1982 (7) TMI 94 - HC - Customs

Customs - Shortlanded goods liable to penalty and not duty - Writ jurisdiction - Appeal - Limitation

Summary

Issues:
1. Challenge to the order imposing penalty under Section 116 of the Customs Act, 1962 for shortlanding of high speed diesel oil.
2. Constitutional validity of Section 116 of the Customs Act.
3. Requirement of depositing penalty amount for filing an appeal under Section 129.

Analysis:
1. The judgment addresses the challenge to an order imposing a penalty under Section 116 of the Customs Act for shortlanding of high speed diesel oil. The petitioner contested the penalty on the grounds that shortlanding does not automatically warrant a penalty and that the provision of Section 116 may be unconstitutional. The court emphasized that the penalty is not imposed solely due to shortlanding but when the deficiency is not satisfactorily accounted for. The person in charge of the conveyance is given an opportunity to explain reasons for the shortfall. The court clarified that Section 116 does not confer arbitrary power on customs authorities but serves to prevent unauthorized imports, making it a question of fact to be addressed through statutory appeal under Section 128 of the Customs Act.

2. The constitutional validity of Section 116 of the Customs Act was challenged on the basis that it could lead to arbitrary imposition of penalties, potentially violating fundamental rights. The court rejected this argument, stating that the provision does not grant unbridled power to authorities. It highlighted that the penalty is not a duty but a consequence of failing to account for shortlanded goods to the satisfaction of the Assistant Collector of Customs. The court emphasized that the provision does not violate fundamental rights as it requires a factual determination of whether the shortfall was properly accounted for. It noted that the appellate process is the appropriate avenue for addressing grievances related to penalties imposed under Section 116.

3. The judgment also addressed the requirement under Section 129 of the Customs Act, which mandates depositing the penalty amount for filing an appeal. The petitioner argued that this condition creates undue hardship and restricts the right of appeal. The court disagreed, pointing out that Section 129 allows the appellate authority to consider requests to waive the deposit based on hardship. It clarified that the petitioner should approach the appellate authority to seek relief from the deposit requirement rather than challenging it through a writ petition. The court concluded that the petitioner's failure to file a timely appeal should not preclude the appellate authority from considering the appeal if filed within a specified period and the petitioner's request for relief from the deposit condition.

In conclusion, the writ petition challenging the penalty order was dismissed, emphasizing the importance of following the statutory appeal process for addressing grievances related to penalties under the Customs Act.