| SooperKanoon Citation | sooperkanoon.com/2912 |
| Court | Customs Excise and Service Tax Appellate Tribunal CESTAT Tamil Nadu |
| Decided On | Oct-17-1986 |
| Reported in | (1987)(12)LC748Tri(Chennai) |
| Appellant | M.V. Chidambaram and ors. |
| Respondent | Collector of Customs |
2. Shri Ram Kumar, the learned counsel made his submissions for all the appellants other than appellant Shri Gajraj. It was urged that the Master of the ship has issued a general circular to the effect that the crew members shall not contravene provisions of any law. It was further submitted that having regard to the nature of the Master's job, the magnitude of the ship, the number of passengers who generally travel in the ship there would be little scope for the Master to control the activities of the crew and the Master can only take reasonable precautions which in the instant case the Master has taken. The learned counsel further contended that prior knowledge of the existence of contraband goods is a condition precedent before the Master could be visited with penal consequence under Section 112 of the Act and in the instant case the contraband goods have been recovered from various places from inside the pannellings and from certain other places which could not have been in the knowledge of the Master of the ship. It was urged that the impugned order only charges the master with sheer casualness, negligence or inefficiency and these factors would not ipso facto impute knowledge to the Master so as to bring him under the mischief of Section 112 of the Act. The learned counsel also places reliance on the judgment of the Bombay High Court reported in 1984 (15) ELT 375 (Bom) in the case of Garware Shipping Corporation Ltd. v. J.H.Joglekar, Addl. Collector of Customs, Bombay in support of his plea that proof of knowledge on the part of the Master is an essential pre-requisite before imposition of penalty in terms of Section 112 of the Act. The learned counsel also relied upon the ruling of the Madras High Court in the case of B. Lakshmichand v. Govt. of India reported in 1983 ELT 322 (Mad) and contended that inasmuch as the show cause notice has not specifically mentioned the Sub-section (a) or (b) of Section 112 the appellants have suffered prejudice and the impugned order is therefore vitiated. Regarding the shipping agent K.P.V. Shaik Mohd.
Rowther 5c Co., the learned counsel contended that there is no legal basis much less any evidence warranting the imposition of penalty on them in the circumstances of this case. It was urged that the shipping agent discharges only certain functions such as filing statutory documents etc. and cannot be liable if contraband goods were recovered from the ship on which either statutorily or otherwise the shipping agents have no control whatever. In respect of other appellants who are crew members of the ship the learned counsel contended that appellant Khalasi was a maintenance officer while appellant Dravidamani was only a petty officer. Likewise it was urged that appellant Fernando was only a petty officer for maintenance while appellant John Mathew was only "Deck utility hand" in charge of saloon. It was urged that merely because the appellants were in charge of maintenance of certain places like auditorium, passengers' bunks and cabins they cannot be made liable inasmuch as those places are easily accessible to the passengers of the ship and others as well. The learned counsel also urged that the evidence on record disclosed that the keys of the various places were from contraband goods were recovered were with the welfare officer of the ship and so the crew members cannot be visited with penalty as there is no evidence to impute knowledge to any of them. The learned counsel also contended that the impugned order is vitiated by reason of the fact that the show cause notice was not served on the crew members, the appellants mentioned above. It was urged by the learned counsel that the crew being ordinary employees did not have any obligation to prevent smuggling activities under law. Regarding the appellant Sripad Thite it was urged that he is only the leader of the music party and could not have had any access at all to the cavity behind the transformer room.
3. Shri Ravi Paul, the learned counsel appearing on behalf of Shri Gajraj (Appellant in C/60/86) submitted that there is no evidence on record to impute the knowledge to Gajraj about the presence of the contraband goods under seizure. The learned counsel also assailed the correctness of the reasoning of the adjudicating authority under the impugned order that the statement recorded from Gajraj indicated knowledge on his part about the contraband goods under seizure. It was urged that appellant Gajraj had given the keys to the music party and likewise other keys to various other members of the crew with the result he could not be made, liable for the recovery of any contraband goods when admittedly other people had access to the various places where from contraband goods were recovered. The learned counsel further urged that in the criminal prosecution in E.C.C.C. No. 278/85 filed in the Additional Chief Metropolitan Magistrate, Economic offences, Madras ended in acquittal and since the evidence in respect of the charge in the criminal court and the charge that was set out against Gajraj in the show cause notice are more or less the same the verdict of acquittal by a competent criminal court should be taken into consideration in exonerating appellant Gajraj. The learned counsel also urged that the statement recorded from Gajraj could only indicate that he did not have knowledge about the presence of the contraband goods under seizure. It was further argued that the impugned order is violative of principles of natural justice inasmuch as the copy of the mahazar was not furnished to the appellant in spite of specific request by him by his letter dated 8.5.85. The learned counsel also assailed the finding of the adjudicating authority that appellant Gajraj "opted not to reply" as incorrect. Finally the learned counsel also adverted to the omission of the Sub-section (a) or (b) of Section 112 in the Show Cause Notice and pleaded that it has resulted in prejudice to the appellant in the conduct of the case against him.
4. The learned SDR submitted that very substantial quantities of contraband goods from various places of the ship have admittedly been recovered and nobody has claimed the goods. The goods under seizure admittedly were not entered in the ships store list or the private property list of the crew members. The master of the ship holding a high position and responsibility, it was contended cannot disown his responsibility and merely plead ignorance of the presence of such huge quantity of goods. The learned SDR urged that the magnitude of the seizure, various places where-from the goods were seized would be proof positive of the fact that the Master of the ship knew about the presence of the contraband goods under seizure. Regarding the charge against various crew members who are appellants herein, the learned SDR urged that the crew members admittedly having access to the various places where-from contraband goods have been recovered should have been aware about the existence of the goods under seizure. Regarding the liability of the shipping agent Shaik Mohd. Rowther & Co., the learned SDR fairly conceded that there is no evidence on record to indicate that they had any knowledge about the contraband goods but offered to adopt the reasoning of the adjudicating authority under the impugned order. Regarding the appellant Sripad Thite the learned SDR urged that he being a musician and having been continuously present in or about the auditorium should have knowledge about the contraband goods and so would be liable under law. Regarding the appellant Gajraj, the learned SDR contended that being the Welfare Officer of the ship he was holding a position of responsibility and so having admittedly the keys of various places where-from the goods under seizure were recovered he cannot disown knowledge about the same. Regarding the legal question with reference to the non-mention of Sub-section (a) or (b) in the show cause notice, the learned SDR urged that the necessary ingredients have been clearly set out in the show cause notice and none of the appellants either pleaded or contended to have suffered any prejudice in the conduct of their defence and so there was no substance in the arguments of the learned counsel for the appellants. It was further urged by the learned SDR that the show cause notices have not only been sent to the crew members under registered post ack. due and other appellants but also displayed in the notice board of the Custom House thereby satisfying the requirements under law as specified in Section 153 of the Act.
5. We have carefully considered the submissions of the parties herein.
The fact that contraband goods totally valued at Rs. 3,41,310/- c.i.f.
were recovered from number of places in the ship as indicated above has not been disputed. Having regard to the magnitude and volume of the contraband goods, various places where-from they were recovered, we do not feel persuaded to hold that the Master of the ship would not have had any knowledge about the presence of the same. We are not inclined to accept the submission of the learned counsel that the Master., has taken reasonable precautions in the circumstances and could not have any prior knowledge at all about the existence of the goods under seizure. The reasoning of the judgment of the Bombay High Court relied upon by the learned counsel for the appellant will not be applicable to the facts and circumstances of this case because we find from the evidence on record that the Master should have been aware of the presence of the contraband goods under seizure in the present case. We agree with the submissions of the learned SDR that non-mention of the sub-section either clause (a) or (b) of Section 112 of the Act in the facts and circumstances of this case has not caused any prejudice to the appellants herein because all the necessary ingredients have been clearly set out in the show cause notice. It is not disputed before us that none of the appellants ever put-forth any plea that they were not in a position ^o give a reply to the show cause notice by reason of any vagueness with reference to the allegation therein or by the non-mention of particular sub-clause under which they were sought to be proceeded against. We therefore find that the ratio of the ruling of the Madras High Court reported in 1983 ELT P. 322 (Mad) referred to supra has no application to the facts of this case.
6. We find considerable force in the submissions of the learned counsel that evidence on record does not warrant imposition of a penalty on the shipping agent M/s. Shaik Mohd. Rowther & Co. The learned SDR also was not able to substantiate the offence with reference to any evidence on record to bring home the charge against the shipping agent. In the circumstances we exonerate the appellant M/s. Shaik Mohd. Rowther & Co.
(Appellant in C/58/86) of the charge and set aside the penalty imposed on them under the impugned order. Regarding the appellants who are crew members namely S/Shri Khalasi, Dravidamani, John Mathew and Fernando We are not inclined to accept the plea of the learned counsel that they could not have had any knowledge about the contraband goods at all. We have carefully gone through the entire materials available before us and we are convinced that the said appellants (crew members) admittedly were incharge of maintenance of various places and had access to them and hence should have known about the huge quantity of contraband goods recovered from various places under their maintenance. We find it difficult to accept the plea that other than the crew members either passengers or other outsiders could have come and planted all these contraband goods. We also do not find any substance in the plea that the show cause notice was not served on the crew members and as rightly contended by the learned SDR we find on verification of the records that show cause notices have been despatched by Regd. Post Ack. due to the various crew members and others and were also displayed in the notice board of the Custom House satisfying the requirements of law in terms of Section 153 of the Act. So far as the appellant Sripad Thite (C/64/86) is concerned we find that the circumstances are not adequate enough to bring home the charge against him. In this respect we also advert to the ruling of the Tribunal in respect of another appellant who incidently was also one of the members of the music party namely Shri Vilas Davate (C/62/86) decided on 2.6.86. We follow and adopt the reasoning stated therein and exonerate the appellant Sripad Thite of the charge by giving him the benefit of doubt in the facts and circumstances of this case. We therefore set aside the penalty imposed on appellant Sripad Thite under the impugned order. So far as Gajraj is concerned on consideration of the facts on record we find that contraband goods under seizure from various places under his control could not have been stored up there without his knowledge and being the Welfare Officer and admittedly having been in possession of the keys to the auditorium, unoccupied cabins and other places Gajraj cannot pretend he never knew anything at all as to how contraband goods of such huge quantity came to be stored up in various cavities in various places. We pursued the letter of Gajraj addressed to the Collector of Customs, Madras dated 28.5.85 and a careful perusal of the letter gives an unmistakable impression that Gajraj as rightly observed by the adjudication authority under the impugned order was one who was aware of the practice of contraband goods being transported through the vessel in question. The acquittal of Gajraj in criminal prosecution would not ipso facto nullify or invalidate an order of adjudication namely the impugned order herein. The evidence that is admissible in a criminal prosecution before a criminal court is totally different from the evidence that is admissible before the adjudicating authority and all the provisions of the Evidence Act with all vigour are not applicable in adjudication proceedings and the learned counsel was not able to. satisfy us that the acquittal was, based on the identical evidence on the basis of which Gajraj has been .found guilty of a charge under Section 112 of the Act. by the adjudicating authority.
The. plea of the learned counsel about the violation of natural justice is also without substance. The show cause notice contains all the relevant details about the contraband goods that were recovered and the places where-from they were recovered and connected details. More non-furnishing of a copy of mahazar cannot be said to have caused any prejudice at all to Gajraj in the conduct of his defence in this case and after all mahazar is merely a contemporaneous document prepared at the time of seizure of incriminating articles. In the instant case nobody has disputed the fact that contraband goods were recovered from the said various places on the said date from the vessel in question and in such a situation the fact that a copy of the mahazar was not furnished to the appellant Gajraj would not in any way cause any prejudice to him at all. Likewise as we have set out earlier non-mention of Sub-section (a) or (b) of Section 112 is of any consequence in the facts of the case where we find that the show cause notice contains all the necessary ingredients and factual details.
Therefore on consideration of all the evidence we find that the charge against Gajraj has been clearly brought home. So far as the quantum of penalty on Gajraj is concerned we are not inclined to agree with the learned SDR that merely because he occupies a little higher status than the members of the crew he would deserve to be treated in a different way with higher penalty. It is settled proposition of law that in respect of commission of an offence people who are similarly placed with reference to the commission of an offence should be treated similarly unless there is any special circumstance warranting a different treatment. In the present case we do not find any justification for imposing a. higher penalty on appellant Gajraj. We therefore reduce the penalty imposed on appellant Gajraj under the impugned order from Rs. 25,000/- to Rs. 10,000/-. In the result C/64/86 (appellant Sripad Thite) and C/58/86 (appellant Shaik Mohd. Rowther & Co.) are allowed and the other appeals are dismissed except for the modifications indicated above.