1. The Revision Application filed before the Government of India against the Order-in-Appeal No. S/49-45/77 Oil, dated 17-6-1978 passed by the Appellate Collector of Customs, Bombay, statutorily stood transferred to the Tribunal for being heard as an appeal.
2. The facts necessary for the disposal of this appeal may be stated as under: The appellants are the steamer agents. They were issued with the show cause notice to account for the shortlanding of certain quantity of lubricating oil and failing which to pay penalty of Rs. 25,851.47 which is equivalent to the duty payable on the shortage.
Since the appellant did not show any cause, the Dy. Collector of Customs Bombay imposed a penalty of Rs. 25,851.47. Feeling aggrieved, the appellants preferred an appeal before the Appellate Collector It appears that among other things the appellants contende that they were not agents of the ship owners in respect of the general cargo and they were the agents for the ships stores only and therefore, penalty cannot be impose on them for short delivery. It was also contended before the Appellate Collector that the consignee Indian Oil Corporation did not complain of an shortage and on the other hand, it had executed a bond for the entire quantity in favour of the Customs Department and in the said circumstances neither the owners of the ships nor the steamer agents can be called upon to pay penalty for the shortage if any occurred after they had discharged the carg(sic) The Appellate Collector did not accept the contentions of the appellants the they were the agents only for the ships stores. He also rejected the contentic of the appellants that the ship owners and steamer agents are not liable for the shortage because the I.O.C. had executed a bond in favour of the Customs.
3. During the hearing of this appeal, Shri Manerikar, consultant for the appellant contended that M/s. Hind Shipping Agency, the appellants, were n the steamer agents for the general cargo, viz., the lubrication oil and the were only the agents for ships stores and as such they cannot be made liable pay penalty under Section 116 for their failure to account for the unloading the entire manifested quantity. It was also contended by Shri Manerikar th the consignee viz. Indian Oil Corporation received delivery of the entire cargo and in the said circumstances the steamer agents cannot be made liable for the shortage if any caused due to non-delivery of the cargo received by the I.O.C.He, therefore, prayed that the orders passed by the Appellate Collector may be set aside and the penalty paid may be ordered to be refunded.
4. Shri Krishna Kumar for the Respondent Collector however urged that the appellants have not adduced any documentary evidence to show that they were agents only in respect of ships stores and not for the general cargo and therefore, the appellants cannot be heard to say that they are not liable for the penalty if the department is able to establish that the ship had failed to discharge the entire manifested quantity. Shri Krishna Kumar further contended that any agreement entered into by the ships' owners and the Indian Oil Corporation regarding the transport of the cargo from the dock to the storage tank does not absolve the liability of the ship owners or the steamer agents to pay the penalty in respect of the short-landing cargo. He, therefore, urged that the appeal may be rejected.
5. Considered the submissions made on both sides. The appellants were Issued with the show cause notice to account for the shortage. The appellants lid not choose to send any reply. They did not contend that they were not he steamer agents for the general cargo. Even before the Appellate Collector, hey did not produce any document to show that their agency was confined to he ships stores only and that it did not relate to general cargo. In the said circumstances, the contention now urged before the Tribunal that they were not the steamer agents for general cargo cannot be accepted.
6. Before the steamer agents could be made liable to pay penalty under Section 116, the Collector of Customs has to establish by satisfactory evidence hat the ship had failed to unload the entire quantity loaded in the ship at the place of destination. It is only after the Collector establishes by satisfactory evidence that there had been short-landing the liability to account to the satisaction of the Assistant Collector of the failure to unload the shortlanded quantity at the destination by the person in charge of or conveyance arises, 'he orders passed by the Dy. Collector and the Appellate Collector do not pdicate how and on what basis the shortage was determined. Shri Krishna Lumar for the Respondent Collector submitted that shortage was determined in the basis of the measurement taken of the storage tanks at Trombay. It was bntended by Shri Krishna Kumar that storage at Trombay was the place of estination for the discharge of the cargo in question. Therefore, the person charge of the vessel had to discharge the cargo at the storage tanks and if here had been discharge of the cargo at any other place that discharge will ot be a valid discharge and as such the steamer agents cannot be heard to say that the consignee had accepted the discharge of the entire quantity and therefore, they cannot be made liable to pay penalty. The contention raised by shri Krishna Kumar would have been valid if the discharge of the cargo to (sic) consignee at a place other than the destination was without the permission the Customs authorities. If, however, the Customs authorities had permitted e person in charge of the ship to discharge the cargo at a place other than e place of destination, that place becomes landing place for unloading and if e manifested quantity had been unloaded at that place then no penalty can t imposed on the person in charge of the ship on the ground that the entire anifested quantity had not been accounted for at the storage tank which was e ultimate destination. In the present appeal, the appellants have contended at the importers viz., I.O.C. had executed a bond for warehousing the cargo in icstion and that the Customs authorities had allowed discharge part of the rgo at the dock itself. If the I.O.C. which had executed a bond had failed to deliver the entire quantity at the ultimate destination viz the storage tank the Customs can only look to the I.O.C. for the shortage and cannot make the person in charge of the vessel liable for payment of penalty. There is considerable force in this contention. Section 8 of the Customs Act empowers the Collector of Customs to approve proper places in any Customs port for the unloading and loading of goods. The unloading of the part of the cargo according to the appellants took place at the dock and it was permitted by the authorised officer. The appellants have also contended that the consignee took charge of the cargo so unloaded and executed a bond contemplated under Section 59 in favour of the Customs. If what had been contended by the appellants is correct then the appellants cannot be made liable to account for the quantity short delivered at the ultimate destination viz., I.O.C.storage tank at Trombay. The records of the case do not indicate as to the quantity discharged at the dock and the quantity discharged by pipeline at the storage tanks. The records also do not disclose that the shortage complained of was occurred in respect of the quantity discharged at the dock. In the absence of evidence as to the quantity delivered by pipeline and as to the quantity delivered by tank lorries and in the absence of evidence as to the quantity discharged at the dock it would not be possible to come to any definite conclusion as TO the shortage and also as to where and when the shortage occurred. The appellants have contended that the ship had discharged the entire quantity at Indira dock on 24th January, 1970 and the consignees have accepted the receipt of the entire quantity and they even executed a bond contemplated under Section 59 in favour of the Collector. After a lapse of six years, show cause notice was issued complaining shortage.
Though the Customs Act does not provide any period of limitation for imposing a penalty under Section 116, it would be highly unreasonable to call upon a person in charge of the vessel to account for the shortage after a lapse of six years. Significantly, the Department has not referred to the bond executed by the consignee for warehousing the cargo received by them. If the vessel had discharged the manifested quantity at the dock as permitted by the Customs authorities then it cannot be made liable to pay penalty for the shortage if any noticed at the ultimate destination namely storage tanks because for the purpose of unloading, the dock should be considered as a place of unloading.
The liability to account for the manifested cargo ceases when the manifested quantity is discharged at the place of landing which in the instant case was the dock and not the storage tanks. The Customs for the purpose of imposing penalty under Section 116 have taken the quantity received at the storage tanks and not the quantity discharged at the dock and therefore, the very basis adopted for determining the shortage is itself incorrect and as such no penalty could be imposed on the steamer agents for the shortage if any found at the storage tank.
7. After careful consideration of all the aspects I allow this appeal anc set aside the orders passed by the Dy. Collector and the Appellate Collector and direct that the appellants be given consequential relief by way of refund o penalty, if paid, within a period of four months from the date of receipt o this order.