1. The petitioners are a partnership firm carrying on business as shipchandlers. In the course of the business, the petitioners import consignment of various provisions from abroad, and the goods so imported are supplied as stores to foreign going ships. The goods being meant to be used as ships' stores are not liable to payment of any customs duty.
2. Sometime in May, 1979, the petitioners imported consignment of 2400 tins of orange juice and 1200 tins of tomato juice from Australia. The said consignment was sent to India by the petitioners' suppliers by the ship known as 'Nedlloyd Lek'. On May 10, 1979, the petitioners filed the bill of entry in respect of the said goods with the Customs Department. The quantities mentioned in the said bill of entry were identical with the quantity stated in the bill of lading received by the petitioners from their foreign suppliers. The vessel arrived at Bombay Docks on May 15, 1979 and commenced unloading on May 16, 1979. The petitioners attended the Docks on June 5, 1979 with the Customs officials for the purpose of obtaining an order for clearance for warehousing in respect of the said goods. At the time of inspection, it was noticed that there was shortage in the said consignment and the shortages were noted by the Appraisers of the Customs Department on the reverse of the bill of entry.
3. On June 8, 1979, respondent No. 3, the Preventive Officer, incharge of C.B. Bonds, called upon the petitioners to pay the Customs duty amounting to Rs. 1,058 in respect of the said shortages. The petitioners declined to pay the amount and pointed out that the case stands covered by provisions of Section 13 of the Customs Act and no customs duty was payable in respect of the said shortages. Respondent No. 4, thereupon gave hearing to the petitioners and passed the impugned order on August 29, 1979, directing the petitioners to pay the duty amount of Rs. 1058/-. Respondent No. 4 held that the exemption from customs duty under Section 13 of the Customs Act cannot be granted, because the petitioners have not produced evidence to establish that the goods landed in sound condition or were short-landed. Respondent No. 4 observed that it is not clear whether the imported goods were pilferred after unloading. Respondent No. 4 also held that the provisions of Section 23(1) of the Customs Act are not applicable. The order of respondent No. 4 is under challenge in this petition filed under Article 226 of the Constitution of India.
4. Shri Sethna, learned counsel appearing on behalf of the respondents, raised a preliminary objection to the maintainability of the petition on the ground that an appeal, is provided against the impugned order, and the petitioners should not approach this Court without exhausting the statutory remedy of appeal. There is considerable merit in the submission of the learned counsel, but I am not inclined to refuse relief to the petitioners on the ground of an alternate remedy for more than one reason. In the first instance, this petition is pending in this Court for the last over five years, and driving the petitioners to file an appeal at this juncture would lead to multiplicity of litigation. I inquired from Shri Sethna as to whether the appellate authority would be willing to entertain the appeal and decide it on merits within three months without raising the contention of limitation. Shri Sethna declined to give an assurance that the appellate authority would do so. In these circumstances, the preliminary objection raised by Shri Sethna is rejected.
5. Shri Chinai, learned counsel appearing on behalf of the petitioners, submitted that the Deputy Assistant Collector of Customs was clearly in error in not granting the relief to the petitioners under Section 13 of the Customs Act. Section 13 reads as under :
'If any imported goods are pilferred after the unloading thereof and before the proper officer has made an order for clearance for home consumption or deposit in a warehouse, the importer shall not be liable to pay the duty leviable on such goods except where such goods are restored to the importer after pilferage.'
Now, the goods imported by the petitioners were packed in cartons. The endorsement made on the reverse of the bill of entry indicates that the cartons were received in damaged condition and on inspection it was found that number of tins in the cartons were not in accordance with the quantity mentioned in the bill of entry. The Customs Authorities are demanding duty for the goods which were not found on inspection on June 5, 1979. Shri Chinai submits, that this is not a case of short landing and Shri Sethna is not in a position to dispute that statement. Shri Chinai submits that after the goods were unloaded, there must have been a pilferage and certain number of tins were taken out from the cartons. It is not in dispute that the petitioners had no access whatsoever to the goods imported and unloaded at the Port. The petitioner can take possession of the goods only after the clearance from the Customs Authorities and when the petitioners went to take possession along with the Customs Officers, it was found that certain quantity was missing from the cartons. Shri Chinai is right in his submission that the imported goods were pilferred after the unloading and before an order for clearance or deposit in a warehouse is made, and therefore the petitioners are not liable to pay the duty leviable on such pilferred goods. In my judgment, the provisions of Section 13 of the Customs Act are clearly attracted. Shri Sethna submits that it was necessary for the petitioners to produce the certificate of short landing of the goods from the steamer's agent, and in support of the submission, reliance is placed on a Public Notice dated June 2, 1978 issued by the Customs Authorities laying down the procedure for refund/Remission of duty on packets and part-contains of packets, which are found missing. The submission of the learned counsel over-looks that the case in hand is not one of short landing, but of pilferage after landing and before the clearance for warehousing.
6. Shri Sethna then submitted that it was necessary for the petitioners to produce evidence to establish that the pilferage took place after the unloading of the goods. It is impossible to accede to this submission. The petitioners had no access to the goods and it is not possible to expect that the petitioners should lead evidence to establish the pilferage. The order passed by respondent No. 4 is entirely incorrect and cannot be sustained in the circumstances of the case.
7. Accordingly, petition succeeds and the rule is made absolute and the impugned order dated August 29, 1979, copy of which is annexed as Exhibit 'H' to the petition, is set aside. In the circumstances of the case, there will be no order as to costs.
8. The Prothonotary & Senior Master to refund the amount deposited by the petitioners in accordance with the interim order dated September 25, 1979.