M V CHIDAMBARAM Vs. COLLECTOR OF CUSTOMS
LAWS(CE)-1986-10-10
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on October 17,1986

Appellant
VERSUS
Respondents

JUDGEMENT

S. Kalyanam, Member - (1.)SINCE the above appeals arise out of a common order they are taken up together and disposed of by a single order. The appeals are directed against the order of the Addl. Collector of Customs, Madras dated 20.9.1985 imposing a penalty of Rs. 75,000/ on the Master of the Vessel 'M.V. Chidambaram1 (Appellant in C/57/86), Rs. 25,000/- on appellant Shri Gajraj' (Appellant in C/60/86) and Rs. 50,000/- on the shipping agent K.P.V. Shaik Mohd. Rowther & Co. (Appellant in C/58/86) and Rs. 10,000/- each on the rest of the appellants under Section 112 of the Customs Act, 1962 (hereinafter referred to as the 'Act'). On the basis of information on 28.11.84 the Rummaging Officers of the Custom House, Madras along with the officers of the Directorate of Revenue Intelligence, Madras rummaged the vessel 'M.V. Chidambaram' which had arrived from Singapore and berthed at North Quay of Madras Harbour. The rummaging operations went on for about 4 days i.e. 28.11.84, 29.11.84, 1.12.84 and 2.12.84. Huge quantities of textiles and other goods of foreign origin were recovered from various places, by the authorities from the ship during the said rummaging operations. For the purpose of convenience the places, number of bundles and the approximate value of the goods are indicated hereunder :
JUDGEMENT_1205_TLCE0_19860.htm

SINCE the Master of the ship or the crew, the appellants herein were not able to satisfactorily account for all the said goods of foreign origin the goods were seized by the authorities as per law under mahazar - Proceedings instituted by the authorities after further investigations ultimately resulted in the present impugned order now appealed against.

(2.)Shri Ram Kumar, the learned counsel made his submissions for all the appellants other than appellant Shri Gajraj. It was urged that the Master of the ship has issued a general circular to the effect that the crew members shall not contravene provisions of any law. It was further submitted that having regard to the nature of the Master's job, the magnitude of the ship, the number of passengers who generally travel in the ship there would be little scope for the Master to control the activities of the crew and the Master can only take reasonable precautions which in the instant case the Master has taken. The learned counsel further contended that prior knowledge of the existence of contraband goods is a condition precedent before the Master could be visited with penal consequence under Section 112 of the Act and in the instant case the contraband goods have been recovered from various places from inside the pannellings and from certain other places which could not have been in the knowledge of the Master of the ship. It was urged that the impugned order only charges the master with sheer casualness, negligence or inefficiency and these factors would not ipso facto impute knowledge to the Master so as to bring him under the mischief of Section 112 of the Act. The learned counsel also places reliance on the judgment of the Bombay High Court reported in 1984 (15) ELT 375 (Bom) in the case of Garware Shipping Corporation Ltd. v. J.H. Joglekar, Addl. Collector of Customs, Bombay in support of his plea that proof of knowledge on the part of the Master is an essential pre-requisite before imposition of penalty in terms of Section 112 of the Act. The learned counsel also relied upon the ruling of the Madras High Court in the case of B. Lakshmichand v. Govt. of India reported in 1983 ELT 322 (Mad) and contended that inasmuch as the show cause notice has not specifically mentioned the Sub-section (a) or (b) of Section 112 the appellants have suffered prejudice and the impugned order is therefore vitiated. Regarding the shipping agent K.P.V. Shaik Mohd. Rowther 5c Co., the learned counsel contended that there is no legal basis much less any evidence warranting the imposition of penalty on them in the circumstances of this case. It was urged that the shipping agent discharges only certain functions such as filing statutory documents etc. and cannot be liable if contraband goods were recovered from the ship on which either statutorily or otherwise the shipping agents have no control whatever. In respect of other appellants who are crew members of the ship the learned counsel contended that appellant Khalasi was a maintenance officer while appellant Dravidamani was only a petty officer. Likewise it was urged that appellant Fernando was only a petty officer for maintenance while appellant John Mathew was only "Deck utility hand" in charge of saloon. It was urged that merely because the appellants were in charge of maintenance of certain places like auditorium, passengers' bunks and cabins they cannot be made liable inasmuch as those places are easily accessible to the passengers of the ship and others as well. The learned counsel also urged that the evidence on record disclosed that the keys of the various places were from contraband goods were recovered were with the welfare officer of the ship and so the crew members cannot be visited with penalty as there is no evidence to impute knowledge to any of them. The learned counsel also contended that the impugned order is vitiated by reason of the fact that the show cause notice was not served on the crew members, the appellants mentioned above. It was urged by the learned counsel that the crew being ordinary employees did not have any obligation to prevent smuggling activities under law. Regarding the appellant Sripad Thite it was urged that he is only the leader of the music party and could not have had any access at all to the cavity behind the transformer room.
Shri Ravi Paul, the learned counsel appearing on behalf of Shri Gajraj (Appellant in C/60/86) submitted that there is no evidence on record to impute the knowledge to Gajraj about the presence of the contraband goods under seizure. The learned counsel also assailed the correctness of the reasoning of the adjudicating authority under the impugned order that the statement recorded from Gajraj indicated knowledge on his part about the contraband goods under seizure. It was urged that appellant Gajraj had given the keys to the music party and likewise other keys to various other members of the crew with the result he could not be made, liable for the recovery of any contraband goods when admittedly other people had access to the various places where from contraband goods were recovered. The learned counsel further urged that in the criminal prosecution in E.C.C.C. No. 278/85 filed in the Additional Chief Metropolitan Magistrate, Economic offences, Madras ended in acquittal and since the evidence in respect of the charge in the criminal court and the charge that was set out against Gajraj in the show cause notice are more or less the same the verdict of acquittal by a competent criminal court should be taken into consideration in exonerating appellant Gajraj. The learned counsel also urged that the statement recorded from Gajraj could only indicate that he did not have knowledge about the presence of the contraband goods under seizure. It was further argued that the impugned order is violative of principles of natural justice inasmuch as the copy of the mahazar was not furnished to the appellant in spite of specific request by him by his letter dated 8.5.85. The learned counsel also assailed the finding of the adjudicating authority that appellant Gajraj "opted not to reply" as incorrect. Finally the learned counsel also adverted to the omission of the Sub-section (a) or (b) of Section 112 in the Show Cause Notice and pleaded that it has resulted in prejudice to the appellant in the conduct of the case against him.

(3.)THE learned SDR submitted that very substantial quantities of contraband goods from various places of the ship have admittedly been recovered and nobody has claimed the goods. THE goods under seizure admittedly were not entered in the ships store list or the private property list of the crew members. THE master of the ship holding a high position and responsibility, it was contended cannot disown his responsibility and merely plead ignorance of the presence of such huge quantity of goods. THE learned SDR urged that the magnitude of the seizure, various places where-from the goods were seized would be proof positive of the fact that the Master of the ship knew about the presence of the contraband goods under seizure. Regarding the charge against various crew members who are appellants herein, the learned SDR urged that the crew members admittedly having access to the various places where-from contraband goods have been recovered should have been aware about the existence of the goods under seizure. Regarding the liability of the shipping agent Shaik Mohd. Rowther & Co., the learned SDR fairly conceded that there is no evidence on record to indicate that they had any knowledge about the contraband goods but offered to adopt the reasoning of the adjudicating authority under the impugned order. Regarding the appellant Sripad Thite the learned SDR urged that he being a musician and having been continuously present in or about the auditorium should have knowledge about the contraband goods and so would be liable under law. Regarding the appellant Gajraj, the learned SDR contended that being the Welfare Officer of the ship he was holding a position of responsibility and so having admittedly the keys of various places where-from the goods under seizure were recovered he cannot disown knowledge about the same. Regarding the legal question with reference to the non-mention of Sub-section (a) or (b) in the show cause notice, the learned SDR urged that the necessary ingredients have been clearly set out in the show cause notice and none of the appellants either pleaded or contended to have suffered any prejudice in the conduct of their defence and so there was no substance in the arguments of the learned counsel for the appellants. It was further urged by the learned SDR that the show cause notices have not only been sent to the crew members under registered post ack. due and other appellants but also displayed in the notice board of the Custom House thereby satisfying the requirements under law as specified in Section 153 of the Act.


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