Holding

The Supreme Court held that the High Court erred in overturning the collector’s and tribunal’s factual findings; the statutory provisions do not require proof of fraudulent intent or mandatory notice, and the 24‑hour manifest deadline starts at the vessel’s arrival at the customs port, thereby upholding the confiscation orders.

Summary

The Union of India appealed against the Bombay High Court's order that set aside the customs collector's confiscation of prohibited goods and the vessel MANSC0‑3 under Sections 111(d), 111(f) and 115(2) of the Customs Act, 1962. The High Court had held that the vessel's arrival time for the 24‑hour import‑manifest deadline should be measured from payment of port charges, that there was no fraudulent intent, and that lack of notice under Section 124 invalidated the confiscation. The Supreme Court held that the 24‑hour period begins when the vessel arrives at the customs port (outer anchorage), that the collector’s and tribunal’s factual findings were not perverse or unsupported, and that mens rea and notice to the owners are irrelevant to a penalty in rem under Section 111. Consequently, the confiscation orders and the penalty under Section 112 were upheld and the High Court judgment was set aside. The appeal was allowed, dismissing the writ petition and restoring the collector’s and tribunal’s orders.

Issues considered

The proper commencement of the 24‑hour period for filing an import manifest under Section 30(1) of the Customs Act.
Whether the High Court may re‑appreciate evidence and overturn factual findings of the collector and tribunal.
The relevance of the owners' or master’s intention (mens rea) to confiscation under Sections 111(d) and 111(f).
The mandatory nature of notice under Section 124 before confiscation of goods.
The applicability of Section 115(2) confiscation of the vessel without notice to the owners.
The validity of imposing a personal penalty under Section 112 on the managing director.

Legislation cited

Customs Act, 1962s. 111(d), s. 111(f), s. 112, s. 115(2), s. 124, s. 2, s. 30(1), s. 30(3)
Imports and Exports (Control) Act, 1947s. 3
Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976

Subjects

Customs ActImport manifestSection 30Section 111ConfiscationPenalty in remPenalty in personamSection 124 noticeHigh Court jurisdictionWrit petitionBonafide vs fraudulent intentIndian customs water

Judgment

A UNION OF INDIA
v.
MIS. MUSTAFA AND NAJIBAI TRADING CO. AND ORS.

JULY 16, 1998

B [S.C. AGRAWAL AND V.N. KHARE. JJ.]

Customs Act, 1962-

Ss.2, 30 (1)- 24 hour time limit to file the import manifest/ import report
C to be reckoned from the time the vessel arrives at the customs port- The outer
anchorage is part of Bombay port and the Import General Manifest Should
have been delivered within 24 !Iours from the time the vessel arrived at that
point-Discretion to accept the manifest after expiry of the time limit arises
only when the import manifest is delivered to the Customs-Not when there
is no delivery at all.
D
S. 111. (d)-The confiscation of goods has no relation to the intention
of the owners/master of the vessel since it is an action in rem against the
goods which have controverted viz. not mentioned in the import manifest/
report the law and are dutiable/prohibited, are liable to confiscation.

E S. 111. (j) Criteria for confiscation is whether the goods are dutiable/
prohibited and whether they are mentioned in the manifest/ import report as
per the regulations. Mens rea has no bearing on the confiscation.

S. 124. Notice to owner of goods not mandatory-Notice to person
responsible for the contravention is substantial compliance- As Show
F Cause Notice was issued to the owners of the vessel, the agents etc. and no
prejudice caused to the owner of the goods, there is no !aches and the owners
not being present, had no personal knowledge and could not offer any other
explanation than that offered by the master of the vessel and the agents-
Import Manifest (Vessels) Regulations-1971 R 3, 5(1), Imports awi Export
(Control) Act 1947-S 3, Imports (Control) Order-1955-Clauses 3, 11 (e),
G Constitution of India-Article 226 and 227-High Court cannot re-appreciate
evidence before the Tribunal and upset its findings based only on such re-
appreciation, except when it is contrary to actual evidence or is perverse.

Customs Collector pa~sed an order of confiscation of a vessel along
with its cargo on the ground among others, that the Import Manifest was not
H filed, the vessel violattd rules by entering without payment of Port charges
708
U.0.1. v. MUSTAFA AND NAJIBAI TRADING CO. 709

etc., after conducting an investigation, and serving Show Cause notices to A
which replies were filed by the parties. On appeal, the Tribunal upheld the
order of the Collector agreeing with his findings that the explanation for
arriving at Bombay to repair the Radar and V.H.F and to collect cargo, wa~
not tenable, that the vessel had not come for a bonafide purpose. The High
Court relied on State of Bombay v. F.N. Balsara, [1951 [ SCR 682 and B
Radhakrishnan v. Union of India, [1965] 2 SCR 213 and reversed the order
of the Collector holding that S 30 (3) of the Customs Act, was not followed,
that notice under S. 124 was not given, that the 24 hour time limit prescribed
under S. 30(1) started to run only after payment of Port Trust charges, that
the goods were in transit and the visit to the port was not illegal, though at
the same time agreeing that the goods were prohibited goods. Hence this C
appeal. Allowing the appeal this Court.

HELD: I. The impugned judgment of the High Court setting aside the
order for confiscation of the goods passed under Sections 111 (d) and 111
(I) of the Customs Act cannot be upheld. The High Court, while exercising
its jurisdiction under Articles 226 and 227 of the Constitution, has reversed D
the concurrent findings of fact recorded by the Collector and the Tribunal
regarding the avowed purpose of the voyage of the vessel M from Karachi
to Bombay, viz, picking up additional cargo and repair of Radar. Disagreeing
with the findings recorded by the collector as well as the tribunal, the High
Court has accepted the explanation offered by the owners and the master of E
the vessel M for its coming to Bombay from Karachi. The High Court has
held that three was nothing to show that there was any fraudulent intention
on the part of the owners of the vessel, the Captain and the agents at Karachi
in the vessel M's coming to Bombay from Karachi. [725-H; 726-A-B]

2. While exercising jurisdiction under Articles 226 and 227 of the F
Constitution it is not open the High Court to re-appreciate the evidence
produced before the subordinate tribunal and on the basis of such re-
appreciation of the evidence arrive at a finding different from that recor-ded
by such tribunal. The finding of fact recorded by the subordinate tribunal can
be interfered with by the High Court only if is found to be based on no G
evidence or if such a finding can be regarded as perverse. The High Court
cannot convert itself into a court of appeal. A perusal of the impugned
judgment of the High Court shows that while dealing with the Writ Petition,
::" the High Court embarked upon a re-appreciation of the evidence and has
dealt with the matter as if it was hearing an appeal of facts. Such a course
was not permissible. [726-D-E] H
710 SUPREME COURT REPORTS [1998] 3 S.C.R.

A Collector a/Customs, Madras and Ors. v. D. Bhoormall, 1197412 SCC
544 and lndru Ramchand Bharvani and Ors. v. union of India and Ors.,
(19881 4 sec 1, relied on.

3. Bonafides of the owners or the master of the vessel has a bearing
only on the applicability of sub-section (3) of Section 30 which enables the
B proper officer to permit the import manifest or import report to be amended
or supplemented if he is satisfied that the said import manifest or import
report is in any way incorrect or incomplete and there is no fraudulent
intention. In the present case the applicability of sub-section (3) of Section
30 does not arise because no import manifest was delivered by the Master
C of the vessel at any time. The intention of the owners or the master of the
vessel has no bearing on the exercise of the power of confiscation of goods
under Section 111 of the Act because, confiscation of goods is an act in rem
directed against the goods in respect of which the contravention rendering
them liable to be confiscated has taken place. In the matter of confiscation
of goods under Section 111 (d) of the Act intention has, therefore, no bearing.
D What is required to be seen is whether the goods had been imported or
brought within the Indian customs water for the purpose of being imported
contrary to any prohibition imposed by or under the Act or any other law for
the time being in force. If it is found that any goods have been imported or
attempted to be imported or brought within the customs water for the purpose
E of being imported contrary to any prohibition imposed by or under the Act
or any other law for the time being in force the said goods will be liable to
confiscation under section 111 (d) and the question whether the person
importing the said goods intended to commit violation of the provisions of the
Act or any other law for the time being in force would be of no consequence.
Similarly, clause (I) of Section 111 provides for confiscation of any dutiable
F or prohibited goods which are required to be mentioned under the regulations
in any import manifest or import report and which are not so mentioned
therein. In the matter of confiscation of goods under Section 111 (I) what is
required to be seen is whether the goods are dutiable or prohibited goods and
are required to be mentioned in the import manifest/import report. If it is
G found that the goods are dutiable or prohibited goods and are required to be
mentioned under the regulations made under the Act in the import manifest/
import report but have not been so mentioned, the goods will be liable to be
confiscated and the intention of the defaulter would have no bearing on the
exercise of power to confiscate the goods. Since mens rea is not essential
for invoking the power 'of confiscation of the goods under Section 111 of the
H Act, the intention of the master of the vessel or the owners of the vessel and
-.../
r

U.0.1. v. MUSTAFA AND NAJIBAI TRADING CO. 711

the circumstances under which the vessel containing the goods came A
to Bombay has no bearing on the exercises of the power of confiscation
of goods under section 111 (d) and 111 (I) and all that has to be seen is
whether the conditions prescribed under the said provisions were
fulfilled as to justify the confiscation of the goods. [729-D-H; 730-A-D]
Shewpunjanrai Indrasanrai Ltd. v. The Collector of Customs and Ors., B
[1959] SCR 821 and Collector of Customs, Madras and Ors. v. D. Bhoormall,
[1974] 2 sec 544, referred to.
4. Under Section 30 (1) an import manifest has to be delivered within
twenty four hours after the arrival of the conveyance at a customs station.
The expression "customs station" is defined in Section 2 (13) to mean" any C
customs port, customs airport or land customs station". The expression
"customs port" is defined in Section 2 (12) to mean "any port appointed
under clause (a) of section 7 to be a customs port and includes a place
appointed under clauses (aa) of that section to be an inland container depot".
In the present case, the vessel M had arrived at the outer achorage of the
Bombay Port on August 20, 1983. The outer anchorage is a part of the D
Bombay port. This would show that the vessel M had arrived at the customs
port of Bombay on August 20, 1983. In view of Section 30 (1) of the Act the
Import general Manifest should have been delivered within twenty four hours
of the arrival of the vessel at the outer anchorage on August 20, 1983. The
High Court was in error in holding that the vessel would be treated to have
arrived at the customs port of Bombay on August 23, 1983 after the Bombay E
Port Trust charges had been paid and the signal had been given for the
vessel to be brought into the inner anchorage on or after August 23, 198J.
Proviso (b) to sub-section (1) of Section 30, which empowers the proper
officer to accept the import manifest or import report at any time after the
expiry of the period of twenty four hours if he is satisfied that there was F
sufficient cause for not delivering the import manifest or import report or
any part thereof within twenty four hours after the arrival of the conveyance,
has no application in the present case because the Collector as well as the
Tribunal have found the no request for filing the Import General Manifest
after the expiry of the period of twenty four hours was made at any time
either by the captain of the vessel or by the local agents at Bombay. G
[730-H; 731-A-D]
5. The Tribunal has held that the goods that were seized from the
;. vessel were prohibited goods and the said finding has not been upset by the
High Court. In the Circumstances, it must be held that there was contravention
of the requirement regarding mentioning of the goods in the Import General H
712 SUPREME COURT REPORTS (1998] 3 S.C.R.

A Manifest by the Captain of the vessel and the local agents of the owners of
the vessel at Bombay and the goods seized were liable to be confiscated under
Section 111 (I) of the Act. [731-E)

6. The High Court has held that the goods were obviously in transit
to Dubai which was the port of clearance and the visit to Bombay port was
J3 not illegitimate or illegal. The finding of the High Court that there was no
lack of bonafides on the part of the master of the vessel and the owners of
the ship in the ship having come to Bombay, has been arrived at by the High
Court after reversing the finding of fact recorded by the Collector and the
Tribunal and it cannot be susfii.ned. Mens rea is not essential for invoking
the power of confiscation under Section lll of the Act-and, therefore, the
C intention of the owners of the vessel or the master of the vessel has no
bearing on the exercise of the power to confiscate the goods under clauses
(d) and (I) of Section 111 of the Act. [731-G-H; 732-A-B)

7. The distinction between the nature of the two penalties, viz, penalty
D in rem and in personam, had been maintained by the Act. The provision
regarding confiscation of goods contained in Sections 111 and 113 of the Act
is a penalty in rem which is enforced against the goods, while the personal
penalties imposed under Section 112 and other provisions of the Act are in
the nature of penalty in personam which are enforced against the person
concerned. [734-D)
E
Shewpujanrai lndrasanrai Ltd. v. The Collector of Custom and Ors.,
[1959) SCR 821 and Collector a/Customs, Madras and Ors. v. D. Bhoormall,
[1974] 2 sec 544, referred to.

8. Section 124 of the Act, which incorporates the rule of audi a/term
F partem, one of the two basic tenets of the principles of natural justice, does
not have the effect of making any alteration in the nature of these penalties.
There may be situations where the goods are found to be smuggled goods and
are seized !>ut the identity of the owner of the goods is not known. Section
111 of the Act a penalty in rem which attaches to the goods which are the
G subject m11tter of the proceedings for confiscation and if it is found that the
goods are Habel to be confiscated under Section 111 of the Act, they can be
confiscated without ascertaining the real owner. Moreover, in so far as the
rule of audi altrem partem is concerned, the position is well settled that an
order passed in disregard of the said principle would not be invalidated if it ~
can be shown that as a result of denial of opportunity contemplated by the
H said rule the person seeking to challenge the order has not suffered any
U.0.1. v. MUSTAFA AND NAJIBAI TRADING CO. 713

,,,
prejudice. Since Section 124 of the Act incorporates the said principle of A
natural justice, failure to give notice to the owner of goods would, not by
itself, invalidate an order of confiscation. What has to be seen is whether the
owner of the goods has suffered prejudice on account of the failure on the
part of the officer passing the order for confiscation goods to give notice to
the owner of the goods before passing the order for confiscation of the goods. B
The owner of the goods ordered to be confiscated cannot be said to have
suffered any prejudice in a case where notice has been given to the person
responsible for the alleged contravention on which the order for confiscation
is founded and who alone is in a position to offer an explanation for such
contravention. The requirement regarding the issue of notice to the owner
of the goods under Section 124 cannot, therefore, be construed as a mandatory C
requirement so as to have the effect of invalidating an order. An order of
confiscation would not be rendered invalid ifthere is substantial compliance
with the requirements of Section 124 in the sense that before passing an
order of confiscation a notice has been given either to the owner of the goods
or a person who is responsible for the contravention on which the order for
confiscations of goods is founded and who alone in is a position to offer an D
explanations for such contravention . In the present case Show Cause Notices
dated December 31, 1983 were issued by the Assistant Collector of Customs,
R &I, Bombay. The owners of the cargo did not appear before the Collector.
None of the owners of the cargo challenged the order of confiscation of goods
passed by the Collector before the Tribunal awl the order of the collector E
regarding confiscation of goods became final as against the owners of the
goods. In the Writ Petition field before the High Court respondent No 3
claiming to be the owner of a part of cargo which was seized and confiscated,
for the first time sought to challenge the orders passed by the Collector as
well as the Tribunal regarding confiscation of the goods . The said contention
appears to have been raised for the first time before the High Court Moreover, F
under the show cause notices the seized goods were proposed to be confiscated
under sections l ll(d) and lll(f)ofthe Act. The owners of the vessel ,M, the
Master of the said vessel and the local agents of the owners of the vessel at
Bombay were best persons who could offer an explanation and show that
there was no contraventions which could justify the confiscation of goods G
under Sections 111(d) and 111 (f) of the Act. Since the owners of the goOds
were not present on the scene and had no personal knowledge, they could
not offer an explanation other then that offered by the owners of the vessel,
the Master of the vessel and the local agents of the owners of the vessel at
Bombay. In the circumstances, it cannot be said that the failure to issue a
notice under Section 124 to the owners of the goods has resulted in any H
714 SUPREME COURT REPORTS [1998] 3 S.C.R.

A prejudice to the owners of the goods that have been order to be confiscated
and such failure cannot, therefore, be a ground for setting aside the order
of confiscation of goods passed under section lll(d) and 111 (I) of the Act.
1734-E-H; 735-A-H; 736-D-Ef
9. The consideration which weighed with the High Court to set aside
B the order regarding confiscation of goods also weighed with it for setting
aside the order for confiscation of the vessel under Section 115 (2) of the
Act inasmuch as the High Court found that there was no fraudulent intention
on the part of the owners of the vessel in directing the vessel to proceed to
Bombay from Karachi to lift additional cargo and the purp.lse for which the
vessel ,M, was directed to proceed to Bombay was to lift the said additional
C cargo and also to have the Radar and V.H.F. equipment repaired. The said
finding of the High Court cannot be upheld. The High Court has set aside
the confiscation of vessel also on the ground that no notice was issued to the
owners of the vessel under Section 124 of the Act. The order regarding
confiscation of the vessel could not be set aside on the ground that no notice
D under Section 124 of the Act was issued to the owners of the vessel. The
Tribunal upheld the penalty imposed on the respondent no 2 under Section
112 of the Act. There is no infirmity in the said view of the Tribunal.
1737-F-H; 738-A-C; 739-BJ
CIVIL APPELLATE JURISDICTION : Civil Appeal No.152 of 1988.

E From the Judgment and Order dated 14.5.87 of the Bombay High Court
in C.W. No. 6142of1986.

M.S. Usgaonkar, Additional Sclicitor General, N.K. Bajpai, S.D. Sharma
and Ms. Susma Suri for the Appellants.

F A.J. Rana, Madhu M. Patel, Manoj Wad, Ashish Wad and Ms. Jayashree
Wad for the Respondents.

The Judgment of the Court was delivered by

S.C. AGRAWAL, J. This appeal, by special leave, has been filed by
G Revenue against the judgment of the Bombay High Court dated May 14, 1987
whereby the High Court, while allowing Civil Writ No. 6142 of 1986 filed by
the respondents, has set aside the order dated April 6, 1984 passed by the
Collector of Customs (Preventive), Bombay (hereinafter referred to as 'the
Collector') as well as the order of the Customs, Excise ancl Gold (Control)
Appellate Tribunal (hereinafter referred to as 'the Tribunal') dated November
H 26, 1985. By the said order of the Collector dated April 6, 1984, which was
U.O.l. v. MUSTAFA AND NAJIBAI TRADING CO. [S.C. AGRAWAL, J.] 715
affirmed in appeal by the Tribunal, goods valued at Rs. 59,53,560 c.i.f. (Rs. A
I, 78,60,680 at the Indian market rate) were confiscated under clauses (d) and
(f) of Section 111 of the Customs Act, 1962 (hereinafter referred to as 'the
Act'). The gunny bags, white cloth wrappings, wooden cases and the cartons
which were used for keeping the seized goods were also confiscated under
Section 118(1) of the Act. The vessel, MANSC0-3, containing the said goods B
was confiscated under Section 115(2) of the Act but the owner of the vessel
was given an option to redeem it on payment of fine of Rs. 7,50,000 within
one month of the date of receipt of the said order and personal penalties were
'also imposed under Section 112 of the Act on respondent No. 2, the Managing
Director of respondent No. I company (the owner of the vessel) as well as
on the Master of the vessel and other persons. C
In September 1982 408 packets were consigned from Dubai to Afghanistan
via Karachi and were shipped to Karachi on the vessel 'AMETHYST'. When
the said vessel arrived at Karachi port the Government of Pakistan refused
clearance of the consignment and the goods remained in transit shed at
Karachi port. On April 25, 1983 the Central Board of Revenue of Pakistan D
allowed reshipment of the goods back to Dubai. Thereafter the vessel,
MANSC0-3, was sent from Dubai to Karachi for unloading certain cargo at
Karachi and to return to Dubai with the said consignment of 408 packets
which had been detained at the Karachi port. At Karachi port 408 packets
were loaded on the vessel for the purpose of reshipment to Dubai. 971
E
packages of goods of Pakistan origin were also loaded on the said ship.
MANSC0-3 left Karachi on August 16, 1983 but instead of proceeding to
Dubai the vessel proceeded to Bombay. MANSC0-3 reached the outer
anchorage of Bombay harbour on August 20, 1983. From the outer anchorage
the said vessel entered the inner anchorage on August 21, 1983 but was sent
back to outer anchorage on the same day. On August 22, I 983 M/s Regent F
Shipping and Trading Company, the local agents of the shipping company
which owned the vessel, MANC0-3, contacted the Captain of the ship as well
as the Bombay Port Trust Pilot Station and the Bombay Port Trust Control.
They were asked to deposit the piloting charges by the Bombay Port Trust
authorities. On August 23, 1983 piloting charges of Rs. 12,000 were paid to G
the Bombay Port Trust by the local agents and the ship was brought into the
inner anchorage of Port Mazgaon on August 23, 1983 at about 12.20 p.m. On
the morning of August 24, 1983 the officers of the Customs (Preventive) Wing
boarded MANSC0-3 and asked the Captain of the vessel to produce the crew
list, crew property list, store list and the Import General Manifest. The Captain
of the vessel could not produce any of the above referred documents. On H
716 SUPREME COURT REPORTS [1998] 3 S.C.R.

A questioning the Captain the Customs Officers came to know that the Chief
Officer and the Chief Engineer of the vessel had left the vessel in a fishing
craft without completing the customs, health and immigration formalities and
had gone ashore when the vessel was at the outer anchorage. Thereafter the
officers inspected the holds of the vessel and found a large number of white
B cloth wrapped packages bearing the markings 'Star Dubai', Prince Dubai', etc.
They further found a large number of gunny covered packages bearing the
marking 'In Transit to Afghanistan via Karachi and Chamman' below the
white cloth covered packages. Having regard to the markings it appeared to
the officers that the goods were meant for shipment to Afghanistan and the
Captain had port clearance for Dubai from Karachi and not for Bombay. The
C customs officers also came to know that the vessel had on its own attempted
to come to the inner anchorage of Bombay harbour even before Bombay Port
Trust charges were paid and without being escorted by the Port Trust Pilot
and that there was a direction by the harbour pilot to go back to the outer
anchorage. The 408 gunny packages bearing the markings 'In Transit to
Afghanistan via Karachi and Chamman' were found to contain VCRs, Video
D Cassettes, Car Cassettes Players, textiles, TV sets. All these packages originated
from Dubai and were valued at Rs. 56,21,320 c.i.f. and Rs. 1,68,63,960 (market
value). The other packets found in the vessel contained ready-made garments,
PVC pipes, footwears, aluminium utencils packed in 971 packing and were
valued at Rs. 3,32,240 c.i.f. and Rs 9,96,720 (market value) and the said goods
E originated from Pakistan. The Customs Officers recorded the statements of
the Captain of the vessel as well as the representative of the local agents at
Bombay. Since the Captain and the local agents did not take any steps to file
the Import General Manifest and other documents for the purpose of voyage
to Bombay, the Customs Officers seized all the 1379 packets found on board
of the vessel. After completing the investigation Show Cause Notices dated
F December 31, 1983 were issued by the Assistant Collector of Customs, R &
I, Bombay. A reply dated February 19, 1984 to the said Show Cause Notice was
submitted on behalf of M/s Mustafa & Najibai Trading Co., Dubai, respondent
No. I, the owners of MANSC0-3 and respondent No. 2 the Managing Director
of respondent No. I. The Captain and others sent their replies to the Show
G Cause Notice on February 20, 1984. After holding an inquiry the Collector
passed the order dated April 6, 1984 for the confiscation of the goods that
had been seized, valued at Rs. 59,53,560 c.i.f. and Rs. 1,78,60,680 at the Indian
market rate under clauses (d) and (f) of Section 111 of the Act as well as for
confiscation of the gunny bags, white cloth wrappings, wooden cases and
the cartons which were used for keeping the seized goods under Section
H 118(1) of the Act. MANSC0-3 was ordered to be confiscated under Section
U.O.L v. MUSTAFA AND NAJIBAI TRADING CO. [S.C. AGRAWAL, L] 717
115(2) of the Act but the owner of the vessel was given an option to redeem A
it on payment of fine of Rs. '7,50,000 within one month of the date of receipt
of the said order. A personal penalty of Rs. 3,00,000 was imposed on Mustafa
Najibi, respondent No. 2, the Managing Director of respondent No. I, and a
penalty of Rs. 2,00,000 was imposed on Abdul Rahim Kharti, the master of
the vessel. Personal penalties were also imposed on certain other persons, viz, B
Mohammed Yousef Abdulla, Mis Aero Maritime Ltd., Karachi, Ramesh Amritlal
Shah, Abedin Ghadialy, Ramanlal P. Pandya and Dawood Sharafuddin Kaldane.
Feeling aggrieved by the said order of the Collector, an appeal C.D. (Bom.)
A No. 548 of 1984 was filed by Abdul Rahim Khatri, master of the vessel
MANSC0-3 and C.D. (Born.) A No. 549 of 1984 was filed by Mis Mustafa &
Najibi Trading Co., respondent No. 1 and Nuruddin Nustafa, respondent No. C
2, Managing Director of respondent No. I. Both these appeals were dismissed
by the Tribunal by order dated November 26, 1985. Feeling aggrieved by the
said order of the Tribunal, Writ Petition No. 6142 of 1986 was filed in the
Bombay High Court by Mis Mustafa & Najibi Trading Co., respondent No.
1, the owners of the vessel MANSC0-3, Nuruddin Mustafa, respondent No.

-
2, the Managing Director of respondent No. I company, and Mahmood D
Mohmed Abrahim Benzad, respondent No. 3 herein, who claims to be the
owner of some of the packages which had been shipped from Dubai to
Karachi and which were seized from MANSC0-3 by the customs authorities
at Bombay port and were ordered to be confiscated. The said Writ Petition
has been allowed by the High Court by the impugned judgment. Hence this E
appeal.

We have heard Shri M.S. Usgaonkar for the Union of India and Ms. A.J.
Rana, the learned counsel for the respondents.

As mentioned earlier, the orders passed by the Collector and the Tribunal, F
which have been quashed by the High Court, involve :- .

(i) confiscation of the goods which were found in MANSC0-3
during the course of inspection of the vessel by the customs
authorities on August 24, 1983 and had been seized;

(ii) confiscation of the vessel; MANSC0-3; and G
(iii) Imposition of personal penalties on respondent No. 2, the
Managing Director of respondent No. I company and on the
Master of the vessel.

We wiil first take up the matter of confiscation of the goods. As H
718 SUPREME COURT REPORTS [1998] 3 S.C.R.

A indicated earlier, the goods were ordered to be confiscated in exercise of
power conferred under clauses (d) and (f) oL,Section 111 of the Act which
are reproduced as follows :-

"111. Confiscation of improperly imported goods, etc.-The following
goods brought from a place outside India shall be liable to
B confiscation:-

(d) any goods which are imported or attempted to be imported or are
brought within the Indian t:ustoms waters for the purpose of being
imported, contrary to any prohibition imposed by or under this Act
or any other law for the time being in force;
c
(f) any dutiable or prohibited goods required to be mentioned under
the regulations in any import manifest or import report which are not
so mentioned;"

. The expressions "Import", "Import manifest", "India" and "Indian
D Customs Waters" are defined in Section 2 of the Act in the following terms:-
"2(2 3). 'Import', with its grammatical variations and cognate
expressions, means bringing into India from a place outside India."

"2(24). 'Import manifest' or 'import report' means the mJnifest or
E report required to be delivered under Section 30."

"2(27). 'India' includes the territorial waters of India."

"2(28). 'Indian Customs Water' means the waters extending into the
sea upto the limit of contiguous zone of India under section 5 of the
Territorial Waters Continental Shelf, Exclusive Economic Zone and
F other Maritime Zones Act, 1976, (80 of 1976) and includes any bay,
gulf, harbour, creek or tidal river."

In Section 30 of the Act the following provision is made with regard to
delivery of import manifest in the case of a vessel or aircraft :-"

G. 30. Delivery of import manifest or import report.-( I) the person-in-
charge of a conveyance carrying imported goods shall, within twenty-
four hours after arrival thereof at a customs station, deliver to the
proper officer, in the case of a vessel or a aircraft, an import manifest,
and in the case of a vehicle, an import report, in the prescribed form:
H Provided that,-
U.O.I. v. MUSTAFA AND NAJIBAI TRADING CO. [S.C. AGRAWAL J.] 719
(a) In the case of a vessel any such manifest may be delivered to A
the proper officer before the arrival of the vessel;

(b) if the proper officer is satisfied that there was sufficient cause
for not delivering the import manifest or import report or any part
thereof within twenty-four hours after the arrival of the
conveyance, he may accept it at any time thereafter. B
(2) The person delivering the import manifest or import report shall at
the foot thereof make and subscribe to a declaration as to the truth
of its contents.

(3) Ifthe proper officer is satisfied that the import manifest or import C
report is in any way incorrect or incomplete, and that there was no
fraudulent intention, he may permit it is to be amended or
supplemented."

Regulation 3 in the Import Manifest (Vessels) Regulations, 1971
(hereinafter referred to as 'the Import Manifest Regulations') framed under D
·Section 157 of the Act, as in force at the relevant time, required that the import
manifest must be delivered in duplicate and should cover all the goods carried
in a vessel and shall consist of :-

- (i) a general declaration in form I,
E
(ii) a Cargo declaration in form II,

(iii) a Vessel's Stores List in form III,

(iv) a list of the private property m the possession of the Master,
Officers and crew in form IV.
F
In Regulation 5(1) of the Import Manifest Regulations it was provided
that the cargo declaration shall be delivered in separate sheets in respect of
each of the following categories of cargo, namely, (a) cargo to be landed, (b)
Unaccompanied baggage, (c) goods to be transshipped, and (d) same bottom
or retention cargo. G
The Collector held that the seized goods had been imported into India
without an import licence and hence in contravention of the prohibition
imposed under Section 3 of the Imports and Exports (Control) Act, 1947 and
clause 3 of the Imports (Control) Order, 1955 and were, therefore, liable to
confisc~.tion under Section 11 !(d) of the Act and that the goods were also H
720 SUPREME COURT REPORTS [1998] 3 S.C.R.

A liable to be confiscated under Section I I l(f) of the Act because there was
failure on the part of the Master of the vessel MANSCO -3 and the agents
of the owners of the vessel at Bombay to file the Import General Manifest as
required under Section 30 read V'ith the Import Manifest Regulations within
24 hours of the arrival of the vessel in the port of Bombay. The submission
B of the respondents that the goods were not meant for being unloaded in India
and being 'same bottom cargo' they were covered by clause 11 (e) of the
Import (Control) Order and no import licence was required for bringing them
in this country, was rejected by the Collector on the ground that under the
Import Manifest Regulations same bottom cargo or retention cargo carried on
a vessel has to be listed on a separate sheet in the Import Manifest which
C has to be delivered in the manner laid down in Section 30 of the Act within
24 hours of the arrival of the vessel in any customs port in India and that
no import manifest indicating the goods as same bottom cargo was delivered
under Section 30 of the Act. In the absence of an import manifest listing the
goods as same bottom cargo, the said goods, which had crossed the territorial
waters of India, had to be treated as having been imported into India in view
D of the definition of 'Import' contained in Section 2(23) of the Act and,
therefore, they were liable to be confiscated under Section 111 (d) of the Act
since there was no import licence authorising their import.

On behalf of the respondents reliance was placed on clause (b) of the
E proviso to Section 30(1) of the Act and it was submitted that it provided for
a situation where the Import General Manifest is not delivered within 24 hours
of the arrival of the vessel at the port and enables its acceptance by the
proper officer at any time thereafter. The submission was the words "may
accept" in the said proviso should be read as "shall accept". Reliance was
also placed by the respondents on sub-section (3) of Section 30 of the Act
F which provides that the Import Manifest may be permitted to be amended or
supplemented by the proper officer if he is satisfied that the Import Manifest
is in any way incorrect or incomplete and that there was no fraudulent
intention. The Collector, however, rejected the said contention on the view
that there is nothing on record to show that the Master of the vessel MANSCO-
G 3 or its agents in Bombay at any time filed the manifest or they had at any
time made a request for being permitted to flle the manifest and that in the
absence of the manifest the question of request being entertained for amending
or supplementing the manifest under Section 30(3) of the act does not arise.

While dealing with the contention based on the provisions of Section
H 30(3) of the Act, the Collector con>idered the question whether the voyage
/
'

U.0.1. v. MUSTAFA AND NAJIBAI TRADING CO. [S.C. AGRAWAL, J.] 721

,,>- of the vessel MANSC0-3 to Bombay was bonafide and found that the said A
voyage was not bonafide having regard to inconsistencies in the statements
of the Master of the vessel and the other crew members and the agents of
the owner regarding the purpose of the visit of the vessel to Bombay. It was
pointed out that Abdul Khatri in his statement had said that he received a
telex from the owners of the vessel from Dubai asking him to proceed to
Bombay to take 125 tons cargo for Dubai and further that the radar and V.H.F.
B
sets of the vessel MANSC0-3 were not working and they were to be repaired
at Bombay port.

As regards the explanation based on the telex message that the vessel
was directed to proceed to Bombay to load cargo for Dubai, the Collector has c
pointed out that Ramesh Shah, Director of Mis Regent Shipping and Trade
Pvt. Ltd., the local agents of the owners of the vessel at Bombay, in his

' statement dated August 24, 1983, had stated that a telex was received in his
office on August 16, 1983 from Dubai saying that the vessel MANSC0-3 was
sailing from Karachi and was expected to reach Bombay on August 18, 1983
and that the vessel was proceeding to Bombay as the radar and V.H.F. sets D
of the vessel were out of order and as they were to be repaired at Bombay.
He had further stated that he did not have any intimation regarding the cargo
to be lifted by the vessel MANSC0-3 at Bombay and no cargo had been kept
ready by him for loading. Abedin Abdul Hussain Ghadiali, another Director
of Mis Regent Shipping and Trade Pvt. Ltd., in his statement dated August E
24, 1983, mentioned about repair of radar and V.H.F. which showe<l that both
Ramesh Shah and Abedin Abdul Hussain Ghadiall, the Directors of the local
agents at Bombay, did not have knowledge that the vessel had arrived at
Bombay for lifting cargo for Dubai. Mohammed Yousuf Abdulla, who claimed
to be the promoter of Mis Regent Shipping and Trade Pvt. Ltd., in his
.... statements dated August 25, 1983 and September 7, 1982, had made conflicting F
and inconsistent statements. Relying upon the statement of Ramesh Shah, the
Collector held that no cargo was available at Bombay for being shipped on
board the vessel MANSC0-3 and the agents at Bombay would not have been
in a position to arrange for l 00 to 150 tons of cargo which the Master of the
vessel had been instructed to lift from Bombay.
G
The explanation that the vessel MANSC0-3 was brought to Bombay for
repairing of radar and V.H.F. sets was also not accepted by the Collector in
rt view of the statement of the Captain of the vessel dated August 25, 1983
wherein he had confirmed that the Radar was out of order even when the
vessel left Dubai and repairs to the Radar were carried out at Karachi before H
722 SUPREME COURT REPORTS [1998] 3 S.C.R.

A the vessel left that port and that the V.H.F. set was also in working order when
the vessel left Karachi port and according to Mirza Beg, Cadet on board the
vessel, this equipment went out of order only when the vessel was vbout 100
to 150 nautical miles from Bombay. The Collector held thatthe voyage of the
vessel MANSC0-3 from Karachi to Bombay was neither to have the radar and
V.H.F. equipments repaired, nor was it for lifting 100 to 150 tons of cargo from
B Bombay as stated by the Captain and that the real purpose of the visit of the
vessel MANSC0-3 to Bombay was known only to the owners of the vessel
at Dubai, the agents at Karachi and Mohamed Yousuf Abdulla who were in
constant touch with each other over telephone and through telex and that it
could not be said that the voyage was bonafide and there was no fraudulent
C intention. In this context, the Collector pointed out that in order to make the
voyage look bonafide a large number of cartons containing very cheap quality
of goods of Pakistani origin which could not have any market in Dubai were
also placed on ~oard the vessel and the packages containing electronic
goods and textiles which bear markings to show that they were in transit to
Afghanistan were kept hidden below the packages containing cheap quality
D Pakistani goods. The Collector also referred to the fact that the agents at
Karachi even after having informed the Captain that he was to sail for Bombay +--
chose to give him a port clearance for the port of Dubai in a sealed cover
which casts serious doubt about the bonafides of the voyage since such
practice is not indulged in by shipping companies engaged in regular and
E bonafide shipping operations and this irregularity on the part of agents of the
owners of the vessel MANSC0-3 at Karachi lent support to the view that the
intention of the owners, the agents in Karachi and the Master and the
persons controlling the affairs of the agents firm in Bombay were fraudulent.
It was also observed that the Captain of the vessel MANSC0-3 after arrival
at the outer anchorage of the Bombay harbour on August 20, 1983
F surreptitiously and without getting in touch with the control tower of the
Bombay Port Trust and without completing the Port Trust formalities brought
the ship to the inner anchorage which would not have been done in case his
intention was bonafide.

G It was urged on behalf of the respondents that the Captain brought the
vessel inside the inner anchorage on his own because his wife was not feeling
well and he was running short of provisions. The said explanation was,
however, not accepted by the Collector on the view that the purpose for
which the Captain e~tered the inner anchorage was obviously other than the
sickness of his wife or shortage of provisions on board the vessel because
H in his evidence on February 25, 1984 during the course of cross-examination
723
0

U.0.1. v. MUSTAFA AND NAJIBAI TRADING CO. [S.C. AGRAWAL, J.]
l
/' the Harbour Pilot Captain Mavin Kurve had deposed that when he boarded A
the vessel MANSC0-3 on seeing it anchored in an unauthorised spot in the
inner anchorage he was told by the Captain that there was nothing seriously
wrong with his wife and that she was feeling better and as regards the
shortage of provisions, the Collector observed that in case the Captain was
short of provisions and was not able to convey the message to the local B
agents because of the breakdown of V.H.F. equipment shortly before the
arrival of the vessel in Bombay harbour, the Captain could have requested the
harbour pilot Captain Mavin Kurve to convey the message to his agents
through the Bombay Port Trust Control Tower and that instead of taking this
course, the Captain chose to send two senior officers on board the vessel,
viz., the Chief Engineer and the Chief Officer, without completing Customs, C
Health and Immigration formalities, on a fishing craft in a manner which is
highly irregular from the customs angle since instance~ of lakhs worth of
precious metal being smuggled by people by carrying it on their person are
not uncommon and that these two crew members after contacting Mohammed
Yousuf Abdulla disappeared and remained away from the vessel for quite
some time. Having regard to the aforesaid facts and circumstances, the Collector D
recorded the finding that the intentions of the owners of the vessel MANSCO-
3, the Captain and the agents, including Mohammed Yousuf Abdulla, were
fraudulent and, therefore, the question of exercising the discretion for extending
the period for filling the import manifest as provided under Section 30(1) of
the Act or for considering amendment or supplementation of the manifest E
would not arise even if a request would have been made for such extension
of the time limit for filling of the manifest or for its amendment.

The Tribunal, while confirming the order of the Collector regarding
confiscation of goods under clauses (d) and (f) of Section 111 of the Act, has
considered the evidence that was produced before the Collector. The Tribunal F
did not accept the explanation offered by the owners and the master of the
vessel that the vessel MANSC0-3 had come to Bombay from Karachi for
lifting another 100 to 125 tons of cargo from Bombay for Dubai and for repair
of Radar and V.H.F. equipment. The Tribunal has-referred to the statements
of Ramesh Shah and Abedin Abdul Hussain Ghadiali, the two Directors, and G
Mohammed Yousuf Abdulla, the promoter of Mis Regent Shipping and Trade
Pvt. Ltd., the local agents of the owners cf the vessel at Bombay that they
had no information that the ship was coming to Bombay for loading additional
cargo and that they had not arranged any cargo to be loaded and has held
that if the vessel's voyage from Karachi to Bombay was for avowed purpose
of lifting 100 to 125 tons of cargo ihere was no reason for the Bombay agents H
724 SUPREME COl'RT REPORTS [1998] 3 S.C.R.

A to deny knowledge. The Tribunal has pointed out that they have not merely
denied the knowledge but were categorical that they have no such information
and no cargo had been arranged. In so far as repair of V.H.F. eqJipment was •
concerned, the Tribunal found that it was working at the time the vessel left
Karachi till it was about 150 nautical miles away from Bombay and, therefore,
B the question of the vessel sailing to Bombay for repair of the V.H.F. could not
be true. As regard repair of Radar the Tribunal has taken note of the statement
of the Captain of the vessel that the radar was out of order even when the
vessel sailed from Dubai and that some repairing of the radar were carried out
at Karachi and for want of time the entire repairs could not be carried out,
and has observed that if the repairing of the radar was so important as to
C require the vessel to be sent from Karachi to Bombay no reason was
forthcoming as to why the vessel did not wait at Karachi for carrying out full
repairs and that the repair theory was invented for the purpose of the case.
On the basis of the circumstances set out in sub-paras (i) to (xvii) of para 23
of the judgment the Tribunal has concluded that the voyage of the vessel for
Karachi to Bombay was not for the avowed purpose of repair of Radar and
D loading of additional cargo of 100 to 125 tons and that the vessel's entry in
-Bombay port was for clandestine disposal of 408 packages containing +-
electronic and textile goods of foreign origin.

As regards the non-filing of Import Manifest at Bombay, the Tribunal
E has pointed out that the explanation offered by the Captain was that he was
under the belief that customs formalities would be attended to by the local
agents, while Ramesh Shah, one of the Directors of the local agents, had
stated that since no cargo was to be unloaded he thought it was not necessary
to file the Import General Manifest and has held that the Captain was an
experienced Captain who knew his responsibilities and on earlier voyage he
F did file a 'NIL' manifest at another port and in his statement recorded on
September 2, 1983 the Captain had stated that he was aware that the manifest
has to be delivered to the customs immediately when the vessel enters the
customs area even if the vessel comes in Ballast and that, therefore, there was
no good reason for the Captain to be under the impression that the agents
G would attend to the customs formalities and that the explanation of Ramesh
Shah that no Import General Manifest was required to be filed because no
cargo was to be unloaded at Bombay was also not based on any reasonable
ground. The Tribunal rejected the contention based on clause (b) of the ~
proviso to sub-section ( 1) of Section 30 of the Act on the view that not only
no manifest was filed but there was not even a request for accepting the
H manifest after the expiry of 24 hours after arrival of the vessel at the Port of
U.O.l. v. MUSTAFA AND NAJIBAl\TRADING CO. [S.C. AGRAWAL, J.] 725

...II
Bombay. The Tribunal did not accept the contention that in view of sub- A
~
section (3) of Section 30 of the Act it was the responsibility of the customs
officer to inform the Captain or the agents to file the manifest and that non-
delivery of the manifest could not have been made a ground for confiscation
of the cargo. The Tribunal held that Section 30(3) is an enabling provision
which only confers a power on the proper officer to permit the manifest being
amended or supplemented if the manifest is any way incorrect or incomplete
B
and that it was not the case of the respondents herein that they had filed a
manifest which was incorrect or incomplete. The Tribunal, therefore, held that
.,.._ since neither the Master of the vessel nor the agents of the owners of the
vessel MANSC0-3 at Bombay filed the Import General Manifest, there was
a clear violation of Section 30 of the Act and since violation of the provisions c
of Section 30(1) of the Act was intentional, the Collector committed no error
in ordering the seizure of the goods under section 11 l(t) of the Act.

With regard to the confiscation of goods unde'r Section 111 ( d) of the
Act, the submission of the respondents before the Tribunal was that import
of good takes place only when the goods imported in the vessel are unloaded D
and get mixed up with the mass and reliance was placed on decisions of High
--+ Courts wherein the expression "import" had been construed. The Tribunal
rejected the said contention and has observed that the American doctrine of
"original package" which holds that importation is not over so long as the
goods are still in the original package has no application in this country in
E
view of the decision of this Court in State of Bombay v. F.N. Balsara, [ 1951]
SCR 682. Relying upon the decision of this Court in Radhakrishan v. Union
of India, [1965] 2 SCR 213, the Tribunal held that importation of goods is
complete when the goods have crossed the customs frontier. The decisions
of the High Courts on which reliance was placed by the respondents were
held to be inapplicable on the ground that they were given in the context of F
the particular provision under consideration and not in the context of Section
111 (d) of the Act. The Tribunal also observed that admittedly the goods were
prohibited goods which required import licence to import into India and
admittedly no such import licence was obtained and that there had been
violation of the Import and Export (Control) Act, Import (Control) Order and
·the provisions of the Act.
G

The High Court, while exercising its jurisdiction under Articles 226 and
1 227 of the Constitution, has reversed the concurrent findings of fact recorded
by the Collector and t~e Tribunal regarding the avowed purpose of the voyage
of the vessel MANSC0-3 from Karachi to Bombay, viz., picking up additional H
726 SUPREME COURT REPORTS (1998] 3 S.C.R.

A cargo and repair of Radar. Disagreeing with the findings recorded by the
Collector as well as the Tribunal, the High Court has accepted the explanation
offered by the owners and the master of the vessel MANSC0-3 for its
coming to Bombay from Karachi. The High Court has held that there was
nothing to show that there was any fraudulent intention on the part of the
B owners of the vessel, the Captain and the agents at Karachi in the vessel
MANSC0-3 coming to Bombay from Karachi.

Shri Usgaonkar has assailed the said view of the High Court and has
urged that in interfering with the findings of fact recorded by the Collector
as well as the Tribunal, the High Court has exceeded the jurisdiction vested
C in it under Articles 226 and 227 of the Constitution inasmuch as the findings
recorded by the Collector and the Tribunal do not suffer from any infirmity
which could justify interference by the High Court. The said contention, in
our opinion, must be ~ccepted.

While exercising its jurisdiction under Articles 226 and 227 of the
D Constitution it is not open to the High Court to re-appreciate the evidence
produced before the subordinate tribunal and on the oasis of such re-
appreciation of the evidence to arrive at a finding different from that recorded +--
by such tribunal. The finding of fact recorded by the subordinate tribunal can
be interfered with by the High Court only if it is found to be based on no
E evidence or if such a finding can be regarded as perverse. The High Court
cannot convert itself into a court of appeal. Reference, in this context, may
be made to the decision of this Court in Collector of Customs, Madras & Ors.
v. D. Bhoormall, [1974] 2 SCC 544, wherein it has been said :-

"Even if the Division Bench of the High Court felt that this
F circumstantial evidence was not adequate enough to establish the
smuggled character of the goods, beyond doubt, then also, in our
opinion that was not a good ground to justify interference with the
Collector's order in the exercise of the writ jurisdiction under Article
226 of the Constitution. The function of weighing the evidence or
considering its sufficiency was the business of the Collector or the
G appellate authotity which was the final tribunal of fact. "For weighing
evidence and drawing interference from it", said Birch, J. in R. v.
Madhub Chunder "there can be canon. Each case presents its own
peculiarities and in each common sense and shrewdness must be
brought to bear upon the facts elicited". It follows from this observation
H that so long as the Collector's appreciation of the circumstantial
U.0.1. v. MUSTAFA AND NAJIBAI TRADING CO. [S.C. AGRAWAL, J.] 727

evidence before him was not illegal, perverse. or devoid of common A
sense, or contrary to rules of natural justice, there would be no
warrant for disturbing his finding under Article 226." (p. 555).

Similarly, in lndru Ramchand Bharvani & Ors. v. Union of India &
Ors., [ 1988] 4 SCC l, this Court has said :-

"It must be reiterated that the conclusions arrived at by the fact- B
finding bodies, the Tribunal or the statutory authorities, on the facts,
found that cumulative effect or preponderance of evidence cannot be
interfered with where the fact-finding body or authority has acted
reasonably upon the view which can be taken by any reasonable man,
courts will be reluctant to interfere in such a situation. Where, however, C
the conclusions of the fact-finding authority are based on no evidence
then the question of law arises and that may be looked into by the
courts but in the instant case the facts are entirely different. (pp. 9,10)

In the present case, the Collector as well as the Tribunal, after carefully
considering the evidence produced during cour'e of the proceedint,s, arrived D
at the conclusion that the explanation offered by the owners and master of
the vessel MANSC0-3 for voyage of vessel from Karachi to Bombay, namely,
to pick up additional cargo at Bombay and to get the Radar and V.H.F.
equipment repaired at Bombay was unacceptable. Reversing the said view the
High Court has accepted the said explanation. The explanation that the vessel E
MANSC0-3 came to Bombay to pick additional cargo was rejected by the
Collector as well as the Tribunal in view of the statements of Ramesh Shah
and Abedin Abdul Hussain Ghadiali, the two Directors of Mis Regent Shipping
and Trade Pvt. Ltd., the agents of the owners of the vessel at Bombay that
they had no knowledge that the vessel had arrived at Bombay for lifting cargo
and that no cargo was available at Bombay which could be picked up by the F
vessel and that in the telex which was received by the local agents at Bombay
from the owners of the vessel at Dubai there was no mention about picking
of additional cargo by the vessel at Bombay. No reliance was placed on the
testimony of Mohammed Yousef, the promoter of M/s Regent Shipping and
Trade Pvt. Ltd., for the reason that he had made conflicting and inconsistent G
statements as regards the purpose of the visit' of the vessel MANSC0-3 to
Bombay. The High Court has proceeded on the basis that no importance
could be attached to the statements of Ramesh Shah and Abedin Abdul
Hussain Ghadiali since they are not "well versed in the field and have not
much experience to their credit". The High Court, while observing that "the
tendency exhibited by Mohamed Yousef to prevaricate in that behalf is so H
728 SUPREME COURT REPORTS [1998) 3 S.C.R.

A eloquent that it gives rise to a strong inference to be drawn against him'', has
chosen to rely on his statement that in his conversation with Mustafa -\
(respondent No.2) on telephone he had "promised that he would arrange the
cargo for the ship to compensate the expenses of previous dealing". The said
statement was subsequently contradicted as wrong by Mohammed Yousuf in
B his statement. The High Court has discarded the subsequent disclaimer and
has said :

"However, the fact remains that he had been in contact with the Dubai
persons and was anxious to supply additional cargo and at the relevant
time had full knowledge that the vessel was reaching Bombay to lift
c additional cargo and therefore it follows with necessary implications
that he had promised that he would supply the cargo when the ship
comes to Bombay. This would therefore further indicate that it is
because of this promise that the ship officials at Dubai thought it
proper to direct the ship to go to Bombay from Karachi to pick up the
additional cargo for being brought to Dubai."
D
There is nothing to corroborate the statement of Mohammed Yousef on
which reliance had been placed by the High Court. On the other hand, the +-
said statement about Mohammed Yousef having promised to arrange for the
cargo at Bombay does not find support from the telex received at the office
E of the agents at Bombay on August 16, 1983 from Dubai and it is belied by
the fact that no cargo was available at the Bombay port for loading on the
vessel when it arrived at Bombay.

Similarly, as regards repair of Radar and V.H.F. equipment the Collector
and the Tribunal have found that the Radar was not functioning when the
F vessel left Dubai and that it had been repaired at Karachi and that the V.H.F.
equipment was working till the vessel reached about 100 to 150 nautical miles
from Bombay port which shows that repair of Radar and V.H.F. equipment
could not be the reason for the vessel MANSC0-3 proceeding to Bombay
from Karachi. The High Court, while accepting the explanation that one of the
G reasons for the vessel to proceed to Bombay was to have the Radar and V.H.F.
equipment repaired at Bombay, has laid stress on the fact that at the time
when the vessel reached Bombay V.H.F. equipment was not working and that
two mechanics were taken to the vessel for repairing of Radar and V.H.F.
equipment. The fact that the Radar and V.H.F. equipment had to be repaired
at Bombay does not, however, mean that they were not functioning when the
H vessel left Karachi and it cannot be said that the vessel had to proceed to
"1' .

U.0.1. v. MUSTAFA AND NAJIBAI TRADING CO. [S.C. AGRAWAL, J.] 729
Bombay for repair of Radar and V.H.F. equipment. A
..).
A perusal of the impugned judgment of the High Court shows that
while dealing with the Writ Petition, the High Court embarked upon re-
appreciation of the evidence and has dealt with the matter as if it was hearing
an appeal on facts. Such a course, as indicated earlier, was not permissible.
The Collector and the Tribunal, after carefully considering the evidence B
produced during the course of the proceedings, had concurrently arrived at
the finding that the vessel MANSC0-3 had not come to Bombay from Karachi
for a bonafide purpose and that the explanation offered for the vessel
proceeding to Bombay from Karachi could not be accepted. The said finding
cannot be regarded as unreasonable or perverse. We are, therefore, unable to c
uphold the decision of the High Court in reversing the said finding of fact
recorded by the Collector and the Tribunal.

Moreover, bonafides of the owners or the master of the vessel has a
bearing only on the applicability of sub-section (3) of Section 30 which
enables the proper officer to permit the import manifest or import report to be D
amended or supplemented if he is satisfied that the said import manifest or
--+- import report is in any way incorrect or incomplete and there is no fraudulent
intention. In the present case, the question of applicability of sub-section (3)
of Section 30 does not arise because no import manifest was delivered by the
Master of the vessel at any time. The intention of the owners or master of
E
the vessel has no bearing on the exercise of the power of confiscation of
goods under Section 111 of the Act because, as laid down by this Court,
confiscation of goods is an action in rem directed against the goods in
respect of which the contravention rendering them liable to be confiscated
has taken place. (See : Shewpujanrai Jndrasanrai Ltd. v. The Collector of
Customs & Ors., [1959] SCR 821 at p. 838; and Collector o/Customs, Madras F
& Ors. v. D. Bhoormall (supra)). In the matter of confiscation of goods under
Section 111 (d) of the Act intention has, therefore, no bearing. What is required
to be seen is whether the goods had been imported or attempted to be
imported or brought within the Indian customs water for the purpose of being
imported contrary to any prohibition imposed by or under the Act or any
G
other law for the time being in force. If it is found that any goods have been
imported or attempted to be imported or brought within the Indian customs
water for the purpose of being imported contrary to any prohibition imposed
...-<' by or under the Act or any other law for the time being in force the said goods
would be liable to confiscation under Section 111 (d) and the question whether
the person importing or bringing the said goods intended to commit violation H
730 SUPREME COURT REPORTS [I 998] 3 S.C.R.

. A of the provisions of the Act or any other law for the time being in force would
be of no consequence. Similarly, clause (t) of Section 111 provides for "'-
confiscation of any dutiable or prohibited goods which are required to be
mentioned under the regulations in any import manifest or import report and
which are not so meP.tioned therein. In the matter of confiscation of goods
under Section 11 J(t) what is required to be seen is whether the goods are
B dutiable or prohibited goods and are required to be mentioned in the import
manifest or import report under the regulations made under the Act and
whether they are mentioned in the import manifest/import report. If it is found
that the goods are dutiable or prohibited goods and are required to be
mentioned under the regulations made under the Act in the import manifest/
C import report but have not been so mentioned, the goods would be liable to
be confiscated and the intention of the defaulter would have no bearing on
the exercise of power to confiscate the goods. Since mens rea is not essential
for invoking the power of confiscation of the goods under Section 111 of the
Act, the intention of the master of the vessel or the owners of vessel and the
circumstances under which the vessel containing the goods came to Bombay
D has no bearing on the exercise of the power of confiscation of goods under
Sections 11 l(d) and 11 l{t) and all that has to be seen is whether the conditions
prescribed under the said provisions were fulfilled so as to justify the +~
confiscation of the goods.

E As regards the non-filing of the Iml?ort General Manifest either by the
Captain of the vessel or the agents of the owners of the vessel at Bombay,
the High Court has held that the Manifest is required to be filed "within
twenty four hours after the arrival of the vessel at a customs station" and that
time for filing the said Manifest would have started running only after the
Bombay Port Trust charges had been paid and the said cargo charges were
F paid on August 23, 1983. According to the High Court, the customs officials
boarded the vessel on the morning of August 24, 1983 at about 9/10 a.m. and
seized the goods immediately thereafter mainly on the ground that no Import
General Manifest had been filed by that time. According to the High Court,
the period of twenty four hours had not expired and there was still time to
G file the Import General Manifest. We find it difficult to agree with the said view
of the High Court. Under Section 30(1) an import manifest has to be delivered
within twenty four hours after the arrival of the conveyance at a customs
station. The expression "customs station" is defined in Section 2(13) to mean
"any customs port, customs airport or land customs station." The expression
"customs port" is defined in Section 2(12) to mean "ar.y port appointed under
H clause (a) of section 7 to be a customs port and includes a place appointed
U.0.1. v. MUSTAFA AND NAJIBAI TRADING CO. [S.C. AGRAWAL, J.] 73 J
under clause (aa) of that section to be an inland container depot". In the A
present case, the vessel MANSC0-3 had arrived at the outer anchorage of
the Bombay Port on August 20, 1983. The outer anchorage is a part of the
Bombay Port. This would show that the vessel MANSC0-3 had arrived at the
customs port of Bombay on August 20, 1983. In view of Section 30(1) of the
Act the Import General Manifest should have been delivered within twenty B
four hours of the arrival of the vessel at the outer anchorage on August 20,
1983. The High Court was in error in holding that the vessel would be treated
to have arrived at the customs port of Bombay on August 23, 1983 after the
Bombay Port Trust charges had been paid and the signal had been given for
the vessel to be brought into the inner anchorage or on after August 23, 1983.
Proviso (b) to sub-section (I) of Section 30, which empowers the proper C
officer to accept the import manifest or import report at any time after the
expiry of the period of twenty four hours if he is satisfied that there was
sufficient cause for not delivering the import manifest or import report or any
part thereof within twenty four hours after the arrival of the conveyance, has
no application in the present case because the Collector as well as the
Tribunal have found that no request for filling the Import General Manifest D
after the expiry of the period of twenty four hours was made at any time either
by the Captain of the vessel or by the local agents at Bombay.

The Tribunal has held that the Goods that were seized from the vessel
were prohibited goods and the said finding has not been upset by the High E
Court. In the circumstances, it must be held that there was contravention of
the requirement regarding mentioning of the goods in the Import General
Manifest by the Captain of the vessel and the local agents of the owners of
the vessel at Bombay and the goods seized were liable to be confiscated
under Section 11 l(f) of the Act.
F
The High Court has held that the goods were obviously in transit to
Dubai which was the port of clearance and the visit to Bombay port was not
illegitimate or illegal. In holding that there was no contravention of the
provisions of clauses (d) and (f) of Section 111 the High Court has proceeded
on the basis that since the vessel had come to Bombay for legitimate purpose G
and there was no lack of bonafides on the part of the master and the owners
of the vessel in the ship having come to Bombay, it cannot be said that there
was violation of the provisions of Section 11 l(d) and (f) of the Act. As
indicated earlier, the finding of the High Court that there was no lack of
bonafides on the part of the master of the vessel and the owners of the ship
in the ship having come to Bombay, has been arrived at by the High Court H
732 SUPREME COURT REPORTS [1998] 3 S.C.R

A after reversing the finding of fact recorded by the Collector and the Tribunal
and it cannot be sustained. We have also indicated that mens rea is not
essential for invoking the power of confiscation under Section 111 of the Act
and, therefore, the intention of the owners of the vessel or the master of the
vessel has no bearing on the exercise of. the power to confiscate the goods
B under clauses (d) and (t) of Section 11 l of the Act.

The High Court has also held that direction regarding confiscation of
the goods could not be sustained for the reason that no notice as required
under Section 124 of the Act was given by the Collector to the owners of the
goods ordered to be confiscated before passing the order of confiscation of
C goods and the notice that was given to the local agents of the owners of the
vessel cannot ·be a substitute for a notice which is required to be given to
the owners of the cargo since the local agents have no concern whatsoever
with the owners of the cargo. Section 124 of the Act reads as follows :-

"124. Issue of show cause notice before confiscation of goods, etc.-
D No order confiscating any goods or imposing any penalty on any
person shall be made under this Chapter unless the owner of the
goods or such person-

(a) is given a notice in writing informing him of the grounds on which
it is proposed to confiscate the goods or to impose a penalty;
E (b) is given an opportunity of making a representation in writing
within such reasonable time as may be specified in the notice against
the ground or confiscation or imposition of penalty mentioned therein;
and

(c) is given a reasonable opportunity of being heard in the matter :
F
Provided that the notice referred to in clause (a) and the
representation referred to in clause (b) may at the request of the
person concerned be oral."

G Shri Usgaonkar has urged that confiscation of goods under Section 111
of the Act is in rhe nature of a penalty in rem which attaches to the goods
and is distinct from personal penalty that can be imposed under Section 112 •
of the Act which is a penalty in personam. The submission is that while a
notice under Section 124 is required to be issued to the person on whom
.........
penalty under Section 112 is to be imposed, the notice to the owner of the
H goods is not required to be given in every case and there may be cases in
C.0.1. v. MUSTAFA AND NAJIBAI TRADING CO. [S.C. AGRAWAL, J.] 733

,> which the notice has to be given to the person from whose possession the A
goods were seized instead of the owner of the goods. Shri Usgaonkar has,
in this context, pointed out that under Section 123 of the Act in a case where
any goods to which the said section applies are seized under the Act in the
reasonable belief that they are smuggled goods, the burden of proving that
they are not smuggled goods shall be, in a case where such seizure is made
from the possession of any person, on the person from whose possession the
B
goods were seized.

Jn the context of the Sea Customs Act, 1878 this Court has pointed out
the distinction between penalty in rem and penalty in personam. In the case
of Shewpujanrai lndrasanrai Ltd. (supra) this Court was decling with Section
167(8) of the Sea Customs Act, 1878 wherein it was prescribed that it would
c
be an offence "if any goods the importation or exportation of which is for the
time being prohibited or restricted by or under Chapter IV of this Act, be
imported into or exported from India contrary to such prohibition or restriction"
and that "such goods would be liable to confiscation and any person
concerned in any such offence shall be liable to a penalty not exceeding three D
times the value of the goods or not exceeding one thousand rupees". This
-·~ Court, after pointing out that 'a distinction must at once be drawn between
an action in rem and a proceeding in personam', has observed that under
Section 167(8) of the Sea Customs Act :-"

The penalty provided is that the goods shall be liable to confiscation. E
There is a further provision in the penalty column that any person
concerned in any such offence shall be liable to a pr:nalty not exceeding
three time the value of the goods etc. The point to note is that so far
as the confiscation of the goods is concerned, it is a proceeding in
rem and the penalty is enforced against the goods whether the offender F
is known or not known; the order of confiscation under s. 182, Sea
Customs Act, operates directly upon the status of the property, and
under s. 182 transfers an absolute title to Government." (pp. 836,837)

By way of illustration the Court has referred to a case 'where the offender
(the smuggler, for example) is not known, but the goods in respect of which G
the contravention has taken place are known and have been seized."

•
.I
Similarly, in the case of D. Bhoormall (supra) this Court, while considering
the provisions of Section 167(8) of the Sea Customs Act, 1878, has pointed
out that proceedings for confiscation of contraband goods are proceedings
in rem and the penalty of confiscation is enforced against the goods H
734 SUPREME COURT REPORTS [1998] 3 S.C.R.

A irrespective of whether offender is known or unknown and it is not necessary
for the customs authorities to prove that any particular person is concerned
with their illicit importation or exportation and it is enough if the department
furnishes prima facie proof of the goods being smuggled stocks. It was
·observed that the second kind of penalty which is enforced agair st the
B person concerned in the smuggling of the goods is one in personam and in
the case of the said penalty the Department have to prove further that the
person proceeded against was concerned in the smuggling. It was held that
"goods found to be smuggled goods can, therefore, be confiscated without
proceeding against any person and without ascertaining who is their real
owner or who was actually concerned in their illicit import." (pp. 550, 551 and
c 554)
This distinction between the nature of the two penalties , viz., penalty
in rem and penalty in personam, has been maintained in the Act. The provision
regarding confiscation of goods contained in Sections 111 and 113 of the Act
is a penalty in rem which is enforced against the goods, while the personal
D penalties imposed under Section 112 and other provisions of the Act are in
the nature of penalty in personam which are enforced against the person
concerned.

Section 124 of the Act, which incorporates the rule of audi altrem
E partem, one of the two basic tenets of the principles of natural justice, does
not have the effect of making any alteration in the nature of these penalties.
There may be situations where the goods are found to be smuggled goods
and are seized but the identity of the owner of the goods is not known. Can
it be said that since notice cannot be issued to the owner of the goods under
Section 124 of the Act, the goods which are found to be smuggled goods
F cannot be confiscated under Section 111 of the Act? In our view, this question
must be answered in the negative because confiscation of goods under
Section 111 of the Act is a penalty in rem which attaches to the goods which
are the subject matter of the proceedings for confiscation and if it is found
that the goods are liable to be confiscated under Section 111 of the Act, they
G can be confiscated without ascertaining their real owner. Moreover, in so far
as the rule of aud1 altrem partem is concerned, the position is well settled
that an order passed in disregard of the said principle would not be invalidated
if it can be shown that as a result of denial of the opportunity contemplated
by the said rule the person seeking to challenge the order has not suffered
any prejudice. Since Section 124 of the Act incorporates the said principle
H of natural justice, failure to give the notice to the owner of goods would not,
U.O.l. v. MUSTAFA AND NAJIBAI TRADING CO. [S.C. AGRAWAL, J.] 735
by itself, ivalidate an order of confiscation. What has to be seen is whether A
the owner of the goods has suffered prejudice on account of the failure on
the part of the officer passing the order for confiscation of goods to give a
notice to the owner of the goods before passing the order for confiscation
of goods. The owner of goods ordered to be confiscated cannot be said to
have suffered any prejudice in a case where notice has been given to the B
person responsible for the alleged contravention on which the order for
confiscation of goods is founded and who alone is in a position to offer an
explanation for such contravention. rhe requirement regarding issuing of
notice to the owner of the goods under Section 124 cannot, therefore, be
construed as a mandatory requirement so as to have the effect of invalidating
an order. An order of confiscation would not be rendered invalid if there is C
substantial compliance with the requirements of Section 124 in the sense that
before passing an order of confiscation a notice has been given either to the
owner of the goods or a person who is responsible for the contravention on
which the order for confiscation of goods is founded and who alone is in a
position to offer an explanation for such contravention.
D
In the present case, show cause notices dated December 3 1, 1983 were
issued by the Assistant Collector of Customs, R & I, Bombay, to M/s Mustafa
& Najibai Trading Co., Dubai, respondent No. 1, the owners of the vessel,
MANSC0-3, Nuruddin Mustafa, respondent No. 2, the Managing Director of
respondent No. I, Abdul Rahim Khatri, the Captain of the vessel, MANSCO- E
3, the Promoter and the two Directors of M/s Regent Shipping and Trade Pvt.
Ltd., the local agents of the owners of the vessel at Bombay, M/s Aero
Meritimes Ltd., the agents of the owners of the vessel at Karachi and certain
other persons. Replies to the said show cause notices were filed on behalf
of the owners of the vessel as well as by the Master of the vessel and the
local agents of the owners at Bombay. The owners of the cargo did not appear F
before the Collector. None of the owners of the cargo challenged the order
for confiscation of goods passed by the Collector before the Tribunal and the
order of the Collector regarding confiscation of goods became final as against
the owners of the goods. In the Writ Petition filed before the High Court
respondent No. 3, claiming to be the owner of a part of the cargo which was G
seized and confiscated, for the first time sought to challenge the orders
passed by the Collector as well as the Tribunal regarding the confiscation of
the goods. Jn Para 8 of the Writ Petition it has been averred that before the
Collector it was pointed out that the cargo belonged to various parties and
mainly to respondent No. 3 and the names of the owners and other persons
were furnished to the Collector and other customs officers and that they H
736 SUPREME COURT REPORTS [1998] 3 S.C.R.

A should be given an opportunity of hearing if any judicial order is passed in
respect of the cargo belonging to respondent No. 3 and other persons. The
replies that were filed on behalf of respondent No. I before the Collector in
response to the show cause notice do not, however, support the said averment.
Nor is there anything in the order passed by the Collector to show that any
B such contention was advanced before him. The judgment of the Tribunal also
does not indicate that any such plea was raised. The said contention appears
to have been raised for the first time before the High Court. Moreover, under
the show cause notices the seized goods were proposed to be confiscated
under Sections 11 l(d) and 11 l(t) of the Act. The owners of the vessel,
MANSC0-3, the Master of the said vessel and the local agents of the owners
C of the vessel at Bombay were the best persons who could offer an explanation
and show that there was no contravention which could justify the confiscation
of goods under Sections 111 (d) and 111 (f) of the Act. Since the owners of
the goods were not present on the scene and had no personal knowledge,
they could not offer an explanation other than that offered by the owners of
the vessel, the Master of the vessel and the local agents of the owners of
D the vessel at Bombay. In the circumstances, it cannot be said that the failure
to issue a notice under Section 124 to the owners of the goods has resulted
in any prejudice to the owners of the goods that have been ordered to be
confiscated and such failure cannot, therefore, be a ground for setting aside
the order of confiscation of goods passed under Sections 11 !(d) and l l l(f)
E of the Act. We are, therefore, unable to uphold the impugned judgment of the
High Court setting aside the order for confiscation of the goods passed under
Sections l l I(d) and l l I(f) of the Act.

The order of confiscation of the vessel MANSC0-3 was passed under
Section 115(2) of the Act. At the relevant time, Section 115 provided as
F under:-

"115. Confiscation of conveyances.-(!) The following conveyances
shall be liable to confiscation.-

(a) any vessel which is or has been within the Indian customs water,
G any aircraft which is or ha_s been in India, or any vehicle which is or
has been in a customs area, while constructed, adapted, altered or
•
fitted in any manner for the purpose of concealing goods;

(b) any conveyance from which the whole or any part of the goods
is thrown overboard, starved or destroyed so as to prevent seizure by
H an officer of customs;
U.0.1. v. MUSTAFA AND NAJIBAI TRADING CO. [SC. AGRAWAL, J.] 737

(c) any conveyance which having been required to stop or land under A
~
section I06 fails to do so, except for the good and sufficient cause;

(d) any conveyance from which any warehoused goods cleared for
exportation, or any other goods cleared for exp011ation under a claim
for drawback, are unloaded, without the permission of the proper
officer; B

-
(e) any conveyance carrying imported goods which has entered India
and is afterwards found with the whole or substantial portion of such
goods missing, unless the master of the vessel or aircraft is able to
account for the loss of, or deficiency in, the goods.

(2) Any conveyance or animal used as a means of transport in the
c
smuggling of any goods or in the carriage of any smuggled goods
shall be liable to confiscation, unless the owner of the conveyance or
animal proves that it was so used without the knowledge or connivance
of the owner himself, his agent, if any, and the person in charge of
the conveyance or animal and that each of them had taken all such D
precautions against such use as are for the time being specified in the
. - .k- rules:

Provided that where any such conveyance is used for the carriage
of goods or passengers for hire, the owner of any conveyance shall
be given an option to pay in lieu of the confiscation of the conveyance E
a fine not exceeding the market price of the goods which are sought
to be smuggled or the smuggled goods, as the case may be.

Explanation.- In this section, "market price" means market price at the
date when the goods are seized."
F
The consideration which weighed with the High Court to set aside the
order regarding the confiscation of the goods also weighed with it for setting
aside the order for confiscation of the vessel under Section 115(2) of the Act
inasmuch as the High Court has found that there was no fraudulent intention
on the part of the owners of the vessel in directing the vessel to proceed to G
Bombay from Karachi to lift ldditional cargo and the purpose for which the
vessel, MANSC0-3, was directed to proceed to Bombay was to lift the said
additional cargo and also to have the Radar and V.H.F. equipment repaired.
We have already considered the said aspect of the case while dealing with
the matter of confiscation of the goods and have held that the said finding
of the High Court cannot be upheld. The High Court has set aside the H
738 SUPREME COURT REPORTS [1998] 3 S. C.R.

A confiscation of the vessel also on the ground that no notice was issued to
the owners of the vessel under Section 124 of the Act. In this regard, it may
be stated that the show cause notice dated December 31, 1983, indicates that
the said notice was issued to Mustafa Najibi, respondent No. 2, on behalf of
respondent No. 1, the owners of the vessel, as well as to Abdul Rahim Khatri,
the master of the vessel and the promoter and the two directors of Mis
B Regent Shipping and Trade Pvt. Ltd., the agents of the owners of the vessel
at Bombay. Respondent No. I, the owners of the vessel, had full knowledge
of the said show cause notice because a reply to the said notice was filed
on their behalf as well as on behalf of respondent No. 2 and they had
contested the proceedings before the Collector. In these circumstances, we
C are of the view that the order regarding confiscation of the vessel could not
-
be set aside on the ground that no notice under Section 124 of the Act was
issued to the owners of the vessel.

As regards the penalty that has been imposed under Section 112 of!he
Act, Shri Rana, the learned counsel for respondent No. 2, has urged that the
D Collector and the Tribunal were in error in imposing penalty on respondent
No. 2 on the view that respondent No. 2 is the owner of the vessel. It has
been submitted that respondent No. 2 is only a Managing Director of
respondent No. 1 company which is the owner of the vessel. It has also been
urged that at the relevant time respondent No. 2 was not in Dubai and that
he had no role in the vessel being directed to proceed to Bombay from
E Karachi and, therefore, penalty under Section 112 of the Act cannot be
imposed on him. The order passed by the Collector proceeds on the basis that
respondent No. 2 is the owner of the vessel. It appears that no contention
was raised before the Collector that respondent No. 2 was not the owner of
the vessel and that he had no particular role in the vessel being directed to
proceed to Bombay from Karachi. Before the Tribunal. however, a contention
F was raised that respondent No. 2 was only the Managing Director of
respondent No. 1 company and not the owner of the vessel and reliance was
placed on the affidavit of respondent No. 2 dated March 25, 1985 which was
filed before the Tribunal wherein it was stated that the deviation of voyage
from Karachi to Bombay was without his pre knowledge as at that time he
G was away from Dubai and was in Europe in connection with his business. On
behalf of the appellants reliance was placed on the reply to the show cause
notice wherein respondent No. 2 was described as the joint owner of the
vessel. The Tribunal rejected the contention urged on behalf of respondent
No. 2 and has observed that no independent evidence has been adduced to
establish that respondent No. 1 company is owned by any other person other
H than respondent No. 2 and that in the reply to the show cause notice
U.0.1. v. MUSTAFA AND NAJIBAI TRADING CO. [S.C. AGRAWAL. J] 739
respondent No. 2 had been mentioned as the owner of the vessel. The A
Tribunal has also referred to the statement of Mohammed Yousef that he had
received the telex dated August 16, 1983 from respondent No. 2 and has
observed that the said statement clearly established that respondent No. 2
knew about the voyage of the vessel from Karachi to Bombay. On that view
the Tribunal upheld the penalty imposed on respondent No. 2 under Section
112 of the Act. We do not find any infirmity in the said view of the Tribunai. B
We are, therefore, unable to uphold the contention of Shri Rana that the
Tribunal was in error in affirming the penalty of Rs. 3,00,000 imposed on
respondent No. 2 by the Collector.

In the result, the appeal is allowed, the impugned judgment of the High C
Court is set aside and, while restoring the orc.!ers of the Collector and the
Tribunal, the Writ Petition filed by the respondents is dismissed. No order
as to costs.

!.M.A.