S.C.Agrawal, J. - (1.) This appeal, by special leave, has been filed by Revenue against the judgment of the Bombay High Court dated May 14, 1987 whereby the High Court, while allowing Civil Writ No. 6142 of 1986 filed by the respondents, has set aside the order dated April 6, 1984 passed by the Collector of Customs (Preventive), Bombay (hereinafter referred to as 'the Collector') as well as the order of the Customs, Excise and Gold (Control) Appellate Tribunal (hereinafter referred to as 'the Tribunal') dated November 26, 1985. By the said order of the Collector dated April 6, 1984, which was affirmed in appeal by the Tribunal, goods valued at Rs. 59,53,560/- c.i.f. (Rs. 1,78,60,680/- at the Indian market rate) were confiscated under clauses (d) and (f) of Section 111 of the Customs Act, 1962 (hereinafter referred to as 'the Act'). The gunny bags, white cloth wrappings, wooden cases and the cartons which were used for keeping the seized goods were also confiscated under Section 118(1) of the Act. The vessel, MANSCO-3, containing the said goods was confiscated under Section 115(2) of the Act but the owner of the vessel was given an option to redeem it on payment of fine of Rs. 7,50,000/- within one month of the date of receipt of the said order and personal penalties were also imposed under Section 112 of the Act on respondent No. 2, the Managing Director of respondent No. 1 company (the owner of the vessel) as well as on the Master of the vessel and other persons.
(2.) In September, 1982, 408 packets were consigned from Dubai to Afghanistan via Karachi and were shipped to Karachi on the vessel 'AMETHYST'. When the said vessel arrived at Karachi Port the Government of Pakistan refused clearance of the consignment and the goods remained in transit shed at Karachi Port. On April 25, 1983 the Central Board of Revenue of Pakistan allowed reshipment of the goods back to Dubai. Thereafter the vessel, MANSCO-3, was sent from Dubai to Karachi for unloading certain cargo at Karachi and to return to Dubai with the said consignment of 408 packets which had been detained at the Karachi Port. At Karachi Port 408 packets were loaded on the vessel for the purpose of reshipment to Dubai. 971 packages of goods of Pakistan origin were also loaded on the said ship. MANSCO-3 left Karachi on August 6, 1983 but instead of proceeding to Dubai the vessel proceeded to Bombay. MANSCO-3 reached the outer anchorage of Bombay Hourbour on August 20, 1983. From the outer anchorage the said vessel entered the inner anchorage on August 21, 1983 but was sent back to outer anchorage on the same day. On August 22, 1983 M/s. Regent Shipping and Trading Company, the local agents of the shipping company which owned the vessel, MANSCO-3, contacted the Captain of the ship as well as the Bombay Port Trust Pilot Station and the Bombay Port Trust Control. They were asked to deposit the piloting charges by the Bombay Port Trust authorities. On August 23, 1983 piloting charges of Rs. 12,000/- were paid to the Bombay Port Trust by the local agents and the ship was brought into the inner anchorage of Port Mazgaon on August 23, 1983 at about 12.20 p.m. On the morning of August 24, 1983 the officers of the Customs (Preventive) Wing boarded MANSCO-3 and asked the Captain of the vessel to produce the crew list, crew property list, store list and the Import General Manifest. The Captain of the vessel could not produce any of the abovereferred documents. On questioning the Captain the Customs Officers came to know that the Chief Officer and the Chief Engineer of the vessel had left the vessel in a fishing craft without completing the customs, health and immigration formalities and had gone ashore when the vessel was at the outer anchorage. Thereafter the officers inspected the holds of the vessel and found a large number of white cloth wrapped packages bearing the markings 'Star Dubai', 'Prince Dubai', etc. They further found a large number of gunny covered packages bearing the marking 'In Transit to Afghanistan via Karachi and Chamman' below the white cloth covered packages. Having regard to the markings it appeared to the officers that the goods were meant for shipment to Afghanistan and the Captain had port clearance for Dubai from Karachi and not for Bombay. The Customs Officers also came to know that the vessel had on its own attempted to come to the inner anchorage of Bombay harbour even before Bombay Port Trust charges were paid and without being escorted by the Port Trust Pilot and that there was a direction by the harbour pilot to go back to the outer anchorage. The 408 gunny packages bearing the markings 'In Transit to Afghanistan via Karachi and Chamman' were found to contain VCRs, Video Cassettes, Car Cassette Players, textiles, TV sets. All these packages originated from Dubai and were valued at Rs. 56,21,320/- c.i.f. and Rs. 1,68,63,960/- (market value). The other packets found in the vessel contained readymade garments, PVC pipes, footwears, aluminium utencils packed in 971 packings and were valued at Rs. 3,32,240/- c.i.f. and Rs. 9,96,720/- (market value) and the said goods originated from Pakistan. The Customs Officers recorded the statements of the Captain of the vessel as well as the representative of the local agents at Bombay. Since the Captain and the local agents did not take any steps to file the Import General Manifest and other documents for the purpose of voyage to Bombay, the Customs Officers seized all the 1379 packets found on board of the vessel. After completing the investigation Show Cause Notices dated December 31, 1983 were issued by the Assistant Collector of Customs, R and I, Bombay. A reply dated February 19, 1984 to the said Show Cause Notice was submitted on behalf of M/s. Mustafa and Najibai Trading Co., Dubai, respondent No. 1, the owners of MANSCO-3 and respondent No. 2, the Managing Director of respondent No. 1. The Captain and others sent their replies to the Show Cause Notice on February 20, 1984. After holding an inquiry the Collector passed the order dated April 6, 1984 for the confiscation of the goods that had been seized, valued at Rs. 59,53,560/- c.i.f. and Rs. 1,78,60,680/- at the Indian market rate under clauses (d) and (f) of Section 111 of the Act as well as for confiscation of the gunny bags, white cloth wrappings, wooden cases and the cartons which were used for keeping the seized goods under Section 118(1) of the Act. MANSCO-3 was ordered to be confiscated under Section 115(2) of the Act but the owner of the vessel was given an option to redeem it on payment of fine of Rs. 7,50,000/- within one month of the date of receipt of the said order. A personal penalty of Rs. 3,00,000 was imposed on Mustafa Najibi, respondent no.2, the Managing Director of respondent No. 1, and a penalty of Rs. 2,00,000/- was imposed on Abdul Rahim Kharti, the Master of the vessel. Personal penalties were also imposed on certain other persons, viz., Mohammed Yousef Abdulla, M/s. Aero Maritime Ltd., Karachi, Ramesh Amritlal Shah, Abedin Ghadialy, Ramanlal P. Pandya and Dawood Sharafuddin Kaldane. Feeling aggrieved by the said order of the Collector, an appeal C.D. (Bom.) A No. 548 of 1984 was filed by Abdul Rahim Khatri, Master of the vessel MANSCO-3 and C.D. (Bom.) A No. 549 of 1984 was filed by M/s. Mustafa and Najibi Trading Co., respondent No. 1 and Nuruddin Mustafa, respondent No. 2, Managing Director of respondent No. 1. Both these appeals were dismissed by the Tribunal by order dated November 26, 1985. Feeling aggrieved by the said order of the Tribunal, Writ Petition No. 6142 of 1986 was filed in the Bombay High Court by M/s. Mustafa and Najibi Trading Co., respondent No. 1, the owners of the vessel MANSCO-3, Nuruddin Mustafa, respondent No. 2, the Managing Director of respondent No. 1 company, and Mahmood Mohmed Abrahim Benzad, respondent No. 3 herein, who claims to be the owner of some of the packages which had been shipped from Dubai to Karachi and which were seized from MANSCO-3 by the customs authorities at Bombay Port and were ordered to be confiscated. The said Writ Petition has been allowed by the High Court by the impugned judgment. Hence this appeal.
(3.) We have heard Shri M. S. Usgaonkar for the Union of India and Ms. A. J. Rana, the learned Counsel for the respondents.;