Customs Act, 1962 › Chapter XIV — Confiscation of goods and conveyances and imposition of penalties

Section 116. Penalty for not accounting for goods

Customs Act, 1962

Bare Act

Penalty for not accounting for goods. — If any goods loaded in a conveyance for importation into India, or any goods transhipped under the provisions of this Act or coastal goods carried in a conveyance, are not unloaded at their place of destination in India, or if the quantity unloaded is short of the quantity to be unloaded at that destination, and if the failure to unload or the deficiency is not accounted for to the satisfaction of the Assistant Commissioner of Customs or Deputy Commissioner of Customs, the person-in-charge of the conveyance shall be liable, -

(a) in the case of goods loaded in a conveyance for importation into India or goods transhipped under the provisions of this Act, to a penalty not exceeding twice the amount of duty that would have been chargeable on the goods not unloaded or the deficient goods, as the case may be, had such goods been imported;

(b) in the case of coastal goods, to a penalty not exceeding twice the amount of export duty that would have been chargeable on the goods not unloaded or the deficient goods, as the case may be, had such goods been exported.

Judgments on Section 116

  • Vicky Ramchand Asrani vs Mumbai-Air Port — CESTAT, 19 Dec 2024. Illicit import of gold must be deterred, but not by alienation of possession from its owner — where goods are merely restricted and not truly prohibited, absolute confiscation under section 125 fails and the owner is…
  • J.M.Baxi And Co vs Government Of India — Madras High Court, 4 Dec 2019. A steamer or its agent cannot be held liable under Section 116 of the Customs Act, 1962 merely because remission of customs duty was allowed to the importer under Section 23, and invocation of Section 116 long after 9…
  • M/S.British Airways Plc vs Union Of India & Ors — Supreme Court of India, 6 Nov 2001. 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…
  • Scindia Steam Navigation Co. Ltd. vs Collector Of Customs — Calcutta High Court, 8 Jun 1992. Shortlanding is the very basis for attracting penal liability under Section 116 of the Customs Act, 1962, and that fact must be established like any other fact by the Customs authorities - the outturn report alone is…
  • J M Baxi And Co vs Commissioner Of Customs-Nhava Sheva — CESTAT, 13 Dec 2024. Salvage equipment consigned to the master of a 'foreign going vessel' under salvage and used in her refloating constitutes 'stores' under section 88 of the Customs Act, 1962, and an agent such as a shipping agent is not…
  • Ashok Kumar Goyal Manager vs Noida Customs — CESTAT, 3 Jun 2024. A retracted confessional statement is weak evidence which can at best be used as corroboration and cannot by itself sustain a penalty unless the Department establishes its voluntary character and supports it with…
  • Varun Freight Forwarders vs Commissioner Of Customs — CESTAT, 3 Jun 2024. Penalty proceedings under the Customs Act must be initiated and concluded within a reasonable time, and an inordinate, unexplained delay in taking such action—beyond even the five-year period prescribed for demand of…
  • Poonam Pundir vs C.C. Noida — CESTAT, 27 Mar 2024. Section 158 of the Customs Act, 1962 is an enabling rule-making provision under which no penalty can be directly imposed, and a warehouse licence cannot be cancelled on mere possibilities of intention without…
  • Msc Agency India Pvt Ltd vs Kolkata(Port) — CESTAT, 11 Mar 2020. Where container seals are found intact and the Bill of Lading bears a 'Shipper's Load, Stow & Count' clause, no penalty under Section 116 of the Customs Act, 1962 can be imposed on the steamer agent/carrier for short…
  • M/S.South India Corporation… vs The Government Of India — Madras High Court, 9 Mar 2020. Penalty for short landing under Section 116 of the Customs Act, 1962 cannot be sustained where adjudication is unduly delayed—the liability cannot be kept alive beyond five years from discharge per Parekh Shipping—or…
  • Msc Agency (India) Private Ltd vs Commissioner Of Customs — CESTAT, 23 Oct 2013. 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…
  • The Commissioner Of Customs & Central Excise Visakhapatnam vs M/S. Nikhil Refineries Ltd — CESTAT, 18 Jul 2011. Where the into-bond assessment is finalized on the quantity shown in an independent Ullage Survey Report conducted in the presence of the importer, supplier, vessel's master and Customs, any unexplained shortage…
  • Godrej Industries Limited vs Union Of India (Uoi) — Bombay High Court, 22 Mar 2004. For bulk liquid cargo, customs duty must be levied on the quantity actually delivered where that can be ascertained by a recognised method giving more accurate results, and the ullage survey report may be relied upon…
  • Shaw Wallace And Co. Ltd. vs Board Of Trustees Of The Port Of Bombay — Bombay High Court, 10 Dec 2002. A penalty under Section 116 of the Customs Act, 1962 cannot be imposed solely on the basis of a (belated) Port Trust out-turn report where there is no material showing that short landing was noticed at the time of…
  • Wilco & Company, Madras vs Union Of India (Uoi), Represented By The… — Madras High Court, 12 Aug 2002. Penalty under Section 116 of the Customs Act is leviable equally on dutiable and non-dutiable goods not properly accounted for, but where no limitation is prescribed the power must be exercised within a reasonable time,…
  • J.M. Baxi And Co. vs Deputy Collector Of Customs And Ors. — Bombay High Court, 6 Aug 2002. Customs authorities cannot impose a penalty under Section 116 of the Customs Act on the basis of shore tank measurement where the ullage report taken at the time of actual discharge shows the shortage to be within the…
  • Forbes Forbes Campbell And Co. Ltd. vs Deputy Collector Of Customs, Manifest… — Bombay High Court, 10 Jul 2002. No penalty under Section 116 can be imposed on a steamer agent for short-landing based solely on a destuffing out-turn report; the burden lies on the revenue to prove short-landing at the time of discharge from the…
  • Parekh Shipping Corporation vs Asstt. Collector Of Cus., Bombay — Bombay High Court, 12 Jun 1995. Powers under Section 116 of the Customs Act against a vessel's agents for short-landed goods must be exercised within a reasonable time — held to be five years from the date the vessel leaves the port — and the agents'…