Legal principle

Under Section 148(2) of the Customs Act, a carrier whose representatives hand over imported cargo to the custodian as persons representing themselves as agents of the 'person incharge' and accepted as such is liable for penalties under Section 116 for shortages, notwithstanding that it is not itself the person incharge and that a departure order under Section 42(2)(e) has been issued.

Court decision

The Supreme Court dismissed the appeals with costs of Rs. 5,000 in each appeal, upholding the penalties against the airline; it held that the appellants were liable under Section 148(2) as persons representing the person incharge as his agent, and that a Section 42 order does not bar penalty proceedings under Section 116.

Facts

M/s British Airways Plc, an aircraft carrier operating international air transport of passengers and cargo into India under bilateral agreements, had its aircraft unload cargo at Indira Gandhi International Airport, Delhi, where several packages airlifted for India were found short. Show cause notices were issued demanding penalty, and the Assistant Commissioner of Customs imposed penalties on the airline. The Commissioner (Appeals) and Joint Secretary (Revenue) dismissed the airline's appeals, and the Delhi High Court dismissed its writ petitions, leading to these further appeals.

Key provisions

• Section 116, Customs Act, 1962 — Penalty for not accounting for goods