Legal principle

No penalty can be imposed under section 116 on a shipping line or its steamer agent for mis-declaration in the import manifest where the containers were delivered with seals intact and there is no evidence of the carrier's knowledge or collusion, the case being one of short shipment and not short landing.

Court decision

The Tribunal set aside the impugned order in so far as it was passed against the appellant steamer agent, held the order not maintainable on the facts, allowed the appeal, and disposed of the stay petition.

Facts

The appellant, a steamer agent of M/s MSC Mediterranean Shipping Company S.A., handled 150 containers (under 12 Bills of Lading) declared as Shredded Steel Scrap, but examination revealed the containers mostly held broken roof tiles and the actual weight was only about 87.5% of the declared weight. On a show cause notice dated 05-12-2011, the Commissioner absolutely confiscated 364.545 MT of broken roof tiles and 54.21 MT of heavy melting scrap under sections 111(f) and 111(m), and confiscated the 150 twenty-foot containers under section 118 with an option of redemption on payment of Rs.10 lakhs. A penalty of Rs.90,15,924 was imposed on the steamer agent under section 116 for not making a true declaration in the import manifest, while proceedings against the importers and other noticees were dropped. Aggrieved, the steamer agent appealed to the CESTAT.

Key provisions

• Section 116, Customs Act, 1962 — Penalty for not accounting for goods
• Section 112, Customs Act, 1962 — Penalty for improper importation of goods
• Section 111(f), Customs Act, 1962 — Confiscation of improperly imported goods etc
• Section 118, Customs Act, 1962 — Confiscation of packages and their contents