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Issues: Liability for penalty under Section 116 of the Customs Act, 1962 for shortages found in cargo, obligation of Steamer Agents to establish shortages did not occur on board the vessel, interpretation of rules relating to Bill of Lading, delay in conducting survey, relevance of Public Notice 132 dated 10-12-1973, consideration of evidence in determining liability.
Analysis: The judgment by the Appellate Tribunal CEGAT CALCUTTA involved an appeal arising from an order-in-appeal rejecting the appellant's appeal against a penalty imposed by the Deputy Collector of Customs for shortages found in cargo. The vessel carried auto replacement parts, and a show cause notice was issued to the appellants after an Appraisement Survey held 16½ months after landing. The Deputy Collector imposed a penalty, which was unsuccessfully appealed before the Appellate Collector, leading to the current appeal before the Tribunal. The main contention raised by the appellant was that they should not be held liable for the alleged shortages as the goods were lying in the docks for an extended period, and there was no evidence that the shortages occurred on board the vessel. The respondent argued that since the goods landed in unsound condition, the Steamer Agents had an obligation to prove the shortages did not occur on board. The respondent also highlighted the absence of a certificate under the Indian Carriage of Goods by Sea Act, 1925, as a basis for presuming shortages took place on the vessel. The Tribunal considered the delay in conducting the survey, the absence of evidence indicating shortages occurred on board the vessel, and the failure of Clearing Agents to follow procedures outlined in Public Notice 132. The Tribunal noted that the Appellate Collector did not adequately consider the possibility of pilferage during the goods' extended stay in the docks and the requirements set out in the Public Notice. Additionally, the Tribunal referenced a judgment by the Calcutta High Court which held that Steamer Agents cannot be held liable for shortages if a survey was not conducted immediately after discharge from the vessel. Ultimately, after careful consideration and relying on the Calcutta High Court's judgment, the Tribunal allowed the appeal, setting aside the previous orders and directing the Customs authorities to refund the penalty if paid by the appellants. The Tribunal emphasized that the absence of the certificate contemplated by the Bill of Lading rules did not justify imposing the penalty under Section 116 of the Customs Act.
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