ANGUS COMPANY LIMITED Vs. COLLECTOR OF CUSTOMS

JUDGEMENT

(1.) The Court: This is an application made by Angus Company Limited under Article 226 of the Constitution of India praying that the order dated May 22, 1987 passed by the Deputy Collector of Customs and the demand made pursuant thereto be rescinded. The petitioner is also praying for an appropriate writ to nullify the effect of the impugned order and/or to prohibit the Customs Authorities from giving effect thereto. The petitioner was served with a notice dated 27th November, 1976, asking the petitioner to show cause as to why action should not be taken against the petitioner and why penalties should not be imposed on the petitioner under Sec. 116 of the Customs Act, 1962, in terms of the guarantee furnished by the petitioner under Sec. 42 of the said Act. It is to be noted that 1472 cases of vegetable oil were found to be short in the consignment. This was a cargo which was shipped by Lutheran World Relief Inc. to the Food Corporation of India. This cargo consisted of vegetable oil and out of the total 2632 cases of vegetable oil, 1472 cases were delivered short. This was a gift cargo under PL 480 and was meant for distribution amongst the poor in India. The proceedings were commenced by the show cause notice dated 27th November 1976 and it appears that the petitioner was taking time, upto about August 1979 to explain the shortfall. Thereafter, the petitioner was unable to trace the goods and ultimately accepted the responsibility for the shortage.

(2.) After that by Order No. 264/76 dated 7.11.1986, the Deputy Collector (M.C.D.) imposed a penalty of Rupees two lakhs on the petitioner. The petitioner filed an earlier writ petition in this Court, which was disposed of by an order dated 6th April, 1987, whereby this Court directed that if the petitioner deposits the entire amount of penalty of Rs. 2 lakhs, then the impugned order will stand set aside and the respondent Customs Authorities will be directed to rehear the matter after giving an opportunity to the petitioner to be heard and to file written report, if any.

(3.) It appears that a hearing was thereafter given and the impugned order dated 26th May 1987 was made by P. Karthikeyan, Deputy Collector of Customs (MCD). The said Deputy Collector of Customs after considering the various contentions of the parties rejected them and he held that the party was liable to be penalised to pay penalties under Sec. 116 of the Act, on its failing to accept for the shortage to the satisfaction of the Customs Authority.