Commissioner of Customs Vs. the Board of Trustees of the Port of

Commissioner of Customs vs The Board of Trustees of the Port of

Type Court Judgment Court Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai Decided Dec 31, 2004

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Citation: sooperkanoon.com/37589
Court: Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai
Judge: A Wadhwa, S T S.S.
Decided On: Dec 31, 2004
Subject: MRTP

Case Summary

AI-generated summary - not the official court judgment text.

MRTP

Key legal issue: MRTP

Parties & Advocates

Appellant / Petitioner

Commissioner of Customs

Respondent

The Board of Trustees of the Port of

Legal References

Reported In: (2005)(99)ECC394

Excerpt

.....that in practice the presence of the status of a seal was no guarantee for the declared weight of the contents of the packages landed. further, he appreciated the submission that there was no evidence that the lids of the drums were open or and the fact of the contents being taken out and therefore he concluded that it was not proved beyond reasonable doubts, that 'pilferage' had taken place. he concluded that the importer had not protested against the delivery of much lower quantity but had opted to acknowledge the delivery in full and therefore the mystery of the shortage of goods could not be resolved. he further held that for concluding that the goods were landed in full but 'pilfered', while in the custody of the port trust, could not be substantiated directly or otherwise from the circumstances of this case, and granted the benefit of doubt ,and found there was no justification for demanding duty from the port trust under section 45 (3) of the customs act, 1962 and did not find determination of the other facts relevant consequently, he set aside the order of demand.3. the revenue is aggrieved by this decision and findings on the grounds: i) as per invoice, the bill of lading and packing list, the quantity declared 1548 kgs in these drums and it is not necessary that every drum should be of actual weight and pilferage would be established by customs survey report wherein the port trust shed superintendent was one of the signatories. ii) the port trust landing report certifies that the consignment landed was not broker/with missing seal and that would indicate that the entire quantity of the goods was landed and that this would indicate that the goods were landed with seals in tact and seals cannot be broken zuo motto while in mb pt custody and breakage of seal and shortage would inevitably points to pilferage. iii) as a normal practice, delivery is given on the number of packages and not on the net weight basis. therefore, acknowledgement of delivery in full.....

Full Judgment

1. The respondents imported Cobalt Metal Granules. Filed a Bill of Entry No. 3524 dated 09.02.96 for clearance of the said goods on second check basis. On examination of the cargo, total weight of 441 kgs was found short and a survey was held in presence of Shed Superintendent and Bill of Entry was forwarded in terms of Standing Order No. 7191 dtd. 29.02.96 to the Custom House for further action. The original authority concluded that Mb PT being the legal custodian of the goods were liable to pay duty on the goods 'pilfered' after unloading thereof accordingly a demand of an amount of Rs. 4,86,227/- from the appellants was made.

2. In appeal, the Commissioner (Appeals) considered vzrious submissions made on behalf of Mb PT and after examining the material on record, observed that the two drums which were found in tack with the seal one of them contained only 142 kg, which was less than 166/168 kg found in each of the other four drums of which the seal were found to be broken or missing. Therefore, he concluded that in practice the presence of the status of a seal was no guarantee for the declared weight of the contents of the packages landed. Further, he appreciated the submission that there was no evidence that the lids of the drums were open or and the fact of the contents being taken out and therefore he concluded that it was not proved beyond reasonable doubts, that 'pilferage' had taken place. He concluded that the importer had not protested against the delivery of much lower quantity but had opted to acknowledge the delivery in full and therefore the mystery of the shortage of goods could not be resolved. He further held that for concluding that the goods were landed in full but 'pilfered', while in the custody of the port trust, could not be substantiated directly or otherwise from the circumstances of this case, and granted the benefit of doubt ,and found there was no justification for demanding duty from the Port Trust Under Section 45 (3) of the Customs Act, 1962 and did not find determination of the other facts relevant consequently, he set aside the order of demand.

3. The Revenue is aggrieved by this decision and findings on the grounds: i) as per Invoice, the Bill of Lading and Packing List, the quantity declared 1548 kgs in these drums and it is not necessary that every drum should be of actual weight and pilferage would be established by Customs Survey Report wherein the Port Trust Shed Superintendent was one of the signatories.

ii) The Port Trust Landing Report certifies that the consignment landed was not broker/with missing seal and that would indicate that the entire quantity of the goods was landed and that this would indicate that the goods were landed with seals in tact and seals cannot be broken zuo motto while in Mb PT custody and breakage of seal and shortage would inevitably points to pilferage.

iii) As a normal practice, delivery is given on the number of packages and not on the net weight basis. Therefore, acknowledgement of delivery in full is for 6 drums and not for full quantity particularly when the survey was conducted before delivery and found to be of only 1107 kgs which has been delivered in six drums and same has been acknowledged in shed delivery order dtd. 05.02.96.

Further evidence to show that delivery was not in full for 500 kgs.

It is in the ex-bond Bill of Entry only that 1107 kgs have been indicated and assessed for clearance.

iv) In the normal course, any short shipment of goods will be taken up with the supplier and claim will be made to reduce the quantity by the importer as it is an offense Under FERA to remit Foreign Exchange with out actual supply of goods. As there was no such claim from the importer and pilferage was established by the joint survey of Customs. Insurance and MPT Shed Supdt., there is no justification for MPT's changed stand when the demand is raised for the pilfered goods. It is proved to be a pilferage beyond doubt particularly in view of the absence of remark in the landing certificate and survey report.

4. On considering, it is to be held that 'pilferage', if proved, will result in duty liability on the custodian of the goods. The custodian is the MPT at Mumbai. However, before such shift of duty liability from an importer is cast on the custodian, the fact of "pilferage" has to be established. 'Pilferage' denotes certain conditions of loss of goods and cannot be assumed on, of broken seals. 'Pilferage' has to be established by the persons experts in the field i.e. the Police and to establish the duty liability on the Port Trust, it is imperative that the opinion of the Police is brought on record, as regards 'pilferage' having been established. No such report is found. Since it is well known that due handling/mishandling of the goods during landing and even subsequent thereof there are natural losses and breakage of seals etc. The Commissioner (Appeals) order of granting the benefit of doubt in absence of establishing the factutm of 'pilferage' cannot therefore be assailed on the grounds as taken by the Revenue in this appeal.

Consequently Revenue's appeal is required to be dismissed.

Same Court & Year Customs Excise and Service Tax Appellate Tribunal CESTAT Mumb... Same Parties Commissioner of Customs vs The Board of Trustees of the Port of Same Subject MRTP Same Judge A Wadhwa, S T S.S.