UNION OF INDIA Vs. AREBEE AND COMPANY

JUDGEMENT

(1.) This appeal takes exception to the making absolute of the rule quashing the penalty imposed under 5 orders issued under Section 116 of the Customs Act, 1962.

(2.) The respondents, "petitioners" in the writ petition, are Steamship Agents for Rajkumar Lines Limited, a shipping company, plying ships in India. That company's ship S. S. K. R. Ashok reached Bombay Port on June 6, 1967, the start being Calcutta. Its cargo was said to be less than that shown in the manifest submitted under the Customs Act. A person in charge of the ship satisfied the Customs authorities that the goods in the ship were not for export. The respondents, it is alleged, had passed a bond accepting their liability to pay the duty and penalty, if any. On 4th December 1973, the Customs authorities issued notices calling upon respondents to show cause as to why penalty should not be imposed upon them under Section 116 of the Customs Act. The respondents sought adjournments from time to time, and, apparently some sort of hearing was schedule for 15th October 1974, at which the respondents were not present. On 7th December 1974, the respondents addressed a letter to the Assistant Collector of Customs, which letter recited that the Rajkumar Lines had informed them about their office at Calcutta having caught fire. A request was made that the matter be kept pending for two months so as to enable the respondents to settle or sort out the matter through P. & I. Services with whom the vessel was insured. No reply was given to this communication, and on 18th January 1975 the Assistant Collector passed the impugned orders. Findings that the respondents had failed to account for the shortage he held them liable to penal action under Section 116 of the Customs Act. Double the total export duty payable was fixed as penalty and the respondents were called upon to pay the same. The respondents in their writ petition questioned the orders of penalty, contending that the action had been initiated by the Customs authorities after a great deal of time and this had prevented them from giving a proper explanation for the alleged short-landing. Next, it was contended that the show cause notices given to them were barred by the limitation prescribed under Section 28 of the Customs Act. Lastly, it was incumbent upon the Customs authorities to proceed against the principal and that had not been done. They had been picked up for being penalised, merely because of happening to be available at Bombay whereas their principal was at Calcutta. The appellants replied that Section 28 of the Customs Act did not apply and that in any case respondents had given the bond under which they were deemed liable. Their liability extended to making up for duty not paid. The requisite hearing had been offered. It was the respondents who had failed to turn up for that hearing before the Assistant Collector. In any case, the orders assailed could be impugned in appeal under the Customs Act itself, and, this not having been done, the court should not entertain the writ petition.

(3.) The learned Single Judge negatived the pleas urged on behalf of the appellants. He held that Sections 28 and 147 of the Customs Act applied. The Customs authorities had acted unjustly and inequitably. The rule was made absolute with parties were being left to bear their own costs.