# UNION OF INDIA v. MIS. MUSTAFA AND NAJIBAI TRADING CO. AND ORS - **Citation:** [1998] 3 S.C.R. 708 - **Court:** Supreme Court of India - **Decided:** 1998-07-16 - **Case number:** Civil Appeal No.152 of 1988 - **Bench:** S.C. Agrawal, V.N. Khare - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/union-of-india-v-mis-mustafa-and-najibai-trading-co-and-ors-16386 - **Pages:** 32 ## Headnote Customs Act, 1962Ss.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 !I ours 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 agentsImport 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 reappreciation, 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; 72 ## Text _Characters 0–39,929 of 85,973. This is a partial read: ask again with offset=39929 for what follows._ 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, 1962Ss.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 !I ours 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 agentsImport 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 reappreciation, 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 reappreciation 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 (iii) Imposition of personal penalties on respondent No. 2, the Managing Director of respondent No. I company and on the Master of the vessel. G 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 :- B c "111. Confiscation of improperly imported goods, etc.-The following goods brought from a place outside India shall be liable to 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; (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." F "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 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-incharge of a conveyance carrying imported goods shall, within twentyfour 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. (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. B (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, (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. 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. E F 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 MANSCOG 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 B Bombay to take 125 tons cargo for Dubai and further that the radar and V.H.F. 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 D and that the vessel was proceeding to Bombay as the radar and V.H.F. sets 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