JUDGMENT
J.P. Devadhar, J.
1. In this petition, the petitioners have challenged the show cause notice dated 9th September, 1985 issued by the Customs authorities seeking to levy penalty under Section 116 of the Customs Act, 1962, Ordinarily we would not have taken on ourself the onerous responsibility of adjudicating the show cause notice. However, since the issue sought to be raised in the above show cause notice is squarely covered by the judgment of this Court, we have decided to dispose of the matter on merits.
2. The petitioners were agents of a foreign flag vessel m.v. “Texas” which had called at the port of Bombay on 21st October, 1981. As the agents of the vessel, the petitioners had filed Import General Manifest (IGM) on 23rd October,
1981. The vessel berthed on 26th October, 1981 and completed discharge of cargo on 28th October, 1981 and then sailed out from the port of Bombay thereafter. The vessel had discharged 146 containers. One of the containers being Container No. HLCU-233544-2 which was manifested under Item 92 of the said IGM. The said container contained 285 drums of Chemical i.e. Chloroquine Phosphate which was an expensive chemical fetching a high premium in the Indian market. The subject matter of the present petition pertains to these 285 drums contained in the said container shown at Serial number 92 of the I.G.M.
3. It is the case of the petitioners that on discharge of the said container, it was stored in the Bombay Port Trust premises. It is the case of the petitioner that the entry/record made in the log maintained by the Port Trust at the time of discharge of the containers indicates that 146 containers (145 manifested containers + one mail container) were discharged from the vessel. Since, the said container was not traceable for delivery to the importer, on or about 4th February, 1982 the Deputy Chairman of the Bombay Port Trust lodged a complaint with the Additional Commissioner of Police to investigate as to the whereabouts of the said container. Investigations by the police revealed that the cargo from the said container was stolen from the Bombay Port Trust docks and taken to Delhi, where it was put on sale. On or about 8-2-1982 one of the Officers of the Port Trust located an open empty container off berth 13A, Indira Dock, with some identification marks obliterated. Later on it was confirmed that it was the same container which was missing. In spite of the above, on 27-4-
1982, the Port Trust issued an out turn report indicating that the said container was short landed from the vessel.
4. After about four years from the discharge of the cargo, the Customs Authorities sought to issue the impugned show cause notice dated 9th September, 1985 calling upon the petitioners to show cause as to why penalty under Section
116 of the Customs Act, 1962 should not be levied upon the petitioners on the basis of the short landing of the container reported by the Port Trust.
5. On receipt of the said show cause notice, the petitioners took up, the matter with the police authorities as well as with the port authorities. The Yellow Gate police station officials by their letter dated 25th September 1985 confirmed that the container in question with 285 drums of chemicals were stolen from the Bombay Port Trust premises, but in spite of best efforts, the theft could not be detected.
6. Since the show cause notice was based only on the out turn report issued by the Bombay Port Trust, the petitioners have filed present petition challenging the said show cause notice on the ground that penalty under Section 116 of the Customs Act 1962 cannot be levied upon the petitioners based on the out turn report issued by the Port Trust.
7. When the aforesaid petition was taken up for final hearing, Counsel on both sides fairly agreed that issue whether the levy of penalty under Section 116 of the Customs Act solely based on the out turn report of the Port Trust can be levied, has been decided by this Court in the negative, in the case of Forbes Forbes Campbell and Co. Limited v. The Deputy Collector of Customs and Anr. bearing Writ Petition No. 3299 of 1987 decided on 10th July, 2002 (reported in 2002(4) Mh.L.J. 242).
8. In the said judgment it is held that penalty under Section 116 of the Customs Act cannot be levied solely based on the out turn report issued by the Bombay Port Trust. In the instant case the only ground invoked in the show cause notice seeking to levy penalty under Section 116 of the Customs Act is the out turn report issued by the Port Trust. There is no other material brought on record to establish that the said container was short landed at the time of the discharge of the containers from the vessel. Under Section 34 of the Customs Act, imported goods could not be unloaded except under the supervision of Customs Officers. It is not the case of the respondents that any contrary notification was issued by the Board dispensing with the supervision at the time of discharge of the cargo or that the Customs Officers had noticed any shortlanding at the time of discharge. There is no material on record to show that any shortlanding was noticed at the time of discharge of the cargo. Under the circumstances it is not open to the respondents to impose penalty on the petitioners under Section 116 of the Customs Act, 1962 based on the out turn report issued belatedly by the Bombay Port Trust.
9. Moreover, the material on record clearly shows that the container, was, on discharge stored in the Port Trust premises and the Container with the goods contained therein were stolen from the Port Trust premises. Material on record also shows that the said container was ultimately located at Indira Docks and the goods contained therein were sold at Delhi. In this view of the matter, the belated out turn report issued by the Port Trust indicating that the said container was short landed cannot be accepted. Therefore, in the absence of any material to show that at the time of discharge of the cargo from the vessel, there was any short landing noticed, we see no reason to penalise the petitioners under Section 116 of the Customs Act, solely based on the out turn report of the Port Trust that too issued belatedly.
10. Accordingly, we hold that the show cause notice issued to the petitioners, seeking to levy penalty under Section 116 of the Customs Act, 1962 solely based on the out turn report of the Port Trust cannot be sustained. Hence, the said show cause notice dated 9th September, 1995 is quashed and set aside.
Rule is made absolute in terms of prayer Clause (c) of the petition, with no
order as to costs.