TaxTMI 
TaxTMI 
2013 (1) TMI 725
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....2011 had been filed for the cargo pertaining to the above said IGM. After discharge of the cargo said to be in 41 containers at Tuticorin Port on 10-1-2011, an improper sealing in one of the container was reported to the carriers by M/s. PSA SICAL, the terminal operator. The terminal operator had also informed that seal number in all the 41 X 21' containers were different from what was shown in the BL. These 41 containers were sealed with customs seal and then shifted to CWC NHAVA SHEVA CFS by the liner's request dated 18-1-2011. 2.1 Meanwhile, the consignee as per the bill of Lading, M/s. SRS Industries, Salem vide their letter dated 19-1-2011 informed that they have entered into High sea sale agreement with M/s. Kanishk Steel Industries Limited, Chennai and the same was cancelled due to non-supply of individual weighment slips of the containers by the freight forwarders St. John Freight Systems. They also informed that they had instructed their Bank M/s. Indian Overseas Bank, Salem to return the documents to the shipper and M/s. IOB, Salem in their letter dated nil informed that they have returned all the documents received from Malayan Banking Berhad, (May Bank), K....
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....r, and booked the containers on board the vessel operated by M/s. Shipping Corporation of India, for the transport of the containers from Portklang, Malaysia to Tuticorin, India. As, out of the total of 44 containers that reached Tuticorin, 41 were found in empty condition, the Department of Customs has, without further scrutiny, imposed penalty under Section 116 on the appellants. 4.3 The Adjudicating Authorities have not taken into account the fact that the Import General Manifest was filed by the Shippers on 10-1-2011 indicating that the containers were laden, and that only when the cargo was unloaded in Tuticorin, were the applicants made aware that 41 out of the 44 containers were empty and in fact 3 of the containers did not even reach Tuticorin. The adjudicating authorities have not taken into account the fact that the documents based on which the MBL was prepared by the applicants' branch in Malaysia was the HBL as prepared by the Shippers. The applicants submit that they had acted bona fide on the basis of the HBL as issued by the Shipper and therefore the question of imposition of penalty under Section 116 would not arise. They filed a complaint dated 26-6-2011 wi....
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....Portklang Authorities when they investigated and found out that the containers were 'empty'. It is submitted that the Export Manifest filed with Malaysian Customs by the shipper is false and hence not a valid document. 4.5 The applicants reiterate that the role played by them, was restricted to merely providing the containers in which the cargo was shipped, and that therefore they had neither effective control nor prior knowledge of any illegal or illicit activities in relation to the said cargo. This is clearly seen, since after the arrival of the empty containers at Tuticorin customs, the appellants immediately filed a complaint with the Portklang Authorities requesting investigation into the sequence of events, and the letter listing the weights of the containers at the point of export was in response to such complaint. Thereafter, the Malaysian Port Authorities having launched an investigation, and found that the containers were empty at the time of export from Portklang, a fact which was intimated to the Commissioner of Customs, Customs House, Tuticorin, vide their letter ref No. (9) dim. LPK/JOSC/KP.05/02/14 dated 10-8-2011. The adjudicating authority has chosen to di....
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....customs saw fit to seize the containers which have thereafter been in the custody of the Department resulting in irreparable hardship to the appellants. As a result the appellants have filed a writ seeking the release of the sequestered containers. Case laws relied upon by the applicants are : (i) M/s. POL India Agencies Ltd. & Anr v. Addl. Commissioner of Customs & Ors. - 2005 (3) CHN 249 (ii) Hindustan Steel Ltd. v. State of Orissa - 1978 (2) E.L.T. 159 (S.C.) (iii) Forbes Campbell & Co. Ltd. v. Dy. Collector of Customs - 2003 (162) E.L.T. 88 (Bom.) (iv) Scindia Stem Navigation Co. Ltd. v. Dy. Collector of Customs - 1992 (61) E.L.T. 735 (Tri.) (v) Mackinnon Mackenzie & Co. Ltd. v. Collector of Customs - 1989 (43) E.L.T. 36 (Cal.). 5. The respondent-department vide their letter dated 22-11-2012 submitted their cross-objection as follows : 5.1 Though the sealing, the stuffing of the containers and the transport thereof was undertaken by the shippers and though the House Bill of Lading (HBL) was issued by Ms. John Logistics, the appellants have received t....
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.... Port. The Master Bill of Lading issued by M/s. Econ Shipping, as carrier of Cargo, have given undertaking to perform or to procure performance. Petitioner has not followed the appellate remedy provided under Customs Act, 1962. It is also respectfully submitted that the containers were neither detained nor seized and not confiscated as per Order-in-Original No. 3642/2011 dated 22-12-2011 passed by the Deputy Commissioner of Customs, however, penalty under Section 116 of the Customs Act was imposed on M/s. Econship for failure to unload the goods manifested in the IGM as M/s. Econship failed to account for the goods and the liability will be solely on him as it is evident from the Hon'ble Bombay High Court judgment in the case of Shaw Wallace & Co. v. Assistant Collector of Customs & Others - 1986 (25) E.L.T. 948 (Bombay). The said judgment issues detailed clarification and guidelines that are to be followed by Customs authorities and others. In Para (B)(a)(2) it is stated that "if seal is broken, it has to be accounted for by the carrier and the liability for such shortage will be solely of the carrier". In this case, the loading of containers in the vessel had been certified by th....
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....t IX of 1856 gives immunity to the Master of the vessel or other person for any short landing who have not had actually noticed at the time of receiving the cargo. But, in the instant case the cargo had been containerized in the containers provided by the appellant and the appellant has also issued MBL for the weight of the cargo stuffed. Since the container is an extension of the ship, the said immunity which is available to the Master of the vessel cannot save the appellant who has issued the MBL. The fact that the seal nos. mentioned in the MBL and the seal nos. found on the actual seals of the containers are not found tallied is not the sole reason for levying penalty under Section 116 of the Customs Act, 1962 on the appellant. The penalty imposed only for the short landing for which the appellant is responsible as per conditions of the MBL issued by them. 5.6 Further, it is submitted that the word "person-in-charge" in Section 116 of the Customs Act relates not only to Master, Pilot or driver, etc., and it includes the container which is used as mode of transport and ought to be considered as receptacle for the purpose of transport of an extended portion of the ship an....
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....anifest (Vessel) Regulations, 1971 provides that nature, condition and position (including status) to be truly declared as per respective declaration form. It is therefore quite clear that "Manifest" is to be considered a basic legal document and the declarations made therein are to be taken as legal submissions for the purpose of any action under the relevant provisions of Customs Act, 1962. Similarly, Chapter V of the Act provides for levy and assessment of Customs duties and Section 13 thereof when read with provisions of Bill of Entry (Form) Regulations, 1976 the legality of the duty levied in this case can be clearly understood. Further for levy/calculation of impugned penalty, the provisions of Section 116 of the Customs Act, 1962 unambiguously stipulates the levy of penalty not exceeding twice the amount of duty. 10. In order to understand the penalty provisions, relevant Section 116 of Customs Act, 1962 is reproduced below : "116. Penalty for not accounting for goods. - If any goods loaded in a conveyance for importation into India, or any goods transshipped under the provisions of this Act or coastal goods carried in a conveyance, are not unloaded at their ....
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....el at Tuticorin were entirely different. Government notes further in the instant case the applicants had given undertaking to perform or to procure performances of the entire transport from place at which the goods are taken in charge to the place designated for delivery in the bill of lading. They have also undertaken responsibility for the acts and omission of any person of whose services makes use for the performance of the contract evident by the bill of lading. Hence Government finds much force in the contention of the department that the applicant's responsibility do not merely stop with providing the containers in which the cargo was stuffed. They have issued an MBL and accepted the responsibility of delivering the cargo properly at the port of delivery as a person-in-charge of conveyance. 11. Government observes that person-in-charge of conveyance is responsible for any short landing or non-landing of goods. As per definition in Section 2(31) of Customs Act, 1962, person-in-charge of the conveyance is the master of the vessel. There is no dispute in the matter that all the 41 containers were found empty and total quantity as per Bill of Lading was found short. The s....