Skip to content


Mackinon Mackenzie and Co. Ltd. Vs. Collector of Customs - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Mumbai
Decided On
Reported in(1985)(5)LC2433Tri(Mum.)bai
AppellantMackinon Mackenzie and Co. Ltd.
RespondentCollector of Customs
Excerpt:
.....not attached to the said notice. he, further, submitted that the consignee did not request for a steamer survey. neither the master nor the steamer agents was a party to the so-called survey held at the instance of consignee and under the supervision of the customs. he also submitted that the goods came in drums and the bpt remarks were to the effect that 239 drums were dented and three drums were damaged. there is no proof that the contents of the dented or damaged drums did not land. shri vakil urged that the liability of the steamer agents ceases the moment the goods are given to the custody of the custodians and the receipts obtained.it was also urged by shri vakil that merely because the outer covers are damaged or dented there is no presumption that the contents are lost. in that.....
Judgment:
1. The Revision Application filed before the Govt. of India against the Order-in-Appeal bearing No. S/49-1012/79-M dated 10-1-80 passed by the Collector of Customs (Appeals) Bombay statutorily stood transferred to the Tribunal for being heard as an appeal.

The Asstt. Collector of Customs after adjudication called upon the appellants to pay the penalty of Rs. 16223.99 under Section 116 of the Customs Act on the alleged short landing of the goods imported by M/s. Steel Industries of India. On appeal, the Appellate Collector observed that the penalty was levied on shortages noticed during survey which was held under Customs supervision. The shortages occurred due to the denting of 239 drums and damage to 3 drums before the same were landed. As the drums were dented and damaged before the landing and as the survey was held under Customs supervision, the action taken by the Asstt. Collector was maintainable and on this reasoning the learned Collector (Appeals) rejected their appeal.

3. During the hearing of this appeal, Shri Vakil learned Counsel for the appellants, submitted that the goods landed on 3rd January 1979 and the survey was held some time at the end of February 1979. Though a show cause notice was issued, the survey report was not attached to the said notice. He, further, submitted that the consignee did not request for a steamer survey. Neither the Master nor the steamer agents was a party to the so-called survey held at the instance of consignee and under the supervision of the Customs. He also submitted that the goods came in drums and the BPT remarks were to the effect that 239 drums were dented and three drums were damaged. There is no proof that the contents of the dented or damaged drums did not land. Shri Vakil urged that the liability of the steamer agents ceases the moment the goods are given to the custody of the custodians and the receipts obtained.

It was also urged by Shri Vakil that merely because the outer covers are damaged or dented there is no presumption that the contents are lost. In that connection Shri Vakil also relied upon the decision of this Bench in CD (Bom) 92/83 disposed of on 15-6-83.

4. Shri Gidwani for the Respondent Collector however urged that no receipt as such would be given to the steamer agent. The tally sheet would be prepared and a copy would be handed over to the steamer agents. The tally sheet will indicate the shortage or damaged or denting of the containers. Even otherwise, Shri Gidwani submitted that if the submission made by the opposite side is true that they got the receipt, the receipt would also contain the remarks of the Port Trust.

Therefore, it would have been open to the master of the ship or the steamer agent to get the survey conducted so as to absolve themselves of the liability under the Customs Act. Finally, Shri Gidwani submitted that three drums landed in damaged condition with lids open. Therefore, it could be reasonably presumed that the contents were lost before landing. He, therefore, urged that the orders passed by the authorities below may be maintained.

5. Considered the submissions made on both sides. The Customs authori-ties have chosen to invoke the provisions of Section 116 of the Customs Act, 1962 to levy penalty on the steamer agent. Before making the steamer agent liable under Section 116 there should be statisfactory evidence that the goods loaded in the ship did not reach at the place of destination or the quantity unloaded was short of the quantity to be unloaded at the destination. It is only thereafter the steamer agent could be called upon to pay the penalty for not unloading the quantity loaded or for unloading short of the quantity to be unloaded. In the instant case, according to the order of the Collector of Customs (Appeals) the shortage was noticed at the time of survey.

The records do not indicate where and when the survey took place or at whose instance. The appellants have contended in their reply to the show cause notice that they were not party to the survey and that fact is unchallenged. Looking to the nature of the goods contained in the drums it cannot reasonably be assumed or presumed that there would be leakage before landing. If a considerable period lapses between the date of landing and holding of survey and if the survey is not steamer survey, or if the master or steamer agent was not a party to the survey and if the survey takes place beyond their back, though under the supervision of the Customs no penalty under Section 116 could be imposed on the Master or steamer agents for the shortage noticed during such survey. The possibility of the goods being lost in the interval between landing and of holding survey cannot be altogether ruled out.

The Landing Remarks of the Bombay Port Trust by itself would not be sufficient to impose penalty on the steamer agent. Nothing prevented the consignee, from seeking steamer's survey within the stipulated period for establishing the shortage. The contention of Shri Gidwani that the steamer agent should have opted for holding the survey even accepted, would not be sufficient to call upon him to pay the penalty under Section 116. Primarly, it is the responsibility of the consignee to get the survey done particularly when the goods had landed in dented and damaged condition. If steamer's survey was not sought within a reasonable time the Customs authorities cannot call upon the steamer agents to pay penalty solely based on the survey held behind their back after a lapse of considerable time. There should be unimpeachable evidence of short landing bofore a penalty could be imposed under Section 116 of the Customs Act. Such an evidence is lacking in the instant case.

I, therefore, allow this appeal and set aside the order passed by the authorities below and direct that the appellants be granted consequential relief.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //