AJN 1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.8 OF 2009 1 M/s. Greenways Shipping Agencies Pvt. Ltd., a Company incorporated under the provisions of Companies Act, 1956 having its Registered Office at Hamilton House, 8, J.N. Heredia Marg, Ballard Estate, Mumbai – 400 038. ) ) ) ) ) ) ) ) 2 Mr. R.. Balasankar, residing at 17/9, Chinnaih Street, T. Nagar, Chennai – 600 017. ) ) ) .... Petitioners Versus 1 Union of India, Mumbai. ) 2 Joint Secretary, Government of India, Ministry of Finance, Department of Revenue, exercising powers and jurisdiction under the provisions of Customs Act, 1962 having her office at 14, Hudco Vishala Building, “B” Wing, 6th floor, Bhikaji Cama Place, New Delhi – 110 066. ) ) ) ) ) ) ) ) ) 3 Commissioner of Customs (Appeals), exercising powers and jurisdiction under the provisions of the Customs Act, 1962 having his office at New Customs House, Ballard Estate, Mumbai. ) ) ) ) ) ) AJN 2 4 Assistant Commissioner of Customs, Manifest Clearance Department, exercising powers and jurisdiction under the provisions of the Customs Act, 1962 having his office at I.G.M. Sec, Manifest Clearance Department, MbPT -OSC Building, 4th floor, Opp. G.P.O., P.D'Mello Road, Mumbai – 400 001. ) ) ) ) ) ) ) ) ) ) ) ..... Respondents Mr. V.R. Dhond for the petitioners. Mr. R.G. Bhat for the respondents. CORAM : SMT. RANJANA DESAI & J.P. DEVADHAR, JJ. DATED : 18TH MARCH, 2009. JUDGMENT :- (Per Smt. Ranjana Desai, J.) 1. Rule. Rule made returnable forthwith and the Writ Petition is taken up for final hearing by consent of the parties. 2. Petitioner 1 is a company which carries on business as Shipping Agents. Petitioner 2 is the Managing Director of petitioner 1. Petitioner 1 acted as the Indian Agent of one Evergreen Marine AJN 3 Corporation, Taipei (for convenience, “EMC”) carrying on business of carriage of goods by sea. In July, 1999, EMC chartered slot/portion in the vessel M.V. Express Nilgiri for carriage of the consignment into Mumbai. It was consigned to one Blue Star Limited. On 15/7/1999, in anticipation of arrival of vessel M.V. Express Nilgiri, M/s. Patvolk, who were the Main Line Agents of vessel M.V. Express Nilgiri, filed an Import General Manifest (for convenience, “the IGM”) No.2214 wherein the container was manifested under Item No.29 for and on account of petitioner 1. However, the container was not loaded on vessel M.V. Express Nilgiri. It was loaded on board another vessel i.e. M.V. Bux Moon travelling to Mumbai. M.V. Bux Moon arrived in Mumbai on 19/7/1999. The container was finally manifested in IGM No.2268 under Item No.386. On the same day, the container was discharged from vessel M.V. Bux Moon. Blue Star Limited took delivery thereof after paying customs duty. On 10/9/1999, the Bombay Port Trust confirmed discharge/delivery of the container from vessel M.V. Bux Moon. 3. On 14/1/2000, respondent 4 i.e. the Assistant Commissioner of Customs issued a show cause notice to petitioner 1 stating why AJN 4 action under Section 116 of the Customs Act, 1962 (for short, “the said Act”) should not be taken against it since the container was not discharged by vessel M.V. Express Nilgiri in whose IGM it was earlier manifested. Petitioner 1 replied to the show cause notice and pointed out that the container was not discharged by vessel M.V. Express Nilgiri but by vessel M.V. Bux Moon and such discharge was duly manifested. On 8/1/2001, Blue Star Limited addressed a letter confirming that the container had arrived on board vessel M.V. Bux Moon and the same had been duly discharged and taken delivery of. 4. On 19/3/2002, respondent 4 passed an order imposing penalty of Rs.14,50,000/- on the petitioners. The reason given by respondent 4 for imposing penalty is that Item No.29 of the IGM has not been cancelled and, in the absence of cancellation, the petitioners were liable for penalty for not discharging the cargo manifested at Item No.29. On 15/4/2002, petitioner 1 addressed a communication to the Deputy Commissioner of Customs seeking cancellation of Item No.29. On 23/8/2002, the Deputy Commissioner of Customs wrote to petitioner 1 confirming cancellation of Item No.29. On 3/10/2002, the Bombay Port Trust AJN 5 took cognizance of the cancellation and issued an amended Outturn Report. 5. In the meantime, petitioner 1 filed an appeal against respondent 4's order dated 19/3/2002. Petitioner 1 placed the cancellation of Item No.29 before respondent 3. On 1/9/2004, respondent 3 dismissed the appeal on the ground that letter of cancellation of Item No.29 in the IGM was not produced before respondent 4. On 25/1/2007, petitioner 1 received a demand notice from respondent 4. The petitioners then filed Writ Petition No.587 of 2007 raising a challenge to the order passed by respondent 3 dated 1/9/2004. On 7/6/2007 the said writ petition was allowed to be withdrawn with liberty to the petitioners to file a revision application before respondent 2. Respondent 2 was directed to take into account all grounds with regard to condonation of delay. 6. Pursuant to the liberty granted by this court, on 18/6/2007, petitioner 1 filed a revision application before respondent 2. An application for condonation of delay was also filed. On 8/10/2008, respondent 2 dismissed the revision application on the ground that AJN 6 it was beyond time and it was not within the competence of respondent 2 to condone delay. Being aggrieved by these orders, the petitioners have filed the present petition. The petitioners have, inter alia, prayed that order dated 19/3/2002 passed by respondent 4 and order dated 1/9/2004 passed by respondent 3 and order dated 31/10/2008 passed by respondent 2 be set aside. 7. We have heard learned counsel appearing for the parties. It appears from the adjudication order dated 19/3/2002 passed by respondent 4 that penalty is imposed on the petitioners because the 1st petitioner had failed to discharge the cargo manifested at Item No.29 of the IGM. We have already noticed that on 23/8/2002, the Deputy Commissioner of Customs on consideration of the material facts has cancelled the said Item No.29. On 3/10/2002, the Bombay Port Trust also took cognizance of the cancellation and issued an amended Outturn Report. Thus, in view of the fact that the IGM is amended, the very basis of the Order dated 19/3/2002 would not survive and consequently imposing penalty for non-discharge of the cargo would not survive. In other words, on cancellation of Item No.29 of the IGM, there is no question of discharging the cargo under Item No.29 of the IGM and AJN 7 consequently the question of penalising the petitioners for not discharging the cargo set out in Item No.29 of the IGM does not arise. In such a situation, the penalty imposed would become unenforceable. In view of this, it is necessary to set aside the adjudication Order dated 9/3/2002 passed by respondent 4 which is impugned in this petition and it is set aside accordingly. Consequently, the appellate/revisional Orders dated 1/9/2004 and 31/10/2008 passed by respondents 3 and 2 respectively will have to be set aside and are accordingly set aside. The petition is allowed of in the aforestated terms. [SMT. RANJANA DESAI, J.] [J.P. DEVADHAR, J.]