TaxTMI 
TaxTMI 
2026 (8) TMI 743
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....arious CFS about short landing noticed in the import of steel scrap, the Docks Intelligence Unit [DIU] examined the import consignments belonging to various importers. In the Report dated 06.08.2010, from M/s.ICBC Cfs, a huge discrepancy in the weighment of containers said to contain "shredded steel scrap", imported by various Firms, was noticed. It was found that the consignment of goods declared as "shredded steel scrap" were brought into the country under Bills of Lading issued by the Principals of the 1st respondent and declarations were also made in the Import General Manifest [IGM] that the goods were "shredded steel scrap" The weight of the declared goods in each of the containers was also declared. On examination of the goods in respect of 12 Bills of Lading, it was found that the containers largely contained broken roof tiles and there was substantial shortage in the quantity of the declared goods. It was also noticed that the actual weight of the containers was only 87.5% of the weight of the goods declared as per the Bills of lading and thereby, substantially fell short of the declared Bills. (4) A Show Cause Notice dated 05.12.2011, was issued proposing to confiscate....
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....d in view of the categorical finding of the Supreme Court in British Airways PLC Vs. Union of India, where they have harmoniously interpreted Sections 116 and 148 of the Customs Act, to hold that the steamer agent is equally responsible as a person-in-charge of a vessel / aircraft; B) Whether the Hon'ble CESTAT ought to have taken into consideration the interpretation given by the Hon'ble Apex Court in the case of British Airways PLC Vs. Union of India, reported in 2002 [139] ELT 6, wherein it was categorically stated that "besides the person in charge of the conveyance, the liability could be fastened upon his agent appointed under the Act or a person representing the officer in charge who has accepts as such by the officer concerned for the purposes of dealing with the cargo on his [officer-in-charge] behalf"; C)Whether the Hon'ble CESTAT ought to have taken into consideration the conclusion arrived at by the Hon'ble Apex Court in the case of British Airways PLC Vs. Union of India, reported in 2002 [139] ELT 6, giving a quietus to the doubt as to who is the person in charge of the conveyance and whether liability can be fastened upon the officer-....
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....on, who has lodged the IGM with the officer of the Customs, it is deemed to act as an agent of the vessel and hence, liable under Section 116 of the Act. The learned Senior Standing counsel placed heavy reliance on the judgment of the Apex Court in the case of British Airways PLC Vs. Union Of India and Others [2002 [2] SCC 95] and the judgment of this Court in Caravel Logistics Private Limited Vs. General Secretary [RA], Government of India, Ministry of Finance, Department of Revenue, New Delhi and Others [MANU/TN/0959/2016], in support of his submissions. (8) The learned counsel appearing for the 1st respondent, in contra, submitted that the 1st respondent cannot be held liable under Sections 116 and 148 of the Customs Act, inasmuch as the 1st respondent is only a carrier agent and not a party to the declaration of the contents in the containers. The learned counsel submitted that the 1st respondent lodged the IGM based on the particulars furnished in the Bills of Lading and in view of the stipulation in the Bills of Lading that the particulars furnished by the shipper were non-checked by the carrier, and the carrier was not responsible, the penalty imposed under Section 116 of....
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....he proceedings against the importers by accepting their explanation that they were cheated by their shipper/supplier. The Commissioner of Customs, however, on the basis of the materials on record, ordered for confiscation of the goods and also imposed penalty of Rs. 90,15,924/- on the 1st respondent, invoking Section 116 of the Customs Act, on the ground that the 1st respondent failed to make a true declaration in the Import General Manifest and also, had not satisfactorily accounted for the shortage of 3381.129 Metric Tons of "shredded steel scrap" and 162.17 Metric Tons of "heavy melting steel scrap", involving total duty of Rs. 90,15,924/-. The 1st respondent filed an appeal before the Tribunal and succeeded in the same and hence, the present Civil Miscellaneous Appeal, by the Revenue. (13) Before adverting to the legal issues, the factual findings of the Commissioner of Customs are noted. (14) The Commissioner of Customs, in his order, correctly understood the case of the Department that the issue was not whether the Steamer Agent / Carrier was a party to the fraud, but the issue was whether the Steamer Agent / Carrier, having failed to deliver the declared quantity of ma....
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....e] of the declared weight of the goods as per the Import General Manifest [IGM] and the Bills of Lading issued by the shipping line. The Tribunal, despite the aforesaid glaring facts, in a very cryptic manner, reversed the order of the Commissioner of Customs by applying the ratio laid down by the Hon'ble Bombay High Court in Shaw Wallace case [cited supra]. (16) We find upon a perusal of the order-in-original that the Commissioner of Customs, on proper appreciation of the materials on record, rendered factual findings and applied the law correctly. However, the Tribunal even without examining the facts, in a very casual manner, over-turned the order-in-original. The materials on record reveal that in the IGM lodged by the 1st respondent, for the 150 containers shipped by them, the goods declared were 3429.809 Metric Tons of "shredded Steel Scrap" and 168.24 Metric Tons of "Heavy Melting Steel Scrap". However, on inspection by the DIU, it was found that in the 150 containers, the quantity of the declared goods was negligible and that, they contained large quantity of broken roof tiles. Hence, the 1st respondent was bound to explain the deficiency to the satisfaction of the Assis....
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....ary [RA], Government of India, Ministry of Finance, Department of Revenue, and Others [MANU/TN/0959/2016], following the judgment of the Apex Court in British Airways case [cited supra], held that on a combined reading the provisions of Sections 2[31], 30, 31, 116 and 148 of the Act, and the judgment of the Hon'ble Supreme Court in British Airways case, along with the Notification issued by the Central Government dated 19.12.2003 in Notification No.111/2003, held as follows:- "20. From a conjoint reading of Sections 2[31], 30, 31, 116 and 148 of the Act, it becomes clear that person-in-charge of a conveyance together with the person acting on his behalf as his agent or for the matter any other person acting on his behalf by lodging import manifest under Section 30 of the Act, equally becomes liable for payments of the penalty. 21.In fact, the Supreme Court in "British Airways PLC Vs. Union of India" [MANU/SC/0712/2021 : 2002 [2] SCC 95 : AIR 2002 SC 391] has considered the combined effect of Sections 2[31], 116 and 148 of the Act and held as under:- "The scheme of the Act provides that the cargo must be unloaded at the place of intended destination and it....
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....nd that it is the cardinal principle of law that the judgment cannot be read like a statute and that the judgment is only significant for what it decides and lays down as ratio. (22) We are bound by the judgment of the Apex Court in British Airways case which was also followed by a coordinate Bench of this Court and therefore, the contention of the 1st respondent that he cannot be construed as a "person-in-charge", as defined under Section 2[31] of the Act, cannot be accepted. (23) One more aspect which will bring the 1st respondent within the ambit of "a person-in-charge" as defined under Section 2[31] of the Act, is the lodgment of the IGM by the 1st respondent. The importance and significance of the IGM was succinctly explained by the Division Bench of this Court in Carvel's case [referred to supra]. The Division Bench of this Court, at paragraph No.19, held as follows:- "19. In this context, it would be appropriate to notice sub-section [1] of Section 30 of the Act, which required the person-in-charge of a vessel carrying imported goods or any other person specified by the Central Government by notification, in the case of a vessel deliver to the proper officer a....