R. C. Lahoti, J. - (1.) Notice under proviso to sub-section (1) of Section 28 of the Customs Act, 1962 was issued on 13th May, 1985 and served on M/s. Ranadip Shipping and Transport Co. (Pvt.) Ltd., the appellant, (hereinafter RST, for short) and M/s. Sea Land Service Incorporated (the respondent No. 2) (hereinafter SLS, for short) requiring them to show cause why duty amounting to Rs. 37,97,434/- be not levied and recovered from them apart from assessing penalty and other action on account of short levy occasioned by wilful misstatement and suppression of facts by the importers, M/s. RST and their principals, M/s. SLS. It is not disputed that in the transaction in question the appellant had acted in the capacity of agent of respondent No. 2. The adjudicating authority, i.e., the Collector of Customs, Bombay by Order In Original dated 3-5-1988 held as under:-(1) The chassis should be valued on the basis of the valuation shown in the show cause notice and the demand notice i.e. at the unit price US$ 2,535/- per chassis CIF Bombay. The rate of duty and the exchange should be calculated on the rate prevailing on the date of filing of the 4 Bs/E in respect of the 84 chassis out of 184 chassis admittedly imported. (2) Customs duty should be recovered from M/s. Ranadip in respect of 184 chassis imported and put into use in Bombay port in terms of the provisions of Section 28 of the Customs Act, deducting the duty already paid. (3) M/s. Ranadip and M/s. Sea Land are found to have acted or omitted to act in such a manner making these goods otherwise liable to confiscation under the provisions of Customs Act, 1962. Further, as the evidence on record has brought out a case of wilful delaying of payment of Customs Duty I find that M/s. Ranadip Shipping and Transport Co. Pvt. Ltd., as well as their principals M/s. Sea Land Service Inc. have rendered themselves for penal action also. I therefore impose a personal penalty of Rs. 6 lakhs (Rs. Six Lakhs only) on M/s. Ranadip Shipping and Transport Co. Pvt. Ltd. and Rs. 6 lakhs (Rs. Six Lakhs only) on M/s. Sea Land Services Inc. The demand Notice for recovery issued on 15-5-88 is also confirmed."
(2.) The appellant and the respondent No. 2 preferred separate appeals to the CEGAT. The two appeals have been disposed of by a common order dated 14-3-1997. The Tribunal has partly allowed the appeals giving some relief admissible by way of drawback maintaining rest of the order of adjudication. M/s. RST have come up to this Court by filing an appeal under Section 130-E of the Customs Act, 1962.
(3.) During the course of hearing it was agreed between the learned counsel for all the parties that in so far as the quantum of assessment is concerned, it has achieved a finality and none of the parties was disputing the same. The only dispute surviving for adjudication is who should be held liable to pay. According to the appellant - M/s. RST, they were agents of the principals - M/s. SLS, the respondent No. 2. The learned counsel for the appellant submitted placing reliance on Section 147 that except on proof of any wilful act, negligence or default of the agent resulting into no levy or short-levy or erroneous refund of the duty, the agent could not have been held liable. No such finding has been recorded by any of the authorities below. As such the appellant should have been exonerated and the liability fastened only on the principals, i.e., the respondent No. 2. The learned counsel for the respondent No. 2 has on the other hand submitted that insofar as the customs duty is concerned, the liability has been rightly fastened upon the appellant and if at all it could be passed on to the respondent No. 2 under the contract entered into between the appellant and the respondent No. 2 then that was not a matter to be adjudicated upon in these proceedings and it was still open to the appellant to seek enforcement of private rights and obligations, contractual in nature, by initiating appropriate proceedings before a competent forum, i.e., the Civil Court.;