2020 (3) TMI 491 - AT - Customs

Liability of carrier / shipper - import or goods - short landing of goods - evasion of Customs Duty - HELD THAT - In the impugned Bill of Lading, the term Shippers Load Stow Count is mentioned in the description. As long as the seal has not been altered or tampered with, the carrier cannot be held liable for the shortage because the carrier was not present at the time of the packing of the container and carrier does not know what the shipper loaded, stowed or counted. Bill of Lading shows details that was provided by the shipper. Shipper s Load Stow and Count is the term seen in the description of the Bill of Lading for the shipment. This term absolves steamer agent/carrier of any claim relating to damaged or missing cargo etc. - The appellant has also submitted documents like enquiry report etc. which shows that they were not responsible for any shortage etc. Moreover, the department also could not produce any proof against the Steamer Agent and imposed penalty mechanically. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Short landing of goods leading to penalty imposition under section 116 of Customs Act, 1962.

Analysis:
1. The case involved a show cause notice issued to a Steamer Agent for short landing of goods against a specific shipment. The notice detailed the quantity and description of the short landed goods, along with the assessable value and duty amount involved.

2. A joint survey conducted at the port revealed that containers had been tampered with, despite seals being intact. The survey report highlighted the presence of holes in the containers' floor, indicating possible tampering with the goods.

3. In response to the notice, the Steamer Agent argued that they fulfilled their obligations under the contract of carriage, emphasizing that they were not responsible for customs compliance post-discharge. They cited legal precedents to support their position, asserting that they could not be held liable for misdeclarations or fraud by exporters or consignees.

4. The adjudicating authority imposed a penalty of ?10.00 Lakhs on the Steamer Agent under section 116 of the Customs Act, 1962. The Steamer Agent appealed against this decision before the Tribunal.

5. During the appeal hearing, the appellant's advocates argued that the carrier could not be held responsible for shortages as long as the seals were intact, as they were not present during the packing of the containers. They emphasized that the Bill of Lading indicated the details provided by the shipper, absolving the carrier of liability.

6. The Tribunal, after considering the arguments and evidence presented, set aside the adjudicating authority's orders and allowed the appeals. The Tribunal found that the Steamer Agent could not be held liable for the shortage of goods based on the evidence and legal principles discussed during the proceedings.

7. The judgment was pronounced on 11 March 2020 by Hon'ble Shri P.K. Choudhary, Member (Judicial) of the Appellate Tribunal CESTAT Kolkata, providing consequential relief to the appellant as per the law.

This detailed analysis highlights the key aspects of the legal judgment concerning the short landing of goods and the subsequent penalty imposition under the Customs Act, 1962.