2013 (8) TMI 583 - HC - Customs

Short Landing of Goods - Interpretation of Provisions Penalty u/s 116 - The issue involved was the interpretation of the relevant provisions of the Act as argued by the petitioner - In the case of short landing of the goods Section 116 of the Act provides for penalty for not accounting of goods - Held that - The petitioner squarely satisfied the term agent or any person as he dealt with the goods at different stages of its shipment - A conjoint reading of Sections 116, 2(31) and 148 of the Act makes it clear that in a case of short landing of goods, if penalty was to be imposed on the person-in-charge of the conveyance, it can also be imposed on the agent so appointed by the person-in-charge of the vessel. It was very clear that the steamer agent had filed Import General Manifest for goods which had been shipped and they also dealt with the customs department for appropriate orders that had to be passed in terms of Section 42 of the Act - The petitioner was a agent duly appointed - It had to be noticed that the authorities below have on facts come to the conclusion that the steamer agent had affixed the seal on the containers after stuffing and the steamer agent took charge of the sealed containers - If thast was the fact, then the customs authorities were justified in taking appropriate action for levying of penalty for the short shipment or no shipment in 40 containers. SHAW WALLACE & CO. LTD. Versus ASSISTANT COLLECTOR OF CUSTOMS & OTHERS 1986 (7) TMI 106 - HIGH COURT OF JUDICATURE AT BOMBAY - The petitioner as a steamer agent files an Import General Manifest and represents before the customs authorities as an agent of the shipper and conducts all affairs in compliance with the provisions of the Act, then the provisions of Section 116 read with Section 148 of the Act get attracted automatically and as a result penalty becomes leviable - The authorities below were justified in imposing penalty as contemplated under Section 116 of the Act - the writ petition filed for challenging the recovery notice failed Decided against Petitioner.

Summary

Issues Involved:
1. Imposition of penalty under Section 116 of the Customs Act, 1962.
2. Liability of the steamer agent under Sections 2(31) and 148 of the Customs Act, 1962.
3. Interpretation of relevant provisions of the Customs Act in the context of short landing of goods.

Detailed Analysis:

1. Imposition of Penalty under Section 116 of the Customs Act, 1962:
The primary issue revolves around the imposition of a penalty for not accounting for goods under Section 116 of the Customs Act, 1962. The petitioner, a steamer agent, filed an Import General Manifest (IGM) for 40 containers of M.S. Scrap/Plates, which were found empty upon arrival. The Department argued that the steamer agent is liable for a penalty under Section 116, which penalizes the person-in-charge of the conveyance for any goods not unloaded at their destination or for any deficiency in the quantity unloaded. The petitioner contended that the goods were not loaded in Dubai by the exporter/shipper and that the seals on the containers were intact, thus absolving them of responsibility.

2. Liability of the Steamer Agent under Sections 2(31) and 148 of the Customs Act, 1962:
Section 2(31) of the Act defines the "person-in-charge" of a conveyance, and Section 148 extends the liability to the agent appointed by the person-in-charge. The court held that the petitioner, being an agent of the person-in-charge of the vessel, is liable for the obligations and penalties under the Act. The court emphasized that the steamer agent had affixed the seal on the containers and took charge of the sealed containers, making them liable for the short shipment or no shipment in the 40 containers.

3. Interpretation of Relevant Provisions of the Customs Act in the Context of Short Landing of Goods:
The court interpreted Section 116 in conjunction with Sections 2(31) and 148, concluding that the steamer agent, acting on behalf of the person-in-charge, is liable for the penalty. The court referred to the Supreme Court's decision in British Airways Plc. v. Union of India, which held that penalty under Section 116 is leviable for not accounting for goods and that the agent is also liable for penalties and confiscations. The court rejected the petitioner's reliance on the Bombay High Court's decisions in Seahorse Shipping and Ship-Management Pvt. Ltd. and Shaw Wallace & Co. Ltd., emphasizing that the Supreme Court's interpretation in British Airways Plc. takes precedence.

Conclusion:
The court dismissed the writ petitions, upholding the penalty imposed on the petitioner under Section 116 of the Customs Act, 1962. The court found that the petitioner, as a steamer agent, is liable for the short landing of goods and that the provisions of Sections 116 and 148 of the Act are applicable. The court also noted that the petitioner could seek remedies against the shipper for any claims related to the empty containers.