Cma Cgm Agencies India Private v. Union Of India
IN THE HIGH COURT OF JUDICATURE OF MADRAS
DATED: 19.08.2019
CORAM:
THE HONOURABLE MR. JUSTICE M.S. RAMESH W.P.No.14944 of 2011 CMA CGM Agencies India Private Limited, Having its Office at Transworld House, No.118, Dr.R.K.Salai, Mylapore, Chennai - 600004.
Rep. by its Branch Manager.
...Petitioner
Vs
1. Union of India, Ministry of Finance, New Delhi.
2. Indian Corporate Business Centre Limited, Container Freight Station, 126/21, Vaikadu Village, Chennai - 600103.
3. Office of Commissioner of Customs (Import), Chennai Customs House, Rajaji Salai, Chennai - 600001.
...Respondents
PRAYER: Writ Petition filed under Article 226 of the Constitution of India, praying to issue a writ of Mandamus, directing the respondents to forthwith release and return to the petitioner the 75 empty containers (set out in Exhibit) along with such compensation towards the container idling charges as any deem appropriate to this Court, up to the date of release of the containers.
For Petitioner : Mr.S.Raghunathan For Respondents: Mr.T.Pramod Kumar Chopda, SPC for R1 & R3 Mr.S.Murugappan for R2
O R D E R
Alleging certain discrepancies in the weighment of the containers by the 2nd respondent herein during their customary weighment of containers before admitting into the CFS, a total of 75 numbers x 20 feet containers came to be examined by the CFS PO on 05.02.2009 and 13.02.2009. These 75 containers were said to contain 'Heavy Melting Scrap' and the containers were supplied by the petitioner herein. In pursuant to the action taken on this, the 3rd respondent herein had passed a Order-inOriginal No.56606/2017 dated 04.07.2017, whereby he had ordered for confiscation of the 75 x 20 feet containers under Section 118(a) of the Customs Act, 1962 and allowed the Steamer Agent to redeem these containers on payment of Redemption Fine. A penalty of Rs.85,00,000/- was also imposed on the petitioner under Section 116 of the Customs Act in the same order.
2. Aggrieved against the Order-in-Original, the petitioner had preferred an appeal in Sea. C.Cus II No.632 of 2017 before the Commissioner of Customs (Appeals-II) and by an order dated 25.09.2017, the appeal came to be partly allowed, in the following manner:- 5.1. On the first issue, it is seen that the LAA has relied upon the Hon'ble Madras High Court order dated 01.06.2016 in the case of M/s.Caravel Logistics Pvt. Ltd. The facts before the Hon'ble High Court were almost identical to the present case, as in that case also huge storage of MS Steal Scrap was noticed in the containers and the seals on the containers were found intact. The Division Bench of Hon'ble High Court of madras, after taking into consideration the Single Judge Order of Bombay High Court in the case of M/s.
Shaw Wallace has upheld the penalty imposed on the steamer agent under Section 116 of the Customs Act. I have no reason not to follow the jurisdictional High Court order and apply the ratio in the facts of the present case. Accordingly, I do not find any infirmity in the impugned order as far as penalty imposed on the appellant under Section 116 of the Customs Act, 1962 is concerned. However, I find that the penalty imposed is twice the amount of duty involved on short landed goods which is the maximum penalty which can be imposed under the provisions of Section 116. In the facts and circumstances of the case the penalty imposed is excessive and requires reduction. Accordingly, the penalty is reduced to Rs.43,00,000/-. 5.2. To appreciate the second issue. i.e.
Act, I reproduce the Section as under:
"118. Confiscation of packages and their contents- (a) Where any goods imported in a package are liable to confiscation, the package and any other goods imported in that package shall also be liable to confiscation.
(b) Where any goods are brought in a package within the limits of a customs area for the purpose of exportation and are liable to confiscation, the package and any other goods contained therein shall also be liable to confiscation."
5.3. As per the provisions of this Section, a package can be confiscated if the goods imported in the package are liable for confiscation. Without going into the question of whether a container can be considered as a package or not, I find that the LAA has not confiscated the goods i.e. HMS of 56.82 MTs contained in these containers and vacated the seizure. If the goods contained in the containers are not confiscated, then the question of confiscation of the containers would not arise at all. Accordingly, I set aside the confiscation of the containers.
The appeal is partially allowed.
3. Thus, the aforesaid observations made by the Appellate Authority are self explanatory to the effect that confiscation order was set aside and the penalty was reduced to Rs.43,00,000/-. The Appellate Authority has further held that without confiscating the goods in the container, the confiscation of the containers alone is not permissible. I am in agreement with such a finding. It is now brought to the notice of this Court that as against the order of the Appellate Authority, the Department has not filed any appeal or revision till date. The petitioner alone claims to have filed a revision as against the revised penalty imposed by the Appellate Authority.
4. The learned counsel for the 2nd respondent would submit that they are neither parties in the Order-in-Appeal nor are they aware of such an order being passed and that, since these containers have been in their custody for all these years, they are entitled for storage charges.
5. The learned counsel for the petitioner would submit that all along the seizure of these 75 containers, without
confiscation of the goods inside the containers, itself is bad and they are entitled for the release of the containers, which aspect has also been ratified by the Appellate Authority in the order dated 25.09.2017. In view of this development, holding that the confiscation of the containers is bad by the Appellate Authority and also taking into account that the Department has not challenged the order of the Appellate Authority, this Court is of the view that the petitioner would be entitled for redeeming the 75 empty containers from the possession of the 2nd respondent herein. If the 2nd respondent is granted liberty to work out his remedies in accordance with law, for the purpose of claiming storage charges, the ends of justice would be secured. This Court is also conscious of the fact that the entitlement of the 2nd respondent to claim storage charges is a different cause of action, which requires to be dealt with by raising appropriate grounds.
6. In the light of the above observations, there shall be a direction to the respondents in general and the 2nd respondent in particular to forthwith release the 75 containers, which are morefully described in the annexure to this order, in any event, within a period of 30 days from the date of receipt of a copy of this order. The 2nd respondent is also at liberty to work out his remedies for claiming storage charges in accordance with law. Annexure SL. NO CONTAINER NO SIZE TGHU3541691 ECMU1175320 ECMU2088390 GESU2112787 TPHU8091825 CLHU3160215 TRLU3457359 TRLU3764308 ECMU1907591 GSTU5284862 TOLU3331600 ECMU1048840 ECMU1094547 CNCU1519976 ECMU2072732 TRLU3768767 WFHU1086245 ECMU1428095 TRLU8820071
ECMU1417634 SCZU7528970 TRLU3179345 CLHU2454909 ECMU1435129 FSCU7688580 DVRU1305943 TRLU3398092 GATU1008730 CRXU1593418 ECMU1973934 SCZU7660250 ECMU1083590 JAYU1084376 DVRU1571938 ECMU1482943 MMCU2005619 FBLU3103324 ECMU2079681 WFHU1172831 IPXU3281750 INBU3811340 GVCU2072692 TTNU2694850 TRLU2576918 JAYU1036296 DVRU1604517 CAXU2338650 GATU1288436 ECMU2004764 ECMU1998009 ECMU1044989 ECMU1391484 GLDU3126729 EMCU1199300 SCZU7249403 ECMU1570068 CNCU1517989 TGHU3106349 CNAU2827356 GATU1316327 CMAU1047476 OTAU2638945
DVRU1306214 CRXU1182910 GVCU2051597 TGHU3257941 ECMU2025406 ECMU1714611 TGHU2728796 GESU2455678 TRLU9373614 GSTU4360211 IPXU3075560 DVRU1532947 GESU2446336
7. Accordingly, the Writ Petition stands allowed. No costs. hvk Sd/- Assistant Registrar //True Copy// Sub Assistant Registrar To
1. Union of India, Ministry of Finance, New Delhi.
2. Office of Commissioner of Customs (Import), Chennai Customs House, Rajaji Salai, Chennai - 600001.
+1cc to Mr.S.Murugappan, Advocate, SR.No.70445/19 W.P.No.14944 of 2011 Kak(14/10/2019)