ORDER
K.S. Dilipsinhjil, Member (T)
1. This is an appeal under Section 131-B of the Customs Act filed by M/s. J.M. Baxi & Co. against the order of penalty of Rs. 27,211.35 imposed by the Deputy Collector of Customs, Bombay in his Order No. 10-IGM-1130/68-69, dated .5-5-1976 and confirmed by the Appellate Collector of Customs, Bombay in his Order No. S/49-28/76, dated 1-2-1977. the appellants argued that for the purposes of levy of penalty in terms of Section 116, the lower authorities have taken into account the 11 consignments of oil brought by m.t. AGAPI of 2-12-1968 at Bombay individually. Though these 11 types of oil were stored separately on board the Agapi and they have been received in separate tanks on the shore by the Indian Oil Corporation who were the consignees in all the cases, the oils have been pumped continuously through the same pipeline, and these would have got mixed with one another and in these circumstances the appellants pray that the benefit of 1% wastage allowance should be given on the total quantity of oil manifested for discharge at Bombay and the accountal done individually for each parcel of oil by the Deputy Collector and the Appellate Collector, should be dispensed with. In that case the total shortage of 94.187 metric tonnes as certified by the Survey Report No. 69/149, dated 24-1-1969 of M/s. Ericson & Richards would be well’ within the 196 of the manifested quantity of 14,087.220 tonnes, and therefore no penalty under Section 116 would be leviable on the steamer agents. The appellants pray that the aforesaid request be granted and He, therefore, requested that the appeal be dismissed.
2. The learned departmental representative has opposed the submissions. He has. maintained that the action of the Deputy Collector in considering losses against each parcel of oil was correct. He has pointed out that 1 % allowance was given by the Deputy Collector on three grades of oil namely; stocks 352, 5015 & 5025, and only the excess quantity has been considered for the payment of penalty. The departmental representative has stated that these quantities were manifested separately, stored separately on board the Agapi and discharged separately on the shore tanks. The consignee, M/s. Indian Oil Corporation had admitted these quantities as discharged, and therefore, there was no force in the appellants’ prayer. He therefore, requested that the appeal be dismissed.
3. We have examined the submissions on both the sides. There is no doubt that the process of discharging oil from the tanker to the shore is continuous and in this process one type of oil is apt to get mixed with another type. The survey report confirms these facts as there have been excesses in some cases, and shortages in the others. The survey was carried out in the presence of the Customs Officers. It has been taken as the basis of accounting for the discharge of oil for the purposes of Section 116. In these circumstances we see no objection why the accounting should be done on the basis of each grade of oil instead of on the total quantities of all the. grades manifested. We find that the request of the appellants to do so is quite legitimate. Accordingly, we concede that request and in that analysis we observe that the loss is well within the 1% allowance given by the Customs Authorities. Therefore, there is no justification for the levy of penalty. Accordingly, we set aside the orders of the Deputy Collector and the Appellate Collector and direct that the amount of penalty of Rs. 27,211.35 be refunded to the appellants. The appeal is thus allowed.