1. Vessel 'm.v. Rosario' was rummaged at Visakhapatnam and four cavities (cutways) were found in the cabins occupied by the 2nd Officer of the vessel and three crew members. The Additional Collector of Customs, Visakhapatnam, by his order referred to supra, ordered confiscation of the vessel under Section 115 (1) of the Act and fixed a fine in lieu of confiscation of Rs. 1 lakh. He also imposed a penalty of Rs. 1000/- each on the owners of the vessel M/s. International Shipping Co. Ltd. Liberia (appellant in No. 108/84) and the Master (appellant in No. 109/84). The first Appeal No. 108/84 is from the owners of the vessel and the second (No. 109/84) is from the Master.
During the course of hearing, we had occasion to see the photograph showing the position of the cavity and the manner in which cut-ways had been made.
2. Counsel for the appellants urged that the more or less uniform space accessible would suggest that those space formed part of the normal structure of the vessel and one cannot say that they are cavities specially made for the purposes of smuggling. He also referred to the voyage of the vessel which was from Brazil to Visakhapatnam with bulk cargo charter, a run in which it is not normally found that smuggling takes place. Hence, he suggested that action under Section 115(1) was not warranted. In the alternative, he urged that the fine in lieu of confiscation is high.
3. So far as the owners and the Master are concerned, counsel submitted that there is no violation of Section 117 of the Act; thrt there is no knowledge or overt act on the part of the owners or the Master to invite the penalty under that Section.
4. The Departmental Representative, on the other hand, referred to the manner in which cutways have been found which allow access to specific and fixed spaces of the vessel. In view of the wording of Sub-section (1) of Section 115, he urged that the action taken is maintainable. In so far as penalties under Section 117 of the Act are concerned, he mentioned that as the cavities were not for normal acceptable purposes, it should be presumed that there has been violation on the part of the owners of the vessel as well as the Master.
5. We have considered the arguments of both sides. From the shape of the cutways and their placement, we are satisfied that the vessel has been altered in the sense referred to in Section 115 (1) (a) of the Act and that is all that is necessary for sustaining the penal action taken in terms of that sub-clause. We, therefore, uphold the order of confiscation of the vessel. However, we think that the ends of Justice would be met if the fine in lieu of confiscation is reduced to Rs. 50,000/- (Rs. fifty thousand only). We order accordingly.
6. Section 117 of the Act imposes a liability on a person who contravenes any provision of the Act or abets any such contravention or fails to comply with any provisions of the Act. Section 115(1) (a) makes a conveyance liable to confiscation when it has been constructed, adapted or altered or fitted for the purpose of concealing goods. It is not the department's case that either the owners of the vessel or the Master either made any alteration on their own or abetted in the making of such alterations. As rightly pointed out by the counsel for the appellants, no particular rules have been framed under Section 115 (2) regarding precautions to be taken by the owner of a vessel, which precautions, one or many have not been taken by either the owners or the Master of the vessel. We, therefore, consider that there is no scope for imposition of penalty on either the owners of the vessel or the Master. Accordingly, we set aside the penalties imposed under Section 117 of the Act with consequential relief.