JUDGMENT
J.P. Devadhar, J.
1. In this Writ Petition, the petitioners challenge the order-in-original dated 29th November, 1986 issued on 22nd September, 1987 (Exhibit ‘J’ to the petition), wherein penalty of Rs. 6,25,772.96 ps. has been levied by the respondent No. 1/Deputy Collector of Customs under Section 116 of the Customs Act, 1962.
2. The facts bearing the subject matter in the present petition are as follows:
The petitioners are a company carrying on business as Agents for foreign flag vessels calling at the Port of Bombay. At the material time, the petitioners were Agents of the foreign flag vessel “PRESIDENT ROOSEVELT”. The said vessel called at Bombay in or about the second week of August, 1979 with general cargo in containers, full container load (F.C.L. containers) as well as less than the container load (LCL container) for discharge at Bombay. On arrival of the said vessel, the petitioners had to file necessary Import General Manifest (IGM) and the vessel commenced discharging her cargo on 12th January 1979 and completed her discharge of vessels by 16th August, 1979 and sailed from Bombay soon thereafter. According to the petitioners, the vessel discharged all the cargo manifested for discharge at Bombay as per the IGM,
3. The petitioners thereafter received Show Cause Notice dated 14th July 1980 from the Collector of Customs, Bombay alleging that as per the out-turn report of the Bombay Port Trust the goods so mentioned in the schedule to the show cause notice were short-landed and by the said notice called upon the petitioners to account for the alleged short-landed or to show cause why penalty should not be imposed on them under Section 116 of the Customs Act, 1962. The petitioners replied the show cause notice and contended that the discharge of the cargo was as per the IGM and gave satisfactory accounts for the alleged short-landed goods. By an order dated 26th May, 1986 issued on 14th August, 1986 the respondents levied penalty of Rs. 6,25,772.96 ps. on the petitioners by holding that there was short-landing of goods as set out in the show cause notice. The petitioners challenged the said order by filing Writ Petition No. 2527 of 1986 and by judgment and order dated 4th October 1986, the petition was allowed and the impugned order dated 26th May 1986 based upon only out-turn report was set aside. By the said order, the respondents were called upon to complete the adjudication proceedings afresh, in accordance with law and guidelines laid down by Mr. Pendse, J. in Writ Petition No. 1889 of 1986.
4. Thereafter, the respondents took up the matter for adjudication afresh by giving personal hearing to the petitioners and called upon the petitioners to show cause as to why penalty under Section 116 of the Customs Act should not be levied on the basis of the out-turn report of the Bombay Port Trust. The petitioners pointed out to the respondents that as per the order passed in Writ
Petition No. 2527 of 1986 it was obligatory on the part of the petitioners (sic) not to hold the petitioners responsible for the alleged short-landing merely on the basis of the out-turn report. It was pointed out that at the time of unloading of the container from the vessel its seal was intact and that at the time of destuffing of the container much later in the Bombay Port Trust docks if there was no seal, then the petitioners cannot be held responsible and the alleged short-landing cannot be attributed to the petitioners. It was pointed out that the fact that at the time of unloading of the containers from the vessel the seal of the container was intact is evident from the fact that there was no any mention in the record maintained by the Bombay Port Trust with regard to the seal tampering. It was submitted that after the containers were discharged from the vessel and during the period when the container were stored in the Bombay Port Trust if seals were found to be tampered then the same cannot be attributed to the petitioners. It was submitted that in absence of any material to show that the seals of the containers were not intact at the time of unloading from the vessel, the petitioners cannot be held liable for penalty under Section 116 of the Customs Act, 1962. However, by an order dated 26th November, 1986 issued on 22nd September 1987 the Deputy Collector of Customs imposed penalty of Rs. 6,25,772.96 ps. upon the petitioners under Section 116 of the Customs Act, 1962. Challenging the said order, the present petition has been filed.
5. Mr. Gomes, learned Counsel appearing for the petitioner submitted that in the light of the judgment and order dated 4th October, 1986 passed by this Court in Writ Petition No. 2527 of 1986 the respondents could not have fastened the liability upon the petitioners solely on the basis of the out-turn report of the Bombay Port Trust. It was submitted that as per the guidelines laid down by this Court in Writ Petition No. 1889 of 1986 if at all the liability was to be fastened on the petitioners, then it was obligatory on the part of the respondents to adduce evidence to the effect that at the time of discharge of the containers from the vessel the seals were not intact. It was submitted that as per Section 45 read with Section 2(34) of the Customs Act, 1962 it was evident that the Bombay Port Trust was under a statutory obligation to send a copy of the tally sheet to the proper officer, i.e. the officer of the Customs regarding the conditions of containers and discharge from the vessel. It was submitted that the respondents could not have kept back the tally sheet with them and purported to levy penalty on the petitioners solely on the basis of the out-turn report of the Bombay Port Trust in contravention of the order passed by this Court on 4th October, 1986 in Writ Petition No. 2527 of 1986. It was submitted that the impugned orders being decided in contravention of the order passed in Writ Petition No. 2527 of 1986 was liable to be quashed and set aside.
6. Mr. Sethna, learned Counsel appearing on behalf of the respondents on the other hand submitted that it is settled position of law that if an order imposing penalty under Section 116 of the Customs Act, 1962 is reasonably based on a rational consideration of the relevant circumstances, the High Court should not interfere with such orders under Article 226 of the Constitution of India. It was submitted that the impugned order is a well reasoned and speaking order passed, by taking into consideration all the submissions of the petitioners and as per the directions given in Writ Petition No. 1889 of 1986. It was submitted that a copy of the tally sheet was also given by the stevedores to the petitioners and that it was open to the petitioners to establish their claim by producing the tally sheet. As the petitioners have failed to produce the tally sheet so as to account satisfactorily about the short landed cargo it was submitted that no fault can be found with the order which is impugned in the present petition. It was submitted that in the absence of production of tally sheet of Bombay Port Trust to prove that seals were intact at the time of unloading, the petitioners are not entitled to any relief in the present petition.
7. Having heard the Counsel on both the sides and after perusing the records placed before us, we are of the view that the order impugned in the petition cannot be sustained at all. This Court by its order dated 4th October 1986 in Writ Petition No. 2527 of 1986 had set aside, similar order passed by the respondents, against the petitioners wherein the penalty was sought to be levied solely based on the out-turn report. When the matter was sought to be remanded it was obligatory on the part of the respondents to base their claim on any material, other than the out-turn report. As pointed out by Mr. Gomes, learned Counsel far the petitioners, it was statutory obligation on the part of the Port Trust to serve a copy of the tally sheet on the proper officer viz. officer of the Customs. In absence of tally sheet, it is not open to the respondents to contend that there was any short-landing at the time of discharge of the container from the vessel. The learned Counsel for the respondents states that it is impossible to keep track of tally sheets furnished to it by the Port Trust because in a day large number of tally sheets are submitted by the Port Authorities to the Customs Authorities. It was submitted that the petitioners are also furnished with a copy of the tally Sheet by the Bombay Port Trust and it was open to the petitioners to produce the same to prove their case. In our opinion if the very base of the show cause notice is upon a out-turn report obtained while destuffmg the cargo from the containers in the Bombay Port Trust and it is not based upon any evidence obtained at the time of discharging the container from the vessel, then such a show cause notice itself is defective. The reliance placed by the respondents upon the decision of this Court in the case of Shaw Wallace and Co. Ltd. v. Asstt. Collector of Customs and Others reported in 1986 (25) E.L.T. 968 (Bombay) is also misplaced. In that case the guidelines have been laid down to the effect that where the cargo is brought in Full Container Load (F.C.L. Container) and at the time of unloading of the Container from the vessel, the seal is found broken, then the survey report has to be prepared of the contents of such container in the presence of Customs Officer. In the instant case the containers have already been unloaded from vessel and while the containers were lying in the Bombay Port Trust, it was found that the seals were broken. In that event any survey taken after the containers were discharged from the vessel cannot be taken into account and arrive at a conclusion that on the date of discharge of the container from the vessel, the seals were broken. In our opinion the guidelines given by the Learned Single judge, in the case of Shaw Wallace and Co. Ltd. (supra) would be applicable to the goods which are to be off-loaded from the vessel thereafter and it cannot be made applicable to the container which are already unloaded from the vessel. Failure or inability on the part of the Officers of Customs to produce, the tally sheet which is statutorily available with them cannot be held against the
petitioners. Similarly failure on the part of the petitioners to produce a copy of the tally sheet cannot be held against them.
8. Mr. Sethna, learned Counsel, for the respondents brought to our notice a bunch of documents to show that at the relevant time the practice adopted by Port Trust was to supply a copy of the tally sheet to the steamer agent and whenever the steamer agent has produced tally sheets to establish that there is no short landing, relief has been granted to the steamer agents in all such cases. In our opinion, before invoking the provisions of Section 116 of the Customs Act, the respondents are bound to disclose the reasons in the show cause notice on the basis of which they would like to penalise the steamer agents under Section 116 of the Customs Act for the short-landed goods. The burden is upon the revenue to show that there is short-landing at the time of the discharge of the container from the vessel. In the absence of any such material, it is not open be the revenue only on the basis of out-turn report obtained much after the discharge of the container from the vessel to contend that there has been short-landing of goods at the time of the discharge of the container from the vessel. As stated hereinabove, as per Section 45 read with Section 2(34) of the Customs Act, it is the Customs authorities who are statutorily in custody of the tally sheets and even if the petitioners might be having a copy of the tally sheet and if they are unable to produce the same, the liability cannot be fastened upon them, when primarily it is the duty of the Customs authorities to produce the same. Under the circumstances, in our opinion the alleged short landing, based solely on the basis of the out-turn report of the Bombay Port Trust at the time of discharging the cargo from the containers cannot be attributed to be short-landing at the time of discharging of the container, from the vessel. In this view of the matter, the impugned order dated 29th November, 1986 (Exhibit ‘J’ to the petition) cannot be sustained, and the impugned order dated 29th November, 1986 (Exhibit T to the petition) is liable to be quashed and set aside.
9. Accordingly the petition succeeds. Rule is made absolute in terms of prayer Clause (a) to the petition.
10. However, in the facts and circumstances of the case, there will be no order as to costs.