came to the conclusion that the Steamer Agent is answerable for the quantity of goods that were loaded on the containers. The reasoning given by the third respondent is as follows : "12. The statement of Shri K.M. Ravi Varma, Line Manager, dated 29-9-2009 under section 108 of the Customs Act, 1962 only shows that whatever is declared on BL has been accepted by steamer agent without verifying its veracity. Apparently, the steamer agent may not be liable for answering to the description of the contents but is squarely answerable for the quantity. In the instant case, since no quantity was imported as declared and as seen from the statement of the steamer agent that his agent had affixed the seal on the container, the st....
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.... of the 'said to contain' cargo. Hence going by the provisions of the Section 116(e), the appellant can be charged with a penalty not exceeding the twice the amount of duty that would have been chargeable on the goods not unloaded, had such goods been imported. The total duty involved was Rs. 26,31,318/- had the manifested 'said to contain' cargo been imported. The LAA imposed a penalty of Rs. 32,00,000/- under the above provisions, which is not in excess of the twice the amount of duty involved. 22. In view of the above discussions, legal positions stated therein, I do not want to interfere with the lower authority's order and uphold the same. The appeal is rejected. Considering the fact that the appellant deposited Rs. 4,00,000/- in cash and Rs. 4,00,000/- by way of Bank Guarantee in compliance with the Hon'ble Madras High Court's order dated 22-9-2011 in W.P. No. 19243 of 2011 emanating from this forum's interim order dated 11-8-2011, I order that both the amounts may be adjusted against the total penalty amount of Rs. 32,00,000/-. I order the appellant to pay the balance amount in accordance with the procedure laid down for the same." 3.7 The petitioner filed a revision befor....
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....India, or any goods transhipped under the provisions of this Act or coastal goods carried in a conveyance, are not unloaded at their place of destination in India, or if the quantity unloaded is short of the quantity to be unloaded at that destination, and if the failure to unload or the deficiency is not accounted for to the satisfaction of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, the person-in-charge of the conveyance shall be liable,- (a) in the case of goods loaded in a conveyance for importation into India or goods transhipped under the provisions of this Act, to a penalty not exceeding twice the amount of duty that would have been chargeable on the goods not unloaded or the deficient goods, as the case may be, had such goods been imported; (b) in the case of coastal goods, to a penalty not exceeding twice the amount of export duty that would have been chargeable on the goods not unloaded or the deficient goods, as the case may be, had such goods been exported." 7. Section 116 of the Act imposes a liability for penalty on the person- in-charge of the conveyance. The person-in-charge is defined u....
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....ers. If this is the fact, then the customs authorities are justified in taking appropriate action for levying of penalty for the short shipment or no shipment in 40 containers. 10. On the factual aspects of the case, therefore, it is very clear that the steamer agent had filed Import General Manifest for goods which have been shipped and they also dealt with the customs department for appropriate orders that has to be passed in terms of Section 42 of the Act. Section 42 of the Act reads as follows : "Section 42. No conveyance to leave without written order. - (1) The person-in-charge of a conveyance which has brought any imported goods or has loaded any export goods at a customs station shall not cause or permit the conveyance to depart from that customs station until a written order to that effect has been given by the proper officer. (2) No such order shall be given until - (a) the person-in-charge of the conveyance has answered the questions put to him under section 38; (b) the provisions of section 41 have been complied with; (c) the shipping bills or bills of export, the bills of transhipment, if any, and such other documents as the proper officer may require have been d....
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....-in-charge, who deals with the cargo on behalf of the person-in-charge and held that they are liable for penal consequences. In that case, the appellant-British Airways, an aircraft carrier transporting passengers and cargo, claimed that they are not person-in-charge of the aircraft and, therefore, they are not liable for shortage of the goods unloaded in terms of Section 116 of the Act. Even in that case, show cause notice was issued on the appellant therein alleging short landing of goods as in the present case. The appellant therein contended that they are not person-in-charge in terms of Section 42(2)(e) of the Act and, therefore, they are under no liability and that plea was repelled by the Supreme Court by holding that penalty is leviable against the person-in-charge or a person representing the person-in-charge, who accepted to deal with the cargo on behalf of the person-in-charge. The Supreme Court held as under : "7. It may be noticed that sub-section (2) of Section 148 was incorporated by way of an amendment. The objects and reasons for its incorporation were notified in the Gazette of India on 14-12-1962, Part II, S. 2, Ext., p. 368 as under : '148. - Sub-section (1) c....
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....e Act nor his agent, it cannot be denied that they shall be deemed to be a person representing the person-in-charge to the officers of the Customs as his agent for the purposes of dealing with the cargo offloaded from the aircraft of the appellants' carrier. 12. Accepting the submission of the appellants that after the issuance of an order under Section 42 of the Act no proceedings could be initiated against the person-in-charge of the carrier would amount to negating the working of the Act and defeating the object sought to be achieved by it. Sections 42 and 116 of the Act are distinct as they deal with different contingencies. Whereas Section 42 puts the restriction that no conveyance shall be permitted to depart from the customs station until a written order to that effect is given by the proper officer under sub-section (2) of it, Section 116 deals with the penalty for not accounting for goods unloaded at the intended destination. The purpose of Section 42 is to not detain the conveyance unnecessarily and pass an order for its departure on prima facie satisfaction that the person-in-charge of the conveyance has unloaded the goods which apparently do not show the levy of a pena....
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....ection 148 of the Act gets attracted to this case without any doubt or reservation. 14. The decision of the Division Bench of the Bombay High Court in Seahorse Shipping and Ship-Management Pvt. Ltd. v. Union of India - 2004 (163) E.L.T. 145 (Bom.) relied on by the learned counsel for the petitioner is also a case where the seals were found to be intact, but when shortage of goods stuffed inside the containers by foreign suppliers was alleged, it was held that shipping agents cannot be made liable. I am unable to accept this contention in the light of the decision of the Supreme Court in British Airways Plc. case, referred supra. Furthermore, as has also been recorded earlier, there is a definite finding by the respondents that the Import General Manifest has been filed by the petitioner and the seal was affixed by the petitioner and he took charge of the sealed containers. Therefore, factually the Division Bench decision of the Bombay High Court may not apply to the present case. The petitioner, being a steamer agent and acting on behalf of the Master of the vessel the person-in-charge, is liable in terms of Section 148 of the Act. Moreover, the Division Bench of the Bombay High C....