Custom, Excise & Service Tax TribunalMr. Erol Gilbert Tennyson vs Commissioner Of Customs (Import) ... on 17 April, 2008IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
COURT  NO.
APPEAL NO. C/693,700,740,750
,793/07-Mum.

(Arising out of Order-in-Original No. 70/2007/CAC/CC(I)/AKP(SIIB)(I) dt. 17.05.2007 passed by the Commissioner of Customs, (Imports) N.C.H. Mumbai.

For approval and signature:

Honble Shri M. V. Ravindran,  Member (Judicial)
Honble Shri K.K. Agarwal, Member (Technical)



============================================================1.	Whether Press Reporters may be allowed to see	   :     
	the Order for publication as per Rule 27 of the
	CESTAT (Procedure) Rules, 1982?

2.	Whether it should be released under Rule 27 of the     :    
	CESTAT (Procedure) Rules, 1982 for publication 
        in any authoritative report or not?

3.	Whether Their Lordships wish to see the fair copy       :  
	of the Order?

4.	Whether Order is to be circulated to the Departmental  :    
	authorities?

=============================================================



Mr. Erol Gilbert Tennyson
:
Appellant
M/s. Sea Bulk Oftshore LLC.
Ashok Sasthe
Abdul Subhan Abdul Rahim Shaikh
Commissioner of Customs (Import) Mumbai.



VS





Commissioner of Customs (Import) Mumbai.
Vivencio Bartiloni Degollacion


Respondent

Appearance

Shri Anil Balani, Advocate
Shri S.N. Kantawala, Advocate
Shri G.B. Yadav, Advocate           
Shri N.D. George, Advocate
Shri H.K. Prem, Advocate with          
Shri Ashok Singh, Advocate		     for Appellants/Respondents


Shri B.K. Singh,                            		     Authorized Representative (Jt. CDR)
 

CORAM:

Shri M. V. Ravindran, Member (Judicial)
Shri K.K. Agarwal, Member (Technical)

       Date of hearing : 8.4.2008, 17.4.2008
       Date of decision.

ORDER NO.

Per : Shri M. V. Ravindran, Member (Judicial)All these appeals are directed against order-in-original No. 70/2007/CAC/CC(I)/AKP(SIIB)(I) dt. 17.05.2007. Since all these appeals arise out of the same order-in-original, and the facts being the same, they are being disposed off by a common order.2.		The relevant facts that arise for consideration are that a specific information was received by the SIIB (import), New Customs House, Mumbai, on 23.5.2006 that a supply vessel Sea Bulk Toota  is indulging in illegal sale of smuggled diesel to barges in and around Mumbai Docks.  It was also learnt that the vessel was anchored  near Chinai Tekdi, opposite Ferry Wharf and would be delivering around 30,000 to 40,000 liters of Diesel to the barges in the night of 23.05.2006 around 11.00 p.m. Based on the information, the SIIB (Import) made necessary arrangements for conducting the search in the night of 23.5.2006 itself.  The Customs staff of the joint-sea patrolling boat of R & I Division,, of Preventive Commissionerate was contacted and additional staff from  the Docks Intelligence Unit of Rummaging & Intelligence Wing was also taken to join this operation.After confirming the exact location of the vessel the officers of SIIB (Import) along with members of the NGO, as independent Panchas, left towards Chinai Tekdi and reached the spot at about 11.45 p.m. After locating the suspect supply vessel, the team of officers went near the supply vessel, they noticed a Barge was anchored alongside the supply  vessel.  On seeing the Customs party, the Barge quickly started to leave the supply vessel after removing the pipe from the supply vessel through which they had been receiving diesel. The Customs team immediately chased the barge and after a lot of warnings, the barge was apprehended.  A closer inspection showed the name of the Barge to be ML Anchor.  The Customs staff then boarded the barge and caught hold of the Tandel who gave his name as Viplav Kumar Rai @ Sunil Rai and after questioning he accepted that he had purchased 40 MTs of High Speed Diesel from the supply vessel Seal Bulk Toota and was running away to avoid being caught re-handed.Some of the Customs staff  were asked to remain on the barge and guard the staff members of the barge along with Tandel Shri Viplav Kumar Rai @ Sunil Rai.  The remaining staff boarded the supply vessel Sea Bulk Toota with two independent Panchas (members of NGO).  After boarding the supply vessel the Custom officers got hold of the Chief Engineer, who was standing on the  Deck and went to the Master of the Vessel where both of them were subjected to interrogation.  After some time the Chief Engineer of the Vessel, Shri Errol Tennyson, accepted that he had sold 40MTs of HSD to the Barge ML Anchor and further admitted that earlier also he used to purchase HSD for his vessel during his Mumbai High voyage and by selling the same to Barges he used to make money.After this it was decided to search the barge, ML Anchor, thoroughly.  During the search of the Barge it was found that the Barge had purchased  diesel which was found to be stored in the hatch of the barge; which as admitted by the Chief Engineer of the supply vessel was sold to Barge Anchor from the vessel Sea Bulk Toota.  During the search of the barge US$ 18600/- was recovered from a gunny bag of rice in which it had been concealed and was to be given to the Chief Engineer of the vessel Sea Bulk Toota for the diesel received by the barge but which could not be given due to the raid by  Customs party.After this the team of Customs Officers along with the independent Panchas escorted the Tandel of the barge, Shri Viplav Kumar Rai, to the supply vessel Sea Bulk Toota and while two officers stood guard near the Tandel of the barge, the remaining  staff along with the Panchas  commenced the search of the supply vessel, Sea Bulk Toota,  which resulted in the recovery of unaccounted foreign currency of US$ 27050 from the cabin of the Chief Engineer Shri Errol Tennyson. The currency had been cleverly concealed amongst readymade garments in a black coloured Zipper bag in the Cabin of Shri Errol Tennyson.  Preliminary interrogation of Chief Engineer Shri Errol Tennyson revealed that this money was the sale proceeds of the sale of diesel on earlier occasions.  All the foreign currency amounted to US $ 45,650.00 equivalent to Rs.20,55,000/-(approx.),  the barge M.L. Anchor along with 40,000 liters of diesel and the vessel Sea Bulk Toota  along with 1,35,000 litres of diesel (as  declared by Chief Engineer Shri Errol  Tennyson) were taken over and seized under the provisions ofIndian Customs Act, 1962read withForeign Exchange  Management Act(hereinafter referred to as FEMA). Total quantity of the diesel seized was 1,75,000 litres valued at Rs.36,75,000/- (CIF) and having estimated Market Value of Rs.70,00,000/-.  The value of the barge M.L. Anchor was around Rs.10,00,000/- (as declared by Tandel Shri Viplav Kumar Rai) and of the Vessel Sea Bulk Toota was around Rs.3 Crores (as verbally declared by the Captain of the Vessel). After recording statements of various persons, the adjudicating authority issued show cause notices to all the appellants directing them to show cause as to  why :[ I]	The aforesaid seized 44.11 MTs of HSD involving duty of Rs. 5,37,412.88 as per Annexure-F, should not be confiscated absolutely underSection 111(d),111(f)&111(h)of the Customs Act, 1962 read with the provisions of Foreign Trade Policy (2002-07).[ii]	The 3.6 MTs of diesel stored in the supply vessel M.V.Sea Bulk Toota over and above 45 MTs declared on arrival on 23.05.2006 at Mumbai and 102.197 MTS purchased on 23.05.2006 be held liable to confiscation underSection 111(d),111 (f)and111(h)of the Customs Act, 1962 read with the provisions of Foreign Trade Policy (2002-07) and since no duty was paid on the illegally imported diesel oil of 3.6 MTs, why the  duty amounting to Rs.43,860.30 as detailed in Annexure-G should not be recovered from M/s. Sea Bulk Ofrfishore Dubai LLC., Post Box No.32387, Dubai, UAE, the owners of Vessel Sea Bulk Toota,  being the  de facto importers of the of HSD, underSection 28of the Customs Act, 1962 why interest on the duty amount not paid should  not be recovered underSection 28ABof the Customs Act, 1962.[iii]	The 147 MTs of diesel stored in supply vessel Sea Bulk Toota in  which the smuggled HSD were mixed in such  manner that the smuggled HSD cannot be separated should not be confiscated under the provisions ofSection 120 (2)of Customs Act, 1962 and the Customs Duty Rs. 17,90,966.47 as detailed in Annexure-II leviable should not be recovered.[iv]	The foreign currency amounting to USD 27050 recovered from the cabin of the Chief Engineer Shri Errol Gilbert Tennyson being the sale proceeds of the past sale-purchase of smuggled diesel should not be confiscated underSection 121of the Customs Act, 1962.[v]	The foreign currency amounting to USD 18,600 recovered from the barge M.L. Anchor belonging to shri Viplav Kumar Rai which was to be given to the Chief Engineer of the supply vessel M.V. Sea Bulk Toota as payment towards the purchase of smuggled HSD and was attempted to be smuggled out of India subsequently seized by Customs should not be confiscated underSection 113of the Customs Act, 1962.[vi]	The supply vessel M.V. Sea Bulk Toota valued at Rs.8,31,67061.00 (Eight Crores thirty one lakhs sixty seven thousands sixty one only) and the barge M.L. Anchor valued at Rs. 10 lakhs (Ten lakhs only) should not be held liable to confiscation underSection 115of the Customs Act, 1962.[vii]	Penalty underSection 112(a)of the Customs Act, 1962 should not be imposed on Shri Mohammed Ali Abu baker Shaikh, Shri Abdul and Shri Ashok Sasthe (yet to be apprehended).[viii]	Penalty underSection 114as well asSection 112(a)& (b) of theCustoms Act, 1962should not be imposed on Shri Viplav Kumar Rai, the Tandel of the barge M.L. Anchor.[ix]	Penalty underSection 112 (a)& (b) of theCustoms Act, 1962should not be imposed on Shri Errol Gilbert Tennyson (Chief Engineer of the supply vessel M.V. Sea Bulk Toota) and Shri Vivencio Bartolini (Captain of the supply vessel M.V. Sea Bulk Toota) and/or any other persons(s) concerned with the said goods, for their act of omission and commission in relation to the said seized goods and for the smuggling of earlier goods, which are not available and which was cleared illegally without payment of Customs duty.[x]	Shri Mohammed Ali Abu baker Shaikh, Shri Abdul, Shri Ashok Sasthe (yet to be apprehended), Shri Viplav Kumar Rai, the tandel of the barge M.L. Anchor, Shri Errol Gilbert Tennyson (Chief Engineer of the supply vessel M.V. Sea Bulk Toota) and/or any other person/s concerned with the said goods are required to state specifically in their written explanation, whether they wish to be heard in person by the Adjudicating Authority viz. Commissioner of Customs (Import), Mumbai before the case is adjudicated.All the appellants herein contested the show cause notice on various grounds and the adjudicating authority after considering the submissions made by the appellants, after allowing cross examinations, as sought wherever possible, came to conclusion and passed the following order:-The aforesaid seized  4.11 MTs of HSD, valued at Rs. 14,23,623.65 involving duty of Rs.5,37,412.88 is confiscated absolutely underSection 111(d),111(f)&111(h)of the Customs Act, 1962, and the sale value of the HSD sold to M/s. BPCL is appropriated towards its value.The 3.6 MTs of smuggled diesel, valued at Rs.1,16,187.82 left behind in the supply vessel M.V. Sea Bulk Toota, is also confiscated underSection 111 (d),111(f)and111(h)of the Customs Act, 1962.  Since trhis quantity has already been provisionally released (mixed with legally acquired HSD) against bond and BG.I  impose a fine of Rs.50,000/- (Rupees  Fifty Thousand only) in lieu of confiscation underSection  125of the Customs Act, 1962.  Since no duty was paid on this illegally imported diesel oil of 3.6 MTs, the duty amounting to Rs.43,860.30 is also required to be paid. Since the vessel is owned by M/s. Sea Bulk Offshore Dubai LLC they have to pay this fine and duty.They will also be required to pay the interest on the duty amount underSection 28ABof the Customs Act, 1962.The 147 MTs of diesel, valued at Rs.47,44,336.35 stored in supply vessel Sea Bulk Toota in which the smuggled HSD was mixed in such a manner that the smuggled HSD could not be separated, is confiscated under the provisions ofSection 120(2)of Customs Act, 1962.  Since they have already been released provisionally against bond Rs. 8.86 crores and BG of Rs. 2.20 crores I impose a fine of Rs. 20,00,000/- (Rupees Twenty Lakhs only) in lieu of  confiscation, under Section 125 of the Custroms Act, 1962 and appropriate the same from the Bank Guaranteee.  No duty is required to be paid on this quantity if it has been consumed in the normal course of letgitimate use.The foreign currency amounting to USD 27,050/- recovered from the cabin of the Chief Engineer Shri Errol Gilbert Tennyson being the sale proceeds of the past sale is absolutely confiscated underSection 121of the Customs Act, 1962.The foreign currency amounting to USD 18,600/- recovered from the barge M.L. Anchor belonging to Shri Viplav Kumar Rai which was to be given to the Chief Engineer of the supply vessel M.V. Sea Bulk Toota as payment towards the purchase of smuggled HSD and was attempted to be smuggled out  of India, is absolutely  confiscated underSection 113and121of the Customs Act, 1962.The supply vessel M.V. Sea Bulk Toota valued at Rs. 8.31,67,061/- (Eight Crores Thirty one lakhs sixty seven thousands sixty one only) is confiscated underSection 115of the  Customs Act, 1962.  Since it has already been released against bond of Rs. 8.86 crores and a BG of Rs. 2.20crores, I impose a fine of Rs. 1,00,00,000/-(Rs. One Crore only) and appropriate the same from the BG.The barge M.L. Anchor valued at Rs. 10,00,000/- (Ruppes Ten lakhs only) is confiscated underSection 115of the Customs Act, 1962.   Since it has already  been released against bond of Rs.7.5 Lakhs and Revenue Deposit  (R.D.) of Rs. 1.5.Lakhs, I impose a fine of Rs. 1.50,000/- (Rupees One Lakh Fifty Thousand Only) and appropriate the same from the R.D.
	I impose a penalty of Rs. 2,00,000/- (Rupees Two Lakhs only) underSection  112(a)of the Customs Act, 1962, on Shri Abdul Subhan Abdul Rahim Shaikh
	I impose a penalty of Rs. 5,00,000/- (Rupees Five Lakhs only)  underSection 112(a)of the Customs Act, 1962, on shri Ashok Sasthe.I impose a penalty of Rs. 1,00,000/- (Rupees One Lakh only) underSection 112(a)& (b) of theCustoms Act, 1962, on Shri Viplav  Kumar Rai, the Tandel of the barge M.L. Anchor.No penalty is imposed on Shri Vivencio Bartolini Degollacion (Captain of the supply vessel M.V. Sea Bulk Toota)
	No penalty is imposed on shri Mohammed Ali Abu Baker Shaikh.No penalty is imposed on M/s. Sea Bulk  Offshore LLC, Dubai
All the appellants are in appeal against the above said order.3.  In Appeal No. C/693/07:- Shri Anil Balani Ld. Counsel appearing for the appellant in this case submits that the entire order of imposition of penalty on the appellant is wrong.  He submits that the entire case is based on the  panchanama dt. 23.5.2006 and draws our attention to the same.  It is his submission that the current appellants signature was not taken on the panchanama  even though he was present.  It is his submission that there was also no signatures on the panchanama.  It is his further submission that panch witness namely  Shri I.G. Khandelwal was an informer  and hence the reliance placed by the adjudicating authority on the panchanama is vitiated and panch/witness cannot be called as a reliable witness.  It is his submission that one of the panch witness was not made available for cross examination on the ground that he was not available.  Ld. Counsel draws our attention to the statement of the appellant and submits that no one has seen any transfer of diesel from vessel to barge.   He submits that lower authorities were aware that rough log book is maintained and subsequently log book is finalized.  To support this proposition, he draws our attention to various portions of the statement of Chief Engineer i.e. current appellant. The Ld. Counsel draws our attention to the statement of the captain of the ship to indicate that entire crew was present on the date when the vessel was intercepted along with the barge but no  statements of  any member of crew was recorded.  He draws our attention to the statement of the representative of the Sea Bulk Toota (ship line), to submit that they were informed about the movement of the ship and they were maintaining correct records of consumption of the diesel.  It is his submission that the entire movement of the ship was on the coastal run and all the documents in relation to this was submitted with the Revenue department. He draws our attention to the submissions of the appellant as to show that there was no direct evidence regarding sale and purchase of diesel.  It is his submission that the entire case has been built up by the revenue authorities without considering the fact that the diesel which was alleged to have been sold is not a smuggled diesel but the diesel which was saved by the ship during its coastal run.  It  is his further submission that the statements of the appellant was retracted by him on 2.06.2006 when he preferred an application for bail on his arrest.  The basic thrust of the Ld. Counsel was that Revenue has not discharged its duty towards the fact that the diesel which was found in the barge was imported illegally.  It is his submission that the provisions  ofSection 11A,11B,11C&11Dare attracted towards the notified goods.He submits that HSD/Diesel is not notified under Section 11Ds andSection 123of the Customs Act, 1962.  After reading the sections, he submits that the burden was on the revenue to prove that the diesel was of smuggled nature and department has not discharged the burden.  It is his further submission that the foreign currency which was seized from the current appellant cannot be confiscated as it is not proved beyond doubt that the said currency is the outcome of the sale proceeds of illegally imported goods. For this proposition he relies upon the Tribunal decision in the case ofRamchandra Vs. Collector of Customs[1992 (60) E.L.T.277 (Tribunal)]  as regards the burden is entirely on the department to prove that the diesel was of smuggled nature and no evidence to brought on record he relies upon the  Bombay High Court decision in the case ofCommissioner of Customs (Preventive), Mumbai Vs. Aakash Enterprisesas reported at  [2006 (205) E.L.T.23 (Bom.),]State of Maharashtra Vs. Genu Yeshwant Divateas reported at [1988 (36) E.L.T 410 (Bom.)].  It is his further submission that the authorities had drawn the samples of the diesel and sent it for analysis.  It is his submission that the test reports of such sample was not given to the appellant.  He submits that the said  test report would indicate, as to whether diesel, which was seized from the barge is of imported nature or is of indigenous nature.  It is his submission that in the absence of any concrete evidence that diesel which was seized is of imported nature it cannot be held against the appellant, as the ship was on the costal run, always procured  diesel, while on  such costal run.4.	The Ld. Jt. CDR on the other hand would read the order-in-original as regards the findings of the adjudicating authority in respect of this appellant.  It his submission that the witnesses who appended the signature to the  panchanamas were independent witnesses.  It is his submission that of Shri Viplav Kumar Rai Tandel of the Barge had clearly given an inculpatory statement against this appellant.  Ld. Jt. CDR would submit that the Mobile Phone of the  appellant were seized and the phone numbers of the appellant was the same, as was given by the other persons and they were always in touch with this appellant for  sale and purchase of illegal diesel.  It is his submission that there is no explanation coming forth from the appellant as to how and when appellant got US $ 27050 which was recovered from his cabin.  It is his submission there is a confirmation of purchase and sale of diesel by appellant, and the statement being un retracted, it cannot be said that this appellant is innocent.  He reads the definition of the imports and submit that the issue is squarely covered within the provisions of theCustoms Act.  It is his submission that various people in their statement have recorded that this appellant was in the habit of selling diesel, for this submissions,  he draws our attention to the various statements. He submits that diesel which is confiscated, is smuggled can be ascertained from the statement of various persons who recorded that they are purchasing smuggled diesel from this appellant.  It is his submission that the copy of the panchanama as recorded on the date of seizure was handed over to the captain  of the ship and  need not be given to the current appellant.  It is  his submission that there  is no need for signature of this appellant on the panchanama.  The Ld. Jt. CDR submits that  in the absence of  retraction of the statements, the smuggled nature of the confiscated goods stands proved.  He relies upon the decision in the case of K.I. Pavunny Vs. Asstt. Collr. (HQ), C.EX. Collectorate, Cochin as reported at [1997 (90) E.L.T. 241 (S.C.)]andSurjeet Singh Chhabra Vs. Union of India[1997 (89) E.L.T. 646 (S.C.)].  He submits that the burden of proof in the case of non-notified goods also shifted to the person/assessee when it is proved by corroborative evidence that the goods are of smuggled nature.  It is his submission that in this case the purchasers have clearly indicated in their statements that they are purchasing smuggled  diesel from this appellant.5.		The Ld. Counsel by way of rejoinder would submit that the reliance on the statement of third mate is in correct.  It is his submission that captain and Chief Engineer were in custody and their statements were not recorded and were not corroborated by confirming the same by further statement of the captain/chief engineer.  It is his submission that lower authorities have not confronted the statement  of 3rd Mate with captain/chief engineer.  It is his submission that the entire statements of other persons which has been relied upon by the Jt. CDR is  only here say.  He submits that recovery of the mobile phone as has been submitted that by the Jt. CDR is in correct and in fact the mobile phone were handed over by the appellant himself.  As regards the corroborative statements of the purchasers of the diesel as to being of smuggled nature, it is his submission that the said statement was recorded almost after six months of the incident.  It is his submission that no log entries of the ship/vessel and the barge was checked by the authorities.6.		We considered the submissions made at length by both sides and perused the records.  It is seen from the records that it is undisputed that the quantity of the diesel i.e. 44.11 MTs of diesel was seized from the barge M.L. Anchor in night of 23/24.05.2006.  It is also seen from the records that the high speed diesel of 44.11 MTs was found in barge M.L. Anchor.  There is nothing on the record to show what was the business of M.L. Anchor of being near the vessel MV Sea Bulk to Toota.  The Tandel as well as the other persons of the barge M.L. Anchor had confirmed that they were near the ship/vessel M.V. Sea Bulk Toota when they were intercepted. If that be so, the presence of unaccounted diesel on barge M.L. Anchor is the question which is unanswered.  The findings of the adjudicating authority as regards the quantity of the diesel on the ship after the discharge of 44.11.MTs to barge M.L.Anchor seems to be tallying with the records which were produced by the Sea Bulk Toota before the authorities.  In short, the presence of 44.11 MTs of diesel on barge  M.L. Anchor remains unaccounted  for in the records of sea M.V. Sea Bulk Toota.  Hence the conclusion of the adjudicating authority that the excess unaccounted diesel of 44.11 MTs on the barge M.L.Anchor was correct.  As regards, the penalty imposed on this appellant, the findings of the adjudicating authority are as under:-I now come to the penal provisions and the role of different individuals/companies.Mr. Errol Gilbert Tennyson, Chief Engineer of Vessel M.V.Sea Bulk Toota- In his statement recorded on 24.05.2006 he has admitted to having diverted around 40(actually 44.11)MTs. of HSD to the barge M.L. Anchor for a consideration of a US $ 18600/-, and also that the currency of US $ 27050/- recovered from his cabin was the sale proceeds of smuggled diesel sold on previous occasions.  He, however, changed his stand when he was bought from Jail on remand (after his arrest ) for further interrogation on 31.05.2006 and admitted to only the current deal of sale of 40 Mts.of diesel.   In his bail application dated 12.06.2006 he denied everything, contending that the statements recorded were under force and  duress.  But his denial/retraction is of no avail in view of the overwhelming documentary and  corroborative evidence of acquiring and selling of smuggled HSD. Further, his first statement was recorded on 24.05.2206 and he has retracted his statement  after nearly 3  weeks.  His statement dated 24.05.2006  is also corroborated  by the statement dated 24.05.2006 of Shri Viplav Kumar Rai, the person incharge of the Barge of the M.L. Anchor about the sale of smuggled diesel.  It is also corroborated by the statement dated 15.11.2006 of Shri Abdul Subhan Abdul Rahim Shaikh who was the middle-man between Mr. Tennyson and the buyer Shri  Ashok Sasthe.  In fact Shri Abdul was traced only on the basis of the mobile phone number of Shri Abdul provided  by Mr. Tennyson.  The telephone  records obtained from the Mobile Telephone Company have established that on the night of 23/24 May,o6, Mr. Tennyson, Shri Viplav Kumar Rai and Shri Abdul were in a constant touch with one another at the time when the transfer of smuggled diesel was taking place.  The statement dated 01.06.2006 of Mr. Reuben James S. Cruz 3rd Mate of the vessel M.V.Sea Bulk Toota also corroborates the happenings  on 23/24 night which resulted in the apprehension of the two vessels while transferring the smuggled diesel, as also the recovery of foreign currency of  US $ 27050/- from the cabin of Mr. Tennyson. The representative of the owner of M.V. Sea Bulk Toota, Captain R.S. Likhari, also confirmed in his statement dated 31.05.2006 that there was no way through which Mr. Tennyson could have legally acquired the foreign currency US $ 27050/- recovered from him. Thus the retraction of the statement of Shri  Tennyson cannot be accepted.  Retraction without evidence of duress or coercion do not deflect from evidentiary value of statements, specially if facts stated there in are corroborated by other evidence.  In the case of  Kirshnand S. Bhatt Vs. Commr. (2002 (148) ELT 492 (Tri.Mumbai) it was held that the retraction of statement could not be upheld on ground  of duress as no representation was made against the officer who allegedly committed duress.  There is no evidence that in the instant case Shri Tennyson and made any representation or complaint against any investigating officer who allegedly used threat, coercion or duress to record his statement.  The above decision of the CESTAT has been confirmed by the Apex Court as reported in 2003 (155) ELT 157A (SC).A similar view has been upheld by the Madras High Court in the case ofDy. Director Narcotics Control Bureau Madras Vs. Senna K. Sevan2003 (159) ELT 62 Madras.  Thus, the role of Mr. Tennyson in acquiring/transporting and disposing smuggled HSD is established beyond doubt making him liable for penal action underSections 112 (a)& (b) of theCustoms Act, 1962.We find from the records that the recovery of foreign currency of US $27050, from this appellants cabin remains totally unexplained till date.  The fact  that the current appellant as well as the entire staff has been paid salary in Indian rupees remains undisputed.  We find that the entire submission made by the Ld. Counsel and in the appeal memorandum, the presence of the foreign currency is undisputed and there is no explanation from where this amount has come from.  The entire defense of this appellant is on the ground  that the statements given by him are retracted and  he was not given the cross examination of one of the panch witnesses.  In short, the current appellant is trying to defend the case  by assailing adjudicating authoritys findings, only on technical grounds.  It is seen from the records that the statements of this appellant was recorded on the day of seizure.  It is the submission that the said statement was retracted.  We find the  said statement was retracted very meekly in his bail application.  The said bail application is also not signed by him.  Further, we find that there is nothing on record that the current appellant  tried to submit any defence from the jail.  We find that the statement of Shri Viplav Kumar Rai, in charge of the barge,  that he had come to purchase the unaccounted/smuggled diesel from the vessel M.V. Sea Bulk Toota.  It is also  noticed from the statement of the various persons, that this appellant was always in touch with those people as regards  sale of diesel from the vessel.  We also find that the reliance placed by the adjudicating authority on the various other statements, including this appellant, clearly indicate that this appellant was in the business of sale of the diesel from the said vessel.  It is to be noted that this is also corroborated from  the fact of recovery of foreign exchange to the tune of US $ 27050 from his cabin.   The insistence of the Ld. Counsel to verify the  log book of the ship line and relied upon the documents, will not be of any use for the defense, as the presence of unaccounted diesel, and the presence of unexplained  foreign exchange, will clearly indicate that this appellant was in fact selling diesel from the vessel.  We find that all the case laws which were relied upon by the Ld. Counsel will be of no use, as the diesel is notified as canalized item and import of the same is restricted one. If an item is under restricted category, the provisions ofCustoms Act, will apply to it.   In view of these findings, we hold that the reliance placed by the Ld. Counsel on the various case laws, as regards the discharge of burden of proof is on the Revenue, is misplaced.  As regards the sample drawn and sent for test, we are of the view that once statements of the appellant as well as the corroboration of the fact that the appellant was  involved in purchasing and selling of illegal diesel, the test report of the samples drawn would be in consequential.  We find that the provisions ofSection 11AtoSection 11Dwhich has been enacted by the legislature would clearly apply in this case, as the said diesel was seized from ferry wharf, which is a notified area. It is on record that, the appellant, after  his release on bail, vide his letter dated 13.11.2006, has admitted that he is in the habit of selling diesel during the coastal voyage.7.		In view of the above reasonings, in our considered view,  in this appeal (No. C/693/07) the appellant has not made out a case and due to the fact that there was recovery of the foreign exchange and statements clearly implicating him,  we find that the findings reached by the adjudicating authority as reproduced hereinabove are correct and does not require any interference.  The absolute confiscation of foreign currency of US$ 27050/- is also upheld. The appeal is rejected.8.	In Appeal No. C/700/07 :-  Shri S.N. Kantawala Ld. Counsel appearing on behalf of the shipping lines  submits that the M.V. Sea Bulk Toota is owned by the appellants.  It is his submission that the adjudicating authority has invoked the provisions ofSection 115andSection 125of the Act, to confiscate the vessel and confiscate the diesel which was found on the said M.V. Sea Bulk Toota, that the adjudicating authority has erred in confiscating the diesel which was on the vessel and the vessel.  It is his submission that the owners i.e. current appellant were unaware that the Chief Engineer i.e. Shri Errol Gilbert Tennyson was involved in such kind of illegal activities.  He draws out attention to the findings at paragraph  84 (7)  of the adjudicating  authority.  He draws our attention to the letter/instruction  given by the current appellant to the staff of the vessel as regards the duties and liabilities.   He submits that the said Mr. Tennyson, who was Chief Engineer had done all the misdeeds for his personal gain and the current appellant could not be held responsible for such acts and deeds.9.		Ld. Jt. CDR submits that the current appellant has no case.  It is his submission that the captain and the Chief Engineer were in-charge of the  vessel M.V. Sea Bulk Toota.  He reads the statement of Mr. Tennyson, the Chief Engineer to submit  that the captain of the vessel was aware of illegal purchase and sale of diesel.  It is his submission that such an activity of clandestine sale and purchase  of unaccounted diesel could not have occured without the knowledge of the captain.  It is his submission that the confiscation of the vessel and the  diesel which was found on the vessel are  liable for confiscation and redemption fine imposed is also reasonable.10.		We considered the submissions made at length by both sides and perused the records.  We find that in this case the appellant is in appeal against the confiscation of the vessel  and the confiscation of the diesel which was found on the vessel.  The  current appellant is the owner of the vessel M.V, Sea Bulk Toota.   As the owner of the vessel, the current appellant had vide their  letter dt. 28.3.2005 had given  clear cut  instructions, which we may read:-It must be clearly understood that fuel oil stocks on board your vessel represent a large financial expenditure by either the customer or Seabulk Offshore.  Any careless handling of the bunkers is therefore tantamount to gross negligence and any deliberate mishandling of the bunkers is tantamount to theft.Responsibility :1. The Master is responsible for ensuring that  his vessel has adequate stocks of fuel oil on  board for the forthcoming voyage.  He must ensure that the quantities shown in his Daily Reports are  as accurate as possible.  He must also ensure that any large discrepancies observed are immediately reported to Seabulk Offshore.2. The Chief Engineer is fully responsible for maintaining an accurate account of fuel oil received, discharged, consumed and remaining  on board the vessel.3. The Master and Chief Engineer share a common responsibility to manage  the bunkers properly and to be able  to account accurately to both the Customer and to Seabulk Offshore for the fuel oil supplied to the vessel.Fuel Oil Consumption:1. Accurate determination of fuel oil consumption and of fuel oil remaining  on board the vessel can be made only by taking tank soundings.2. Actual fuel oil consumption  rates can vary greatly and estimated fuel oil consumption rates are not to be relied upon for accuracy over an extended period of time between soundings.3. Fairly accurate estimates of fuel consumption rates can be achieved by frequent monitoring of consumption at various engine RPM, load conditions, etc., then drawing up a graph reflecting the results.Fuel Oil Soundings:1.	The Chief Engineer is to witness the actual soundings of all fuel oil tanks and ensure accurate readings are recorded in the log.  The Chief Engineer should not delegate Allowing crews to provide your sounding reading is dangerous.2.	Fuel oil soundings should be taken at weekly intervals, even while at sea when possible.3.	Difference between estimated fuel oil consumption and the actual amount should be relatively small and may be shown as a fuel oil correction.4. Large differences indicate a serious flaw in monitoring and must be reported and investigated.5. Most customers will request the immediate relief of the Master and Chief Engineer if a difference of 5% over or under the recorded log readings. Seabulk endorses that policy as well.Fuel Oil Bunkering:1. Fuel oil soundings should be taken before and after each bunkering.2. Any discrepancies observed during bunkering are to be reported immediately.3. In the event of a short delivery (i.e. there is a difference between the bunkers actually received and the quantity shown on the delivery receipt) then a note of protest is to be made and delivered to the bunker supplier.  The bunker receipt should only be signed if  note is written on the receipt clearly stating that it has been signed under protest.Unauthorized Fuel Oil Transfers:1.   Seabulk Offshore and its customers take a very serious view about           unauthorized fuel oil transfers and deliberate short loading of fuel oil.2. Customers will usually off-hire the vessel and in most cases terminate the charter if a serious discrepancy is noted or if an unauthorized transfer is discovered.3. Seabulk Offshore reserve the right to prosecute any individual believed to be involved in unauthorized fuel oil transfers or short loadings.4. Seabulk Offshore may also report an individual to his home state Maritime Administration if he is found to be negligent in the performance of his duties with respect to the receipt, transfer, storage or use of a vessels bunkers.5. In Singapore or on Singapore Registered vessels fuel theft means a JAIL SENTENCE and STROKES  of the RATTAN. Make sure it does not happen on your vessel.  You have been warned.It can be noticed from the above reproduced instructions that all the crew were instructed regarding the misdeeds that should not be done by them.  We also see from the records that the purchasers of the said unaccounted diesel had clearly stated that they were dealing with Chief Engineer.  We find from the records that Mr. Tennyson, the Chief Engineer,  is one of the employees responsible for maintaining accurate account of diesel and shared common responsibility of  managing bunkers. The provisions ofSection 115are very relevant in this case and are read:-Confiscation of conveyances  (1)The following conveyances shall be liable to confiscation :-(a) any vessel which is or has been within the Indian customs waters, any aircraft which is or has been in India, or any vehicle which is or has been in a customs area, while constructed, adapted, altered or filtered 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, staved or destroyed so as to prevent seizure by an officer of customs;(c) any conveyance which having been required to stop or land undersection 106fails to do so, except for goods and sufficient cause;(d) any conveyance from which any warehoused goods cleared for exportation, or any other goods cleared for exportation under a claim for drawback, are unloaded, without the permission of the proper officer;(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 smuggling of any goods or in the carriage of any smuggled goods shall be iable 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.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 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.It can be noticed from the above reproduced section that  the conveyance i.e. the vessel could be confiscated under the provisions ofSection 115(2)of the Customs Act, 1962, only if there is knowledge of the illegal activity.  We find that the adjudicating authority in his order-in-original has held as under.-M/s. Sea Bulk Offshore, Dubai LLC- They are the owners of the vessel M.V. Sea Bulk Toota.  They were not involved in the smuggling.  In fact, they had given clear instructions to the Captain vide letter dated 28.3.2005 not to illegally sell any diesel from the stocks. Thus no penal liability can be imposed on them.We find with above findings, the  adjudicating authority has proceeded to confiscate the vessel  under the provisions ofSection 115.  We are of considered view that the Chief Engineer being one of the responsible person responsible for maintaining correct account of fuel, he can be held as agent of the current appellant. Hence confiscation of the vessel is upheld but the redemption fine imposed is very excessive.  Considering the findings of the adjudicating authority as reproduced above and that the chief engineer has kept the master and owners in dark, for his personal gain, in the facts and circumstances of the case, we are of the considered view  that  a token amount should be imposed as redemption fine in lieu of confiscation.  To meet the ends of  justice, we reduce the redemption fine imposed as the appellant to Rs. 5,00,000/- (Rupees five lakhs only).  Subject to above modification the appeal is disposed off.11.		As regards the confiscation of the diesel which was found on the M.V. Sea Bulk Toota, we are of the considered view that it is brought on records that the vessel had purchased this diesel, from the shore and evidences were produced before the adjudicating authority.  Since these evidences clearly indicate that the purchases were legal and legitimate, the said quantity of diesel on the vessel Sea Bulk Toota cannot be held as offending goods. Confiscation of the said diesel  found on M.V. Sea Bulk Toota is unwarranted . As such, the confiscation of the 147MTs of diesel  is liable to be set aside and we do so.12.		Accordingly, the appeal filed by Sea Bulk Offshore is disposed off as indicated hereinabove.13. In Appeal No. C/740/07 :-  The Ld. Counsel appearing for the appellant submits that this appeal is filed by the appellant who is considered as  owner of the barge.  He draws our attention to the order-in-original more specifically to paragraph No.6 wherein it is mentioned that Shri Ashok Sasthe was the owner of the Barge.  It is his submissions that the current appellant i.e. Ashok Sasthe was not owner of the barge.  He draws our attention to paragraph 67 to submit that he was not the owner at the time of seizure, and actual owner turned out to be Shri  Abdul Rahim  Shaikh and the barge was released provisionally to him.  It is his submission that the adjudicatingauthority has imposed a penalty of  Rs. 5.00 Lakhs on the current appellant on the ground that the entire arrangement of purchase and sale of diesel was done at his instance.  He submits that the applicant had sought cross examination  of the various persons to defend his case but none was granted, hence there is a violation of principles of natural justice.14.		Ld. Jt. CDR on the other hand would submit that the current appellants address was not given, and he was always in touch with the Tandel of the vessel of Shri Viplav Kumar  Rai.  It is the submission of the Jt. CDR that the Tandel Shri Viplav Kumar Rai had in a statement recorded inSection 108had given Mobile Phone number of the current appellant and it turned out to be correct. It  is his submission that the current appellant remained absent and never responded to the summon sent to him.   In the absence  of any justification from the current appellant,  penalty imposed on him is correct.15.		We considered the submissions made by both sides and perused the records.  The adjudicating authority while coming to the conclusion that the current appellant has to be penalized, held as under:-Shri Ahsok Sasthe  His name first cropped up while recording the statement of Shri Viplav Kumar Rai on 24.05.2006 when he said that he was working on the instructions of one Shri Ashok Sasthe and that the foreign currency of US$ 18600 was also arranged by Shri Ashok Sasthe. Shri Abdul Subhan Abndul Rahim Shaikh, in his statement dated 15.11.2006, has also referred to shri Ashok Sasthe on whose behalf he was coordinating with Mr. Tennyson the chief Engineer of M.V. Sea Bulk Toota.  The Mobile telephone records of Shri Viplav Kumar Rai. Mr.  Tennyson, Shri Ashok Sasthe and was in constant touch with Shri Viplav K. Rai @ Sunil. Shri Rai.  He made at least 6 calls on the night of 23/24.05.2006 to Shri Viplav Rai and further two calls were also made from shri Viplavs Mobile No. 9821948563 to Shri Ashok Sasthe (9324242596). Shri Viplav also made call to the Chief Engineer Shri Errol  Tennyson (9821116462) at 21.36.32 Hrs. on 23.05.06 and in response, Shri Errol Tennyson replied by making call to him at 21.50.54 Hrs. & 22.04.03 Hrs. on the same night.  There were 3 number of calls between 8 pm and 10.30 pm from the Mobile number of Shri Abdul Subhan Abdul Rahim Shaikh (9870078645) to Shri Ashok Sasthe on the night of 23.05.2006.  Thus the statements of Viplav Kumar Rai, and Shri Abdul Subhan Abdul Rahim Shaikh have been corroborated by the telephone records.  Hence the role of Shri Ashok Sasthe in the smuggling is established as the one who provided the money to Viplav Kumar Rai and arranged for the purchase of the smuggled diesel.   He is, therefore, liable for penal action underSection 112 (a)of the Customs Act, 1962, for abetment.It is seen from the records that the above findings of the adjudicating authority has been on the ground that this appellant had given the Tandel Shri Viplav Kumar Rai an amount of US $ 18500/- for purchase of diesel from Mr. Tennyson.  It is undisputed that the said amount of US$ 18500/- was recovered from the barge and Tandel  Shri Viplav Kumar Rai categorically stated that  this amount of US $ 18500/- was given by this appellant.  It was for the current appellant to come forth and show evidence and defend that the said amount was not given by him.  He has not done so.  In the  replies submitted by  him and in the grounds of appeal, this appellant has only tried to defend by showing that  he is not the owner of the barge.  We find that the adjudicating authority has also held so, but the imposition of the penalty on the  appellant is underSection 112(a)of the Customs Act, 1962.  It is un-explained by the  appellant even before us, as to where he got an amount of US $ 18500/- to be given to the Tandel for purchase of diesel.  Even today, the Ld. Counsel has not given any proper justification.  Shri Viplav Kumar Rai in his inculparory statement has categorically stated that  this appellant is the person who has given the amount for purchase of diesel, from M.V. Sea Bulk Toota. On perusal of the record it is seen that the penalty has been imposed on the current appellant under the provisions ofSection 112(a)on the statements which has been recorded by the authorities of three different persons.    There is no reason  why all the three persons would  lie and implicate  the appellant16.		Accordingly, in the facts and circumstances of the case, since the current appellant is implicated in various statements, as being the person in contact for sale and purchase of Diesel, the provisions ofSection 112(a)of the Customs Act, 1962 are applicable, hence there is no infirmity in the order imposing penalty.17.		Accordingly, the penalty imposed on the appellant is uphed and the appeal is rejected18.	In Appeal No. C/750/07 : -  Shri G.B. Yadav   the Ld. Counsel appearing for the appellant herein draws our attention to internal page 54 and the findings recorded against the current appellant.  He submits that there is no evidence against the current appellant as being abettor of the smuggled diesel if any.  He submits that the current appellant has acted as a middleman  as a guarantor for payment.  He submits that this appellant has no role to play in the smuggling,  if any, hence penalty imposed underSection 112(a)is not applicable.  It is his submission that, assuming but not accepting, that the appellant had role, there is no evidence that the said seized diesel was brought from a place outside India.  It is the submission that the provisions ofSection 111of the Customs Act, does not apply, as diesel was seized in ferry wharf, and is not a Customs Notified area.19.		The Ld. Jt. CDR on the other hand would submit that the statements given by this appellant is not attracted.  He submits that the  appellant has clearly stated that he was in touch with Mr. Tennyson for sale of 40MTs of diesel, which is admitted as being smuggled.  It is the submission  that  this appellant had abetted the smuggling and hence penalties imposed on him is correct.  In rejoinder, the Ld. Counsel submits that there is no proof of smuggling and if there is no smuggling there cannot be any abettement.20.		We considered the submissions made by both sides and perused the records.  The charge against this appellant is that he abetted  in the smuggling of the diesel which was seized by the authorities.  The findings of the adjudicating authority against the appellant is as under:-Shri Abdul Subhan Abdul Rahim Shaikh  He has admitted in his statement dated 15.11.2006 that he was acting as a middle-man between Mr. Tennyson, the seller of the smuggled diesel and Mr. Ashok Sasthe, the buyer of the HSD.  He was also collecting his commission.  The Mobile Telephone Call details of shri Abdul have also confirmed his statement [para 39 above]. However, it is  to be noted that he has admitted that he was aware that Mr. Tennyson was purchasing smuggled HSD oil from foreign going vessel at Mumbai High and used sell the same on arrival in Mumbai.  Shri Errol Tennyson, Chief Engineer of the supply vessel Sea Bulk Toota  has stated in his statement on 24.05.06 that one  Abdul called him from Mobile number 9870078645 and  enquired if he could sell some diesel and on being asked by Shri Abdul he (Tennyson) informed him that he could sell 40 Mt of the diesel.  In another words, Shri Abdul knew that he was  acting as a middle-man for sale/purchase of smuggled diesel oil.  In other words, he abetted the offence of smuggling.  His role also resulted in the actual sale of smuggled diesel from the vessel M.V. Sea Bulk Toota to the barge M.L. Anchor. Thus Shri Abdul Subhan Abdul Rahim Sahikh is liable for  penal action for abatement  underSection 112(a)of the Customs Act, 1962.It can be noticed that the appellant has himself  gave a inculpatory statement that he is into arranging of sale and purchase of smuggled diesel.  If that be so, then the penalty imposed underSection 112(a), of the  Customs Act, 1962, is correct, as the appellant has abetted an act, which has rendered the goods liable for confiscation underSection 111of the Customs Act, 1962.21.	In Appeal No. C/793/07 :-  This appeal is filed by the Revenue against the Order-in-Original which dropped the proceedings initiated against Shri Vivencio Bartolini Degollacion, Captain of the vessel Shri M.B. Sea Bulk Toota and Shri Mohd. Ali Aboo Backer Shaikh.  Ld. Jt. CDR submits that there was a specific information that the said Sea Bulk Toota was in engaged in selling smuggled diesel.  It is his submission that there was no saving of diesel and no one has claimed the ownership of the seized diesel of 40MTs. He submits that statements of 3rd Mate clearly indicates that the captain was aware of the  activities going on in the ship.  He draws our attention to the various  statements of crew  to press home the  point that the captain was aware of the entire deal.  He relies upon the decision in the case ofGreat Eastern Shipping Co. Ltd. Vs. Union of India[2002 (150) E.L.T. 1403 Del.)].  He submits that, it is unacceptable, that as a  captain of the ship,  respondent Shri  Vivencio Bartolini, Degollacion, could not claim  that he was unaware of happenings.  As regards the proceedings  being dropped against  Shri  Mohd. Ali Aboo Backer Shaikh he submits that Mohd.Ali Aboo Backer Shaikh was in constant touch with Shri Viplav Kumar Rai,  Mr. Errol Gilbert Tennyson and Ashok Sasthe, this would indicate that he had some role to play in respect of purchase and sale of the smuggled diesel.22.		Shri N.D. George, the Ld. Counsel appearing on behalf of the respondent M. Vivencio Bartolini, Degollacion, submits that none of the persons has implicated the respondent except Shri  Tennyson  It is his submission that the vessel M.V. Sea Bulk Toota was on a  coastal run.  It is his submission that the confiscation of the diesel made by the authorities would not arise and if that be so, there cannot be any penalties imposed on this respondent. It was also submitted that there is no evidence, to connect the respondent  with any activity  of illegal sale and purchase of diesel.23.		He relies upon the judgment of the Tribunal in the case ofCARL F. Peters Vs. Commissioner of Customs (Prev.)Mumbai [2001 (133) E.L.T. 580 (Tri.Mumbai)], Indoceanic Shipping Co. Ltd. Vs. Addl. Collector of Customs (P) [1993 (64) E.L.T. 196 (Bom.)], Fargo Marine Co. Ltd. Vs. Commissioner of Customs (Seaport), Chennai [2004 (176) E.L.T.347 (Tri. Chennai)].24.		Mr. H.K. Prem Ld. Counsel appearing on behalf of Shri  Mohd. Ali Aboo Backer Shaikh submits that they are not aware that department has filed an appeal.  He submits that they were not served upon the copy of the appeal filed by the Revenue.  On  the specific direction of the Bench, a copy was served upon the Ld. Counsel, who fairly agreed to go through the same and make  submissions.  It is his submission that the current respondent is in no way connected to the incidence of the smuggling of the diesel.  It is his submission that that evidence against this respondent is totally un corroborated and because he was communicating with Shri Viplav Kumar Rai , Mr. Errol Gilbert Tennyson and Shri Ashok Sasthe, it cannot be said that he had abetted in the illegal activities, if any.25.		In rejoinder, the Ld. Jt. CDR submits that captain was in the knowledge of all activities those were taking place on the ship.  It is his submission that though no incriminating documents or records were found from the cabin of the captain, vicarious liability lies on the captain hence he should be also penalized for abetting the smuggling.26.		We considered the submissions made at length by both sides and perused the records.  The findings of the adjudicating authority as regards the role played by the captain of the vessel and shri Mohd. Ali Aboo Backer Shaikh are reproduced as under:Mr. Vivencio Bartolini, Degollacion, Captain of the vessel M.V. Sea Bulk Toota  So far as the role of captain is concerned, there is no direct         evidence again him except for the statement of the Chief Engineer  Mr.Tennyson saying the captain was also aware of the smuggling and that the captain was also receiving a share of the sales proceeds of smuggled diesel.  In the show cause notice it has been mentioned in Para 8, that in the statement dated 24.05.2006 the captain had confessed that he had knowledge that the Chief Engineer was doing illegal sale of diesel for profit and that he was also aware about the sale of 40MTs of HSD to a Barge in the night of 23/24.05.2006 and that he did not deny that his Chief Engineer was purchasing the diesel in Bombay High from Vessels coming from UAE. However, if one peruses the statement dated 24.05.2006 of the Captain the picture that emerges is quite different. Relevant extracts of his statement are reproduced below:On being asked that the barge M.L. Anchor which was alongside his supply vessel when the customs approached his vessel, had taken 40 MTs HSD from his vessel, I state that it was my mistake that 40MT. Of diesel oil was pumped out of my supply vessel M.V. Sea Bulk Toota to a barge M.L. Anchor that to (sic) when I myself was present  on the vessel and I could not notice the same (emphasis supplied).Q. The Chief Engineer Errol Tenyyson has stated in the statement that he had paid US$ 10,000/- to him as share of the profit which accrued after selling the diesel oil illegally without any valid document to the barge people?Answer :- This is not the profit but the money generated after the illegal sale of diesel oil.  But I did not receive the amount and I do not know as to why he is telling lie.Q.  Do you deny the statement made by your Chief Engineer, he used to purchase diesel at Mumbai High from the vessel coming from Dubai?Ans. No. I do not deny, however, I say that I did not see myself may be I must be sleeping at that time.(a) From the above, it does not appear that the show cause notice has properly extracted the gist of his statements.  In fact, the Captain has nowhere admitted to the knowledge about his Chief Engineer indulging in smuggling  of diesel and has also denied any share of the earnings.  However, as a responsible Captain he has taken full responsibility for the actions of his crew including that of the Chief Engineer, as is obvious from his answer reproduced below:Yes, I have been informed now by you that my vessel M.V. Sea Bulk Toota  has been seized by the Customs and I feel that for this my Chief Engineer is only responsible because he used to sell illegally diesel oil stored in the tank of my vessel without my knowledge and therefore even I am responsible for the same as I am the captain of the vessel.(b)	 None of the other noticees, kike Viplav Kumar Rai, Abdul Subhan Abdul Rahim Shaikh, Ashok Sasthe etc. have taken the name of the Captain as being involved in the smuggling. His telephone records also do not show any interaction with any of the other noticees. Further, though  the Chief Engineer had mentioned that he was sharing the profits out of the sales proceeds of smuggled diesel with his Captain, no foreign currency or Indian Currency was recovered either from the person or the cabin of the Captain.  However, it would be difficult to accept the proposition that whenever the Chief Engineer was transferring HSD from a sea going vessel (which admittedly happened at least on 4 occasions) and then transferring this smuggled diesel to another barge, the Captain remained unaware of this transaction specially when each transfer of HSD would require berthing of a vessel along side and also substantial time in affecting the transfer of HSD. However, in view of the fact that no one else has implicated the Captain except the Chief Engineer, and the allegation of the Chief Engineer regarding the Captains complicity have not been corroborated/verified through any other means, at most a suspicion can remain regarding the role of the captain.  Thus, the most that can be said against the captain is that either he was duped by his Chief Engineer or that he turned a  blind eye to the shady activities of his Chief Engineer.  But this cannot be a ground for imposing any penal liability on him.Shri Mohd. Ali Aboo Backer Shaikh  In the show cause notice the only evidence against Shri Moh. Ali is that Shri Viplav Kumar Rai had mentioned that he has used to also receive calls from Shri Mohd. Ali. Further, the telephone call details obtained form service provider  show that the Mohd. Ali was in constant touch with Shri Viplav Kumar Rai, Shri Errol Gilbert Tennyson, Shri Ashok Sasthe and shri abdul Subhan Abdul Rahim Shaikh.  But this, by self, is not sufficient to hold that he was in any way involved with either the smuggling of the diesel, its transportation or in financing the same.  The smuggled diesel was procured by the vessel M.V. Sea Bulk Toota with the help of Mr. Tennyson and transferred to the barge M.L. Anchor operated by Shri Viplav Kumar Rai and the foreign currency US$ 18600/- was arranged by one Shri Ashok Sasthe. None of the persons, whose statements have been recorded, have indicated the involvement of Shri Mohd. Ali except from the statement of Shri Viplav Kumar Rai that  he used to also get calls from him asking for the whereabouts of the barge.  All this can, at most arouse suspicioun again Shri Mohd. Ali, but this cannot substitute evidence.  Shir Mohd Ali has in his statement dated 8.6.2006, denied his involvement in any of the dealings relating to sale or purchase of smuggled diesel.  Hence, I hold that no penalty is imposable on Shri Mohd. Ali because of lack of evidence.It can be noticed from the above reproduced portion of the impugned order, that no one had implicated the captain, as to that he was having  knowledge of purchase and sale of illegal diesel oil, without any valid document.  It would be worthwhile to mention here that the Chief Engineer has only stated that the captain of ship was always having share in the profit, it is seen that the captain of the ship has denied the receipt of any amount.  It is also seen from records that when the cabin of the captain was searched, no incriminating  documents or currency was found.  It is also seen  from records that none of the noticees other than Shri Tennyson had implicated the captain, in the various statements recorded.  There is also nothing on record to indicate that the captain was communicating with other noticees.  In view of this, we are of the considered view that the findings reached by the Ld. Commissioner in dropping the proceedings initiated against the captain are correct and are well reasoned one, and does not require any interference.27.	As regards the proceedings dropped against, Shri Mohd. Ali Aboo Backer Shaikh, it is also seen that but for the allegation that he was in touch with Shri Viplav Kumar Rai, Mr. Errol G. Tennyson, Shri Ashok Sasthe, there is no other evidence to implicate him in this case.  It is seen that none of the noticees had implicated or has said that he has financed the purchase  and sale of illegal diesel.  Hence we are of the considered view that the findings reached by the adjudicating authority for dropping proceedings initiated against this respondent is a well reasoned one and does not require any interference.28.	Accordinglyf, all the appeals are disposed of as indicated hereinabove.(Pronounced in court on..)



(K.K.Agarwal)
Member (Technical)

(M. V. Ravindran)
Member (Judicial) 




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