Back
2010 Supreme(Bom) 1083
High Court of Judicature at Bombay
THE HONOURABLE MR. JUSTICE V.C. DAGA & THE HONOURABLE MR. JUSTICE S.J. KATHAWALLA
Sai Shipping Company (P) Ltd.
Versus
Union of India & Others
WRIT PETITION NO. 265 OF 2006
Decided on : 04-08-2010
For the Petitioner:A.M. Vernekar, Advocate.
For the Respondents:P.S. Jetly with R.B. Pardeshi, Advocates.
The reliance on Tally Sheets over Out-Turn Reports is crucial in determining short landing of goods under the Customs Act.
Headnote:
Customs Act - Short Landing of Goods - Section 129DD - Article 226 - 116 - 128 - [Customs Act, 1962, Section 129DD, Article 226, Section 116, Section 128]
Fact of the Case:
The petitioner, as the vessel agent, filed Import General Licence (IGM) for goods. Discrepancies arose in the quantity of discharged goods compared to the manifested quantity, leading to a penalty imposed by the Assistant Commissioner of Customs, which was upheld in appeal and revision.
Finding of the Court:
The court found that there was no short landing of Chinese Polished Beans but upheld the finding of short landing of one piece of Seamless Steel Pipe. The court quashed the penalty for short landing of Chinese Polished Beans and remitted the proceedings to redetermine the penalty for the short landing of the Seamless Steel Pipe.
Issues: Discrepancies in the quantity of discharged goods, reliance on Tally Sheets vs. Out-Turn Report, and the imposition of penalty for short landing.
Ratio Decidendi: The court emphasized the importance of relying on Tally Sheets over Out-Turn Reports and found that the penalty for short landing of Chinese Polished Beans was not justified, while upholding the penalty for short landing of Seamless Steel Pipe.
Final Decision: The court partly made the rule absolute, quashing the penalty for short landing of Chinese Polished Beans and remitting the proceedings to redetermine the penalty for the short landing of the Seamless Steel Pipe.
V.C. Daga, J.
Perused petition. Heard learned counsel for the petitioner and learned counsel for the respondents.
2. This petition, filed under Article 226 of the Constitution of India, is directed against the order dated 30th November, 2005 passed by the Joint Secretary to the Government of India in exercise of revisional powers under section 129DD of the Customs Act, 1962 (“Act” for short) affirming the order in appeal dated 7th July, 2005 passed by the Commissioner of Customs (Appeals), Mumbai; wherein the order-in-original dated 28th April, 2005 passed by the Assistant Commissioner of Customs (MCD), Mumbai imposing penalty in the sum of Rs.2,51,640/-for short landing of the goods was confirmed.
Facts :
3. The petitioner as the vessel agent of the vessel M.V. Sangwon, which was due to arrive at Mumbai Port filed Import General Licence (IGM) dated 31st December, 1998 with the Customs in respect of the goods carried on board.
4. The aforesaid vessel arrived at the port of Mumbai loaded with cargo, namely; Chinese Polished Beans (“pulses” for short) in bags and Pipes namely New and Unused Plain and Seamless Steel Casting (“pipes” for short) in bundles. The total quantity meant for discharge at Mumbai was 1,35,586 bags of pulses and 2,200 pieces of pipes under the IGM dated 31st December, 1998.
5. The goods were discharged from the vessel at the Mumbai Port in the presence of and under the supervision of Customs Officer and Mumbai Port Trust (BPT) authorities. The Tally Sheets issued by the Mumbai Port Trust showed that as against the manifested quantity of 1,35,586 bags of pulses, 1,38,848 bags were discharged and as against 2,200 pieces of pipes, 2,266 pieces of pipes were discharged from the vessel. However, Out-Turn Report of BPT reported short landing of bags as well as pipes.
6. The Assistant Commissioner of Customs, the Adjudicating Authority (Manifest Clearance Department), respondent No.3 herein relying on the Out-Turn Report of the BPT issued show-cause-notice dated 9th March, 1999 to the petitioner under section 116 of the Act stating that as per the Out-Turn Report submitted by the Mumbai Port Trust authorities one piece of pipe under Item No.L2 and 1,710 bags of pulses under Item No.L21 had been short landed, as such why action should not be taken under the provisions of the Customs Act.
7. The petitioner filed their reply dated 24th March, 1999 and denied that there was any short landing of the manifested goods under IGM dated 31st December, 1998 and pointed out that as against the manifested quantity of 1,35,586 bags of pulses, 1,38,848 bags were discharged and as against 2,200 pieces of pipes, 2,266 pieces were discharged from the vessel which were in excess of the manifested quantity. The petitioner also drew attention of the adjudicating authority to the public notice No.50 dated 20th March, 1992 issued by the Customs authorities pursuant to the guidelines laid by this Court in the case of M/s.Shaw Wallace & Co.Ltd. v. The Assistant Collector of Customs, Oil Unit & ors., 1987 (3) BCR 151; wherein it was not open for the adjudicating authority to rely on the Out-Turn Report of BPT and that the Tally Sheet was the only document which could have been taken into account.
8. The respondent No.3 by letter dated 29th January, 2004 called upon the petitioner to appear for personal hearing on 11th February, 2004. Accordingly petitioner appeared before respondent No.3 and filed additional copy of its reply along with copies of Tally Sheets. The respondent No.3, during the course of hearing, noticed that there were discrepancies between the Tally Sheets and the Out-Turn Report given by the Mumbai Port Trust authorities. Consequently, hearing was adjourned with a view to seek clarification from the Mumbai Port Trust.
9. The petitioner was again called upon to appear for personal hearing on 6th October, 2004. Accordingly, the petitioner was heard. The respondent No.3 passed an order-in-original dated 28th April
