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Blossom Compania Naviera S.A. and Vs. Collector of Customs - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Mumbai
Decided On
Reported in(1985)LC379Tri(Mum.)bai
AppellantBlossom Compania Naviera S.A. and
RespondentCollector of Customs
Excerpt:
1. the appeal 219/80 arises out of the order-in-appeal bearing nos.377a-378a of 1979, dated 19-12-1978, passed by the central board of excise and customs, by which the board confirmed the order-in-original bearing no. s/14-4-38/78 pint., dated 24-5-1978 passed by the additional collector of customs (preventive), bombay, by which he imposed a personal penalty of rs. 20,000/- on shri fikaris loannis, the master of the vessel m.v. aegic stoic and ordered confiscation of the vessel m.v. aegic stoic but allowed redemption on payment of a fine of rs. 1,50,000/-, of which m/s. blossom compania naviera, s.a. were the owners.2. the appeal 249/80 arises out of the order-in-appeal no. 238-a of 1979, dated 28-9-1979 passed by the central board of excise and customs, by which it confirmed the.....
Judgment:
1. The appeal 219/80 arises out of the Order-in-Appeal bearing Nos.

377A-378A of 1979, dated 19-12-1978, passed by the Central Board of Excise and Customs, by which the Board confirmed the Order-in-Original bearing No. S/14-4-38/78 Pint., dated 24-5-1978 passed by the Additional Collector of Customs (Preventive), Bombay, by which he imposed a personal penalty of Rs. 20,000/- on Shri Fikaris Loannis, the Master of the Vessel M.V. Aegic Stoic and ordered confiscation of the vessel M.V. Aegic Stoic but allowed redemption on payment of a fine of Rs. 1,50,000/-, of which M/s. Blossom Compania Naviera, S.A. were the owners.

2. The Appeal 249/80 arises out of the Order-in-Appeal No. 238-A of 1979, dated 28-9-1979 passed by the Central Board of Excise and Customs, by which it confirmed the Order-in-original bearing No.S/14-5-5/78 Pint., dated 29-7-1979 passed by the Additional Collector of Customs (Preventive), Bombay, by which he imposed a personal penalty of Rs, 20,000/- on the appellant Shri A.L. Fernandez, Master of the vessel M.V. Akbar under Section 112 of the Customs Act, 1962.

3. The Appeal 260/80 arises out of the Order-in-Appeal bearing Nos.

309A-310A of 1979 passed by the Central Board of Excise and Customs by which the Board confirmed the Order-in-original bearing No.S/14-4-547/78, dated 3-4-1979 passed by the Additional Collector of Customs (Preventive), Bombay, by which he imposed a personal penalty of Rs. 10,000/- on the second appellant, Shri U.N. Padwal, Master of the vessel and directed confiscation of the vessel M.V. Marjan belonging to the first appellant but gave an option to the first appellant to redeem the same on payment of a fine of Rs. 1,00,000/-.

4. The Appeal 325/80 arises out of Order-in-Appeal Nos. 317A-318A/79 of 1979, dated 30-11-1979 passed by the Central Board of Excise and Customs, by which it confirmed the Order-in-original bearing No.S/14-4-736/79, Pint., dated 9-3-1979 passed by the Additional Collector of Customs (Prev.) Bombay, by which he ordered confiscation of the vessel M.V. "Bacat-I" but gave option to first appellant, the owners to redeem the vessel on payment of a fine of Rs. 20,000/- and also imposed a personal penalty of Rs. 5000/- on the second appellant, Shri J.J.Mistry, under Section 112 of the Customs Act, 1962.

5. The Appeal 326/80 arises out of the Order-in-Appeal bearing Nos.

317A-318A, dated 30-11-1979 passed by the Central Board of Excise and Customs, by which it confirmed the Order-in-original No. S/14-4-736/78 Pint., dated 9-3-1979 passed by the Additional Collector of Customs (Preventive), Bombay, by which he ordered confiscation of the vessel M.V. "Bacat-I" but gave option to the first appellant who are the owners of the vessel to redeem the same on payment of a fine of Rs. 20,000/-. He also imposed a personal penalty of Rs. 5,000/- on the second appellant, Shri J.J. Mistry, the Master of the vessel M.V, "Bacat-I".

The appeals 325/80 and 326/80 are by the same persons and they are directed against the same Order-in-original as well as Order-in-Appeal.

Apparently, the office while registering the appeals gave two numbers, one on the original of the revision application filed before the Govt.

of India and one on the copy of the said application. In the circumstances, explained above, the appeal 326/80 is closed, as the subject matter of this appeal is covered by appeal No. 325/80.

6. The Appeal 332/80 arises out of the Order-in-Appeal bearing Nos.

315A-316A of 1979, dated 30-11-1979 passed by the Central Board of Excise and Customs, by which it confirmed the Order-in-Original bearing No. S/14-4-669/78 Pint., dated 27-2-1979 passed by the Addl. Collector of Customs (Prev.), Bombay, by which he directed confiscation of the vessel M.V. Vijaya Vasant of which the first appellant M/s. United Shipping Agency, but gave an option to the owners to redeem on payment of a fine of Rs. 30,000/-. He also imposed a personal penalty of Rs. 5,000/- on the second appellant, Shri N.V. Patel, Master of the Vessel M.V. Vijaya Vasant.

7. The Appeal 333/80 arises out of the Order-in-Appeal bearing No. 236A of 1979, dated 20-9-1979 passed by the Central Board of Excise and Customs, by which the Board set aside the penalty of Rs. 5.000/-, imposed on the master of the vessel but confirmed the order of confiscation of the vessel M.V. Al-Loulouah and fine in lieu of confiscation of Rs. 20,000-, passed by the Additional Collector of Customs (Preventive), Bombay vide his Order-in-Original bearing No.S/14-4-528/78 Pint., dated 24-1-1979.

8. The Appeal 335/80 arises out of the Order-in-Appeal bearing Nos.

329A-330A of 1979 passed by the Central Board of Excise and Customs dated 30-11-1979 by which it confirmed the order of the Additional Collector of Customs (Preventive), Bombay in Order-in-Original bearing No. S/14-4-J68/79 Pint., dated 23-4-1979, by which the Addl. Collector directed confiscation of the vessel M.V. AL-Loulouah but gave an option to the first appellant, M/s. Al Jassim Shipping Agencies, Kuwait to redeem the same on payment of a fine of Rs. 20,000/-, and also imposed a personal penalty of Rs. 3000/-, on the second appellant Shri K.S.Contractor, Master of the vessel.

9. The Appeal 352/80 arises out of the Order-in-Appeal Nos. 325A-326A, dated 30-11-1979 passed by the Central Board of Excise and Customs, by which it confirmed the Order-in-Original bearing No. S/14-4-787/78 Pint., dated 18-5-1979 passed by the Additional Collector of Customs (Preventive), Bombay, by which he directed confiscation of the vessel M.V. Noor Jahan but gave an option to the owners of the vessel to redeem the same on payment of a fine of Rs. 30,000/-. He also imposed a personal penalty of Rs. 3,000/-, on Shri A.J. Vaz, Master of the vessel.

10. The Appeal 432/80 arises out of Order-in-Appeal bearing Nos.

313A-314A of 1979, dated 30-11-1979 passed by the Central Board of Excise and Customs by which it confirmed the Order-in-Original No.S/14-4-706/78 Pint., dated 20-2-1979 passed by the Additional Collector of Customs (Preventive), Bombay, by which he directed confiscation of the vessel M.V. Bacat-I but I gave an option to the first appellant the owners of the vessel to redeem the vessel on payment of a fine of Rs. 20,000/-. He also imposed a personal penalty of Rs. 5,000/-, on the Master of the vessel, Shri J.J. Mistry.

11. The Orders-in-Original which were the subject matter of the appeals before the Board were passed by the same Additional Collector Shri A.K.Dutta. All the appellate orders of the Central Board of Excise and Customs were also passed by the same Member, Shri A.K. Bandopadhyay, For the appellants in all these appeals, the same Advocate Shri N.P.Jagesia appeared. For the Respondent, in all these appeals, Shri Krishan Kumar, JDR, appeared.

12. These appeals were clubbed together as they involve common questions of law and relate to the confiscation of vessels and imposition of personal penalty on some of the Masters. Hence, this common order.

Appeal 219/80 : The vessel M.V. Aegis Stoic arrived in the Port of Bombay on 13-1-1979 (1978 ?). On 14-1-1978 on information, the officers of Customs boarded the vessel and searched the same in the presence of panch witnesses and ship's Master and second officer and in an unoccupied cabin. The Customs officers found 3 gunny bags bearing no marks and numbers. They . further found a number of small paper packages, cartons, gunny bags, bundles and some small loose packages in the ceiling panels of two cabins adjoining first cabin on the same deck. The Customs officers further noticed two cartons floating in the sea on the port side of the ship. They retrieved those cartons. On examination of all the packages, gunny bags and cartons, the officers found radio cassette recorder, cassette tape recorders, transistors, electronic calculators, sewing machines, microphones, textiles, toys, cameras, perfumes etc. of foreign origin totally valued at Rs. 83,878/-CIF and Rs. 2,51,634/- M.V. The said goods were seized on the reasonable belief that they were unauthorisedly imported into India.

After investigation, a show cause notice was issued to the owners as well as the Master of the vessel calling upon them as to why the vessel should not be confiscated under Section 115(2) of the Customs Act and why personal penalty should not be imposed on the Master for non-declaration of the seized goods. After consideration of their reply and after giving personal hearing, the Additional Collector ordered confiscation of the seized goods and imposed a personal penalty for non-declaration under Section 30 of the Customs Act on the Master and also ordered confiscation of the ship but allowed redemption on payment of a fine of Rs. 1,50,000/-. Feeling aggrieved the appellants preferred appeals before the Board unsuccessfully. Thereafter, they filed revision applications which statutorily stood transferred to this Tribunal for being heard as an appeal.

14. Appeal No. 259/80 : On information, the Customs officers, boarded the vessel M.V. Akbar on 27-3-1978 and conducted search. During the search they found two paper packets concealed behind commode of the ladies lavatory situated on 'D' deck for the use of cabin class passengers, two wrist watches in loose condition from the tube light fittings in the first class cabin common passage. On opening the two paper packets in the presence of Master of the vessel and panchas they were found to contain 20 pcs. of wrist watches of foreign origin totally valued at Rs. 1,800/- cif and Rs. 360/-M.V. Thereafter they got opened a locker from the master key produced by the Master of the vessel. The locker was found in the officers accommodation on the starboard side. On examination of the locker the officers found five brown paper packets duly taped with adhesive tapes. On opening the said packets in the presence of the Master and others, 4 out of the five packets were found to contain 6 gold bars of 10 tolas each and the remaining contained 3 gold bars of 10 tolas each. All the gold bars had foreign markings such as Johnson Matthey London of the value of Rs. 1,52,782.14 cif and Rs. 2,11,029.40 M.V. The Customs officers seized all the above items under reasonable belief that they were smuggled goods. After completion of the investigation, show cause notices were issued to six stewards and Masters calling upon them as to why the seized goods should not be confiscated and why personal penalty should not be imposed and the vessel should not be confiscated. After considering their replies and after giving personal hearing, the Addl.

Collector imposed a personal penalty of Rs. 20,000/- on the appellant, the Master of the vessel. He, however, did not impose any personal penalty on the other members of the crew. Feeling aggrieved the appellant preferred an appeal before the Board unsuccessfully.

Thereafter he filed a revision application before the Govt. which statutorily stood transferred to this Tribunal for being heard as an appeal.

15. Appeal 260/80 : On 20-8-1978, the officers of Customs on information boarded the vessel M.V. Marjan and conducted a search.

During the search they found some plastic wrapping material in the engine room. They further found one gunny bag, one cloth bundle and two polythene bags in an empty oil tank on the star board side of the engine room, air trunking Kasab stores under the tool racks in kasab stores and in the officers smoke room-cum-dining saloon. Inside the gunny bag the officers of Customs noticed one tin which contained some wrist watches and watch straps. The cloth bundle and the polythene bags contained cigarettes, transistor, ladios, textiles, cassette tapes, electronic battery cells of foreign origin. In all the officers found goods of the value of Rs. 46,607 cif and Rs. 99,261/-M.V. The officers continued the search on 22-8-1978 in the presence of the Chief Officer and Second Engineer. During the search they found another gunny bag containing wrist watches and watch straps concealed in the airvent pipe on port side of the engine room. They further found one cloth bundle containing 4 wrist watches ; a pocket transistor and 3 cartons of cigarettes concealed above the airtrunking in the air-conditioning plant on the boat deck. On further examination of the gunny bag and cloth bundles they found 112 pcs. of wrist watches, 200 cigarettes each in 3 cartons and one pocket transistor of foreign origin in all valued at Rs. 17,567/- cif and Rs. 35,229/- M.V. On 23-8-1978, the Rummaging Officers again searched the said vessel and they found 6 cassette tapes and one pocket transistor of foreign origin valued at Rs. 80/- cif and Rs. 240/- M.V. concealed in the panelling in a common passage of the port side of the main deck.

16. After completion of the investigation, show cause notices we re issued to the second appellant Shri U.N. Padwal, Master of the ship, to the owners and others. After considering their replies and after personal hearing, the Additional Collector ordered confiscation of the vessel M.V. Marjan but, however, gave an option to the owners to redeem the same on payment of a fine of Rs. 1,00,000/-. He also imposed a personal penalty of Rs. 10,000/~ on the second appellant, the Master of the ship for non-declaration. Besides, imposed a personal penalty of Rs. 5,000/- and Rs. 10,000/- against two other persons who are not appellants before us. Feeling aggrieved the owners and the Master of the vessel preferred two appeals before the Board unsuccessfully and thereafter they filed a common revision application which statutorily stood transferred to this Tribunal for being heard as an appeal.

17. Appeal 325/80: On 22-11-1978, the officers of the Rummaging Division searched the vessel M.V. Bacat-I which had arrived from Dubai on 20-11-1978. During the course of the search of the common store room they found one gunny bag concealed inside the lightening hole in the way of the ships inner structure. On examination of the gunny bag it was found to contain 87 pcs. of wrist watches of foreign origin valued at Rs. 13,572/-cif and Rs. 27,144/-M.V. After completion of the investigation a show cause notice was issued to the second appellant, Master of the ship and also to the first appellant, the owners of the ship as to why personal penalty should not be imposed and why the ship should not be confiscated. After considering their replies and after the personal hearing, the Addl. Collector confiscated the vessel but gave an option to the owners to redeem the same on payment of a fine of Rs. 20,000/-. He also imposed a personal penalty of Rs. 5,000/- on the Master of the vessel. He, however, did not impose any penalty on the Chief Officer and the Chief Engineer. Feeling aggrieved the owners and the Master filed two appeals before the Board unsuccessfully.

Thereafter, they preferred one revision application which statutorily stood transferred to this Tribunal for being heard as an appeal.

18. Appeal 332/80 : On 14-10-1978 on an information, the officers of the Rummaging division boarded the vessel M.V. Vijaya Vasant and conducted a search which resulted in the recovery of watches, cassette tapes, cigarettes, transistors, etc., of foreign origin of the value of Rs. 2,572/- cif and Rs. 5,853/- M.V. concealed in a drum box. The rummaging officers again boarded the ship on 18-10-1978 and searched the Poop Dect and the ventilator of the crew gaily. The officers noticed a number of small cartons concealed therein. They also noticed a number of small cartons and loose cassette tapes concealed beneath the wooden crate containing the coal. They further found one paper packet containing wrist watches concealed in the hallow spare of the capstan at the extreme aft of the ship and in the hallow pipe nearby.

Search of the said bags and packets resulted in the recovery of goods of foreign origin totally valued at Rs. 8,746/- cif and Rs. 23,346/- M.V. On 19-10-1978 the rummaging officers again search the said vessel.

They found 8 small cartons and cassette tapes in loose condition 2 car stereos, 3 pocket transistors and four gunny bags concealed in an unoccupied spare of the star board side in a specially made cavity, in the wall panneling behind the table fixed to the wall, in cable at the forepear and in the hallow pipe at the life boat illumination lights of the port and star board sides on the boat deck. The search resulted in the recovery of watches, electronic calculators, transistors, car stereo, cassette tapes collectively valued at Rs. 5,078/- cif and Rs. 12,246/- M.V.19. After completion of the investigation show cause notices were issued to second appellant, Shri N.V. Patel, Master of the vessel Shri Y.R. Namjoshi, Chief Officer, Shri Patankar, Chief Engineer and the owners of the vessel as to why personal penalty should not be imposed and the vessel should not be confiscated. After considering their replies and after personal hearing the Addl. Collector ordered confiscation of the vessel but allowed redemption on payment of a fine of Rs. 30,000/-. He imposed a personal penalty of Rs. 5,000/- on the Master but did not impose any penalty either on the Chief Officer or Chief Engineer or the owners or the agents.

20. Appeal 333/80 : On 10-8-1978, the officers of the rummaging division boarded the vessel M.V. Al-Loulouah which had arrived on 6-8-1978 from Persian Gulf and conducted search. They found one plastic shopping bag concealed above the airtrunking in the passage of the officers' accommodation at the star board side adjacent to Gyro room.

On examination they found to contain 210 pcs. of wrist watches of foreign origin valued at Rs. 13,650/- cif and Rs. 27,300/- M.V. On further search, the officers found 6 pcs. of wrist watches of foreign origin valued at Rs. 900/- cif and Rs. 1,800/- M.V. concealed in the officers' and engineers' toilet at the officers accommodation. After completion of the investigation show cause notices were issued to the appellants who are the owners and also to others including the Master.

After considering their replies and after giving personal hearing, the Addl. Collector of Customs ordered confiscation of the vessel but allowed redemption on payment of a fine of Rs. 20,000/- and also imposed personal penalty of Rs. 5,000/- on the master of the vessel.

He, however, did not impose any penalty on others or the owners of the vessel. Feeling aggrieved the owners M/s. Al-Jassim Shipping Agencies, Kuwait preferred an appeal before the Board unsuccessfully and thereafter filed a revision application before the Government of India which statutorily stood transferred to the Tribunal for being heard as an appeal.

21. Appeal 335/80 : On 21-2-1979, the officers of Customs House, Bombay boarded the vessel M.V. Al-Loulouah and searched the vessel. During the search they found two polythene wrapped bundles concealed underneath mooring rope coil at the stern of the vessel. The bundle contained 90 pcs. of wrist watches of foreign origin valued at Rs. 11,250/- cif and Rs. 22,500/- M.V. After investigation show cause notices were issued to the owners of the vessel, Master and agents of the vessel as well as to the Chief Officer of the vessel. After considering their replies and after personal hearing, the Addl. Collector of Customs ordered confiscation of the vessel but gave an option to redeem the same on payment of a fine of Rs. 20,000/-. He also imposed a personal penalty of Rs. 3,000/- on the Master but refrained from imposing any penalty on the others. Feeling aggrieved the owners as well as the Master preferred appeals before the Board unsuccessfully. Thereafter they filed a revision application which statutorily stood transferred to the Tribunal for being heard as an appeal.

22. Appeal 352/83 : On 18-12-1978, the officers of Rummaging Division, Bombay boarded the vessel M.V. Noor Jahan which had arrived from Jeddah and searched. They noticed 11 gunny bags and 2 beddings bearing no marks and numbers mixed with passenger's baggage in batch Nos. 1, 4 and 5 of the vessel. Since none came forward to claim the said goods, they were examined. The examination revealed lighters and textiles valued at Rs. 23,532/- cif and Rs. 70,596/- M.V.23. On 19-12-1978 the officers again searched the said vessel. They noticed one dust bin outside the entrance of the steering gear room which was found to contain one brown paper packet which in turn contained one wrist watch valued at Rs. 156/- cif and Rs. 312/- M.V.and 79 Bills of U.S. Dollars in denomination of $ 100 each and 10 Bills of U.S. Dollars in denomination of $ 50 each. As none came forward to claim the goods they were seized. After completion of the investigation, show cause notices were issued to the Master of the vessel and also to the owners and agents. After considering their replies and after personal hearing, the Addl. Collector of Customs (Preventive), Bombay ordered confiscation of the vessel but gave an option to the owners to redeem the same on payment of a fine of Rs. 30,000/-. He also imposed a personal penalty of Rs. 3,000/- on the Master of the vessel Shri Vaz who is not an appellant before us.

Feeling aggrieved the owners preferred appeal before the Government unsuccessfully. Thereafter, they filed a revision application which statutorily stood transferred to the Tribunal for being heard as an appeal.

24. Appeal 432/80 : On 4-11-1978, the officers of the Rummaging Division boarded the vessel M.V. Bacat-I and conducted a search. They found one paper packet on the steel ledge on the ship side on the port side. They found another packet on steel ledge on the ship side on star board side in the engine room. They also found one more packet in the crew toilet in crew accommodation. On examination of the three packets they found to contain 60 pcs., 30 pcs. and 7 pcs. of wrist watches respectively all of foreign origin collectively valued at Rs. 14,772/- cif and Rs. 29,544/- M.V. After completion of the investigation, show cause notices were issued to the owners, Master and also to two others.

After consideration of their replies and after giving personal hearing, the Addl. Collector (Preventive), Bombay ordered confiscation of the vessel but gave an option to the first appellant to redeem the same on payment of a fine of Rs. 20,000/-. He also imposed a personal penalty of Rs. 5,000/- on the second appellant. Feeling aggrieved the appellants preferred two appeals before the Board unsuccessfully.

Thereafter, they filed one Revision Application before the Central Govt. which statutorily stood transferred to this Tribunal for being heard as an appeal.

25. Shri N.P. Jagasia, learned Advocate who appeared for the appellants in all the above appeals contended that the Additional Collector ordered confiscation of the vessels holding that they were used as a means of transport in the smuggling of goods and that the owners and the Masters of the ship have not adduced positive evidence that the vessels were not so used without the knowledge or connivance of the owners or the Masters and that they had failed to discharge the burden of proof cast on them under Section 115(2) of the Customs Act. The Additional Collector has further held that the owner has to adduce evidence which should prove beyond doubt that the owner or his agent or the master could not possibly have any knowledge and that they had taken all possible precautions to prevent the use of the vessel in smuggling activities. Excepting stating that the master had searched certain places and made entries in the log book, positive evidence had not been adduced. Shri Jagasia further submitted that the finding of the Additional Collector against the Masters of the vessels was that they have failed to declare the goods which were seized in the manifest, and therefore, violated the provisions of Section 30 of the Customs Act, and became liable for personal penalty under Section 112.

It was further submitted by Shri Jagasia that the learned Member of the Board who heard all the appeals also recorded a finding that the owners and the Masters of the vessel have not brought out any evidence to establish that they had no knowledge about the contraband goods on board the vessel, excepting their mere denial of knowledge. The further finding of the Board was that the owners and Masters have not brought any evidence to establish that they had taken any precautions against the use of their ship for smuggling purposes. It is on account of these findings the Board confirmed the confiscation of the vessels. It was urged by Shri Jagasia that the Board confirmed the personal penalty on the Masters relying on the judgment of the Calcutta High Court in Collector of Customs v. J.D. Crighton. The Board upheld the finding of the Additional Collector that the masters were required to declare the contraband goods found in the vessel in the Import Manifest, and that they had failed to do so. Shri Jagasia contended that the learned Additional Collector as well as the learned Member of the Board have totally misunderstood the scope and extent of the burden that the owners and masters are required to discharge under Section 115(2) of the Customs Act. He contended that the onus of proof cast on the master and his agent is in the mature of a negative proof, namely, that they did not have knowledge or they did not connive with the act of smuggling or in the carriage of smuggled goods. In the said circumstances, there was no scope to adduce any positive proof to prove a negative fact. Shri Jagasia further submitted that neither the Additional Collector nor the Board had recorded a finding that either the owner or the agent had the knowledge that the vessels were used as a means of transport in the smuggling of contraband goods or used in the carriage of the smuggled goods. There was not even a finding by the Additional Collector or by the Board that the master or the owner of any of the vessels had knowledge of the existence of the contraband goods in the vessel. Shri Jagasia further submitted that the master had stated that he had taken all reasonable precautions to prevent smuggling by the crew members and others and he had even conducted search and had made entries in the log book. Thus, established that reasonable precautions were taken by the master. There was no contra evidence that the master did not warn the crew members and others against the act of smuggling or that he did not conduct the search of the vessel. The Customs Authorities had recorded the statements of the crew members. None implicated the master either in the act of smuggling or in the carriage of the smuggled goods. In the said circumstances the master is deemed to have discharged the burden that was cast on him under Section 115(2) of the Customs Act. Shri Jagasia also submitted that the precautions required to be taken by the owner and his agent are those which are to be prescribed in the rules. But no rules were framed prescribing the precautions required to be taken by the owner and his agent, and in the said circumstances it cannot be said that the owner and the master of the vessel have not taken the required precaution. It was contended by Shri Jagasia that even though no rules were made prescribing the precautions to be taken by the owner and the master, both the owners and the masters have taken all precautions which would have been ordinarily taken by a prudent person. There were circular instructions to the crew members against smuggling. Further, the master himself had carried out the searches and made necessary entries in the log book. The finding of the Additional Collector that the masters searched only a few places was not borne out by the record.

It was further contended by Shri Jagasia that looking to the places where the smuggled goods are found and the manner in which they are concealed, the nature of the packets in which they were found it was impossible for the master to detect them. Shri Jagasia submitted that even expert Customs Officers were unable to find out all the smuggled goods on one occasion and in respect of a few vessels the searches were conducted for more than 2 days which itself indicated that even with a due diligence the master could not detect the concealed items. The Additional Collector and the Board according to Shri Jagasia had not considered the various circumstances such as the places where the smuggled goods were found, the nature of the packages, the manner of concealment and the value. The master was only in overall charge and supervision of the ship. The ship has 4 parts, such as deck where the Chief Officer would be in control, engine room which would be under the control of the Chief Engineer, catering department which would be under the control of the Mess Manager or contractor who serves food to passengers and the master's cabin. If all these aspects were taken into consideration it would be clear that the master had no knowledge and could not have any knowledge as to the existence of the smuggled goods in the vessel. He, therefore, urged that the order of confiscation of various vessels involved in these appeals may be set aside.

26. In support of his contention that in the absence of the rules prescribing the precautions required to be taken by the owner and the master, they are not required to take any precautions, Shri Jagasia relied upon certain decisions of the Bombay High Court to which we shall make reference later. Shri Jagasia also relied upon certain decisions of the Bombay High Court to fortify his contention that the owner and the master are not required to adduce positive proof regarding the absence of knowledge and connivance. Finally, Shri Jagasia submitted that the Additional Collector as well as the Board had committed a grave error in holding that the masters of the vessels were required to declare the smuggled goods in the manifest and failing to declare the smuggled goods carried in their vessels amounts to violation of the provisions of Section 30, and, therefore, the masters are liable for penalty under Section 1 12. Shri Jagasia contended that the declaration contemplated under Section 30 of the Customs Act is in respect of the goods legitimately carried in the vessel and there is no legal obligation to make any declaration in respect of the goods which were illegitimately carried, and of which the master has no knowledge.

In support of his contention Shri Jagasia relied upon an unreported decision of the Division Bench of the Bombay High Court dated 5-10-1982, The Mogul Line Ltd. and Ors. v. A.K. Dutt and Anr.. Shri Jagasia urged that the order passed by the authorities below may be set aside. Fine and penalty if paid, may be ordered to be refunded.

27. Shri Krishan Kumar for the respondent Collector, however, urged that none of the appellants contended that the goods seized were not the smuggled goods. All the goods seized were found in the vessels. The vessels were used in the carriage of the smuggled goods, and therefore, they became liable for confiscation. It was further contended by Shri Krishan Kumar that the statute, namely, Section 115(2) imposes a burden on the owners and their agents to establish that they had no knowledge that the vessels were used as a means of transport in the smuggling of goods or in the carriage of smuggled goods. Further, the burden is on them to establish that they did not connive with the act of smuggling or in the carriage of smuggled goods. This burden according to Shri Krishan Kumar was not discharged by any of the appellants, and therefore, the learned Collector as well as the Board were justified in ordering confiscation of the ships. Shri Krishan Kumar further submitted that Section 30 of the Customs Act requires the master of the ship to make declaration of all the goods found in the vessel, whether the goods were legitimately carried or not and since the masters in all the cases admittedly did not declare the seized goods, they have violated the provisions of Section 30, and therefore, the Additional Collector was legally justified in imposing the personal penalties on the masters. He contended that the orders passed by the Additional Collector and the Board do not suffer from any infirmity, and as such they are not required to be interfered with by the Tribunal.

28. We have considered the submissions made on both sides. We have carefully gone through the records of the case and the decisions referred to by the learned Advocate for the appellants.

29. The points that fall for determination in these appeals are : (1) Whether on the facts and in the circumstances of the case the order of confiscation of the vessels involved in these appeals are not justified (2) Whether the imposition of personal penalty on the masters of the vessels involved in these appeal is not legal 30. We will, in the first instance, take up for consideration the second point first. The Additional Collector had imposed a personal penalty on the masters of the various vessels solely on the ground that they had failed to make declaration of the contraband goods seized from their vessels. The Additional Collector as well as the Board held that the masters have contravened the provisions of Section 30 of the Customs Act.

31. Sub-section (1) of Section 30 requires that the person in-charge of a conveyance carrying imported goods shall within twenty-four hours after arrival thereof at a customs station, deliver to the proper officer, an import manifest, and to make and subscribe to a declaration as to the truth of its contents at the foot of the manifest. The finding of the Additional Collector and confirmed by the Board was to the effect that the masters have failed to include the goods which were seized from the vessels in the manifest and therefore, the declaration made are not true declaration, and thus, violated the provisions of Section 30 and hence, became liable for personal penalty under Section 112 of the Customs Act. We have already referred to the rival contentions, namely, the contentions urged by Shri Jagasia and Shri Krishan Kumar. Shri Jagasia contended that the declaration contemplated by Section 30 of the Customs Act is only of the goods legitimately carried in the ship and not the goods which are smuggled either by the members of the crew or the passengers, whereas Shri Krishan Kumar for the respondent Collector had contended that there is a legal obligation on the master of the ship to make declaration of all the goods carried legitimately or otherwise. The contention of Shri Krishan Kumar finds support in the judgment of Calcutta High Court relied upon by the Board, namely, the decision of the Calcutta High Court in J.D. Crighton v. S.K. Srivastava-AlR. 1969 Calcutta page 260. A Single Judge of the Calcutta High Court in the said decision had held that mens rea may not be an element in the interpretation of Section 30, the responsibility to submit a correct return or to suffer the consequences of an incorrect return may be a strict liability of the masters. The appellants' Counsel had produced a photostat copy of the judgment of the Division Bench of the Calcutta High Court in Appeal No. 212/69. The Division Bench had held that apart from whether the master has any knowledge that the ship has been used as a means of transport for smuggling of any goods or in the carriage of any smuggled goods, when the ship arrives at the Port, the master must also open his eyes wide enough. Before delivering the Import Manifest he has a duty to check and ascertain what goods the ship has brought to the Customs station so that he may declare them fully and truly in the manifest. Whereas the Division Bench of the Bombay High Court consisting of their Lordships, Chandurkar and Lentin, J.J. had taken a view different from the view taken by the Calcutta High Court in Misc. Petition in Appeal No. 57/79, The Mogul Line Ltd. and Ors. v. A.K. Dutt and Anr.. Their Lordships of the Bombay High Court considered the Single Judge judgment of the Calcutta High Court. They also considered the provisions of the Customs Act and the regulations made in the year 1971 and the forms prescribed thereunder. The Division Bench ultimately held that 'in our opinion, the reference in Section 30 to imported goods as defined in Section 2(25) must necessarily means goods which are legitimately brought into India from a place outside India. The words 'any goods' in Section 2(25) must mean, not the classification of goods like smuggled, shop-soiled, damaged, decayed and so forth but must mean goods in their different varieties from a pin to an elephant legitimately carried by the vessel'. Shri Krishan Kumar was not able to point out any other decision of the Bombay High Court or the Supreme Court which has taken a view different from the view taken by the Division Bench in Mogul Line Ltd. The judgment of the Bombay High Court is binding on us.

Following the above cited decision of the Bombay High Court we hold that the imposition of penalty on the masters for violation of Section 30 of the Customs Act is not legal, and therefore, we set aside the penalties imposed on the masters of the vessels.

32. Now coming to the first of the points, Shri Jagasia contended that the Additional Collector as well as the learned Member of the Board have misunderstood the scope and extent of the burden cast on the owners and the masters of the vessels under Section 115(2) of the Customs Act. He had urged that the authorities below were not right in taking a view that the master and the owner are required to adduce positive proof as to the absence of knowledge and connivance. He contended that the burden cast on the appellants under that Section is negative burden which cannot be proved by positive evidence. He had further contended that even though no rules were framed prescribing the precautions required to be taken by the owners and the masters, the owners and masters of the vessels had taken all precautions that could have been possibly taken, namely, the crew members have been warned by circular instructions against indulging in smuggling activities and the consequences of smuggling and that the masters of the various vessels have even conducted the search and made entries in the log book as to the search conducted.

"any conveyance used as a means of transport in the smuggling of any goods or in the carriage of any smuggled goods shall be liable to confiscation, unless the owner of the conveyance proves that it was so used without the knowledge or connivance of the owner himself, his agent, if any, and the person in-charge of the conveyance and that each of them had taken all such precautions against such use as are for the time being specified in the rules." Now it is not the case of the department nor there was any finding by the Additional Collector or by the Board that the contraband goods found in the various vessels were taken inside the vessel with the knowledge or connivance either of the owners or the masters. The masters of the vessels had stated in their statements that circular instructions were issued to the crew members against smuggling and consequences of a smuggling. They had further stated that they had conducted the search and made entries in the log books. Neither the Additional Collector nor the Board disbelieved the statements of the masters. The Additional Collector however, had observed that the masters searched only a few places and sufficient precautions had not been taken. During the course of investigation the statements of crew members were recorded. None implicated the master in any manner. In Misc. Petition 54/1978, The Mogul Line Ltd. v. The Additional Collector of Customs, R&I Department and Anr., Pendse J. observed that 'The Additional Collector felt that the master and the Chief Officer have failed to take all reasonable precautions against the use of the vessel during the voyage. It is required to be stated that under Sub-section (2) of Section 115 of the Customs Act, the conveyance could be confiscated if it was used with the knowledge or connivance of the owner or its agent for the purpose of transport of smuggled goods. It is not in dispute that the Government of India has not framed no rules in regard to the precautions to be taken by the owner or his agent under this sub-section. The Additional Collector relied upon the fact that the petitioners sent a radio message to the master of the ship to search the vessel on September 7, 1977 and though the search was carried out, it was not a thorough search. According to the Collector if the search was thorough, then the master could have detected the contraband goods. In my judgment the approach of the Additional Collector is not accurate. The contraband material was concealed in a drum cavity of the lift boat and the log book entry clearly shows that the search was carried out throughout the ship but nothing was detected. There is no reason to presume that the search was not thorough and the master failed in his duty. In absence of any rules providing for the precautions to be taken, it is not proper to hold that the master has not taken proper precautions'. In a case reported in 1982 ECR 152 (Bombay), The Shipping Corporation of Saudi Arabia v.The Additional Collector of Customs (Prev.) and Anr.. Pendse J. after referring to Sub-section (2) of Section 115 of the Customs Act observed 'a mere perusal of this sub-section indicates that the carriage of any smuggled goods is liable to confiscation if the owner or his agent or any person in-charge of the conveyance and knowledge that the smuggled goods are conveyed or had failed to take precautions as specified in the rules. It is not in dispute that no rules are framed specifying the precautions to be taken as contemplated by Sub-section (2) of Section 115 or the Act---' In a case reported in 1982 E.L.T. page 397 (Bombay), The Mogul Line Ltd. v. The Additional Collector of Customs, Bombay, and Anr.. His Lordship Justice Pendse considered the nature and extent of the burden cast on the owner and his agent. His Lordship observed The Additional Collector felt that the master should lead positive evidence to establish that the smuggling activities were carried out without his knowledge and on the strength of that finding, ordered confiscation of the vessel. The observation of the Additional Collector that the master must lead positive evidence to establish that he had no knowledge of the smuggling activities is incorrect. It is not possible to establish a negative fact about the absence of knowledge by leading positive evidence. The approach of the Additional Collector is obviously erroneous'.

33. In a case reported in 1984 E.L.T. page 375, (Bombay), Garware Shipping Corporation Ltd. v. J.H. Joglekar, Additional Collector of Customs (P), Bombay, and Anr., His Lordship Justice Pendse after preferring to the provisions of Section 115(2) observed 'the plain reading of this sub-section indicates that the owner of the canveyance and the master in-charge of the conveyance are required to take all precautions against the use of the conveyance for smuggling of goods and the precautions required are those specified in the rules. It is not in dispute that the Customs authorities had not framed any rules providing for precautions which are necessary to be taken by the owner and the master of the conveyance for prevention of the smuggling of the goods. In absence of any rules, it is impossible for the Additional Collector to conclude that the owner or the master had failed to take requisite precautions in accordance with the rules. The Additional Collector observed in his order that the master failed to take all such precautions before the vessel entered the Indian territorial waters. In my judgment, in absence of any rules providing for certain set of precautions, it is impossible to direct confiscation of the vessel under Sub-section (2) of Section 115 of the Customs Act, 1962 and the order of confiscation, therefore, requires to be set aside'.

34. The Division Bench of the Bombay High Court in Misc. Petition in Appeal No. 57/79, The Mogul Line Ltd. and Ors. v. A.K. Dutt and Anr.

affirmed the view taken by Justice Pendse. In paragraph 6 of the judgment, the Division Bench o bserved "thus, the next question that arises is whether 'all such precautions against such uses' had been taken as required by Sub-section (2). Now according to Sub-section (2) itself, the precautions to be taken must be 'as are for the time being specified in the rules'. Admittedly, no rules have been framed in that behalf. Hence, in the absence of any such rules, the precautions to be taken must necessarily depend on the facts and circumstances of each case. In the present case, the master admonished and impressed upon the Officers and crew against indulging in nefarious activities like smuggling and drew their attention to the severe penal consequences thereof. This is not disputed by the department or by Mr. Bulchandani.

Thereafter the master followed up his admonition by personally undertaking a search of the vessel shortly before it touched Bombay.

This is also not disputed by the department or by Mr. Bulchandani. For that matter, the search undertaken by the master has been recorded in the vessel's log book. This is also not disputed by the department or by Mr. Bulchandani. It is difficult to see what more the master could possibly have done. As stated earlier, knowledge or connivance by the company or the master was not even sought to be attributed to them even by Mr. Bulchandani and rightly so".

35. It is thus seen that the various judgments of the Bombay High Court fully supported the contentions taken by Shri Jagasia. But as has been rightly contended by Shri Krishan Kumar that each case depends on the facts and circumstances established therein, we therefore, proceed to consider the facts and circumstances established in each case to ascertain whether the owner and the master had discharged the burden that was statuterily cast on them under Section 115(2) of the Act.

36. Coming to Appeal 219/80, the total value of the smuggled goods found was Rs. 83,878/- cif and Rs. 2,51,634/- M.V. The nature of the goods found were radio cassette recorders, cassette tape recorders, transistors, electronic calculators, sewing machine, microphones, textiles, toys, cameras, perfumes, etc. Some of these goods were contained in two cartons floating in the sea on the port side of the ship. Others were found in gunny bags which did not bear any marks and numbers and these gunny bags were in an unoccupied cabin. Some small paper packages and loose packages were found inside the ceiling penals of two cabins. As has been stated earlier, there was no evidence that the Captain had the knowledge of the existence of these goods. None of these goods were found lying in the open. The evidence is silent as to who could have been responsible for throwing out the cartons. The Master of the ship had stated in his statement that he had conducted a search. None of the crew members or others have implicated the Master with the knowledge of existence of these goods. The possibility of somebody hiding some of the goods and throwing away to the sea which are found floating after the Master had effected the search cannot be ruled out. The cabin itself was unoccupied and apparently accessible to all the crew members. Looking to the duties that a Captain has to discharge and considering the fact that he had taken such precautions which a reasonable and a prudent man in the circumstances would have taken and in the absence of any other circumstances to impute the knowledge to the Captain it could be safely said that the Master, i.e.

Captain had no knowledge of the existence of the contrabands. The department did not even contend that the Master of the ship connived in the importation of the smuggled goods. We, therefore, hold that the learned Additional Collector and the Board were not justified in directing confiscation of the vessel. We set aside the confiscation.

37. Appeal 260/80 : The search conducted on the vessel M.V. Marjan by the Customs officers resulted in the recovery of some plastic wrapping material in the engine room, one gunny bag, one cloth bundle and two polythene bags in an empty oil tank on the star board side of the engine room. The gunny bag contained some wrist watches and watch straps, cloth bundle and the polythene bags contained cigarettes, transistor radios, textiles, cassette tapes, electronic battery cells totally valued at Rs. 46,607/- cif and Rs. 99,262/- M.V. The Customs officers carried out search of the vessel again on 22-8-1978 and this search resulted in the recovery of another gunny bag containing wrist watches and watch straps concealed in the airvent pipe on the port side of the engine room. They further found one cloth bundle containing 4 wrist watches, a pocket transistor and 3 cartons of cigarettes concealed above the airtrunking in the air-conditioning plant on the boat deck. The total value of the wrist watches, and cigarettes was Rs. 17,567/- cif and Rs. 35,229/- M.V. The Rummaging Officers on 23-8-1978 again searched the vessel and they found 6 cassette tapes and one pocket transistor of foreign origin valued at Rs. 80/-cif and Rs. 240/- M.V. concealed in the panelling in a common passage of the port side of the main deck. It is thus seen that officers who are experts in detecting the smuggled goods could not detect all the goods during the search which they conducted on the first day and they have to carry out search on three days. When that was so one cannot expect the Master who is not an expert to find out small articles kept concealed in various places of the ship. They were not bulk goods. They were also not found in open space but were concealed. Further major portions of the goods were found inside the engine room which was in exclusive control of the Chief Engineer. The Additional Collector did not impose any personal penalty on the Chief Engineer. In the circumstances the Master cannot be implied with the knowledge of the existence of the above goods and therefore, it can be said that he failed to discharge the burden cast on him under Section 115(2) of the Customs Act. As in the other case, in this case also the Customs did not contend that the Master connived in the act of smuggling or in the carriage of smuggled goods. We, therefore, set aside the order of confiscation of the vessel.

38. Appeal 325/80 : The search conducted by the Rummaging officers of the vessel M.V. Bacat-I, which is the subject-matter of this appeal resulted in the recovery of one gunny bag concealed inside the lightening hole in the way of the ships inner structure of the common store room. This gunny bag contained 87 pcs. of wrist watches of foreign origin valued at Rs. 13.572/-cif and Rs. 27,144/-M.V. Looking to the nature of the goods and manner of concealment and value thereof it is highly improbable that the Master would have connived in the act of smuggling or would have known the existence of the smuggled goods.

In the circumstances and for the reasons already given earlier, we hold that the Additional Collector was not justified in ordering the confiscation of the vessel. We, therefore, set aside the confiscation, 39. The search carried out by the Rummaging Officers of the vessel M.V.Vijaya Vasant which is the subject-matter of the appeal 332/80 resulted in the recovery of watches, cassette tapes, cigarettes, transistors, etc. of foreign origin of the value of Rs. 2,572/- cif and Rs. 5,853/- M.V. concealed in a drum box. The second search conducted by the officers on 18-10-78 after a period of 4 days from the date of first search resulted in the recovery of a number of small cartons and loose cassette tape concealed beneath the wooden crate containing the coal.

They also found one paper packet containing wrist watches concealed in the hallow spare of the capstan at the extreme aft of the ship and in the hallow pipe nearby. The goods recovered was of the value of Rs. 8,746/- cif and Rs. 23,346/- M.V. The Rummaging officers again conducted a search on 19-10-78 and this search resulted in the recovery of 8 small cartons and cassette tapes in loose condition, 2 car stereos, 3 pocket transistors and four gunny bags concealed in an unoccupied space of the star board side in a specially made cavity, in the wall pannelling behind the table fixed to the wall, in cable at the forepear and in the hallow pipe at the life boat illumination lights of the port and star board sides on the boat deck. This search resulted in the recovery of watches, electronic calculators, transistors, car stereo, cassette tapes collectively valued at Rs. 5,078/- cif and Rs. 12,246/- M.V. The very fact that expert officers had to search the ship on three days clearly indicates that the Master who is not an expert possibly could not detect the concealment. Looking to the nature of the goods, the size and value thereof any of the crew members or other passengers could easily smuggled them into the ship without the knowledge of the Master. Further, the Master coiild not detect them in his search having regard to the places of concealment. We, therefore, hold that the Master has satisfactorily discharged the burden cast on him and accordingly we set aside the confiscation.

40. The vessel M.V. Al-Loulouah is the subject-matter of Appeal No.333/80. The search carried out by the Customs resulted in the recovery of one plastic shopping bag concealed above the airtrunking in the passage of the officers' accommodation at the star board side adjacent to Gyro room. This bag contained 210 pcs. wrist watches of foreign origin valued at Rs. 13,650/- cif and Rs. 27,300/- M.V. Besides the said plastic bag, the officers found 6 pcs. of wrist watches valued at Rs. 900/- cif and Rs. 1,800/-M.V. concealed in the officers' and engineers' toilet at the officers accommodation. As in the previous cases, considering the nature of the goods, size and value thereof and their place of concealment, the Master even if he had taken due care and precaution, could not have detected the goods. We, therefore, hold that the Master had satisfactorily discharged the burden cast on him under Section 115(2). We therefore set aside the order of confiscation of the vessel.

41. The vessel M.V. Al-Loulouah which is the subject-matter of the Appeal 335/80 was searched by the officers on 21-2-1979, they found two polythene wrapped bundles concealed underneath mooring rope coil at the stern of the vessel which contained 90 pcs. of wrist watches of foreign origin valued at Rs. 11,250/- cif and Rs. 22,500/- M.V, Here, again, considering the quantity of the wrist watches and value thereof it is highly improbable that the Master would have been a party to the smuggling of the goods in question. Looking to the place of concealment, we are satisfied that the Master who is not an expert could not have detected the goods during the search. We, therefore, hold that the Master has discharged the burden cast on him.

Accordingly, we set aside the order of confiscation of the vessel.

42. The search carried out by the officers of the Rummaging Division of the vessel M.V. Noor Jahan which is the subject-matter of Appeal 352/83 on 18-12-1978 resulted in the recovery of II gunny bags and 2 beddings bearing no marks and numbers mixed with passengers' baggage in batch Nos. 1, 4 and 5 of the vessel. They contained lighters and textiles valued at Rs. 23,532/-cif and Rs. 70,596/- M.V. The search conducted on 19-12-78 resulted in the recovery of one brown paper packet containing one wrist watch valued at Rs. 1561- cif and Rs. 312/- M.V. and 79 bills of U.S. Dollars in denomination of 1100 each and 10 Bills of U.S.Dollars in denomination of $50 each, inside one dustbin outside the entrance of the sterring gear room. In order to dectect the smuggled goods the experts had taken two days. The first set of goods were found in the midst of passenger's baggage. The possibility of the passengers smuggling the lighters and textiles without the Master's notice cannot be ruled out. The Master could not himself find out them during his search as he cannot be expected to search the personal belongings of each passenger. The other goods, one wrist watch and 89 bills of U.S.Dollars were found inside a dustbin. One cannot expect the Master to detect during his routine check. As the ship was a passenger ship any of the passengers could have smuggled these articles and coming to know of the search could have thrown them into the dustbin after the search carried out on the first day. In the circumstances of the case, we hold that the Additiona1 Collector was not justified in ordering confiscation of the vessel. We, therefore, set aside the order of confiscation.

43. The vessel M.V. Bacat-I is the subject matter of Appeal No. 432/80.

The search carried out by the officers of Rummaging Division on 4-11-1978 of the above vessel resulted in the recovery of one paper packet on the steel ledge on the ship side on the port side and another packet on steel ledge on the ship side on star board side in the engine room. Yet another packet in the crew toilet in crew accommodation. On examination of all the 3 packets they found to contain 60 pcs., 30 pcs.

and 7 pcs. of wrist watches respectively totally valued at Rs. 14,772/- cif and Rs. 29,544/- M.V. Considering the nature of the goods and size of the packages and the manner in which they were concealed and also value of the goods, it cannot be said that the Master had either connived in the act of smuggling or had the knowledge of smuggled goods being carried in the ship. In the circumstances the Addl. Collector was not justified in ordering confiscation of the vessel. We, therefore, set aside the confiscation.

44. It may be stated that the finding of the learned Additional Collector in all these cases was that the vessels were used as means of transport in the smuggling and not that they were used for the carriage of smuggled goods. The Board had only confirmed the finding of the Additional Collector. There was hardly any evidence to establish that the vessels were used as means of transport in the smuggling of the goods. Just because certain smuggled goods were found in the vessels, one cannot jump to a conclusion that the vessels were used as means of transport in the smuggling of the goods found inside the vessel. The vessels are either cargo vessel or passenger vessel. In the circustances, the said finding of the learned Collector, in our opinion, is not based on any evidence. On this ground also the confiscation of the vessels are liable to be set aside. As we had set aside the orders of confiscation of the vessels, the question of setting aside the fine imposed in lieu of confiscation does not arise, 45. In the result, all these appeals are allowed. The orders of confiscation are set aside and the personal penalties imposed on the masters are also set aside. The fine and penalty, if paid, shall be refunded.

46. Before parting with these appeals, it is necessary to point out that relying upon a decision of the Bombay High Court we had set aside the Personal Penalties imposed on the Masters of the vessels. During the-hearing of these appeals, both sides contended before us that the personal penalties on the Masters were imposed for violation of provisions of Section 30 of the Customs Act. But while going through the Order-in-Appeal No. 249/80 we find that the Addl. Collector has imposed personal penalty on the Master of the ship not only for the violation of the provisions of Section 30 of the Act but also on the ground that gold bars which were found in Locker No. 88 were brought by the Master himself or with his connivance or knowledge. It is necessary, therefore, to consider whether the learned Additional Collector was justified in holding that the gold bars found in the locker were brought by the Master or with his knowledge or connivance.

The only circumstance against the Master was that he possessed the master key of the locker and with that master key the locker was opened. The statements of the Master and other crew members disclosed that the duplicate key of the locker was required to be with the Chief Officers and the Chief Stewards and second stewards will have pass keys. The Chief Stewards had stated in his statement that Locker No. 88 was in possession of one Shri Dennis Mazarello who signed off two months earlier to the seizure and that one Shri G.S. Lawrence was asked to take over charge of Shri Mazarello. He should have in possession of the key. He had further stated that neither he nor the second stewards had any duplicate keys of the said locker. The second steward in his statement had stated that he had no knowledge as to whom the gold belonged to or as to who had kept them in Locker No. 88. The General Stewards Shri Lawrence who was required to be in-charge of Locker No.88 stated that he did not lock that locker and he did not receive the key from Mazarello. The other five stewards also denied the knowledge of gold bars found in Locker No. 88. Now it is seen that besides the Master, the Chief Officer, Chief Stewards and second stewards can have access to the locker in question because they too possessed the duplicate keys of the locker. The Additional Collector has not chosen to impose personal penalty on any of these persons. Shri Lawrence Fernandez, a general stewards, according to the statement of Chief Stewards was required to be in possession of the key. But Lawrence denied that he was given the key by Shri Mazarello when he signed off.

No investigation was carried out as to whose responsibility it was to see that key of Locker No. 88 was given to Lawrence Fernandez. Whether it was the responsibility of the Master or the Chief Stewards or the second stewards or the Chief Officer. None of the stewards have implicated the Master. Just because Locker No. 88 was opened with the master key found in possession of the Master one cannot come to a conclusion that the gold bars found were either smuggled by the Master or that he connived in the smuggling of the gold bars. As has been stated earlier, any of the above persons, viz., Chief Officer, Chief Stewards or second steward or the Master could have kept the gold bars inside that locker. The Additional Collector had not imposed any personal penalty on the other members except the Master. It is significant to note that in spite of his finding that the Master himself had smuggled the gold bars valued at Rs. 1,52,782.14 cif and Rs. 2,11,029.50 local market rate, did not chose to order confiscation of the vessel even though in respect of the vessels which carried contraband goods of lesser value were ordered to be confiscated. The circumstances of the case and various factors referred to by us require giving of a benefit of doubt to the Master. We, therefore, hold that the Additional Collector was not justified in imposing a personal penalty of Rs. 20.000/- on the Master of the vessel.


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