Research › Browse › Judgment

Calcutta High Court · body

1986 DIGILAW 192 (CAL)

HEILGERS LTD. v. DY. COLLECTOR OF CUSTOMS

1986-05-02

SUDHIR RANJAN ROY

body1986
SUDHIR RANJAN ROY, J. ( 1 ) IN this case the impugned order of the Deputy Collector of Customs imposing penalty upon the petitioner has been challenged on two main grounds namely that since the subject consignment is Nepal Cargo which is not dutiable no penalty could be levied for short landing of such cargo under section 116 of the Customs Act, 1962. And secondly, that since the ex parte insurance survey for detecting the alleged short-binding took place more than a month after the discharge of the cargo by the petitioner it could not positively be said that the alleged deficiency occurred on board the ship. ( 2 ) HOWEVER, this Court having recently delivered a judgment holding that even in case of short landing of Nepal Cargo penalty is leviable under section 116 of the Customs Act, Mr. Ghosh, the learned Advocate representing the petitioner did not press that point. ( 3 ) SO far as the other point is concerned, it appear that the petitioner as Steamer Agenta for the Port of Calcutta brought by the vessel NORFOLK HARU a consignment of ten cases said to contain 100% Nylon Crape Dechine Printed, Shipped as Port of Busan Korea, for delivery at Calcutta for exportation to Nepal. ( 4 ) ON arrival at the Port of Calcutta the ship completed discharge of the cargo en September 13, 1979. Thereafter, by a letter dated October 16, 1979 the petitioner was requested, on behalf of the consignee to arrange for steamer/insurance Survey for one case of Nylon Crape alleged to be lying in broken condition at the yard at 4, N. S. Road. The petitioner did not agree to this proposal since the discharge of the cargo had been completed more than a month back. However, on or about November 19, 1979 the Assistant Collector of Customs Manifest Clearance Department issued a notice upon the petitioner alleging than on an Insurance Survey held on October 23,1979, some contents of one case out of the consignment of 10 cases valued at Rs. 4383/- were found short and that the said shortage had occurred on board the ship prior to landing. ( 5 ) ACCORDING to Mr. 4383/- were found short and that the said shortage had occurred on board the ship prior to landing. ( 5 ) ACCORDING to Mr. Ghosh, the learned Advocate, representing the petitioner, the alleged Insurance Survey held after about 40 days from date of completion of the discharge of the cargo and that too without any notice upon the petitioner, was of no Value and no reliance could be placed thereon. ( 6 ) IN this connection Mr. Ghosh drew my attention to the Public Notification No. 132 dated December 14, 1973 by which the Importers/clearing Agents are required to have the goods surveyed by the Steamer Agents immediately after their landing from the vessel in order to establish that the shortage took place on board the ship before landing. But in the instant case, as pointed out by Mr. Ghosh, the application for steamer survey was made after more than a month from the date of completion of discharge of the cargo. Mr. Ghosh contended that the carrier cannot be penalised for the shortage unless a steamer survey is held and such shortage is detected in course of such steamer survey held immediately after the completion of discharge of the cargo. Such steamer survey, Mr. Ghosh contended, should be arranged for as expeditiously as possible in order to obviate the possibility of the cargo being interfered with while lying in the dock exposed to all sorts of hazards including pilferage. ( 7 ) WHILE it must be accepted that the survey for detection of any shortage should be held without the least possible delay after discharge of the cargo to avoid any outside interference including pilferage, there is no duty cast upon the customs authorities to arrange for such survey. The Public Notification No. 132 dated December 14, 1973 (Annexure G to the writ petition) on which, reliance was placed by Dr. Ghosh relates to refund of duty on goods found missing in packages landed under qualified receipt and it calls upon the Importers/clearing Agents and all other concerned to have the goods surveyed by the Steamer Agents immediately after their landing from vessel in order to establish that the shortage took place before landing and on board the ship. This notification does hot call upon the Customs authorities to arrange for such survey. This notification does hot call upon the Customs authorities to arrange for such survey. This is firstly because, the concerned Public Notification No. 132 relates to refund of duty and not to imposition of penalty under section 116 of the Customs Act and, secondly, considering the amount of cargo which the Customs authorities have to deal with every day (of which judicial notice may possibly be taken or) it would be practically an impossible task for them to arrange for such survey in each and every case. ( 8 ) INCIDENTALLY, this Notification (No 132) deals indirectly with imposition of penalty under section 116 and it provides that where on the basis of the survey arranged by the Steamer Agents, refund of duty is made by the Steamer Agents directly to the importer, there would be no question of refunding the duty to the importer by the Customs House and similarly no question would arise for initiating action separately for imposing penalty on the Steamer Agents under section 116 of the Customs Act, 1962. ( 9 ) HOWEVER, this Notification, which is in modification (not supersession) of the earlier Public Notification No. 81 of 1971, does not speak about the responsibility of the Steamer Agents to mate arrangements for survey in the presence of a Customs Officer in view of their liability under section 116 of the Customs Act for the goods missing from the packages. Since this aspect of the matter has not been specifically dealt with in the subsequent Notification No. 132, the earlier Notification No. 81 should be deemed to be still holding the field so far it relates to the responsibility of the Steamer Agents to arrange for survey in consideration of their liability under section 116. ( 10 ) IN this connection the relevant portion of the Public Notification No. 81 dated June 17, 1971 is quoted below: Since the Steamer Agents are also responsible under section 116 of the Customs Act, 1962 for the goods missing from the packages landed under a qualified receipt, it is necessary for them to make arrangements for survey in the presence of a Customs Officer in order to determine the extent of deficiency or loss, failing which they will be held responsible for the deficiency or loss, if any, found on subsequent examination of the goods and will be liable to penal action under section 116. ( 11 ) THUS, though the earlier Notification No. 81 also relates primarily to claim for refund of duty on goods found missing in packages landed under qualified receipt. It also deals specifically with the responsibility of the Steamer Agents under section 116 of the Customs Act, 1962, which the latter does not. The subsequent Notification No. 132, significally, is totally silent on the point and since this notification simply modifies the earlier one without superseding it, the provision relating to section 116 in the earlier Notification No. 81 should be deemed to be fully operative, not in any way modified or superseded by the subsequent Notification. ( 12 ) NOW, so far as section 116 of the Customs Act, 1962 is concerned, the Customs authorities in order to impose any penalty upon the person-in-charge of a conveyance are initially required to prove that the quantity of the cargo unloaded is short of the quantity to be unloaded, before the onus shifts to the said person-in-charge of the conveyance to account for his failure to unload or the deficiency. Since no duty has been cast upon the customs authorities to arrange for survey of the goods shortly after their landing or subsequently and since the Importers/clearing Agents etc. are not generally up and doing in the matter, the person-in-charge or the concerned vessel may always come forward with the defence that there was in fact no short landing or deficiency and any deficiency which may ultimately be detected ill due to subsequent outside interference including pilferage at the docks. Such defence may be taken even when the goods or a part thereof are unloaded in broken or damaged condition. ( 13 ) THUS, unless there is a survey of the cargo immediately after their landing it may be difficult, if not impossible for the customs authorities to discharge their initial burden of short or deficient landing for the purpose of section 116 and unless that burden is discharged there can be no occasion for calling upon the person-in-charge of the conveyance to account for any short landing. And since no such survey of the cargo is generally taken out either by the Importer, the Clearing Agents or the customs authorities immediately after the landing of the cargo the penal provision laid down in section 116 of the Customs Act becomes practically nugatory. And since no such survey of the cargo is generally taken out either by the Importer, the Clearing Agents or the customs authorities immediately after the landing of the cargo the penal provision laid down in section 116 of the Customs Act becomes practically nugatory. ( 14 ) POSSIBLY in order to get over this impasse that the Public Notification No. 81 dated June 17, 1971 was issued by the Collector of Customs providing that keeping in view their responsibility under section 116 of the Customs Act 1962, it is necessary for the Steamer Agents to make arrangements for Survey in the presence of a Customs Officer in order to determine the extent of deficiency or loss, failing which they will be held responsible for the deficiency or loss, if any found on subsequent examination of the goods and will be liable to penal action under sect on 116. This part of the notification (which relates specifically to section 116 and not refund of duty) as already seen, is still in force not having been superseded or modified by the subsequent Notification No. 132 dated December 14, 1973, which has been made Annexure G to the writ petition. ( 15 ) THUS, where goods are landed under qualified receipts i. e. unsound condition, the survey should be arranged by the Steamer Agents in terms of the Public Notification No. 81 in their own interest in consideration of their responsibility under section 116 of the Customs Act. They cannot sit light over the matter and claim advantage of the inaction of the importers or their Clearing Agents. In case the Steamer Agents fail to arrange for necessary survey they will be bound by the results of any subsequent survey unless they fail to discharge their onus i. e. to account for the deficiency or the short landing to the satisfaction of tile Assistant Collector of Customs. ( 16 ) IT seems that on a mistaken belief that the Notification No. 81 dated June 17, 1981 stands superseded by the subsequent Notification No 132 dated December 14, 1973, the Steamer Agents do not arrange for any survey of the cargo. ( 16 ) IT seems that on a mistaken belief that the Notification No. 81 dated June 17, 1981 stands superseded by the subsequent Notification No 132 dated December 14, 1973, the Steamer Agents do not arrange for any survey of the cargo. In case of late survey at the instance of the Importers of their Clearing Agents, the Steamer Agents, as in the present case, deny any liability for penalty under section 116 of the Customs Act relying on the Public Notification No 132 dated December 14, 1973, though the said notification has nothing directly to do with imposition of penalty under section 116. ( 17 ) THIS approach, as already seen, is entirely wrong. ( 18 ) COMING to the facts of the instant case, we find from the impugned order (Annexure F) that one of the cases of the subject consignment was landed in a broken condition (Bk condition) but no survey was arranged by the Steamer Agent in terms of the Public Notification No. 81. Subsequent Insurance Survey held on October 23. 1979 at the instance of the Importer disclosed that goods worth Ks. 4, 335/- were short. Since these are findings of facts and the petitioner also did not challenge the said findings in appeal before tile customs authorities, it is beyond the Jurisdiction of this Court to go into such facts. ( 19 ) THE impugned order (Annexure TFT) shows that the petitioner before the Adjudicating authority took the plea that the discharge of the cargo having been completed on September 13, 1979 the alleged ex parte Insurance Survey conducted on October 23, 1979 was practically of no value. This contention was found to be not acceptable by the Adjudicating authority since according to him the concerned case having been landed in a broken condition it was the duty of the Steamer Agent to arrange for immediate survey in terms of the Public Notification No. 81 dated June 17, 1971, which they did not do. In my view, this approach far from being perverse, is absolutely correct for the reasons which I have already mentioned earlier. That being so, it was open to the Adjudicating authority to conclude in terms or the Public Notification No. 81 that the shortage found in the Insurance Survey occurred on board the ship. In my view, this approach far from being perverse, is absolutely correct for the reasons which I have already mentioned earlier. That being so, it was open to the Adjudicating authority to conclude in terms or the Public Notification No. 81 that the shortage found in the Insurance Survey occurred on board the ship. No attempt having been made by the petitioner to explain this shortage, penalty under section 116 was rightly imposed on the petitioner. ( 20 ) IN my judgment there is nothing wrong in the impugned order calling for interference by a writ Court exercising extraordinary jurisdiction. ( 21 ) THE Writ application thus fails. The Rule issued be discharged and interim order, if any, does stand vacated. ( 22 ) THE respondents will now be at liberty to realise their dues from the petitioner as per the impugned order by encashment of the bank guarantee, enforcement of bond or in any other lawful manner. ( 23 ) NO order is made for courts. Petition dismissed. .