LAWS(MAD)-2002-8-134

WILCO AND CO Vs. UNION OF INDIA

Decided On August 12, 2002
WILCO AND CO Appellant
V/S
UNION OF INDIA Respondents

JUDGEMENT

(1.) The petitioner seeks to quash the appellate order of the Government of India, Ministry of Finance, dated 20.12.1994 and also the consequential order dated 14.6.1995 of the Assistant Commissioner of Customs, Central Excise, Cuddalore, calling upon the petitioner to pay a penalty amount of Rs.2,94,123/- towards short landing of quantity of 104.750 Metric Tonnes of urea.

(2.) According to the petitioner, on 20.7.1984 the vessel m.v.Northland arrived at Pondicherry to unload the cargo viz., urea in bags weighing 14,784,250 Metric Tonnes. It was alleged that there was short landing of 109.750 Metric Tonnes. The consignees of the goods were Southern Petrochemical Industries Corporation Limited, Madras. Action was initiated against the petitioner as agents under Section 148 of the Customs Act. Proceedings were also initiated under Section 116 of the Customs Act for levy of penalty. Show-cause notice was however, issued only in the year 1990 after a period of six years. The authorities without appreciating the proper scope and effect of Sections 116 and 148 of the Customs Act levied a huge penalty of Rs.3,08,162/-. As against the said order, the petitioner filed an appeal to the fourth respondent and by order dated 23.9.1993, the fourth respondent confirmed the order of the third respondent. The petitioner thereupon filed a revision before the Central Government. The said revision was also dismissed by order dated 20.12.1994. This was followed by a demand dated 14.6.1995 from the fifth respondent for the payment of penalty amount. Hence, the above two writ petitions. The petitioner has contended in the affidavit that the second respondent had acted contrary to the provisions of the Act and failed to note the scope and effect of Sections 116 and 148 of the Customs Act. It is further stated that the respondents erred in invoking Section 116 of the Customs Act on the basis of the shortlanding recorded at the stage of the proceedings under Section 42 of the Act. It cannot be stated that there was deficiency which was not accounted for to the satisfaction of the Customs Department. It is further stated that the urea are exempted goods and hence no import duty was payable. There was no question of payment of any penalty on goods which were not dutiable. The penalty was linked with duty chargeable and when no duty was chargeable no penalty can be levied. The further contention is that the demand should have been raised within a reasonable time and the demand having been raised after seven years the penalty proceedings were totally beyond reasonable period of limitation. Hence, the above two writ petitions.

(3.) In the counter filed by the respondents, it is contended that the petitioner Company acted as an authorised agent for unloading the cargo at Pondicherry Port. The vessel has discharged a total quantity of urea of 14674.500 M.Ts. As per the landing certificate as against the manifested quantity of 14784.250 M.Ts. With the result, there was a short landing of 109.750 M.Ts. Of urea. The import duty that would have been chargeable on the deficit goods but for the exemption was Rs.3,08,162/-. Therefore, the petitioner was called upon to show why a penalty not exceeding twice the amount of import duty could not be imposed as against the petitioner. The revisional authority in their order, allowed short landing of 0.5 per cent of the manifested quantity to be condoned due to inevitable loss during the transit and handling operations and accordingly granted relief in respect of 100 more bags in addition to 1395 bags, which was already condoned as lost over board, in the landing certificate itself. Accordingly, a duty of Rs.2,94,123/- was leviable and the penalty was also fixed on the said basis.