{"id":178312,"date":"1983-09-09T00:00:00","date_gmt":"1983-09-08T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/j-m-baxi-and-co-vs-collector-of-customs-on-9-september-1983"},"modified":"2016-10-15T10:10:20","modified_gmt":"2016-10-15T04:40:20","slug":"j-m-baxi-and-co-vs-collector-of-customs-on-9-september-1983","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/j-m-baxi-and-co-vs-collector-of-customs-on-9-september-1983","title":{"rendered":"J.M. Baxi And Co. vs Collector Of Customs on 9 September, 1983"},"content":{"rendered":"<div class=\"docsource_main\">Customs, Excise and Gold Tribunal &#8211; Mumbai<\/div>\n<div class=\"doc_title\">J.M. Baxi And Co. vs Collector Of Customs on 9 September, 1983<\/div>\n<div class=\"doc_citations\">Equivalent citations: 1983 ECR 1990 D Tri Mumbai, 1987 (31) ELT 440 Tri Mumbai<\/div>\n<\/p>\n<pre><\/pre>\n<p>ORDER<\/p>\n<p>1. The present appeal is directed against the Order-in-appeal No. S\/49-11\/82-Oil dated the 6th November, 1982 passed by the Collector of Customs (Appeals) Bombay. By this order, the learned Collector (Appeals) has upheld the original order dated 5-6-1982 passed by the Deputy Collector of Customs, Oil Unit, Bombay.\n<\/p>\n<p>2.    The undisputed facts are :\n<\/p>\n<p> The appellants imported a consignment of Orthoxylene by the vessel &#8220;STOLD SPAN&#8221;. The Bill of Lading of the consignment was shown as 1049.840 M.T. The quantity discharged as per the shore Storage tank measurement was found to be 1029.784 M.T. Thus, there was a shortage of 20.056 M.T. The appellants were called upon to explain the shortage of 9.558 M.T., after giving without for leaving ocean loss at 196. The appellants submitted their explanation. Subsequently, the Deputy Collector raised the ocean loss from 1% to L.3% and adjudged the unaccounted quantity to be 6.409 M.T. He, therefore, imposed a penalty of Rs. 23,3961-on the appellants under Section 116 of the Customs Act, 1962. (hereinafter called the Act.) Feeling aggrieved by the Order of the Deputy Collector, the appellants preferred an appeal before the Collector (Appeals) unsuccessful.\n<\/p>\n<p>3.     During   the  hearing  Shri   Raman,   the   learned   Advocate  of   the appellant reiterated the contentions raised on the grounds of the appeal. He  pointed  out  that  there  were  two  surveys  by   independent  surveyors as to the quantity found in the ship before discharge. The entire quantity so found were  let  in  to the pipeline and nothing  remained  in the tank of  the ship. Shri Raman pointed out at the surveys indicated that there was no shortage if the ocean loss is taken into consideration. The further submission of Shri Raman was that the custom authorities had quantified the loss with reference to the quantity of the oil received in the shore tank. According to him this was not correct. He maintained that the liability of the appellant under Section 116 had to be determined with reference to the quantity found  to be by  independent surveyors, particularly when there  was   evidence   that   the  whole   of   the  quantity   surveyed  had  been let  in to  the  pipeline. He contended that the difference in quantity  as recorded to be short by the customs could only be due to leakage in the pipeline or must have been due to certain quantity being left in the pipeline. He, therefore, prayed that the penalty may be set aside.\n<\/p>\n<p>4.     Shri Gidwani,  the learned  Departmental representative contended that it will never be possible to have accurate measurement of the mineral oil  in the ship  tank when the ship  is alongwith. He disputed that there could be  any  leakage  or intermediate loss. He, further, pointed out that the  survey  report  of   M\/s.  3.B.  Boda  Marine  &amp;  General  Survey  Agencies Pvt. Ltd. disclosed that there was a continuous survey and  it started on board this vessel and until completion of discharge. The report also disclosed total quantity of product received in storage tank. If there had been any leakage in the pipe the surveyors could have noticed the same. Similarly, if any quantity was left behind in the pipeline that could have also been taken into account by the surveyors. Shri Gidwani finally contended that the  loss has to be  determined on  the basis of  the quantity  received  in the shore tank and it is only on that basis the loss has been determined and therefore authorities below have not committed any error. He, therefore, prayed for the dismissal of the appeal.\n<\/p>\n<p>5.     We   have  carefully  considered  the  records  of   the  case   and  the submissions made by the parties to this appeal. The point for our determination  in  this  appeal  is  whether  the  customs  authorities  are  justified  in taking  the  shore  tank  measurement  as  the  basis for  the  determination of   the  shortage. The goods  in question is mineral oil. The  discharge  or unloading   of   the  mineral  oil   is  only   through  pipelines  and  the  quantity so  discharged  or unloaded  is  recieved in the  shore tanks.   In the  survey report  of   M\/s.   J.B.  Boda  Marine   &amp;  General Survey  Agencies Pvt. Ltd., it   has   been   mentioned   that   the   vessel  commenced   discharging   the  oil from tank No. 6 wings on 6th November, 1981 at 0850 hours and completed discharge   on   the  same  day   at   1840  hours.  The  product  was  discharged from  the ship&#8217;s tanks by means of  ship&#8217;s pumps. The receivers connected a flexible hose  to the discharge  pipe  on board and led the oil into the storage tank  through 6&#8243; pipeline. On completion of discharge,  the    shore pipeline contents were cleared with Nitrogen Gas preceded by a batching pig,  pushing  the  product  into storage tank. The  report further disclosed that   the   surveyors   have   inspected   the   storage  tanks  prior   to  receiving the product and was found empty and clean to receive the product. The report also disclosed that the surveyors gauged the storage tanks on completion of receipt of the product from the ship. The quantity received in the storage tank was calculated on the basis of the calibration table available at the Installation. Shri Raman did not dispute the procedure followed for discharge of mineral oil from the ship&#8217;s tank to the storage tank. He also did not dispute the total quantity received in the storage tank as found by the surveyors. In the said circumstances, the contentions urged on behalf of the appellants that the difference in quantity as recorded to be shortage by the customs could only have been due to leakage in the pipeline or that some quantity of oil must have left behind the pipeline cannot be accepted having regard to the procedure followed for emptying the contents of the pipeline. Further, the contention of Shri Raman that the shipping agent cannot be made liable on the basis of the storage tank measurement cannot also be accepted for the following reasons :\n<\/p>\n<p> When the ship is along, within the Govt. the accurate measurement of the oil in the storage tank cannot be ascertained. This is because, the ship will not be steady and the level of the oil on board the ship will also not be steady. The accurate measurement is not possible can be demonstrated in this case. The surveys of the quantity found in the ship&#8217;s tank were held on the same day viz. on 6th November, 1981 by two different survey agencies M\/s. J.B. Boda Marine &amp; General Survey Agencies Pvt. Ltd. and M\/s. Ericson &amp; Richards (Surveyors) Pvt. Ltd. M\/s. Ericson &amp; Richards (Surveyors) Pvt. Ltd. found the difference between the manifested quantity and ship&#8217;s calibration table to be 3.992 M.T. whereas M\/s. J.B. Boda Marine &amp; General Survey Agencies Pvt. Ltd. found the difference between the Bill of Lading quantity and the total quantity on board of arrival prior to discharge to 6.218 M.T. Secondly, that there is no means of ascertaining the quantity after the oil is let in to pipeline and till it is received in the storage tank. It has been submitted by Shri Gidwani, the learned Departmental representative that storage tank measurement is taken after the goods reached a stage of stability in their level. Shri Gidwani submitted that this has been the procedure followed by several decades. In our view, the only acceptable objective method of finding out the quantity of unloading or discharge in the case of mineral oil is by taking the measurement of the storage tank after the oil in the storage tank reaches the stage of stability. Any other method of determination of the quantum does not seem to be possible. We are in agreement with the view expressed by this Bench in Appeal No. 81 of 1983 (South India Corporation (Agencies) Ltd. v. Collector of Customs, Bombay] wherein this Bench consisting of different Members had held that the system of determining the landed quantities of oil on the basis of dip reports of the storage tank in which the oil is received after discharge from ship is more accurate and the same has to be prevailed in preference to the ullage survey on board the ship.\n<\/p>\n<p>6. In the above view of the matter we see no merit in the appeal and therefore we dismiss the same.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Customs, Excise and Gold Tribunal &#8211; Mumbai J.M. Baxi And Co. vs Collector Of Customs on 9 September, 1983 Equivalent citations: 1983 ECR 1990 D Tri Mumbai, 1987 (31) ELT 440 Tri Mumbai ORDER 1. The present appeal is directed against the Order-in-appeal No. S\/49-11\/82-Oil dated the 6th November, 1982 passed by the Collector of [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-178312","post","type-post","status-publish","format-standard","hentry","category-judgements"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>J.M. 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