ORDER
K. Gopal Hegde, Member (J)
1. The revision application filed before the Government of India against Order No. 35 of 1982 dated 31.1.1982 passed by the Central Board of Excise & Customs, New Delhi statutorily stood transferred to the Tribunal for being heard as an appeal.
2. The appellants are the steamer agents. They were issued with a show cause notice as to why penalty should not be imposed on them for shortlanding 1176 bags of urea weighing 58.800 MT. The appellants appeared to have replied contending. among other things, that the cargo arrived in sound condition whereas the Port out turn was to the effect that 1441 bags are landed in slack and torn condition. The out-turn however, failed to mention sweeping that were collected from those slack and torn bags. They further urged that during the discharging operation some cargo understood to have been taken out by the consignee directly which was not accounted for. They further contended that receivers viz-contractors appointed by the Port Trust have signed the statement of facts to the effect that the entire Bill of Lading quantity viz. 1,60,000 bags were discharged from the ship. In view of the discharge receipt, subsequent out turn report should not be relied upon. They further urged that according to the practice prevailing in the Bombay Port Shortlanding to the extent of 0.7% being condoned. As the shortlanding was 0.75% the same may be condoned and that no penalty may be levied.
3. The Additional Collector of Customs Ahmedabad who held the enquiry did not accept the appellants’ contention. Based on the Port out-turn report be held that there was shortlanding of 1170 bags and therefore he imposed a penalty of Rs. 10,093.61 which is equivalent to the duty payable on the shortlanded goods. Being aggreieved by the Order, the appellants herein preferred an appeal to the Central Board of Excise & Customs unsuccessfully.
4. During the hearing of this appeal, Shri Gopalratnam reiterated the contentions urged before the Additional Collector, he contended that there was Hatch survey by Eriscon & Richards. The surveyors found that there was no damage to the cargo. Shri Gopalratnam further contended that the statement of facts recorded on 19.3.80 contained a statement that 160000 bags weighing 8600.00 MT Urea (empty spare bags 1600) were delivered to Port Landing Contractors under supervision of Chief Officer and Receivers Stevedores. This statement of fact was signed by the Receivers’ agent and while signing they did not remark that they have not received 1,60,000 bags. In the circumstances, the Customs authorities were not justified in relying upon the out turn report subsequently prepared. Lastly Shri Gopalratnam contended that the cargo was urea. While discharging from the ship there is bound to be loss in the contents and the parcentage of loss works out to 0.7% which is normally condoned and therefore penalty levied may be set aside.
5. Shri N.K. Pattekar who represented the Collector submitted that he has no records and except what had been stated by the Additional Collector and the Board he has no further submissions to make.
6. I have carefully considered the submissions made by both sides and perused the records of the case. The liability to pay the penalty for the shortlanded goods is provided under Section 116 of the Customs Act. As far as the porovisions of the said section are concerned the initial burden is on the Customs authprities to establish that the quantity unloaded was short of the quantity to be unloaded. It is only thereafter the steamer agent is required to account for the deficiency to the satisfaction of the Assistant Collector. If the Assistant Collector is not satisfied with the explanation he is empowered to levy penalty which could be twice the amount of duty payable on the shortlanded goods.
7. The Additional Collector who levied the penalty as well as the Board relied on the Port Trust outurn report for the purpose of establishing the shortlanding. The Additional Collector appeared to have taken into consideration that there was refund of duty on the shortlanded goods to the consignee. Neither the order of the Additional Collector nor the Board refers to the statement of facts or hatch survey conducted by Erickson & Richards. Their orders also do. not indicate that they had taken into consideration the contentions of the appellants that it was normal practice to condone certain percentage particularly having regard to the nature of the cargo.
8. There was no dispute that M/s. H.K. Dave Pvt. Ltd. were the contractors appointed by the Port Trust for unloading operation. They were also the agents of the consignee, viz. Indian Potash Ltd. As observed earlier, the earliest document viz. statement of facts contained statement as to the delivery of 1,60,000/- bags containing 8000 MT to Port landing contractors under supervision of Chief Officers and Receivers.
The Receivers’ Agent had signed the document. The authorities below ought to have considered this document. Further, the authorities below ought to have examined the contention of condonation which is normally granted in the case of cargo of this nature. In reply to the show cause notice the appellants herein had drawn the attention of the customs authorities that according to the outturn report, 1441 bags were landed in slack and torn condition. This remark is not supported by Hatch Survey report. Further, if that quantity of hags did land in lack and torn condition, as has been rightly contended by the appellants, there would have been sweepings, either in the ship or in the shed. The orders passed by the both the authorities is silent as to the existence of sweepings. The appellants had also contended that certain quantities has been taken out by the consignee and that quantity had not been accounted for. This contention was also not examined. In the circumstances, I allow this appeal, set aside the orders passed by the authorities below and remand the matter to the Additional Collector of Customs Ahmedabad for consideration afresh in the light of the observations contained in this order.