ORDER
K. Gopal Hegde, Member (J)
1. This appeal arises out of and is directed against the Order-in-Appeal bearing No. S/49-1293/87-MCD (Ahd.) dated 31- 12-1987 passed by the Collector of Customs (Appeals), Bombay. The undisputed facts are the appellants imported waste papers the quantity of which had been shown in the Bill of Lading as well as the manifest as 304 bales weighing 199.910 M/Tons. It appears even though the destination was the Port of Bombay due to strike the vessel was diverted to Porbandar. After the vessel discharged the cargo at the instance of the importers, a survey was held by M/s. J. B. Boda Marine & General Survey Agencies Pvt. Ltd., Porbandar and during the survey the actual weight was found to be 169.755 M/Ts as against 199.910 M/T. Thus there was a shortage of 30.155 M/Ts. Since the waste papers were exempt from payment of duty they were released on execution of a Bond which stipulated production of End Use Certificate. It appears the appellant produced End Use Certificate in respect of 169.755 M/T. In the adjudication held by the Asstt. Collector, he confirmed the demand of differential duty of Rs. 3,22,461.67. On appeal, the Collector of Customs (Appeals) confirmed the order of the Assistant Collector.
2. During the hearing of this appeal, Shri Parthasarathy appearing for the appellant contended that since the actual clearance was only 169.755 M/Ts, they could only produce End Use Certificate in respect of that quantity and not against the manifested quantity of 199.910 M/Ts. Shri Parthasarathy contended that both the authorities below have not properly considered the documentary evidence produced on behalf of the appellants. He urged before actual physical clearance of the goods by reputed surveyors who conducted the survey and in the weigh bridge recognised by the Customs the quantity received was weighed. The survey report, as well as the weigh bridge certificate clearly established that the actual quantity cleared was only 169.755 M/Ts and not 199.710 M/Ts, the manifested quantity. Shri Parthasarathy also contended that even the lorry receipt confirmed the contentions of the appellants. But then, the authorities below, without properly considering the documentary evidence, confirmed the demand made in the show cause notice. Shri Parthasarathy further contended that the Collector (appeals) proceeded on the footing that the appellants were the Steamer Agents and there was a penalty on the appellant under Section 116 of the Customs Act. This itself indicates the non-application of mind on the part of the Collector of Customs (Appeals). Shri Parthasarathy further submitted that only ground on which the Collector (Appeals) did not place reliance was on the survey report because of certain corrections found in the xerox copy. It was also the submission of Shri Parthasarathy that since the quantity was found short the matter was taken up with the suppliers. They have reimbursed the value of the goods found short. In that connection, he also produced certificate of forward remittance.
3. Shri Prabhu appearing for the Collector, on the other hand, opposed the appeal and contended that the Customs was not associated during the survey. The weigh bridge is outside the Customs area and therefore much reliance cannot be placed either on the survey report or on the weighment certificate. He, therefore, pleaded that the appeal may be rejected.
4. We have considered the submissions made on both the sides and perused the available records. Undisputedly the duty was demanded for non-production of End Use Certificate. The plea of the appellants was that they had not cleared 30.155 M/T out of the manifested quantity and as such they could not produce End Use Certificate in respect of the said quantity. If the appellant’s contention, that they did not clear 30.155 M/Ts is established by satisfactory evidence then in our view the Department cannot insist upon End Use Certificate in relation to that quantity and consequently no duty can be demanded in respect of the said quantity tor non-production of End Use Certificate. As stated earlier, the appellants had relied on the survey report of M/s. J. R. Boda Marine & General Survey Agencies Pvt. Ltd. According to this survey report, the goods were discharged on 13-14-15 and 17th April, 1984. The survey was held on 23-4-84. It was held in old Port Porbandar. According to the survey report outer cover of most of the bales were torn. It is stated in the survey report that the delivery of the consignment started on 23-4-84 and continued thereafter till completion and throughout they were present. The bales were weighed on the lorry weigh bridge of M/s. Hindustan Weigh Bridge, Porbandar prior to despatch. The survey report further disclosed out of 304 bales 55 bales were found sound. Outer cover of 115 bales were torn; outer cover of 124 bales were missing and 10 bales were in broken condition. The total weight was found to be 169.755 M/Ts as against the manifested quantity of 199.910 M/Ts. It was not the allegation of the Department that it was the appellants or their agents who pilferred the goods after discharge from the vessel. The weigh bridge, though situated outside the port, was not in any way connected with the appellants. The weighment certificates issued by the weigh bridge tallied with the weight given in the survey report. Besides, the lorries through which the packages were transported have also issued receipts which again tallied with the weight mentioned in the survey report and the weigh bridge certificate. All those are contemporary documents. The authorities below did not hold that those documents are not genuine or got up for the purpose of the case. The documentary evidence as well as the certificate of foreign inward remittances, satisfactorily established that the actual quantity cleared was less by 30.155 M/Ts than the manifested quantity. In the circumstances, insisting upon the appellant to produce consumption certificate in respect of the quantity which they had not received amounts to performing an impossibility.
5. In his order, the Collector (Appeals) has observed, “The Assistant Collector, after going through the documentary evidence had imposed a penalty of Rs. 3,22,461.67 under Section 116 of the Customs Act. 1962.” This observation of the Collector (Appeals) is factually incorrect and it is not clear how the Collector (Appeals) could observe that the Asstt. Collector has imposed a penalty under Section 116 of the Customs Act. The Asstt. Collector has only confirmed the demand of duty for non-production of End Use Certificate. The question of imposing penalty on importers under Section 116 of the Customs Act would not arise at all. It is further seen from the Collector (Appeals) order that he was satisfied as to the shortage. This is what the Collector (Appeals) observes:
“After going through the submissions, it is observed shortage had taken place after the discharge of the cargo.” But his finding was that this shortage did not take place at the port of shipment. He, therefore, rejected the appellant’s contention.
6. If once the Collector (Appeals) was satisfied that there was a shortage before actual clearance of the goods, he should have granted the relief prayed for because the End Use Certificate could be in respect of the quantity cleared and not in respect of the quantity not cleared.
7. Having regard to the documentary evidence referred to by us, the genuineness of which are not disputed by the Department, we are of the view that the Assistant Collector was not justified in confirming the demand for non-production of the End Use Certificate which could not produced since the quantity in respect of which certificate was not produced was not at all cleared by the appellants.
8. In the result, we allow the appeal, set aside the order passed by the authorities below and direct that the appellants be granted the consequential relief.