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Kasvikis Spiridon and ors. Vs. Collector of Customs - Court Judgment

LegalCrystal Citation
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Tamil Nadu
Decided On
Reported in(1985)(5)LC2177Tri(Chennai)
AppellantKasvikis Spiridon and ors.
RespondentCollector of Customs
Excerpt:
.....noon on 5-5-1983 and an amount of 20992 u.s. dollars found in the table drawers and locker of the chief purser of the vessel mr. kasvikas spiridon was recovered theis being in prepared between 4.30 and 5.30 p. m. in the presence of the agents and the chief purser. in a letter handed over to the assistant collector of custome, who came on board later, the chief purser stated that without the seized money the ship cannot sail with 122 passengers because it has many obligations in every port. round about 8.15 p.m. purser. in a letter handed over to the assistant collector of customs, whothe chief the money belonged to passengers and that 1; j l urser .cla(tm)ed that issued by him and he had maintained a book of account for the same of receipt not able to produce the book.by this time.....
Judgment:
1. As these five appeals arise from out of a single order passed by the collector of Customs, Cochin and are based on the same set of facts, we are disposing of the same in a single order.

2. Based on intelligence 'M. V. Illiria', a passenger vessel under the command of the capt. Anastasois Parissis was rummaged at about noon on 5-5-1983 and an amount of 20992 U.S. dollars found in the table drawers and locker of the Chief Purser of the vessel Mr. Kasvikas Spiridon was recovered theis being in prepared between 4.30 and 5.30 p. m. in the presence of the Agents and the Chief Purser. In a letter handed over to the Assistant Collector of Custome, who came on Board later, the Chief Purser stated that without the seized money the ship cannot sail with 122 passengers because it has many obligations in every port. Round about 8.15 p.m. Purser. In a letter handed over to the Assistant Collector of Customs, whothe Chief the money belonged to passengers and that 1; J l Urser .cla(tm)ed that issued by him and he had maintained a book of account for the same of receipt not able to produce the book.

By this time certain incidents have taken place which are being was which are being interpreted by the Department and the appellants in different ways. What happened appears ways. What happened appears to be that the ship gangway was lifted. The Department Department felt that thus its officers were confined to a corner by the Master and the Chief Purser with the assistant of staff Capt. Zanetos Theostastos, Second Officer Mr. Remantas Haristos, Bosun Anthasiou Georges and other crew members. It was also stated that the Captain assisted by other took away the currency seized by Customs by force after a scuffle. Later at the intervention of the steamer agents, the Chief Purser accompanied by the Master appeared in the Custom House at 15 minutes past midnight on 6-5-83. At that time the Chief Purser had stated that the currency, said to have been snatched from the Customs officers, had been distributed to the passengers and eight receipts were produced along with a register containing some account.It was also noted that about 3 million dollars were kept in other lockers, the keys of which were kept with the respective passengers. In a note submitted at 4.00 a.m. on the 6th the Captain stated that as captain stated that as captain of the ship he had to give the money to its owners and as such he took the money form the Customs officers and personally distributed it among the owners. A representative of the ship's agent in a letter addressed to the Asst. Collector cofirmed that when when he heard that there was a problem on board the ship, he visited the ship but found the ship's ladder up and he got it lowered and boarded the ship and found a large number of people standing together along with the Customs officers; he was told that the ship's people took away money from Customs officers.

3. Show cause notices were issued to the Master and Chief Purser calling upon them as to why the currency should not be confiscated under Section 111 (d) and (f) of the Customs Act, 1962 read with Section 13 (1) of the Foreign Exchange Regulations Act, 1973 (FERA).

They were also called upon to explain why a penalty should not be imposed under Section 112 of the Act. The staff captain, Zanetos Theoktastos and II Mate, Remantos Hristos and Bosun, Athanasiou Georges were called upon to explain as to why a penalty should not be imposed on them under Section 112 of the Act for aiding and abetting the Chief Purser and the Master of the Vessel. Certain explanations were offered as to the alleged seized currency by the officers from the Chief Purser and the lifting of the gangway after sunset for safety and security of the passengers. Discrepancies between the date of receipts and date of entries in the book was explained on the basis that receipts are granted when money is given and the entry in the book is made when the money was actually received for safe custody. It was also stated that in terms of Section 43 (1) of the Act the vessel is exempted from filing any import manifest; the Collector held that the exemption under Section 43(1) is confined to a vehicle, which is used as a conveyance on land and hence did not apply to a passenger ship. He found that there was a clear violation regarding non-declaration of currency in the manifest. Accordingly, he ordered confiscation of the currency under Section 111 (d) and (f) of the Customs Act, 1962 read with Section 13(1) of the FERA, 1973. Finding the various persons liable for action under Sec, 112 he imposed a penalty of Rs. 75,000/- on Captain, the Master of the Vessel; Rs. 50,000/- on Chief Purser of the vessel and a penalty of Rs. 5,000/- each on the staff Captain, II Mate and Bosun of the vessel.

4. Before us the advocate for the appellants urged that there was no import of currency into the country; for this proposition he relied on the decision of the Kerala High Court in the case of "Sri Ramalinga Mills Pvt. Ltd. v. The Asst. Collector of Customs and Anr." (1982 JSCTL p. 308). In that case some viscose staple fibre intended for Cochin was in a vessel which reached Bombay prior to a change in the rate of duty; the vessel stayed secure at that Port for a few days before she reached Cochin on 4-1-1979; it was held that there was no import of the goods at Bombay. On an analogy it was urged that the currency was not imported at Cochin. He next referred to the decision of the Supreme Court in the case of "Charandas Malhotra v. Assistant Collector of Customs" (AIR 1968 Cal. 28) wherein Their Lordships of the Calcutta High Court have held that imposition of penalty requires deliberate action of the knowledge on the part of the person and in a show cause notice he must be charged with ingredients of an offence which expose him to a penalty. Next he referred to the case of "James David Crighton and Ors. v. S.K. Srivastava" (AIR 1969 Calcu ta 260) wherein the Calcutta High Court has held that liability of a Master ftor filing incorrect manifest does not arise when goods have been clandestinely imported in his vessel without his knowledge. As no action has been taken against the owners of the vessel themselves, he urged that the Master cannot be held liable under Section 112. Next he referred to the case of "Radha Krishan Bhatia v. Union of India and Ors." (AIR 1965 SC 1072) wherein the Supreme Court held that mere finding that a person was in possession of smuggled goods does not justify a conclusion that he must be concerned in illegal importation thereof. (We note that this decision relates to Section 167(8) of the Sea Customs Act, 1878 and not Section 112 of the Customs Act, 1962 which is differently worded).

5. Continuing he stated that obstruction of the officers Bosun, was not in order as they were not involved in the offence punishable under Section 111 of the Act.

6. The Senior Departmental Representative, on the other hand, urged that the currency declaration has been given by the Chief Purser on behalf of the Master, a fact accepted by the Master; there were no claims from the eight passengers at the time the currency was seized.

The entries in the register were found to be haphazard and the register did not appear to have been kept in the normal course of business. The claim that the currency belonged to certain passengers was made four hours after the seizure. Even then none of the passengers were brought forward in support of the claim. Bringing of currency without declaration is prohibited under Section 13 of the F. E. R. Act, 1973.

The explanation to this Section provides that "the bringing or sending into any port or place in India of any such Article... without being removed from the ship or conveyance in which it is being carried shall nonetheless be deemed to be a bringing, or, as the case may be, sending, into India of that Article" is prohibited. According to Section 67 ibid the restrictions under Section 13 of the FERA, 1973 shall be deemed to be one imposed under Section 11 of the Customs Act, 1962. Hence the confiscation of the currency under Section 111(d) of the Act is maintainable in law. Section 111 is definitely attracted as the currency declaration is part of the import manifest and it is accepted that the seized and confiscated currency was not mentioned in the ship's currency declaration.

7. Next he referred to Section 112 (b) of the Customs Act, 1962 which reads : "any person... concerned in carrying, removing... or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under Section 111" attracts a penalty. In the case of the Staff Captain, the Ilnd Engineer and the Bosun, they did remove the currency or dealt with it in any other manner knowing that the currency was liable to confiscation.

Hence the action taken against each of them is maintainable.

8. Continuing he observed that considering the circumstances of the case the quantam of penalty are not excessive.

9. We have considered the arguments of both sides. It is common ground that currency of $ 20992 was not declared in the currency declaration form of the vessel when it arrived at the port. It had been searched based on intelligence and the currency recovered. At the time of recovery the Chief Purser indicated that the money was required because it had various expenses at ports of call with 122 passengers. Later in the day a claim was put forward that the currency belonged to eight passengers who had left it with the Chief Purser as they did not have individual lockers unlike other passengers. A register regarding entry of receipt of such currency was found to be not one maintained in the normal course of business, suggesting that it was best a late concoction. None of the passengers had been examined in support of the claim that their currency was with the Chief Purser.

10. It is on record that the currency declaration was made by the Chief Purser on behalf of the Master. Under Section 30 of the Act the onus of delivery of the manifest rests on the person in charge of the vessel.

In view of the incorrect statement in the currency declaration, the Master is liable for action under Section 112.

11. Considering all the circumstances of this case we are of the view that there was in fact non-declaration of the currency which was in the custody of the Chief Purser on behalf of the vessel represented by its Master.

12. Explanation to Section 13 of the F.E.R.A., 1973 makes it obligatory that goods including currency which are removed or intended to be removed from an importing vessel are governed by the prohibition and violation of Section 13 of the F.E.R.A., 1973 which is a violation under Section 11 of the Customs Act, 1962 thus attracting the provisions of Section 111 of the Act regarding confiscation and hence Section 112 regarding imposition of a penalty. We are thus satisfied that the confiscation of the currency under Section 111(d) and (f) of the Act is maintainable in law. In coming to this decision we have kept in view the decision of the Kerala High Court in the case of Sri Ramalinga Mills. That case dealt with a situation where the vessel with cargo obviously intended for Cochin came to be berthed at Bombay for a few days and then came on to Cochin; in such a situation it was held that the import had taken place at Cochin and not at Bombay. This is different from a situation where the present vessel 'm. v. Illiria' came to Cochin and was anchored within the Port limits and there is a specific provision of Section 13 of the Foreign Exchange Regulations Act about prohibition and restriction that applies to goods which are not taken out of the vessel.

13. The case of R. K. Bhatia-AIR 1965 SC 1072-is not relevant to the present one as it dealt with Section 167(8) of the Sea Customs Act, 1878 and not Section 112 of the Customs Act, 1962 which is differently worded. At the earlier point of time, a person concerned in the importation of prohibited goods was liable and the Court held that once the goods crossed the Customs frontier, illegal importation is complete and any person concerned with the illegally imported goods thereafter would not be covered by Section 167(8) of the Sea Customs Act, 1878.

However, Section 112 (b) makes specific provision in respect of such goods. The principle laid down in Charandas Malhotra case-AIR 1968 Calcutta 28-is that imposition of penalties requires deliberate action.

In the circumstances of the present case such an action and knowledge was there in respect of each of the person on whom penalties have been imposed.

14. The case of J. D. Crighton-AIR 1969 Calcutta 260-is of no assistance either. It deals with a situation where smuggled goods are found and knowledge could not be attracted to the Master. In the present case it was a duty of the Master to make a correct declaration and the declaration itself was made under his authorisation by the Chief Purser.

15. In view of the wrong declaration which rendered the currency liable to confiscation, the Master of the vessal is liable for action under Section 112 of the Act. The Chief Purser made the actual declaration on behalf of the Master; thus he abetted the Master in the commissioning of an offence under Section 111. He too is thus liable for action under Section 112 (b).

16. Turning to the Staff Captain, II Engineer and the Bosun of the vessel, we note that after the seizure of the currency they aided the Master and the Chief Purser in taking it away from Customs officers and distributing the same to the so called owners of the currency who were passengers on board the vessel. As having been concerned in any other manner in dealing with the currency which was obviously liable for confiscation, and which as officers and men on board the vessel, they are liable to action. In the circumstances of the case such knowledge could be inferred. In this view of the matter the imposition of penalty on each of these persons is maintainable in Jaw. Considering the role of each person concerned and the quantum of currency involved we do not find that the penalties imposed on each of the person namely, the Master, Chief Purser, Staff Captain, II Engineer and the Bosun, is excessive. In the result each of the appeals is dismissed.


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