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2019 (12) TMI 1448 - HC - CustomsRemission of duty - import of 50,000 bags of Soda Ash - short receipt of quantity or not - applicability of Section 23 of the Customs Act, 1962 - Levy of Penalty u/s 116 of CA - HELD THAT - In the present case, the custody of the imported goods was with the Tuticorin Port Trust which is constituted under the provisions of the Major Port Trust Act, 1963. Tuticorin Port Trust was required to keep a record of such goods and send a copy thereof to the proper Officer of the customs - There is a categorical finding in O.I.O. No. 4/97, dated 16-4-1997 of the Assistant Commissioner while rejecting the claim for remission of duty of the importer that a proper tally could not be made during the completion of discharge from the vessel as the cargo was dumped due to labour refusing to stack the cargo property into the slings in view of the nature of the cargo. He has further observed that both the Port Trust Certificate and the survey report of M/s. Peirce Leslie, neither show that the entire cargo was not received by the Tuticorin Port Trust. Thus, there is no evidence of short landing. Remission of customs duty was allowed by the Appellate Commissioner to the importer on account of short delivery of the goods and not on account of the short landing of the goods. Therefore, there is no nexus between the alleged short landing and short receipt - In this case, the importers had produced a certificate dated 29-2-1996 of Lloyd s Agents after filing a refund claim on 26-12-1996. In this case, no short landing was noticed by the Customs Department when the goods were discharged at the Tuticorin Port Trust. There is no evidence on record to conclude there short landing. On the other hand, the goods were discharged at the Tuticorin Port. However, after they were discharged, the aforesaid goods were delivered to the importer filed a refund claim on 27-4-1996. The short landing was to be ascertained then and there as and when the imported goods were discharged from the vessel and were transferred to the Port Trust - Therefore, unless there was a report of the surveyors or any other report of the custodian of the goods namely the Tuticorin Port Trust certifying that there were short landing, a steamer or its agent cannot be held liable merely because remission of customs duty was allowed to the importers under Section 23 of the Act. Invocation of section 116 of Customs Act - HELD THAT - Section 116 of the Act applies only if any goods loaded in a conveyance for importation into India are not unloaded at the place of destination in India or where there is a failure to unload and the goods are not accounted for to the satisfaction of the Assistant Collector of Customs. Only under those circumstances, the person in charge of the conveyance shall be liable to a penalty. Further, invocation of Section 116 of the Customs Act is not dependent on the outcome of the application for remission of customs duty of an importer - If there was indeed short landing, the authorities ought to have initiated proceedings independent irrespective of the application for remission of Customs duty under the provisions of the Customs Act, 1962. Therefore, invocation of Section 116 of the Customs Act, 1962 long after 9 to 10 years of the actual import and clearance of the goods by the importer cannot be countenanced. The impugned order of the 1st respondent seeking to justify levy of penalty on the petitioner under Section 116 of the Customs Act, 1962 cannot be sustained and is therefore liable to be quashed - Petition allowed - decided in favor of petitioner.
Issues Involved:
1. Rejection of Revision Application by the 1st respondent. 2. Short landing of goods and remission of customs duty. 3. Issuance and validity of show cause notices. 4. Limitation period for proceedings under Section 116 of the Customs Act, 1962. 5. Liability of the steamer agent under Section 116 of the Customs Act, 1962. Detailed Analysis: 1. Rejection of Revision Application by the 1st respondent: The petitioner was aggrieved by the Impugned Order dated 28-10-2009, wherein the 1st respondent rejected the Revision Application under Section 129DD of the Customs Act, 1962. The Revision Application was filed against the imposition of penalty under Section 116 of the Customs Act, 1962. 2. Short landing of goods and remission of customs duty: The petitioner, a steamer agent, discharged consignments of Soda Ash at Tuticorin Port. The importer claimed a short receipt of 886 bags and filed for remission of customs duty under Section 23 of the Customs Act, 1962. The Commissioner of Customs (Appeals) allowed the remission, and the Customs Department refunded the amount to the importer. However, the Deputy Commissioner of Customs issued a show cause notice to the petitioner for a penalty under Section 116 of the Customs Act, 1962, for the short landing of goods. 3. Issuance and validity of show cause notices: The petitioner received a show cause notice on 9-8-2000 and replied on 18-8-2000. A second show cause notice was issued on 31-1-2004, which culminated in an order dated 18-5-2005, dropping the proceedings. This order was appealed against and reversed by the Commissioner of Customs (Appeals) on 11-8-2006, imposing a penalty on the petitioner. 4. Limitation period for proceedings under Section 116 of the Customs Act, 1962: The petitioner argued that the proceedings under Section 116 should be co-terminus with proceedings under Sections 27 and 28 of the Customs Act, 1962, and that the show cause notices were time-barred. The court referred to the decision of the Bombay High Court, which held that action under Section 116 must be taken within a reasonable time, suggesting a period of five years as reasonable. 5. Liability of the steamer agent under Section 116 of the Customs Act, 1962: The court analyzed the evidence and found no conclusive proof of short landing. The Assistant Commissioner’s Order-in-Original noted deficiencies in the Port Trust Certificate and the survey report. The court concluded that the remission of customs duty was allowed due to short delivery, not short landing, and there was no nexus between the two. The court held that the invocation of Section 116 long after the import and clearance of goods was not justified. Conclusion: The impugned order of the 1st respondent imposing a penalty under Section 116 of the Customs Act, 1962, was quashed. The court provided consequential relief to the petitioner, emphasizing that proceedings under Section 116 must be initiated within a reasonable time and based on concrete evidence of short landing. The connected Miscellaneous Petitions were also closed.
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