TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 1284
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....s of the case in brief are that the intelligence gathered information that a tug 'Alliance' owned by M/s. K B Shipping & Company Jamnagar had illegally made supply of 20 KL of diesel oil to a Pakistan going foreign flag vessel 'MT CANTA' without filing export document. In view of this information, the officers of DRI visited Bangar (DCC) Jetty, Sikka, and interrogated crew of the tug bearing registration no. 3796 on board. The crew members and one of the owners, appellant Shailesh M Mehta admitted to have effected supply of 20 KL of diesel oil to vessel 'MT CANTA' in high seas through the said Tug 'Alliance' without informing Customs department nor filing any documents like shipping bills. Port clearance was obtained by the Tug 'Alliance' from Sikka Custom House to sail for Porbandar. However, instead of going to Porbandar Port, the Tug went straight to MT CANTA which was on way to Pakistan and delivered 20 KL of diesel oil, two packets of welding rods, one grinder with six discs and thereafter went to Porbandar port and deposited their port clearance to Customs Porbandar. After obtaining port clearance from Porbandar port for Sikka port, they sailed back to Sikka port. Shri Musa I....
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....lso took place in as much as no shipping bill was filed for export of goods and no permission was sought for loading of goods for export, thereby attracting Section 13 (f) and (g) of Customs Act, 1962 for confiscation of goods. He agreed with the findings of the lower authority regarding confiscation of Tug and imposition of redemption fine. However, he reduced the amount of penalty imposed upon the appellants but confirmed the Order-in-Original in other respects. Feeling aggrieved from the impugned order dated 19/20 August, 2015 passed by the learned Commissioner of Customs (Appeals), the present appeals have been filed by the appellants. 4. The learned Consultant / C.A. for the appellants submitted that the impugned order passed by the learned Commissioner (Appeals) is a nonspeaking order and it has not taken into consideration all the submissions advanced by the Authorised Representative of the appellant. Learned Commissioner (Appeals) has failed to give consideration to the plea of the appellant that the learned Additional Commissioner had passed Order-in-Original in violation of the principles of natural justice as he refused to give opportunity to the appellant for cross e....
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....bove material to the ship 'MV CANTA'. He also stated that as the Master of the ship, he knew that it is unlawful to supply any goods to any vessel, inside the seas without permission from Customs Authority. He made a mistake by supplying diesel oil, welding rods, cutting wheels and grinder to the ship MV CANTA through our Tug "Alliance". 4.4 The learned Consultant / C.A. for the appellants also submitted that there is no evidence to show that M/s. K B Shipping or their partners Shri Shailesh Mehta and Shri Vijay Sanghvi had any prior knowledge about the mistakes on the part of Shri Musa, who was the Master of the 'Tug'. Shri Tarun Patel, who was deputed for obtaining "No Dues Certificate" from Gujarat Maritime Board for the Tug is not even a co-noticee in the present case. Therefore, no penalty was imposed on him. He also submitted that the omission on the part of Shri Musa and Shri Tarun Patel was not in the knowledge of M/s. K B Shipping and their partners Shri Shailesh Mehta and Shri Vijay Sanghvi and Shri Tarun Patel was not even implicated in the case. Therefore, no penalty ought to have been imposed upon M/s. K B Shipping, Shri Shailesh Mehta and Shri Vijay Sanghvi, Partne....
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....er Section 114 (iii) of Customs Act, 1962 by alleging that diesel supplied by Shri Musa to the vessel 'MT CANTA' by using Tug 'MT Alliance' was sold by him. However, it has been provided in Section 114 of the Customs Act that any person, who in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under Section 113 or abets the doing or omission of such acts shall be liable to a penalty. In this case, it is no where alleged in the show cause notice that Shri Rajendra Bhanushali had rendered anything liable to confiscation under Section 113, therefore, the requirements of Section 114 are not satisfied and Shri Rajendra Bhanusali is not liable to penalty under Section 114 of the Customs Act, 1962. It has been prayed by the learned Consultant / C.A. for the appellants that the 'Tug' is not liable to confiscation under Section 115 (2) and M/s. K B Shipping, M/s. V S Marine Service, Shri Shailesh Mehta and Shri Vijay Sanghvi are not liable to penalty under Section 114 (iii) and 114 AA as imposed. 5. The learned Authorised Representative for the department reiterated the Order-in-Appeal dated 19th August 2015 passed by ....
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.... appellants. Sections 50 and 51 of the Customs Act, 1962 are reproduced below:- "SECTION 50. Entry of goods for exportation. - (1) The exporter of any goods shall make entry thereof by presenting [electronically] [on the customs automated system] to the proper officer in the case of goods to be exported in a vessel or aircraft, a shipping bill, and in the case of goods to be exported by land, a bill of export [in such form and manner as may be prescribed]: [Provided that the [Principal Commissioner of Customs or Commissioner of Customs] may, in cases where it is not feasible to make entry by presenting electronically [on the customs automated system], allow an entry to be presented in any other manner.] (2) The exporter of any goods, while presenting a shipping bill or bill of export, shall [xxx] make and subscribe to a declaration as to the truth of its contents. [(3) The exporter who presents a shipping bill or bill of export under this section shall ensure the following, namely:- (a) the accuracy and completeness of the information given therein; (b) the authenticity and validity of any document supporting it; and (c....
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....d, 'Alliance' to supply the bunker diesel to vessel "MT CANTA". The tug was earlier owned by M/s. K. B. Shipping and was later transferred to M/s. V. S. Marine Service, Jamnagar. Therefore, Shri Musa Ibrahim Modi contacted Shri Shailesh Mehta, Partner of M/s. V. S. Marine Service to provide the tug. 6.5 It is pertinent to mention here that there is no evidence on record that Shri Rajendra Bhagwanjibhai Bhanushali, partner of M/s. Raja Petroleum was duly informed that 20KL of diesel oil has to be procured so that it can be supplied to the ship "MT CANTA" in violation of provisions of Customs Act, 1962. Therefore, I am of the view that penalty has been wrongly imposed by the Adjudicating Authority on the appellant Shri Rajendra Bhagwanjibhai Bhanushali, partner of M/s. Raja Petroleum and has been wrongly confirmed by learned Commissioner through the impugned order. 6.6 At page 42 of the Order-in-Original, the learned Adjudicating Authority has mentioned that M/s. Raja Petroleum was not authorised to sell more than 2KL diesel at a time to any customer and in violation of the relevant rules, he has supplied 20KL of diesel by 10 different invoices issued in the name of M/s. Chisti....
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.... M/s. V. S. Marine Service has stated in his statement recorded on 20.09.2013 under Section 108 of the Customs Act, 1962 which has been reproduced at page 21 to 24 of the Orderin-Original that "he had asked Shri Rafiq Narpali to contact his Partner Shri Shailesh Mehta and to tie up the supply programme. He had ensured telephonically with Musa as well as Rafiq to leave for supply after completion of all the formalities of port and Customs. He also conveyed to his Partner Shri Shaileshbhai to ensure to complete all formalities of port and Customs before sailing for bunker." He has also stated that "it was not his intention to mislead Customs but he admitted of committing a mistake on their part that Musa had not filed shipping bill for this bunker, though, it was to be supplied to Foreign Going Vessel in the high seas. They had trusted Shri Musa Ibrahim Modi but he had misrepresented the facts related to supply of diesel and spare parts and has betrayed them in the matter." He has further stated "Shri Musa Ibrahim has suppressed and misrepresented the facts to them in the entire issue. He was not involved in the smuggling of diesel and spare parts." 6.10 From the above mentioned s....
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.... that Shri Musa Ibrahim Modi informed Shri Shailesh Mansukhlal Mehta that he had obtained 'Port Clearance Certificate' showing wrong destination or he made any mention of vessel "MT CANTA" or he had informed him that he had not filed any 'Manifest' as well as "shipping bills" showing supply of above mentioned items. Unless the above mentioned facts are in the knowledge of Shri Shailesh Mansukhlal Mehta and unless this fact is proved that Shri Shailesh Mansukhlal Mehta was in knowledge of those facts, no penalty can be imposed upon him. It appears from the facts of the case that Shri Shailesh Mansukhlal Mehta was not involved in the smuggling of diesel oil and spare parts through tug "Alliance" from Sikka port to vessel "MT CANTA" and penalty has been wrongly imposed upon him and the impugned order imposing penalty upon him cannot be sustained. 6.14 It is pertinent to mention here that Shri Shailesh Mehta, common partner of M/s. K. B. Shipping & Co. and M/s. V.S. Marine Services, Jamnagar has stated in his statement that he did not have any prior knowledge about the fact that Shri Musa, to whom the tug was given on lease for supply of diesel and spares to the vessel, had not file....
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....e tug without filing shipping bills or without making correct declarations before the Port and Customs Authorities regarding the "Port Clearance" from the Customs. It appears that Shri Shailesh Mehta and Shri Vijay Kantilal Sanghvi had no prior knowledge regarding the fact that the goods would be transported by Shri Musa or Shri Tarun Patel by using their tug, without filing the shipping bills and the tug would sail from the port of Sikka under the cover of 'No Dues Certificate' issued by GMB showing the tug in ballast. Neither Shri Vijay Kantilal Sanghvi nor Shri Shailesh Mansukhlal Mehta filed any applications before the Port Authorities or Customs Authorities in connection with obtaining "Port Clearance Certificate". In fact, the applications were filed by Shri Tarun Patel an employee of M/s. K. B. Shipping & Co. Shri Tarun Patel had prepared the alleged erroneous applications before the "Port Authorities" for obtaining 'No Dues Certificate' and before the Customs Authorities for obtaining the "Port Clearance Certificate" but, Shri Tarun Patel has been given a clean chit by the department and no notice was issued to him. Even in the show cause notice, no allegation has been made....
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.... 6.17 From the above statement made by Shri Musa and from the perusal of the records, it is clear that in the whole episode, Shri Musa Ibrahim Modi, the "Master of the tug" at the relevant time and Shri Tarun Patel, Supervisor of M/s. K. B. Shipping & Co. played key roles in the whole episode. Shri Tarun Patel obtained port clearance but did not take any other permission from Customs House Sikka for supplying diesel oil, welding rods, grinders and disks to the vessel "MV Canta". They did not inform Customs House Sikka or Customs House Probandar about the above supplies to ship "MV Canta". Therefore, in these Circumstances, no liability can be fastened on Shri Shailesh Mehta or Shri Vijay Kantilal Sanghvi or their firm M/s. K. B. Shipping & Co., Jamnagar. 6.18 Now the question before the Tribunal is whether the actual owner of the tug 'Alliance' M/s. V. S. Marine Services, Jamnagar is responsible for the above mentioned irregularities and illegalities and whether penalty has been rightly imposed upon them. In this context, it is pertinent to mention here that at the relevant time, the tug 'Alliance' was at the disposal of M/s. K. B. Shipping & Co. and their employees. It was n....