Shri S.K. Gaule

1. Heard both sides. These Appeals are directed against the Order-in-Original No. 18/Cus/CC(P)/WB/2009 dated 24.06.2009 passed by Commissioner of Customs(Prev.), West Bengal, Kolkata. The issue involved in these Appeals is common. Therefore, they are taken up together for disposal.

2. Briefly stated facts of the case are that during the course of river patrolling, the Customs Officers intercepted a vessel namely, M/V Pandaw 4, Yangon at the rear end in a suspicious condition. No person including Mr. Neville Joseph in-charge of the vessel on board (all being Myanmar Nationality) came forward to give proper reply regarding the necessary shipping document or any other licit documents towards the importation of the vessel. Information was gathered that M/s. B. Ghosh & Co. Pvt. Ltd. was Handling Steamer Agent. In response to the correspondence made by the Department, M/s. B.Ghosh & Co. Pvt. Ltd. vide their letters dated 23.05.2009 and 25.05.2009, could not show that any Customs formalities or any entry/information were with regard to Pandaw 4. They stated that Tug Century 1 owned by M/s. Century Star Shipping Ltd. had towed Pandav 4 from Myanmar to Sagar Road. It was found that M/s. B.Ghosh & Co. Pvt.Ltd. were the Steamer Agent for M/s. Century Star 1. Neither the Captain of Tug Century 1 nor M/s. B.Ghosh & Co. Pvt. Ltd. informed the Boarding Officer of Customs that the Tug Century Star 1 and Pandaw 4 had brought the vessel, Pandaw 4. The IGM filed by M/s. B.Ghosh & Co. Pvt. Ltd. before the Custom House for the Tug Century Star 1 only showing as Water Ballast. From the statements of different persons from time to time and the letter of M/s. Century Star Shipping dated 30.05.2009, it revealed that at Sagar Point, the Pandaw 4 was detached from Tug Century Star 1, and thereafter, it was propelled by her own power to Kolkata with the assistant of one Inland Master, one Sukani and a sailor of Century Star 1 were with other five Mayanmarese during her voyage from Sagar Point to Kolkata. The Captain P.K.Rojin, DGM/Port Captain Century Star Shipping Ltd. and Mr. Raj Singh, Director, Pandaw Cruises India Pvt. Ltd. were present at Sagar Point. Shri Nitin Sakunia of M/s. Travel Bureau had given Rs.15,000/- to the Myanmarese person on board of Pandaw 4 and of denomination of Rs.500/- and Rs.100/-. He stated that he was a representative of M/s. Pandaw 4. Two Myanmarese boarded at Sagar Point. Again in the statement dated 27.05.2009, he reiterated that only two persons were transferred at Sagar Point from Kolkata, but the statements of the Captain P.K.Jain and Shri Nevelle Joseph@Myo Min Soe reveal that five Myanmarese persons went to Sagar. Shri Nitin Sakunia of M/s. Travel Bureau had given his statements on 22.05.2009 and 26.05.2009, wherein he stated that they were the representatives of Pandaw Cruises India (P) Ltd. He stated that all thirteen numbers of crews/persons inside the vessel, Pandaw 4 are Myanmar Nationality. These 13 crews had not formally signed on in the vessel as per the Customs requirements. The two persons boarded the vessel at Sagar along with the Indian Master who came by road on 12.05.2009 and then went to Sagar. Rest of the Team boarded the vessel, Pandaw 4 on 18.05.2008. This was also stated that all crews came through Air Route from Myanmar to Kolkata with business Visas. Shri Nitin Sakunia in his statement dated 27.05.2009 had informed that he was neither related to the owner of Pandaw 4 nor had any stake of the company. He was only a transport provider. However, he was the representative of Pandaw Cruises India(P) Ltd. as per his statement dated 26.05.2009. Shri Neville Joseph@Myo Min Soe stated that he arrived at Kolkata Airport at 16.45 by IC-728 on 1.05.2009 and went to Panasia Guest House, Salt Lake with one person not known earlier and stayed there upto 14.05.2009. He was also accompanied by four Myanmar Nationality persons. All these five persons are now on Pandaw 4. On 15.05.2009 morning, they went to Sagar by car and then by vessel. After waiting for about four hours they saw Century Star 1 bringing their vessel, Pandaw 4. He had boarded the vessel along with other four Myanmar Nationality crews namely, (1) U Than Win; (2) U Thant Zaw 00; (3) Maung Maung 00; and (4) Zaw Moe. Shri Neville further stated he did not know why the Pandaw 4 did not arrive at Kolkata from Yangon by her own. He had been instructed by his office to bring Pandaw 4 from Sagar Point to Kolkata by her own engine after Tug Century Star 1 denied bringing the same from Sagar to Kolkata. He did not know who imported Pandaw 4 from Yangon to India. Shri Paul Strachen, CEO of Pandaw Cruises, England was the owner of Pandaw 4 as on date. He did not know to whom the Pandaw 4 will be handed over at Kolkata/India. It was alleged that that no Customs permission and no immigration permission was taken by the Steamer Agent, M/s. B.Ghosh & Co. Pvt. Ltd. for the boarding of Myanmarese to the foreign vessel, Pandaw 4. The visas of all the Myanmarese who were on the vessel did not possess the requisite visas for the ship. During the voyage from Yangon to Sagar, there was no person on board of Pandaw 4. There was no permission from the Immigration and the Customs Authorities for offloading of Pandaw 4 from Century Star 1 at Sagar. Since the Tug Century Star 1 entered the Indian Customs Water (Sagar Roads) with vessel, Pandaw 4, therefore, Pandaw 4 was held to have imported goods carried by the Century Star 1 in terms of Section 2(22), 2(23) and 2(25) of the Customs Act, 1962 by not declaring the cargo brought by the Tug Century Star 1, i.e.Pandaw 4, the same became liable for seizure because goods i.e.Pandaw 4 had been smuggled by her in India. Accordingly proceedings were initiated against M/s. B.Ghosh & Co. Pvt. Ltd., M/s. Century Star Shipping Ltd., M/s. Pandaw Cruise India Pvt. Ltd., Mr. Nitin Sakunia of Travel Bureau and the Master of the Tug Century Star 1. However, they had requested to take up the matter for adjudication without issuance of Show Cause Notice to them and also personal hearing. Learned Commissioner adjudicated the case and ordered as under:-

a) I order to confiscate the vessel M/V Pandaw 4 bearing official number 8388 valued at Rs.5 Crores u/s 111(a), (b), (d) & (h) of the Customs Act, 1962.

b) I order to confiscate the tug Century Star 1, IMO No.9298454, official no.SKN 1001519 u/s 115(2) of Customs Act, 1962.

However there is an option to release the vessel, Pandaw 4 and the tug Century Star 1 on payment of Redemption Fine of Rs.50 lakhs (Rupees Fifty Lakhs only) and Rs.75 lakhs (Rupees Seventy Five Lakhs only) respectively.

c) I impose a penalty of Rs.60 lakhs (Rupees Sixty Lakhs only) to M/s. B Ghose Co Pvt Ltd. u/s 112(a) of Customs Act, 1962.

d) I impose a penalty of Rs.60 lakhs (Rupees Sixty Lakhs only) to M/s. Century Star Shipping Ltd u/s 112(a), 112(b) of Customs Act, 1962.

e) I impose a penalty of Rs.2 lakhs (Rupees Two Lakhs only) to M/s. Pandaw Cruise India Pvt. Ltd. u/s 112(a) & 112(b) of Customs Act, 1962.

f) I impose penalty of Rs.5 lakhs (Rupees Five Lakhs only) to M/s. Pandaw Cruise Company Ltd.(BVI) under 112(a) of Customs Act, 1962.

g) I impose a penalty of Rs.10,000/- (Rupees Ten Thousands only) to Mr. Nitin Sakunia of M/s. Travel Bureau u/s 117 of Customs Act, 1962.

2.1.1 Dr. P. Kumar, Learned Advocate appearing for the Appellants, M/s. Pandaw Cruise India Pvt. Ltd. and M/s. Pandaw Cruise Co. Limited (BVI) contended that the Appellants were conducting a bonafide import of the vessel in terms of all the permissions obtained well in advance from the Central Government and State Governments of West Bengal and Bihar. They genuinely wanted to develop waterways in India, which has not been explored as a source of transport. Only after all the approvals were in place, the vessel was imported.

2.1.2 The contention is that Appellants complied with the advice given by the Inland Water Transport Directorate (IWAI), Government of West Bengal, vide its letter No.145/WT dated 18.06.2009. They had appointed M/s. B.Ghosh & Co. Pvt. Ltd. as a steamer agent to meet the procedural requirement of Customs like obtaining clearance etc.

2.1.3 The contention is that valid documents like bill of lading, export documents etc. were correctly produced. Accordingly, export licence issued by the Directorate of Trade, Myanmar (Registration No.4072) containing all the vital details like names of exporter and importer, last date of export, mode of export, port of export, port discharge, country of origin, country of final destination, method of export, value and description of goods etc. were produced. Besides that, fixture note issued by M/s. Mekong Marine Corporation (BVI), British Virgin Islands containing details like name of tug vessel, towing vessels name, laycan, freight, towing load port position, discharge port, mode of payment of freight and other terms of conditions.

2.1.4 The contention is that Pandaw 4 started her voyage from Yangon, Mayanmar and reached Sagar Road, West Bengal by the Tug Century Star 1, belonging to M/s. Century Star Shipping Ltd., 6,Lyons Range. From Sagar Road, she sailed of her own and was anchored at the allotted mooring place alongside M.V.Homi Bhava at IWAI BISN Jetty, Kolkata-001, the mooring place allotted for her by the IWAI at Kolkata. The vessel was then seized by the Customs (Preventive) on 01.06.2009. The contention is that the mooring place, allotted for Pandaw 4 by IWAI, alongside M.V.Homi Bhaba at IWAI BISN Jetty, Kolkata, vide letter No.IWAI/KOL/MM(28)/GC/08-09 dated 16.05.2009 was not an unauthorized place. Therefore, the Appellant should not be penalized for the bona fide mistake of M/s. B.Ghosh & Co. Pvt. Ltd., the steamer agent of both the Century Star 1 (the towing vessel) and Pandav 4. The contention is that the steamer agent was required to meet all the formalities like Customs clearance which included filing of inward entry; reflecting Pandaw 4 on the IGM or store list of the Tug Century Star 1 vessel; giving of information regarding detaching of Pandaw 4 from the Tug Century Star 1 at Sagar Road; boarding of crew members on Pandaw 4 from Sagar Road; and sailing of Pandaw 4 from Sagar Road to her mooring place at Kolkata port etc. The contention is that no person was on board Pandaw 4 during her voyage from Yangon to Sagar. Sufficient documentary evidence was produced before the Commissioner. The contention is that the Commissioner erred in rejecting the transaction value and wrongly arriving at the value of Pandaw 4 was US$2,50,000/- without any evidence on record. The transaction value cannot be rejected except any specified circumstance. In support of his contention he placed reliance on the judgements of the Honble Supreme Court in the case of Eicher Tractors vs. CC reported in : 2000(122) ELT 321 (SC) and in the case of CC, Calcutta vs. South India Television Pvt. Ltd. reported in 2007 (214) ELT 3(SC). He also referred to Section 111(a) of the Customs Act, 1962. He submitted that Section 111(a) can be invoked, only if Pandaw 4 was unloaded or attempted to be unloaded at any place other than a Customs Port or Customs Airport appointed under clause (a) of Section 7 for the unloading of such goods. He also contended that the provisions of Section 111(b) of the said Act are not applicable to the facts and circumstances of the present case. The contention is that Section 111(d) of the Act ibid, empowers confiscation of only those goods which are imported or attempted to be imported or are brought within the Indian Customs Waters for the purpose of being imported, contrary to any prohibition imposed by any Order under the Customs Act or any other law for the time being in force. Therefore, he contended that the provisions of Section 111(d) are not applicable to facts of the present case. He also referred to page no.17 of the impugned Order whereby the learned Commissioner has observed that no duty was involved on the cruise vessel in terms of Serial No.352 of Notification No.21/2002-Cus. The contention is that when no duty is leviable, penalty is not imposable. He also contended that if goods are not liable to confiscation, no penalty is imposable. In this context, he placed reliance on the following decisions:-

(i) 2006 (201) ELT 325 (SC) CCE,Aurangabad vs. Balakrishna Industries;

(ii) : 2005(184) ELT 276 (Tri.-Mumbai) Sunland Metal Recycling Industries vs. CC, Nhava Sheva;

(iii) : 2000(122) ELT 625(Tri.) Dhirendra N. Sheth vs. CC, Kandla;

(iv) 2005(191) ELT 166 (Tri.-Bang.) Pioneer Business Enterprises vs. CC, Bangalore;

(v) : 2005(186) ELT 459(Tri.-Chennai) K.Kamala Bai vs. CC&CE, Trichy;

(vi) : 2001(131) ELT 453(Tri.-Del.) Mohindra Hospital & Research Centre vs. CC, New Delhi.

2.2.1 Learned Advocate, Dr. S.Chakraborty appearing for M/s. Century Star Shipping submitted that the learned Commissioner has confiscated the Dumb Barge under Section 111(a), (d), (f), (g) and (h), which is not applicable to the present case. Therefore, the Tug Century Star 1 is not liable for confiscation.

2.2.2 The contention is that Section 112 is also not applicable to them, since Section 115(2)(a) of the Customs Act, 1962 provides for confiscation of a conveyance used as a means of transport in the smuggling of any goods or as a carriage of any smuggled goods. The Tug Century Star 1 was not used as a means of transport for smuggling of any goods or in carriage of any smuggled goods. In support of his contention, he has placed reliance on the following decisions:-

(i) : 2004(174) ELT 156(Bom) A.P. Moller Singapore Pvt. Ltd. vs. Assistant Director;

(ii) : 2001(135)ELT 625(T) Sedco Forex International Drilling Inc. vs.CC. [affirmed by the Honble Supreme Court in Commissioner vs. Sedco Forex International Drilling Inc. reported in 2005 (179) ELT A 39(SC)].

2.2.3 The contention is that under Section 112(a) of the Customs Act, any person who in relation to any goods does not omits to do any act, which act or omission would render such goods liable to confiscation under Section 111 thereof, is liable to penalty thereunder. In the instant case, there is nothing disclosed as to the acts of omission or commission committed by the Appellant in respect of the goods, Pandaw or the Tug, which rendered them liable to confiscation. In fact, there is no such allegation in the said Order against the Appellant. The allegations are against the Steamer Agent, M/s. B.Ghosh & Co. Pvt. Ltd. of omission and commission. In such circumstances, there can be no imposition of penalty upon the Appellant under either Section 112(a) or (b) of the Customs Act, 1962.

2.2.4 Lastly, without prejudice to the aforesaid and fully relying on the same, it is also his contention that the imposition of redemption fine of Rs.75 lakh and penalty of Rs.60 lakh, in the facts and circumstances of the instant case, is undue, oppressive, discriminatory, inequitable and hence, untenable and unsustainable.

2.3.1 Appearing on behalf of M/s. B.Ghosh & Co. Pvt. Ltd., learned Advocate, Shri S.Bhattacharjee submitted that the primary responsibility of Master of Vessel was not delegated to them. They are not covered under Section 2(31) of CA62. Hence penalty on the count of contravention of Section 30 of CA62 cannot be invoked against them for the vessel Pandwa 4. They had no liability towards contravention of the alleged provisions of Section 111 of the Act and hence no penalty is warranted against them. They had also informed the Harbour Master (River), Kolkata Port under their letter dated 15.05.09 about the arrival of the tug and the vessel. They prayed for payment of pilotage charges and subsequently paid but not concealed any material facts from the Department. They rightly discharged their dock formalities for both the Vessel and the Tug. Since they did not receive the vessel details, its B/L and Crewmembers list and master of the vessel had not contacted them in filling IGM the same was not filed. It is also his contention that they had obtained all necessary documents pertaining to CENTURY STAR 1 they assisted the person-in-charge of Tug to file the IGM with water ballast. The Pandaw 4, the alleged ship was arrived unmanned at Sagar and thereafter it was moored at the nominated jetty on his own propulsion by an engagement of other agency other than the appellant. No one had contacted on behalf of the Vessel in filling an IGM and in absence of the B/L, the detailed particulars, the appellant was unable to assist the owner for filing the IGM. The appellant though asked for the same from the owner but did not receive. They were not acting on behalf of Master of Vessel and no primary responsibility of Master of Vessel was delegated to them. Under such circumstances, omission and commission, on the part of the appellant, are not warranted. The contention is that the learned Commissioner also found that the imported vessel is falling under CTH-8901 of CTA,1975 and in terms of Notification No. 21/02-Cus, Serial No. 352 no duty was involved for importation of the said cruise vessel and no objectionable materials found therein. The question of illegal importation shall not arise. The appellant had no intentional lapse if at all be in connivance, abetment with the importer for the alleged offence. It is also his contention when the Century Star 1 had arrived alone at the Port, then as to how the appellant would have been responsible for non-inclusion of the vessel Pandaw 4 in the manifest submitted by the person-in-charge of Tug CENTURY STAR 1. The appellant had no responsibility for the alleged contravention of 30 of CA62 in respect of Century Star 1 and when no contraband was found in the Vessel tugged/towed by the Century Star 1, the question of invocation of Section 115 of CA62 in respect of the Century Star 1, is not maintainable. It is his contention that the appellant on his own accord had intimated the Port Trust Authorities in advance on 15.05.2009 about the arrival of Pandaw 4 at Sagar towed by CENTURY STAR 1 and they were agreed to pay pilotage charges for the vessel so being brought from Sagar to Kolkata. The Harbour Master when had advised the Superintendent of Collection for collection of pilotage charges, the appellant had also paid the pilotage charges.

3.1 The contention of the learned Special Counsel appearing for the Revenue, is that the submission of Import General Manifest stating full and complete facts together with entry inward and landing at approved places and Customs stations can hardly be over-emphasized, particularly in the wake of serious security breaches resulting in the massacre of the city of Mumbai by ten well-trained terrorists. In the application for entry inwards, there is a Remarks column, vide Customs Form No.56, apart from the mandatory requirement to have separate attachment for sensitive cargo. The Director of Inland Water Transport Directorate of Govt. of West Bengal, vide his Office Letter No.145/IWT/dt.18.06.2009 advised Sh. Raj Singh to obtain Customs clearance. The vessel, having been towed from Myanmar to Sagar (unauthorized landing place) lost the character of a vessel upto that point and has been rightly ordered to be confiscated under Section 111(a), (b), (d) and (h) of C.A.62. The Tug Century Star 1 has been rightly ordered for confiscation under section 115(2) of CA.62, for smuggling in Pandaw 4, by clandenstinely detaching at Sagar point and suppressing the fact from the Customs Authorities.

3.2 As regards M/s. B. Ghosh & Co., the contention is that as for individual responsibilities, they had handled both Century Star 1 and Pandaw 4 and they are having vast experience as Steamer Agents. How could they do such omissions and commissions Therefore, it is his contention that the penalty imposed on them under Section 112(a) of CA 62 is justified.

3.3 As regards M/s. Century Star Shipping, it is his contention that they as owner of Century Star 1 arranged to tow the vessel, Pandaw 4 from Myanmar to Sagar and detach/offload there. Their port Captain and Raj Singh were present at Sagar and made all arrangements without Customs clearance and without informing anybody.

3.4 Further, he submitted that as per Boat Charter Agreement dated 4.5.09 between Pandaw Cruise Co. (BVI) and Pandaw Cruise India Pvt. Ltd., the vessel was to be delivered to Charter, Pandaw Cruise India Pvt. Ltd., New Delhi at the port of Kolkata and re-delivered to owner Pandaw Cruise Co. Ltd. (BVI) at the port of Kolkata and that M/S. B.Ghosh & Co. being appointed as inward agent for arrival of Pandaw 4 by Mr. Paul Strachan of Pandaw Cruise. Shri Raj Singh, Director of Pandaw Cruise BVI personally went to Sagar Point for making arrangement for bringing it on self-propelling from Sagar to Kolkata, though upto Sagar it was towed by Century Star 1. As per export licence issued by Directorate of Trade, Myanmar, it is seen that consignee is Pandaw Cruise BVI and the commercial invoice dated 01.09.08 produced during adjudication on 24.06.09 showed that Pandaw Cruise BVI is consignee and the port of discharge is CCU, Kolkata, India. So, Pandaw Cruise VI, the actual importer and charter Pandaw Cruise India were in full knowledge together with B.Ghosh & Co. and Century Star Shipping and have rightly been penalized. We have considered the submissions and perused the record. Undisputedly, at the time of adjudication of this case, the Appellants had waived the show cause notice and personal hearing. We find that the learned Commissioner could not consider the submissions made now by the Appellants at the time of adjudication, since the Appellants had waived the show cause notice and personal hearing. The submissions made now by the Appellants are required to be considered. In these circumstances, the case is remanded to the learned Commissioner to consider the submissions made by the Appellants and decide the issue afresh. It is made clear that all the issues are kept open. Both sides are at liberty to produce documents in their support. Needless to say that reasonable opportunity of hearing may be granted to the Appellants. The Appeals are allowed by way of remand.

Pronounced on 25.07.2012