ORDER
S. Kalyanam, Member (J)
1. Since a common issue arises for consideration in all the above appeals, they are taken up together and disposed of by this single order.
2. These appeals are directed against the order of the Collector of Customs & Central Excise (Appeals), Madras dated 27-8-1990 rejecting the appellant’s claim for refund on the ground of short receipt of goods imported. The appellant imported steel scrap by different vessels and paid customs duty on the invoiced quantity. The steel scrap loaded in lorry/truck was weighed in the Madras Port Trust weigh-bridge which issued weighment certificate showing the quantity cleared. Since the quantity cleared was less than the quantity for which the appellant had paid duty, the appellant claimed refund of duty in respect of such short delivered goods under the provisions of the Customs Act, 1962, the Act for short. The appellant’s claim was rejected under the impunged order out of which the present appeals arise. The appellant filed revision application before the Govt. of India under Section 129DD(1) of the Act, as amended and the revision authority returned the papers holding that the Govt. had no jurisdiction and that it would be open to the appellant to approach the Tribunal for relief, hence the appeals herein.
3. Shri Chakrapani, the learned Consultant for the appellant submitted that it is not disputed by the Department that the importers did not receive the full quantity for which the importers admittedly paid duty. It was urged that the appellant took delivery of the goods after weighment by the Port Trust authorities in the presence of the Customs examiner and the relevant particulars were duly recorded and certified as per the regular practice in regard to the issue of weighment certificate. It was urged that inasmuch as the appellant did not receive the entire quantity for which they had paid duty their claim for proportionate refund in respect of the short supply should be allowed under the Act. The learned Consultant also referred to the Ruling of the West Regional Bench in the case of Buckau Wolf India Ltd. v. CC, Bombay, in Order No. 2029/91/WRB, dated 31 October, 1991 and also produced an order passed in favour of the importer under similar circumstances by Collector of Customs (Appeals), Madras, dated 13-7-1989 in a batch of 47 appeals.
4. Shri J.P. Gregory, the learned SDR submitted that in respect of bulk cargo the Department does not issue short landing certificate in form ‘C’ and the appellant should have insisted for the weighment certificate before payment of duty under the first appraisement system. The learned SDR submitted that the Act contemplates refund only under Sections 13 & 23 and while Section 13 of the Act would cover pilferage, Section 23 would be applicable only in respect of loss or destruction of goods other than pilferge. In the present case, short supply cannot be construed to be goods either “lost or destroyed” coming within the mischief of Section 23 of the Act.
5. I have carefully considered the submissions made before me and considered the entire records and evidence.
For the purpose of convenience, I extract below the details of BE Nos., the qty. covered by BE, the quantity delivered against each BE, etc. given by the appellant:
——————————————————————————–
BE Nos. Qty. Qty. Madras Qty. short Refund
covered by delivered Port Trust delivered claimed
BE according Certificate
to weigh-
ment Rs.
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HD 102534 1750 MT 1783 MT K. Dis E1/ 12 MT 21,801/-
dt. 18-1-1990 145/90
& HD TO dt.
0101873 dt. 9-2-1990
11-1-1990
(Appeal No,
C/538)
HD 0209688 2800 MT 2760.840 K. Dis E1/ 39.160 MT 38,147.25
dt 19-2-1990, MT 377/90 To
HD 0291464 K. Dis E1
dt. 9-2-1990 376/90
& HD TO dt.
0202087 dt. 28-3-1990
4-2-1991
(Appeal No.
C/529/91)
HD 0203081 390.500 MT 354.990 K. Dis E1/ 35.510 MT 39,472.25
dt. 21-2-1990 336/90
(Appeal No. TO dt.
C/544) 15-3-1990
HD 1002072 649.00 MT 621.180 MT K. Dis E1/ 27.820 MT 33,701.75
dt. 18-10- 1842/89
1989 TO dt.
20-11-1989
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6. It is not disputed or disputable that the appellant had not received the full quantity for which the appellant had paid duty. In law, in my view, for claiming refund in respect of the short receipt or delivery of goods the question whether the appellant had paid duty under the first appraisement system or the second appraisement system would hardly have any relevance. If the importer did not receive the entire quantity of the goods for which he has paid duty the importer would be entitled to claim the proportionate refund in respect of the short supply of the goods under the Act. As rightly contended by the learned SDR Sections 13 and 23 would come into operation in respect of grant of refund and while Section 13 is applicable if the importer’s goods are pilfered after unloading and before the proper officer has made an order for clearance for home consumption, and in such a situation, the importer will not be liable to pay any duty on such pilfered goods. Section 23 deals with the circumstances for grant of remission of duty of the goods “lost or destroyed” or abandoned and this is without prejudice to the provisions of Section 13 aforesaid. Under Section 23, if the goods have been lost, otherwise than as a result of pilferage, or destroyed any time before clearance for home consumption, the Assistant Collector of Customs, shall remit the duty on such goods. In the present case the factual position is that the importer did not receive the entire quantity of the goods for which he had paid duty and this fact does not admit of any controversy. This short supply also has been certified by the Madras Port Trust weighment certificate which is a contemporaneous record which has come into existence before the goods were actually cleared out of the Customs area for home consumption. In a similar situation, the West Regional Bench, Bombay has given relief of duty refund or remission for non-delivery of goods. Therefore, in the facts and circumstances of the case, I am inclined to hold that the appellant would be entitled to proportionate remission of duty in respect of the goods short delivered. I also derive support for my conclusion from the ratio of the ruling of the West Regional Bench cited supra, wherein the Bench in similar circumstances has observed as under :
“After hearing both the sides, we find that the undisputed factual position is that the non-availability of the goods with the custodian was made known to the Department before the out of charge order was given. In fact it is reported to have been noticed, even before examination of the goods. The duty has been paid under second appraisement procedure, before examination. The Air India has clearly acknowledged non-availability of the goods, which are admittedly received in their custody. Hence, the non-availability could be due to loss on account of theft, pilferage, mishandling or misplacement by the custodian. The custodian’s presumption that the goods might have been disposed of in the auction is not supported by any notice which is required to be issued by the custodian under the provisions of Section 48 of the Customs Act. Hence we are led to conclude that in so far as the appellants are concerned, the goods have been lost to them and they were lost in the custody of the custodian, before clearance for home consumption. Even if it is a case of theft or pilferage in the custody of the custodian, Section 13 would be available in this case; because the non-availability has been noticed even before examination of the goods. Delay in payment of duty cannot take away the benefit under Section 13 or Section 23 of the Customs Act. Because the importer has to pay for the demurrages for the period of delay and is also exposed to the risk of losing the goods if the custodian chooses to resort to auction of the goods under Section 48 of the Customs Act. Hence, so long as the conditions laid down under Section 13 or 23 of the Customs Act are satisfied and there are evidences to show nondelivery of the goods to the appellants, it has to be construed as a loss in the custody of the custodian and duty remission is to be given.”
I also take note of the order passed by the Collector of Customs (Appeals), Madras, in a batch of 47 appeals disposed of on 13-7-1989, where the Collector (Appeals) has observed as under :
“If we argue on the basis of the draft survey that entire manifested quantity of goods mentioned in the Import General Manifest were unloaded from the vessel in full, we can equally draw inferences from the Port Trust Weighment Certificate that the quantity stated by the appellant was found short at the time of clearance. In the circumstances, the fact of shortage of the impugned goods before the clearance of the same is clearly established. It is not in dispute that the entire cargo unloaded from the vessel till the stage of weighment was in the physical control of the Port Trust authorities and the appellants had absolutely no control over the same. In the circumstances, the only conclusion that can be drawn in this case is that the goods were lost (to the appellants) before clearance of the same. Direct perception is not the only source of knowledge. Knowledge is also acquired by reasonable inference. On the basis of the above, I hold that the case in question is clearly covered by the provisions of Section 23(1) of Customs Act, 1962 and the appellants are clearly entitled for remission of duty in respect of these goods as it is established that the same were lost before clearance, under circumstances beyond the control of the appellants”.
In my view the connotation of the expression “lost” occurring in Section 23 of the Act has to be construed to be comprehensive so as to embrace a situation of this kind for the purpose of doing justice in a situation where the importer has not admittedly received the full quantity of the goods for which he had paid duty. Such an interpretation would be in consonance with fairness and equity. If the Department feels that goods had not been short landed it is open to the Department to initiate action against the Steamer Agent as per law under Section 116 of the Act.