1. By this petition filed under Article 226 of the Constitution of India, the petitioners are challenging the legality of the order dated August 24, 1977 passed by the Additional Collector of Customs (Preventive) Bombay confiscating the vessel s.s. 'Mohamadi' under Section 115(2) of the Customs Act, 1962 (hereinafter referred to as the 'Act') and giving an option to redeem the same on the payment of fine of Rs. 50,000/-.
2. The petitioners M/s. Mogul Line Limited are a fully owned Government of India Corporation and are owners of vessel 'Mohamadi'. The vessel arrived from the Gulf countries on June 15, 1977 and after it was berthed in the Bombay Port, the Customs authorities rummaged the same and found contraband i.e., wrist watches of foreign origin valued at Rs. 39,000/- C.I.F. and Rs. 78,200/- market value. The authorities noticed that 290 pieces of wrist watches were concealed in a printed cotton cloth bag containing 5 paper adhesive taped packets. The watches were concealed behind the side of the main engine near the engine leading to the Engineer's mess room and in the air blowers in the petty Officers' toilet on the star board side. The authorities recorded the statement of Shri Y.S.K. Sultan, the Master of the ship and also certain other Officers. The goods were seized and a show cause notice dated July 2, 1977 was issued to the Master and the owners of the ship to explain why the vessel should not be confiscated as it was used as the means of transport in the smuggling of the goods.
3. The petitioners and the Master of the ship filed their statements denying any knowledge that the vessel was used for transport of the smuggled goods. It was pointed out that the goods were concealed in such a manner and at such a place that ordinarily it would be difficult to locate them even if great care is exercised by the Master. It was further pointed out that the Master had taken all reasonable steps by calling upon the Security Officers, the Ship Officers and the crew members to search the vessel and in spite of their best efforts the concealed goods could not be traced. After considering the defence, the Additional Collector came to the conclusion that the Master had failed to take reasonable precaution against the use of the vessel for carrying contraband and mere denial of knowledge is not sufficient to take the case out of the ambit of Section 115(2) of the Act. The Additional Collector felt that the Master should lead positive evidence to establish that the smuggling activities were carried out without any knowledge and on the strength of that finding, ordered confiscation of the vessel. The Officer did not impose any personal penalty on the Master or the owner under Section 112 of the Customs Act on the finding that sufficient evidence of knowledge has not been led either against the owner or the Master. This order is under challenge in this petition.
4. The learned counsel appearing in support of the petition submitted that the Additional Collector was clearly in error in exercising jurisdiction under Section 115(2) of the Act and confiscating the vessel after recording the finding that there was no sufficient evidence that the owner or the Master had knowledge of smuggling activities. It is true that the Additional Collector has recorded a specific finding that the Master or the owner of the ship had no personal knowledge about the smuggling activities and, therefore, no penalty could be imposed under Section 112 of the Act. In view of this clear-cut finding, it is difficult to hold that the Master had knowledge that the vessel was used for carrying contraband within the meaning of Section 115(2) of the Act. The observation of the Additional Collector that the Master must lead positive evidence to establish that he had no knowledge of the smuggling activities is incorrect. It is not possible to establish a negative fact about the absence of knowledge by leading positive evidence. The approach of the Additional Collector is obviously erroneous. In fact, the finding that the Master had no personal knowledge and the finding that the Master had failed to establish that he had no knowledge of the smuggling activities is clearly conflicting and contrary. The order under challenge cannot be sustained in this state of findings. The petitioners are entitled to get the relief of setting aside the order of confiscation passed by the Additional Collector in exercise of the jurisdiction under Section 115(2) of the Act.
5. Accordingly, the rule is made absolute and the order dated August 24, 1977 passed by the Additional Collector of Customs (Preventive), Bombay, is set aside only as far as the confiscation of the vessel s.s. 'Mohamadi' is concerned. As the order of confiscation of the vessel is set aside, the question of redeeming it on payment of fine does not arise. It is made clear that the rest of the order is sustained. In the circumstances of the case, there will be no order as to costs.