2020 (3) TMI 381 - CGOVT - Customs

Penalty u/s 116 of the Customs Act, 1962 - Commissioner (Appeals) has set aside the Order-in-Original on the basis of the fact that the OTR (Out Turn Report) alone cannot be the basis of imposition of penalty where the Surveyor s report has confirmed that there was no short landing - HELD THAT - Government finds that the present case is regarding imposition of penalty under Section 116 of the Customs Act, 1962 on the ground of short-landing determined on the basis of quantity. C.B.I. C. s Circular No. 46/95-Cus., dated 4-5-1995, relied on by the Respondent - The circular relied upon by the respondent is regarding levy of duty and penalty. Therefore the respondent does not get any benefit of the above circular. No explanation has been offered by the respondent as to how the weight of 2473.628 MT in the survey report can match the weight of the imported shipment wherein 11 pieces of logs have short landed. Survey Report is silent both in respect of volume and quantity of the impugned cargo. Since there is no evidence to contrary, the fact regarding short-landing of eleven pieces of logs gets established. Since the person-in-charge of conveyance is liable for penalty in case of quantity unloaded is short of the quantity to be unloaded at the destination, the adjudicating authority has correctly imposed the penalty on the respondent under Section 116 of the Customs Act, 1962. Government sets aside the order of the Commissioner (Appeals) - Revision Application is allowed.

Summary

Issues:
1. Imposition of penalty under Section 116 of the Customs Act, 1962 based on short-landing of goods.
2. Interpretation of relevant circulars and legal provisions regarding levy of duty and penalty.
3. Evaluation of evidence and submissions to determine liability for penalty.

Analysis:
1. The case involved a revision application filed by the Commissioner of Customs against the Order-in-Appeal that set aside the penalty imposed on a steamer agent for short-landing of Malaysian Round logs. The initial penalty was imposed under Section 116 of the Customs Act, 1962, based on the Out Turn Report (OTR) from Kolkata Port Trust. The Commissioner (Appeals) overturned the penalty citing lack of evidence beyond the OTR. The respondent argued for a determination of short-landing based on Metric Tons or Cubic Metre, supported by surveyor reports and Bill of Lading. The Government found the penalty justified as the survey report did not provide evidence to counter the short-landing of 11 pieces of logs, upholding the imposition under Section 116.

2. The respondent relied on C.B.I. & C.'s Circular No. 46/95-Cus., dated 4-5-1995, concerning the levy of duty and penalty on imported goods. However, the circular clarified the basis for duty calculation in weight-based transactions, not applicable to the penalty under Section 116 of the Customs Act, 1962. The legal provision outlines penalties for goods not unloaded at the destination or short-landed quantities, holding the person-in-charge of the conveyance liable. The absence of evidence to reconcile the survey report's weight with the actual shipment weight established the short-landing, justifying the penalty imposition.

3. During the proceedings, personal hearings were scheduled, but only the respondent's representative attended, presenting additional evidence and arguments. The Commissioner (Appeals) orders, written submissions, and the original penalty decision were thoroughly examined. The Government's decision to set aside the Commissioner (Appeals) order and uphold the penalty was based on the lack of evidence to refute the short-landing of goods, affirming the liability under Section 116. The detailed evaluation of submissions and evidence led to the conclusion that the penalty imposition was appropriate in this case.

In conclusion, the judgment addressed the issues of penalty imposition for short-landing under the Customs Act, interpretation of relevant circulars, and evaluation of evidence to determine liability. The decision to allow the revision application and uphold the penalty highlighted the importance of substantiating claims with evidence in customs penalty cases.